Posts filed under 'Compliance'
October 3rd, 2006
Harvard’s lesson in ethics (USA Today via IndyStar.com)
Jeffrey Skilling, who was convicted in May of masterminding a massive accounting fraud at Enron, has one.
So does E. Kirk Shelton, the former vice chairman of Cendant who was found guilty last year of fabricating earnings at the company.
What do these men, former titans of the new economy, share besides being snared by investigations into securities fraud? They have master of business administration degrees from Harvard Business School.
If any lesson is to be learned from the accounting scandals of recent years, it’s that no one — not even executives trained at some of the nation’s most prestigious institutions of higher learning — is immune to the temptations of the executive compensation bonanza, where subtle manipulations of accounting entries can translate into bonuses and stock options worth tens of millions of dollars.
As a result of the wave of accounting frauds exposed at Enron, WorldCom, HealthSouth and other companies, business schools across the nation have beefed up their offerings on ethics education.
September 20th, 2006
Justin Jones of SmartLogik Action Group will be giving a 20 minute presentation followed by 20 minute Q & A session on:
“Experiences of a Shareholder Action Groupâ€. Without going into too much detail, this will cover why the SmartLogik Action Group was started up. It is suggested that the proliferation of shareholder action groups in the UK is a direct result of the “light touch†regulatory approach that exists, where unscrupulous companies can take advantage of the system. Action Groups are needed to represent the interests of shareholders (esp. the small shareholders), create balance and highlight the importance of good corporate governance. The big mutual funds are needed to ensure that the interests and rights of all investors are safeguarded.
The Sustainable Finance Summit will be held at the Regent’s Park Marriott Hotel, 28 - 29 November 2006. Some 100 - 150 senior executives from banking and finance are expected to attend. See following link for more details and list of speakers:
http://www.ethicalcorp.com/finance/speakers.shtml
September 16th, 2006
Ernst and Young Update on SmartLogik Liquidation, August 06
The latest update from the official liquidator for SmartLogik is now available and can be downloaded from the link directly above. They conclude that there may be a small surplus left over for the shareholders, perhaps 1 or 2 pence in the pound. This will no doubt be of little comfort to the long suffering shareholders.
There will be a meeting of the members and creditors of SmartLogik Group PLC at Ernst & Young LLP, 1 More London Place, London, SE1 2AF on 6 October 2006 at 10:00am and 10:30am respectively, for the purpose of laying before the meetings an account of the Liquidators’ acts and dealings and of the conduct of the winding up during the proceeding year.
A form of proxy for use at the meetings, if desired, can be downloaded at the above link, together with the Liquidators’ update report. The only resolution listed is one for creditors to vote on and is a vote to give permission to Ernst & Young to draw their remuneration fees from the liquidation bank account. If you are a creditor, you can vote using this proxy form. It should be lodged with the Liquidators at Ernst & Young LLP, 1 More London Place, London SE1 2AF not later than noon on the business day before the meeting.
For all matters relating to the forthcoming meeting, please contact Ernst & Young (do not send any proxy forms to the SmartLogik Action Group):
Salman Saif at Ernst & Young can be contacted at,
Direct Line: 020 7951 9372
Direct Fax: 020 7951 9234
E-mail: ssaif@uk.ey.com
August 27th, 2006
Briton facing extradition to US on corporate fraud charges (AFP via Yahoo! News)
Thu Aug 24, 1:04 PM ET
LONDON (AFP) - A British businessman who tried to surrender voluntarily to face fraud charges in the United States must instead await formal extradition and travel under arrest, his lawyer said.
Jeremy Crook, 53, former European vice-president of software firm Peregrine Systems, had preferred to fly to the United States on his own accord to face the allegations, which he denies. He even went so far as to book a flight for next Tuesday and was understood to be in negotiations with the US Department of Justice about potential bail conditions.
But when he went to City of Westminster magistrates court on Wednesday to request his passport back, he was refused — and told he must face full extradition proceedings. If he does not appeal the ruling, or if he loses an appeal, he will be arrested and accompanied by US marshalls onto a flight to the United States in a scene repeating the extradition of three NatWest bankers implicated in an Enron-related fraud case in Texas.
August 22nd, 2006
Corporate governance (FT.com via Yahoo! News)
Kim Thomas Mon Aug 21, 6:25 AM ET
The July extradition of three British bankers to the US shows that the repercussions of the Enron scandal - in which company executives were able to conceal billions of dollars of debt from shareholders - are still being felt.
