Corporate Accountability Report Index-Summary

FAIR VALUE

– AICPA Auditing Standards Board revisions proposed, 1138
– Alternative investments, FASB guidance to issue soon, 586
– Auditing of complex financial instruments paper, IAASB seeks comments, 1270
– Auditor liability for mortgage-backed securities valuation, Analysis and Perspective, 84
– Auditor oversight, groups urge guidance on standards, 361; recent changes cited, 362
– Comment letters from SEC focus on credit crunch, fair value, 209
– “Current value” method considered as alternative, 586
– Derivative litigation, fair value of corporate stock must take pending action into account (Cal. Ct. App.), 264
– Differences between FASB and IASB guidance to be eliminated, 1293
– Disclosures

– – FASB may enhance in third quarter, 550; field visits testing proposed footnote disclosures will delay final rules, 673; sensitivity analysis not expected, 982; sensitivity analysis to be included, 1010; proposed standards update released, 1106
– – IASB proposals will further align with FASB, 551
– – SEC's enhancement advice not taken, 39

– Distressed financial assets, IASB concerned about FASB guidance, 360
– EU pressures IASB for changes, 77; pushes adoption of FASB mark-to-market rule changes, 449; IASB rejects EU demand to amend IFRS to align with FASB, EU threatens to withdraw from process, 552
– FAS 107-a, disclosure proposal creates controversy, 108
– FAS 107-b draft, applying standard on disclosures to both interim and annual reports, would replace 107-a, 143; draft revamped, 180
– FAS 107-e and other-than-temporary impairments, guidance issued, 359
– FAS 157-e on fair value, impairments, FASB issues guidance, 442; Chamber wants PCAOB guidance on new rules, 476; final staff positions issued, 476; many criticize new impairment rules, 477; SEC amends Accounting Bulletin, 480; PCAOB issues guidance, 510; FASB Chair defends expedited process, 583; Comm. on Capital Markets Regulation urges improvements to new standard, 674
– FAS 157-f, liabilities, FASB issues proposed guidelines, 585; final staff guidance due in Aug., 867; codification updates issued., 1106
– Financial crisis role

– – Banks, insurers, trade groups say FASB response to crisis too slow to help, 329
– – Credit freeze, fair value played no meaningful role, but SEC study recommends improvements, 54; Chamber of Commerce supports SEC recommendations, 241; lawmakers' letter to Schapiro urges action on study, 361
– – Debate continues on impact in financial crisis, Special Report, 186
– – Fair value not to blame, Schapiro says, 124; eliminating fair value would create problems, 896
– – FCAG concludes fair value did not create cycle that caused crisis, 950
– – Goldman Sachs CEO discusses role of fair value, executive compensation, regulation, 446

– Financial instruments, differences between IASB and FASB slow convergence project, 1135
– IASB issues exposure draft for comment, 715
– Interviews

– – FASB Chair Herz on fair value and impairments, 56
– – SEC chief accountant Kroeker on fair value, 1241

– Mark-to-market accounting

– – Congressional action discouraged by Dodd (D-Conn), 324
– – Suspension

– – – Discouraged by Schapiro, others, 412
– – – SEC requirement for

See LEGISLATION, FEDERAL, HR 1909

– Measurement and disclosure, FASB plans more guidance, 241
– Obama financial reform package proposes accounting changes, 805
– PCAOB reviews standards, interview with Baumann, 837
– Regulation recommendations made by Comm. on Capital Markets Regulation, 670
– Standards, changes coming in 2009, Outlook, 78
– Trade groups send letter urging preservation, 240
– Uncertainty and fraud risk should be separated, says PCAOB SAG, 1267

FANNIE MAE

See MORTGAGES

FASB

See FINANCIAL ACCOUNTING STANDARDS BOARD (FASB)

FEDERAL PREEMPTION

See PREEMPTION

FEES

See ATTORNEYS' FEES

FIDUCIARY DUTY

– Anti-dilution protections not breached, Amazon.com suit dismissed (Del. Ch.), 857
– Bear Stearns, breach of fiduciary duty cases consolidated into 3 cases (S.D.N.Y.), 72
– Business judgment rule

See BUSINESS JUDGMENT RULE

– Closely held companies, shareholders owe each other fiduciary duties (Utah), 1234
– Compensatory shares issued for financing personal guaranties diluted plaintiff interest, Del. law approves at time of crisis but not later (1st Cir.), 1288
– Definition of duty likely in case involving mutual fund advisory fees, SEC files amicus brief (U.S., rev grant), 1003
– Del. corporation law cases, 2008 review, 22; first quarter 2009, 451; second quarter 2009, 842; third quarter 2009, 1087
– Derivative litigation

