March 16, 2005

They Finally Got Their Man!

Former WorldCom CEO Bernie Ebbers was finally found guilty for his role in the massive fraud on his watch, as a slow-moving jury found him guilty yesterday on all counts. The verdict was a major victory for Justice Department prosecutors who spent nearly three years investigating the $11 billion fraud. Here is a Reuters article that includes my over-the-top quote on this important conviction.

Many of you will remember that the desire for reform legislation had all but died in Congress in mid-summer ’02 until WorldCom collapsed. Then, within a few short weeks Sarbanes-Oxley was enacted, capped by an unanimous vote in the Senate. All of us can thank Bernie for the job security and late nights in the office…

CalPERS Changes Its Voting Policies

As they indicated they would do late last year, CalPERS modifed its proxy voting guidelines regarding non-audit services. Under last year’s controversial guidelines, CalPERS automatically withheld its proxy votes from all members of audit committees that hired outside auditors to perform non-audit services.

Under the new guidelines, effective for this proxy season, CalPERS intends to withhold support for audit firms, rather than individual directors. However, CalPERS would retain power to seek the removal of a director in cases where “egregious” conflicts of interest have occurred.

This LA Times article states, “Switching to the new criteria should lead CalPERS to withhold votes against auditors at only about 5% of the companies in which it owns stock, CalPERS staff estimated. Auditors would be opposed by CalPERS if they were found to violate protocols outlined in proposed audit independence rules being drafted by the Public Company Accounting Oversight Board set up by the Sarbanes-Oxley Act of 2002.”

Job Choice & Changes

With my unique background (trifecta experience of law firm, inhouse and government), I often get asked for my advice about job changes and opportunities. To help those mulling their prospects – either within their present organization or outside – I have compiled some materials in our new “Job Choices/Changes” Practice Area.