February 11th, 2006
The specter of the Enron bankruptcy has left two lasting legacies: litigation and corporate governance. Whether these issues have been a benefit or a liability continues to be debated.
“The pig may have moved through the python,” said Joseph Grundfest, director of the Class Action Clearinghouse at the Stanford Law School and a former commissioner of the Securities and Exchange Commission.
The clearinghouse’s report on litigation shows that the number of securities fraud class actions filed in 2005 declined to 176, down more than 17 percent from the previous year.
“Two factors are likely responsible for the decline. First, lawsuits arising from the dramatic boom and bust of U.S. equities in the late 1990s and early 2000s are now largely behind us. Second, improved governance in the wake of the Enron and WorldCom frauds may have reduced the actual incidence of fraud,” said Grundfest
February 11th, 2006
NEW YORK–(BUSINESS WIRE)–Feb. 10, 2006–Companies with the poorest earnings quality and corporate governance underperformed the SandP 500 Index by 11% in 2005, according to a study by RateFinancials Inc., a New York-based independent risk research firm that evaluates the financial reporting of publicly held companies.
Using the firm’s propriety methodology, RateFinancials has identified more than 50 companies whose financial statements should give investors pause for concern. The companies range in size from automakers General Motors and Ford to Jupiter Media and Helen of Troy. The firm’s ratings are heavily based on quality and transparency of earnings disclosures and corporate governance.
“We continue to establish a strong correlation between poor stock performance and companies with questionable earnings quality,” said Victor Germack, founder and president of RateFinancials. “Investors who choose to ignore these warning signs have a high probability of sustaining losses.”
February 9th, 2006
Getting More Truth Is First Step to Fix This, Says Shareholder Activist
PALMETTO BAY, Fla., Feb 7 /PRNewswire/ — Greed rules corporate America, says Gunther Karger. Power-hungry Washington tells us the economy is strong while skyrocketing energy costs suck disposable income from our wallets nearly bankrupting our transportation industry.
Americans must dig out more truth and reality from corporate and government leaders to reduce our risks, says Karger, retired executive and shareholder advocate, in his new book “Wall Street and Government Fraud” (Discovery Group, $14.95) available online including on http://www.guntherkarger.com . He tells us to heed that old Russian Proverb “When money speaks, truth keeps silent.”
Comment from SmartLogik Action Group: Could this equally apply to the UK?