– – AIG, claim against former directors may proceed (Del. Ch.), 261
– – Audit committees, fiduciary duty, business judgment rule, and liability in financial crisis litigation, Analysis and Perspective, 807
– – Citigroup, waste claim for $68M golden parachute survives, fiduciary breach claim failed to show presuit demand futility (Del. Ch.), 291
– – FCPA violations resulting in settlement, demand futility not shown (S.D. Tex.), 735
– – Stock option backdating, standing fails after Biomet merger (Ind. Ct. App.), 265

– ERISA

See ERISA FIDUCIARY DUTY

– First refusal agreement by Wayport Inc. did not apply to transactions, insider information and breaching duty to minority shareholder claims can continue (Del. Ch.), 1008
– Fund investing in distressed companies, fraud claim, N.Y. Martin Act preempts claim (S.D.N.Y.), 46
– Mergers and acquisitions

See MERGERS AND ACQUISITIONS

– Personal liability of directors under DGCL 102(b)(7), Analysis and Perspective, 28
– Recapitalization, material facts omitted, claim for breach of duty stated (Del. Ch.), 699
– Standard and definition should be clarified, says Investor Advisory Committee, 943
– Voluntary exchange offer, Viacom and Blockbuster, no breach or disclosure violation (Del.), 204

FILING REQUIREMENTS

See REPORTING REQUIREMENTS

FINANCIAL ACCOUNTING FOUNDATION

– Revenue down due to financial crisis, 677

FINANCIAL ACCOUNTING STANDARDS BOARD (FASB)

See also ACCOUNTING
– Advisory committee on IFRS, FAF-FASB wants SEC to form, 328
– Annual testimony by chairman

See LEGISLATION, FEDERAL, HR 2664

– Banks, insurers, trade groups say response to crisis too slow to help, 329
– Business combinations, guidance on acquired contingencies issued, 448; SEC makes technical amendments to align with FASB, 512; SAB updates guidance, 745
– Consolidations, derecognition, joint work plan with IASB agreed, 393; will hold joint roundtable, 515
– Convergence with IASB standards

– – Companies could not handle changes if 2011 deadline met, says FASAC, 1268
– – Delayed by financial crisis, 1134; income reporting aspects getting closer, 1136; convergence secondary after dealing with crisis, 1163; financial instruments are sticking point, but improving reporting is point of effort, says Herz, 1211

– Credit freeze, fair value played no meaningful role, but SEC study recommends improvements, 54; Chamber of Commerce supports SEC recommendations, 241; lawmakers' letter to Schapiro urges action on study, 361
– Credit losses and quality of financing receivables, disclosure draft released for comment, 800
– Debt securities impairment, staff guidance issued, 76
– Derecognition for sale and leaseback, whole asset approach favored, 776
– Disclosure framework project begun, 831; deliberations will begin to make disclosures more coherent, 868
– Discontinued operations, IFRS 5 considered, 1294
– Dynamic provisioning should be used by bank regulators, says Grant Thornton, 616
– Fair value

See FAIR VALUE

– Federal Accounting Oversight Board, creation

See LEGISLATION, FEDERAL, HR 1349

– Financial Crisis Advisory Group

– – Members named, 16
– – Report with recommendations coming, 930; financial reporting improvements, independence, pushed in report, 950

– Financial instrument accounting projects launched, 17; proposal may come as early as 2009 year-end, 425; political restraint urged by FCAG in letter to G-20, 553; investor subcommittee urges post-mortem to identify information that would help investors, 745; deadline coming, 4 models considered, 773; board combines fair value and cost-based reporting, 928; American Bankers Ass'n says proposed models will not increase transparency, 1011; scope of project tentatively set, 1040; classification differences with IASB slow progress, 1135
– Financial instruments with equity characteristics, draft standard on measurement coming, 746
– Financial statement presentation, panelists comment on proposals, 146
– GAAP codification and hierarchy exposure draft to issue in Mar., 267; will align with XBRL, 267; issued for public comment, 422; finalization vote expected by early June, 584; implementation likely to find accountants unprepared, Special Report, 651; will launch on time, 710; webcast scheduled, In Brief, 777; professional version $850 annually, basic free, 777; concept statements not included, 798; launch expected to cut research time and raise reliability, 861; SEC interpretation clarifies references to GAAP refer to corresponding references to codification, 1038; updates including liabilities fair value, accounting for redeemable equity instruments, released, 1106; PCAOB staff Q&A points to codification as authoritative source, 1107; website lists XBRL elements, 1213
– “Going concern” guidance, PCAOB urged to wait for FASB to adopt standards, 444; revised proposal will issue, 713
– IFRS

See INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

– Independence

– – ITAC questions, suggests restructuring of board, 804
– – Necessary for standard setters, Special Report, 186
– – Questioned at hearing, 412

– Insurance contracts, fulfillment value favored, but IASB leans towards exit value, 296
– Interview, FASB chair Herz on fair value and impairments, 56
– Investor input, webcast scheduled, 1214; webcast held, 1271
– Lease accounting discussion paper comments analyzed, will discuss with IASB, 1139
– Lessor accounting issues, discussion paper expected, 110
– Loan loss and credit risk, quarterly footnote disclosures, draft rules coming, 513
– Loans and related losses next issue, says Herz, 833
– Loss contingencies, FAS 5 exposure draft discussed in roundtable, 330; effective date of disclosure, details discussed, 1039
– Measurement, discussion paper to be drafted for conceptual accounting framework, 747
– Off-balance sheet accounting

– – Blamed for crisis, FCAG wants to simplify financial instrument accounting, 326
– – Guidance, work with banking regulators on greater disclosure continues, 675
– – Loan loss comes to forefront, 582

– Oil and gas disclosure and reserve calculation requirements, proposed amendments open for comment, 983
– Oil and gas disclosure expansion, FASB exposure draft, comments sought, 1135
– Other comprehensive income, exposure drafts on amendments to issue, 1295
– Pensions and postretirement plans, FAS 132(R)-1 requires more disclosure on net periodic benefit costs, 54
– Provisioning by banks, reporting of, working group with IASB proposed, 331
– Quarterly financial reports robust, better quality, says FASAC, 1212
– Rescission of irrelevant guidance and corrections of pronouncements expected, 109
– Revenue recognition

– – Contract-based proposed model discussion paper issued with IASB, 17; gets positive comments by panelists , 424; issues such as contingencies discussed, 447; support drops as revenue complexity grows, survey says, 714; performance obligation should determine what to record, 775; outreach planned to avoid problems with exposure draft, 951
– – Milestone method, will propose as acceptable, 394

– Securitizations and consolidations, Statement 140 and FIN 46R, changes planned, 19; some issues resolved, 144; final rules to issue in June, 481; staff working on amendments, 644; Chamber urges delay in new rules, 712; new guidance will increase items on balance sheets, 801; new rules released, 802; agency watches for skirting of rules, 831
– Standards, changes coming in 2009, Outlook, 78
– Subsequent events, new standard issued, 712
– Tax reserves disclosure, FIN 48, one-third of large companies failed to meet minimum requirements, 294
– Variable interest entities consolidation, changes proposed to shared power, kick-out rights, 362; work on guidance continues, 449

FINANCIAL INSTITUTIONS

See BANKING
– Emergency Economic Stabilization Act

See EMERGENCY ECONOMIC STABILIZATION ACT

FINANCIAL PRODUCT SAFETY COMMISSION

– Creation

See LEGISLATION, FEDERAL, HR 3126, S 566

FINANCIAL REPORTING

See REPORTING REQUIREMENTS

FINANCIAL RESTATEMENTS

– Chart of recent SEC filings, Dec. 6-Jan. 2, 90; Jan. 5-16, 155; Jan. 16-30, 215; Jan. 30-Feb. 13, 276; Feb. 16-27, 335; Mar. 2-13, 399; Mar. 27-Apr. 10, 558; Apr. 13-24, 592; Apr. 27-May 8, 653; May 11-22, 718; May 22-June 5, 781; June 8-19, 846; June 22-July 2, 904; July 5-17, 961; July 17-31, 1019; July 31-Aug. 14, 1075; Aug. 17-28, 1149; Aug. 28-Sept. 11, 1169; Sept. 11-25, 1221; Sept. 18-Oct. 2, 1274
– Clawback of bonuses, SEC goes after innocent former CEO for bonuses based on fraudulent financial statements (D. Ariz.), 915; case shows need to consider restatement effects and avoid need for them, 1050
– Decline in 2008 for second year, but stealth filings are up, 323; number still dropping in 2009, due to emphasis on materiality standard, 941
– Executive compensation disgorgement, Section 304 claim fails without financial restatement (E.D. Mo.), 44
– Huron Consulting Group reports class action filings, SEC investigation, after restatements related to acquisitions, 1006