The most lasting impact of Enron, and other corporate failures such as Italy’s Parmalat, has been felt via the US’s Sarbanes-Oxley Act, which requires companies listed on the US stock exchange to establish and manage an adequate internal control structure and procedures for financial reporting, and to obtain annual reports from its auditors about the effectiveness of those procedures.
Businesses in the EU, too, are facing numerous new regulatory requirements. The financial sector has been affected in particular by regulations such as Basel II, the first phase of which comes into force at the end of this year, and the Market in Financial Instruments Directive (MiFID), a wide-ranging directive that comes into force in 2007, and imposes requirements governing the organisation and conduct of business of investment firms.
August 14th, 2006
Buttoning up white-collar cases (The Philadelphia Inquirer)
When Jack Dodds left the U.S. Attorney’s Office for a big Philadelphia law firm in 1993, he joined two other former prosecutors here and one in Washington in a nascent white-collar defense unit.
Today, there are about 50 lawyers in that unit in offices across the nation and in Paris, and they are busy - helping companies and executives enmeshed in investigations of everything from accounting fraud and health-care violations to price-fixing and insider trading.
But Morgan, Lewis & Bockius L.L.P. is not the only firm enjoying a burst in business in this specialized area of criminal defense: A new era of increased law-enforcement scrutiny of white-collar crime has triggered a boom across the country for defense lawyers who know what to do when FBI agents walk into a business with a grand-jury subpoena.
August 9th, 2006
Scotland’s corporate fraud figures reach record £47m (Edinburgh Evening News)
SERIOUS corporate fraud in Scotland hit a record £47 million over the first-half of 2006 - more than double the £18m rip-off seen over the whole of 2005, KPMG’s latest Forensic Fraud Barometer showed today.
July 23rd, 2006
The Parmalat fraud has generated too little reform (Financial Times)
Parmalat shareholders will tomorrow elect a new board of directors, signalling the revival of the Italian maker of milk, yoghurts and fruit juices less than two years after its collapse in Europe’s biggest corporate fraud. The ripple effect, however, is likely to be felt for years as regulators, banks, auditors and politicians grapple with an uncomfortable question: has enough action been taken to prevent another Parmalat?
July 16th, 2006
An American court is the right place for the NatWest Three (The Sunday Times)
Three former NatWest employees extradited from Britain were bailed on Friday by a court in Texas on charges related to the Enron affair. The relevant law, the Extradition Act 2003, is deficient and should be changed but that is not reason enough to stay their trial. They are a bad example of the act’s failings since there is a clear case for them to answer, and in America. The Enron scandal, one of the biggest frauds in history, ruined the lives of tens of thousands of people. No British court found in favour of the trio’s plea to stay at home.
Britain is widely regarded as liberty hall to financial malpractice, as its auction houses long knew to their advantage. Yet Britain’s treatment of foreigners in its legal system is a disgrace, holding them in prison for long periods without trial and jailing 500 West Indian women, almost all first offenders, for being dupes of Jamaican drug dealers. Britain can hardly criticise American courts on these grounds. Nor do most of these people have “pro bono†public relations firms depicting them as humble citizens with tear-stained families. They have no costly lawyers or sudden parliamentary concern or “white-collar crime†epithets to launder their case. They cannot cry “civis Britannicus sum†and work Fleet Street’s financial pages into a lather of righteous indignation.
July 2nd, 2006
The SmartLogik Action Group thoroughly endorses the UKSA initiative to get full shareholder rights for shareholders in nominee accounts. Please try to support the demonstration taking place outside the Houses of Parliament on 6th July (see the post below). SmartLogik Action Group is affiliated to UKSA, so go for it!
We support this UKSA initiative because we have direct experience of how difficult it is to make contact with shareholders in nominee accounts. Despite a concerted effort in 2004, it was only possible to persuade a few nominees to pass on information to their shareholder clients. We estimate that there are literally thousands of SmartLogik shareholders in nominee accounts. Since the nominees (banks, etc.) do not have to pass information on to them, these people probably have no idea that there is an action taking place on their behalf. This has had the effect of significantly reducing the funding available to us - less action group members, less funding.
In view of the huge profits being made by the banks through irresponsible lending - did you see Panorama on BBC1 tonight, “The Money Trap” - we believe it is time for them to stop using cost as an excuse for not giving full shareholder rights to shareholders in nominee accounts. They have to do it in the USA, Canada and Australia, so why shouldn’t British shareholders also have these rights? We are a democracy, aren’t we?
Next Posts
Previous Posts
