SEC appoints top legal officer
Brian Cartwright, a law school and, later, law firm colleague of Securities and Exchange Commission Chairman Christopher Cox, was named general counsel at the regulator.
Cartwright, 58, a partner at Latham & Watkins, was due to join the SEC on January 23. He will replace Giovanni Prezioso, 48, who announced in November that he would leave the agency. Both Cox and Cartwright attended Harvard Law School and worked together at Latham. Cartwright has overseen Latham's public company practice in the United States.
In addition to representing the SEC in any court action, the general counsel evaluates the legality of any new rules proposed by the agency and also acts as an advisor to the SEC's five commissioners on any enforcement actions.
Cox still has four major vacancies to fill at the SEC: directors for the agency's market regulation and investment management divisions, the chief accountant, and the head of the Public Company Accounting Oversight Board.
Firms settle federal travel charge
Big Four firms Ernst & Young and KPMG, along with consulting concerns BearingPoint and Booz Allen Hamilton, agreed to pay $25.6 million to settle claims that they had overcharged the government for travel expenses. According to published reports, BearingPoint, the former KPMG Consulting, agreed to pay $15 million, Ernst & Young $4.47 million, Booz Allen $3.37 million and KPMG $2.77 million. In 2001, the government charged the quartet with failing to disclose the rebates they had received for travel expenses that had been billed to the government. The suit was similar to one settled by Big Four firm PricewaterhouseCoopers last year for roughly $42 million.
BMC merges in McDade Abbott
Bolstering its presence in the Philadelphia market, BMC, a CPA and business consulting firm formerly known as Beard Miller Co., has merged in Paoli, Pa.-based McDade Abbott. Terms were not disclosed. The merger adds three partners and nine staff to the combined entity, which going forward will operate under the BMC brand. Joining BMC will be Robert G. Finn, Joseph C. Sassa III and Charles W. Shug.
The 80-year-old firm of McDade Abbott provides audit, accounting, tax and consulting services to large and small companies in the financial services, insurance, manufacturing and health care sectors. BMC ranked No. 48 on Accounting Today's 2005 Top 100 Firms list with revenues of $34.7 million.
Enron's Causey pleads guilty
Enron Corp.'s former chief accounting officer figures to be the government's star witness after pleading guilty to securities fraud and agreeing to testify against Enron founder Ken Lay and former chief executive Jeffrey Skilling.
Richard Causey, 45, will serve seven years in prison and forfeit $1.25 million to the government. His sentence can be reduced to five years if the government is happy with his cooperation. Causey had faced 36 counts of conspiracy, wire fraud, securities fraud, insider trading, money laundering and making false statements on financial reports. All three men were scheduled to go to trial on Jan. 17 and had pleaded not guilty to charges related to the company's 2001 bankruptcy.
Causey was responsible for the company's public accounting statements, reported directly to Skilling for years, and took part in conference calls with Lay in the fall of 2001. Unlike former Enron finance chief Andrew Fastow, who already struck a deal with the government and will testify, Causey did not directly profit from any of Enron's alleged side deals and suspect accounting practices. Lay, Skilling and Causey had a joint defense agreement, meaning they agreed to share information for trial. A lawyer for Skilling has already said that he will ask the court to delay the trial for up to two months.
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