The Shadow Chancellor's Notebook by Orlando Plumbe

Greenspan predicts US governance revamp

Link: FT.com / World / US - Greenspan predicts US governance revamp.

Alan Greenspan, former chairman of the US Federal Reserve, predicted yesterday the US would make "changes" to the burdensome financial and corporate governance requirements driving companies out of US markets.

WSJ.com - Stock Activism's Latest Weapon

Link: WSJ.com - Stock Activism's Latest Weapon.

For years, shareholder activists have tried to change American corporations by proposing resolutions at annual meetings. Although many have passed, they typically have taken the form of nonbinding advisory resolutions, and directors often ignore them. Now a few corporate-governance advocates are pushing a more radical approach: amending companies' bylaws, the rules governing a corporation's internal affairs.

Law.com - Ken Starr Signs On for Constitutional Challenge to SOX

Link: Law.com - Ken Starr Signs On for Constitutional Challenge to SOX.

A law that reshaped the accounting industry after a wave of corporate scandals is being challenged on constitutional grounds by pro-business conservatives. Their big-guns legal team includes Kenneth Starr, best known as the special prosecutor in the Monica Lewinsky affair. Bitterly opposed to the sweeping anti-fraud law, they are challenging the board it established to oversee the accounting industry, arguing that it violates the Constitution's mandated separation of powers among the three branches of government.

Deferred Prosecution Deal Raises Objections

Link: Deferred Prosecution Deal Raises Objections.

Attorneys defending the indicted former employees or partners of these companies complain that the ever more onerous terms contained in deferred prosecutions prevent them from effectively representing their clients. "A problem is that there are no standards governing what terms are appropriate in these agreements," said Stephanie Martz, director of the White Collar Crime Project of the National Association of Criminal Defense Lawyers. "It's whatever prosecutors can get away with, and that's a lot, because companies trying to save themselves are willing to do anything, and that starts with cutting government-targeted employees loose and not paying their lawyers," Martz said.

WSJ.com - Heard on the Street

Link: WSJ.com - Heard on the Street.

Federal securities regulators have a message for hedge funds thinking of using a clever maneuver to influence corporate mergers: Don't buy up shares to vote on deals if you're not at risk of losing money. The Securities and Exchange Commission is considering bringing a civil enforcement action against Perry, a big New York hedge fund, which tried such a maneuver, according to a letter Perry sent its investors this week.

SEC to Propose Overhaul of Rules On Executive Pay

Link: WSJ.com - SEC to Propose Overhaul of Rules On Executive Pay.

The Securities and Exchange Commission, responding to rising criticism of soaring -- and partially hidden -- executive pay, is poised to propose the most sweeping overhaul of pay disclosure rules in 14 years, seeking to push companies to divulge much more about their top executives' perquisites, retirement benefits and total compensation.

This is Overdue - SEC Stakes Out Middle Ground On Fines Policy

Link: WSJ.com - SEC Stakes Out Middle Ground On Fines Policy.

The Securities and Exchange Commission, seeking to defuse a controversy about its use of big fines to punish corporate wrongdoing, publicly laid out a set of guidelines to help determine whether and how much to fine companies engaged in financial fraud.

WSJ.com - Former Qwest CEO Nacchio Is Indicted by Grand Jury

Link: WSJ.com - Former Qwest CEO Nacchio Is Indicted by Grand Jury.

Former Qwest Communications International Inc. chief executive Joseph Nacchio was indicted Tuesday on 42 counts of insider trading in the culmination of a three-year investigation of possible wrongdoing at the company. Prosecutors plan to seek $100 million in restitution.

Who Is Watching the Watchdog?

Link: WSJ.com - Who Is Watching the Watchdog?.

But outside the courtroom, some are discovering that the SEC's hedge fund scheme is actually so broad it could likely ensnare two other investing segments crucial to dynamic growth: venture capital and private equity. Last year, for example, the National Venture Capital Association (NVCA) wrote to the SEC that the hedge fund regulations "create a risk of future burdensome regulation on venture capital."

SEC's Cox Wants Simpler Rules, More Competition for Accounting

Link: WSJ.com - SEC's Cox Wants Simpler Rules, More Competition for Accounting.

Addressing a meeting of the American Institute of Certified Public Accountants, Mr. Cox called for clearer, more straightforward accounting rules, saying that would benefit investors, public companies and accountants.

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SEC Commissioner Paul Atkins, who also addressed the meeting, acknowledged that regulators were surprised by the cost of internal-control rules that took effect for the largest U.S. companies last year, and he said he hopes such costs will be lower this year.