FINANCIAL STATEMENTS

– Internal controls, SEC deficiencies could cause errors, 436
– KPMG complicity in financial misstatements, claims filed by New Century Fin. Corp. (S.D.N.Y.) (Cal. Super. Ct.), 423
– Presentation, panelists comment on FASB proposals, 146
– Reporting requirements

See REPORTING REQUIREMENTS

FLORIDA

– Agency lacking, BDO Intl. not responsible for member firm liability (Fla. Cir. Ct.), 833
– BDO Seidman replacing fired auditor, no federal jurisdiction over failure to correct prior misstatements, remanded to Fla. (S.D. Fla.), 615
– Injunctions, appraisal required by law in reverse stock split adequately protects minority shareholder (Fla. Dist. Ct. App.), 612

FOCUS

See ANALYSIS AND PERSPECTIVE

FOIA

See FREEDOM OF INFORMATION

FOOD

– American Italian Pasta Co. earnings fraud, two former executives sentenced (W.D. Mo.), 1289
– Krispy Kreme Doughnuts, earnings misstatement settles, company and former finance officer will cease and desist, 288
– Nanomaterials, more shareholder disclosure resolutions expected, 103
– Nature's Sunshine Products Inc., revocation of securities registration proper for chronically late filings (SEC), 141
– Wrigley-Mars merger class action, court finds settlement fair (Del. Ch.), 203

FOREIGN CORRUPT PRACTICES ACT

See INTERNATIONAL DEVELOPMENTS

FRAUD

– Acquisition of car dealership, buyer claims fraudulent financials led to inflated price, election of remedies (D. Or.), 1042
– Aiding and abetting

See AIDING AND ABETTING

– AIG

– – Improper accounting transactions, former executives agree to fines, disgorgement (S.D.N.Y.), 1006
– – Loss reserves inflation, General Reinsurance Corp. settles fraud case (S.D.N.Y.), 352

– Attorney, former partner for Mayer Brown convicted in Refco fraud scheme (S.D.N.Y.), 926
– Attorney general and postal inspection funding to combat

See LEGISLATION, FEDERAL, HR 1748

– Auditor liability

See AUDITOR LIABILITY

– Bear Stearns Cos.

See BANKING

– Class actions

See CLASS ACTIONS

– Compliance programs important as SEC increases enforcement scrutiny, 632
– Corporate Fraud Task Force expanded to address mortgage cases, 40
– Disclosure

See DISCLOSURE

– Discovery, AIG's confidential report on charges, House committee seeks production, 536
– Earnings fraud at American Italian Pasta Co., two former executives sentenced (W.D. Mo.), 1289
– Enron

See ENRON

– Federal regulatory gaps and preemption problems exposed, Congress urged to act, 387
– Filings increase in 3rd quarter, but Madoff and crisis-related suits drop, 1285
– Financial condition of Collins & Aikman, DOJ drops case against CEO, former OMB Director Stockman (S.D.N.Y.), 73
– First refusal agreement by Wayport Inc. did not apply to transactions, insider information and breaching duty to minority shareholder claims can continue (Del. Ch.), 1008
– Forward-looking statements regarding ability to manage debt, PSLRA safe harbor broad if cautions meaningful (N.D. Ill), 1180
– Fourth Amendment not violated when civil receiver turns records over to law enforcement (5th Cir.), 667
– Geotec Inc., false statements in SEC filings, charges brought (S.D. Fla.), 894
– Health care

See HEALTH CARE

– Holding company may sue former CEO for fraud and fiduciary duty claims involving subsidiary asset purchase agreement (Del. Ch.), 1096
– “Honest services”

– – Exception to liability requires employee to be following orders (5th Cir.), 40
– – Hollinger Intl., finding of harm to party to whom services owed required or not (U.S., rev grant), 637

– Injunction preventing former Adelphia official from receiving anything of value from Rigas family vacated (2nd Cir.), 259
– Internal controls

– – Guidance, study on fraud deterrence, risk management importance, coming from COSO, Focus, 1015
– – KPMG survey says one-third of respondents do not expect fraud to be detected, 1107

– Investigations, SEC will focus more on results than process, 601
– Jurisdiction in “foreign-cubed” securities fraud case, Solicitor General invited to comment (U.S., rev sought), 698
– Kickbacks

– – Iraq, Fiat and subsidiary settle for $18M (D.D.C.), 73
– – Pension fund, by former state officials, SEC and N.Y. AG file charges, 383; SEC investigation moves to Cal. with informal inquiry letter to LAFPP, 570; N.Y. AG issues subpoenas to investigate use of paid intermediaries, 571; civil charges filed involving Aldus Equity Partners and DAV/Wetherly, 605; N.Y.C. Comptroller urges SEC to reform placement agent regulations, 635

