Citigroup

Enron settlement a victory for shareholders?

Jim Kim — Thu, 11 Sep 2008 07:51:47 -0400

Believe it or not, Enron is still making news, the latest of which is good for many shareholders. A judge has approved a $7.2 billion settlement that will provide funds for those who purchased Enron stock between Sept. 9, 1997 and Dec. 2, 2001, the day the company went bankrupt. That ranks as the largest private securities class action settlement ever. The big winners are institutional shareholders. The University of California was the lead plaintiff. Law firm Coughlin Stoia Geller Rudman & Robbins will make $688 million plus interest for its work on the case, which started in 2001. The bulk of the funds will come from JPMorgan Chase, Citigroup and the Canadian Imperial Bank of Commerce. Smaller amounts came from Bank of America; Lehman Brothers; former Big Five auditing firm Arthur Andersen and its defunct global umbrella organization, Andersen Worldwide, reports the Houston Chronicle. So is it over? Well, Jeff Skilling's appeal is still out there.

For more:
- here's the Chronicle article

ALSO NOTED: Citigroup seeks more financial expertise for board;

Tue, 08 Apr 2008 06:59:58 -0400

> Jeffrey Skilling appeals the Enron decision. Article
> Security and compliance increasingly requires a global approach. Article
> H-P moves to boost e-discovery offering. Article
> Remorseful CFO gets jail time. Article
> Data centers still riding Sarbox wave. Article
> Sabanes-Oxley whistleblower protections apply to employees outside of U.S. Article
> Citigroup seeks more financial expertise for board. Article

And finally ... Finding work when times get tough. Article

Bank showdown with auditors looming

Tue, 13 Nov 2007 06:59:59 -0500

The worst job in the industry right now: Auditing the books of top banks, the likes of Citigroup and JP Morgan Chase. The stakes are really high. The New York Post notes that little-known law, passed in the spirit of Sarbanes Oxley, that now prohibits banks from indemnifying auditors against mistakes. Most other companies can do this, essentially holding them blameless of mistakes that leads to suits. So if the accountants botch, there could be some real costs. Unfortunately, there are lots of hard-to-value assets and related balance sheets issues that will not easily be grappled with. Auditors will be in full cover-your-butt mode--AS5 be damned--and might press for additional write downs and other measures. Signing off on controls will likely not be easy.

For more:
- here's the New York Post article

Related articles:
- Sarbox and Merrill Lynch's audit committee
- Bar rises for internal auditors

Case study: Replacing tape

Mon, 02 Jul 2007 20:01:39 -0400

CitiStreet, a unit of State Street and Citigroup, has taken the plunge--the same one many companies are pondering. Pressured by compliance needs and escalating costs, it moved away from a tape-only system of data storage. It scrapped its physical tape backup system and replaced it with two Sepaton S2100-ES2 virtual tape library appliances. The result: the time needed to back up 700 gigs of data was cut from 24 to 30 hours to 4 hours. Plus, the firm no longer has to physically handle tapes or ship them. "We don't want our name on the front page of the Wall Street Journal,'' one executive was quoted. CitiStreet does continue to use tape drives for long-term archiving functions, however. There is a view that tape systems are obsolete. But the transition could be tough. Obviously, you want to plan carefully. At a minimum, you need to know how much longer your system can last and things like whether you are asking interns to deliver sensitive information.

For more:
- here's a profile from TechWorld
- data storage: disks or tapes? Commentary

ALSO NOTED: Are you ready for e-proxies?; Firm launches new secure data destruction tool;

Mon, 09 Apr 2007 20:01:38 -0400

> Citigroup has decided to streamline its compliance operations. The bank was forced to really staff up due to some regulatory issues but now wants to rationalize it all. Makes a lot of sense. Article

> Are you ready for e-proxies? It will allow companies to save a lot during proxy season. New rules take effect July 1. Article

> Even Michael Oxley is unhappy with his law. He blames the PCAOB. Article

> Interesting compensation tidbits from proxies. Article

> SEC names Richard Sennett new chief accountant. Article

> Columnist says Chris Cox shares blame for exodus of listing with Sarbanes and Oxley. Column

> Firm launches new secure data destruction tool. Release

> Are more Fair Funds distributions in the offing? The SEC is going after Tenet Healthcare. It wants funds placed into a Fair Fund for distribution to harmed investors in accordance with Sarbanes-Oxley. Article

And finally... A funny Sarbox-related April Fool's day joke at Sun Microsystems.

Time to make sure your CFO is happy

Mon, 05 Mar 2007 19:01:39 -0500

We've spoken a bit about all the high-level CFO turnover recently. Well, it looks like it's going to get worse. In fact, according to a new survey from executive search firm Tatum, you should be prepared for record turnover in 2007. Recall that last year a record 2,302 CFOs left their positions by one measure. We all know the job is as hard as ever, but for the record here is the list of items that drive CFOs to leave: 37 percent say compliance and governance issues are the primary driver of turnover, 30 percent cite unreasonable expectations from board members and others, 13 percent cite work/life balance issues; 12 percent say their skills are not aligned with the business and just 6 percent cite inadequate IT support. I would venture that it is a blend of all these issues. So what to do? The survey found that 27 percent feel that additional resources such as specialized staff to handle new duties would reduce turnover, 25 percent cited deregulation (not something anyone can control and 23 percent cited more support from board members as the key to reduce turnover. The good news is that if a CFO can really prove herself or himself, they will logically be seen as a candidate to run the show someday. All eyes are on Citigroup.

For more:
- here's the survey release from Tatum

CFOs want out fast

Mon, 05 Feb 2007 19:01:39 -0500

Sallie Krawcheck of Citigroup and Alvaro De Molina of Bank of America are hardly the only CFOs who wanted out. Last year, 12 Fortune 50 CFOs opted to quit, and few would be surprised if the trend held for 2007. The issue is how much Sarbanes-Oxley had to do with it. By one account, because of Sarbox, CFOs now spend about one-third of their time on IT systems, paperwork, and board issues (often questions). What's lost is the "big picture" focus that often paved the way for CFOs to ascend to CEO. At the same, shareholder issues--which often are related somehow to Sarbox--have become more vexing. So the bottom line is that the job is now much more task and process oriented, with a lot of risk and little reward, in the words of De Molina. Some companies are adding chief accounting officers to ease the burden, which is a good move. Adding a chief compliance officer might also be wise. Both should report to the CFO.

For more:
- here's a Fortune article

Related Articles:
Should CFOs be stripped of all stock options? Report
The churn begins, turnover high for CFOs. Report