Corporations and securities brief ~ KPMG settles with SEC over Xerox charges News
Corporations and securities brief ~ KPMG settles with SEC over Xerox charges

[JURIST] Leading Wednesday's corporations and securities law news, KPMG LLP [corporate website], the US unit of accounting firm KPMG International [corporate website], has agreed to pay $22.5 million to settle with the SEC [official website] over charges that it allowed Xerox Corp. [corporate website] to manipulate its accounting practices to close a $3 billion gap between actual operating results and the results reported to the investing public. The settlement resolves the civil suit brought by the agency which implicated KPMG and certain partners in the accounting fraud. KPMG will pay a $10 million civil fine, $9.8 million in restitution, and $2.6 million in interest. KPMG will neither admit nor deny wrongdoing but will make a series of reforms to prevent future violations of securities laws. Read the KPMG LLP press release [PDF]. Read the SEC press release, litigation release, and administrative proceeding [PDF]. AP has more.

In other news…

  • Doral Financial Corp. [corporate website] announced the SEC has started an informal investigation into the company's planned financial restatements and other issues concerning its valuation of interest-only securities. Doral will cooperate fully with the inquiry. Read the Doral press release. The announcement comes a day after Doral said it would reduce past earnings by $435 million to account for the overvaluation of certain interest-only securities. Read the Doral press release. AP has more.
  • Agrochemical company Monsanto Co. [corporate website] announced it has received a subpoena from the Illinois Attorney General for information related to its pricing and licensing of genetically modified seeds. Monsanto said the inquiry is similar to requests made in the past. Read the Monsanto press release. AP has more.
  • Enron [corporate website; JURIST Hot Topic news archive] chief executive Stephen Cooper will reopen negotiations to sell Portland General Electric (PGE) [corporate website] in talks with Oregon Governor Ted Kulongoski [official website], Portland Mayor Tom Potter [official website] and representatives of Oregon Mutual Utility Development Inc [advocacy website]. The new negotiations are result of Enron's failed attempts to sell the utility to the Texas Pacific Group after Oregon's utility regulators, Oregon Public Utility Commission [official website], quashed the deal [Oregon Public Utility Commission documents]. The city of Portland is attempting to step directly into the deal with a $2.35 billion offer, matching the offer made by Texas Pacific Group. However, Cooper has indicated the company is looking for more money this time around and may only be interested in selling stock, not assets. If negotiations fail, Enron may give its creditors stock in PGE and let financial markets decide what the company is worth. The Oregonian has more.
  • US Airways Group Inc. [corporate website] announced it is in advanced negotiations with America West [corporate website] to merge thereby creating a national low-cost airline that could compete with discount rivals and also complement each other geographically. US Airways is planning to emerge from bankruptcy court protection later this year. AP has more.
  • The CEO's of mortgage giants Fannie Mae [official website] and Freddie Mac told the Senate Banking Committee [official website] today that overregulation combined with a severe reduction of their multibillion-dollar portfolio holdings will hurt the US housing market. The moves could cut off billions of dollars from investors who help make housing more affordable for moderate-income Americans. Read the prepared testimony of Fannie Mae CEO Daniel Mudd. AP has more.
  • The Delaware Supreme Court [official website] has upheld a a Chancery Court ruling against media magnate Conrad Black. The Chancery Court ruling blocked Black's plan to sell his control of his publisher Hollinger Inc. [corporate website] to the Barclay Brothers, and found that Black violated his duties at Hollinger. The Canadian Press has more.
  • The SEC announced a settlement with four people over insider trading charges. The charges stem from a Florida woman's tips to her husband who later told two others about upcoming corporate acquisitions that she learned about while working at Deloitte & Touche and another public auditing firm more than five years ago. The four will pay a total of $1.27 million to settle the charges. Read the SEC litigation release and complaint [PDF]. Dow Jones has more.

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THIS DAY @ LAW

Indian National Congress founded

The Indian National Congress (INC) was founded on December 28, 1885 in Bombay (now Mumbai), India. In subsequent decades, the so-called Congress Party would advocate for Indian independence from the UK, which was eventually achieved in 1947. The first Prime Minister of independent India, Jawaharlal Nehru, was elected as a member of the INC. Learn more about the history and founding of the Indian National Congress.

Congress recognized Pledge of Allegiance

On December 28, 1945, Congress officially recognized the Pledge of Allegiance and encouraged its recitation in schools. The Pledge was supposedly written in 1892 by Francis Bellamy, a Baptist minister, to celebrate the 400th anniversary of Columbus Day. The words “under God” were added by Congress in 1954. The revised version of the Pledge was the subject of litigation before the United States Supreme Court originally brought by Michael Newdow, a parent who unsuccessfully objected to his daughter's school district policy requiring daily recitation of the Pledge. The court ruled that Newdow had no standing.

Nepal ends monarchy, establishes republic

On December 28, 2007, the Kingdom of Nepal's interim parliament ended the country's monarchy and established the Republic of Nepal. Free elections were held on April 10 of the following year to elect a Constituent Assembly.

Learn more about the rise of democracy in Nepal.