– Kmart, accounting scheme to hide financial condition, verdict against former CEO (E.D. Mich.), 735
– Loss causation in fraud cases, Countryside addresses impact in face of changing market conditions, Analysis and Perspective, 957
– Loss reserves falsely inflated, former AIG VP sentenced (D. Conn.), 142
– Madoff Ponzi scheme

– – Auditor for financial statements charged with fraud, aiding and abetting (S.D.N.Y.), 931
– – Investor files administrative claim with SEC claiming lack of oversight, 44
– – SEC investigation into handling of case, Kanjorski (D-Pa) wants IG report earlier than promised, 771

– Misrepresentations about US Unwired's affiliate contract with Sprint, pleadings show loss causation (5th Cir.), 505
– Mortgages

– – Corporate fraud cases investigated by FBI rise, 664
– – Countrywide Financial, misleading investors about risks taken, SEC brings charges (C.D. Cal.), 734
– – Earnings scheme, CAO charged, Beazer Homes settles (N.D. Ga.), 858
– – Sentencing guideline deviations in securities fraud often needed for justice, Analysis and Perspective, 678
– – Understated losses, former CEO settles with SEC, others don't (S.D.N.Y.), 545

– Operating income overstatement, VeriFone Holdings controller agrees to fine, injunction (N.D. Cal.), 1104
– Pay-to-play, temporary bans on pension advisors who make certain political contributions, SEC to propose, 605; proposed rule would ban practice, 944
– Pension plans, reinvestment delay after combining, audit letters after “as-of” transactions not enough to show §10(b) violation (1st Cir.), 235
– Pleading requirements

See PLEADING REQUIREMENTS

– PurchasePro.com former CEO fined, barred for false financial filings (D.D.C.), 1183
– Qwest Communications International, artificially inflating stock price, former executives named in fraud suits (D. Colo.), 181
– Reporting requirements

See REPORTING REQUIREMENTS

– Restitution under MVRA for corporations' criminal investigation fees, Analysis and Perspective, 112
– Revenue recognition

See REVENUE RECOGNITION

– Royal Dutch Shell to pay foundation on behalf of investors in fraud claim, 708
– Sale-leaseback transactions causing financial misstatement, former CFO pleads guilty and settles with SEC (D. Conn.), 1265
– Scheme liability

– – Mayer Brown, class action dismissed because only accomplices, judge urges Congress to revisit law (S.D.N.Y.), 382; SEC amicus brief says reading of primary violator liability was too narrow (2d Cir.), 1000
– – Price fixing to inflate stock price, class action against Micron Technology as primary actor survives dismissal (D. Idaho), 354
– – Stoneridge reliance requirement results in dismissal of defendants who are not traditional secondary actors, 238

– Scienter

See SCIENTER

– Search warrants for corporate facilities, executives have standing to challenge only if reasonable expectation of privacy (9th Cir.), 127
– SEC funding to combat

See LEGISLATION, FEDERAL, S 386

– Securities registration violations when stock warrants exercised to sell, failure to disclose is fraud (D.C. Cir.), 792
– Sentencing guideline deviations in securities fraud often needed for justice, Analysis and Perspective, 678
– Sham transactions to avoid debt and resulting loss by Newpark Resources, SEC files suit (E.D. La.), 925
– Standing, British Virgin Island's permission to sue provision enforced under internal affairs doctrine in derivative case (Cal. Ct. App.), 742
– Statutes of limitations

– – Improper confidentiality offer starts time running, not expiration of offer (10th Cir.), 733
– – “Inquiry notice” for fraud allegations against Merck about Vioxx safety (U.S., rev grant), 663; notice timeline starts from injury, reinstatement wrong, says SIFMA amicus brief, 1062

– Stock distribution illegal, summary judgment upheld (U.S., rev den), 698
– Stock option backdating

See STOCK OPTION BACKDATING

– Task force being considered by AG Holder, 535
– Tax shelters

See TAX SHELTERS

– Tender offer, minority shareholders knew facts, dismissal affirmed (7th Cir.), 45
– Tex. public pension fund lacks statutory authority to sue, new representative must be named in securities fraud case (W.D. La.), 321
– Tyco former executives settle SEC actions with bars, disgorgement (S.D.N.Y.), 894

FREDDIE MAC

See MORTGAGES

FREEDOM OF INFORMATION

– SEC cases, use of FOIA as tool may rise, but cost and difficulties serious, 828

FREEDOM OF SPEECH

– Regulation FD, anonymous internet postings raise issues, Analysis and Perspective, 483