Corporations and securities brief ~ FBI investigates auto supplier Delphi
Amit Patel at 4:02 PM ET
[JURIST] Leading Friday's corporations and securities law news, the FBI [official website] has announced it has started an investigation into auto supplier, Delphi Corp. [corporate website], over improper accounting at the firm. Delphi, which had launched an internal investigation into its accounting practices after receiving subpoenas from the SEC [official website] and Department of Justice (DOJ) [official website], announced last month that it had improperly accounted for cash payments to former parent General Motors Corp [corporate website]. Delphi said it improperly accounted for $237 million in payments made to GM in 2000 and was reviewing the timing of the release of $45 million of reserves in the first quater of 2002 and recognition of an $18 million payment received from a customer in the fourth quarter of 2000. The FBI is coordinating its investigation with the SEC, DOJ, and the United States Postal inspectors. The Detroit News has more.
In other news...
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- MBIA Inc. [corporate website], the world's biggest bond insurer, announced New York Attorney General Eliot Spitzer [official website] and the SEC have asked for new information about the company's accounting practices. MBIA said the requests were supplements to subpoenas sent last year related to accounting for advisory fees and reserves for claims. Investigators also asked for documents about MBIA reinsurer, Channel Reinsurance Ltd. Read the MBIA press release. Bloomberg has more.
- The SEC has accused ex-Councilman Anthony Sudol III, 44, of Gilroy, California, with insider trading relating to allegations he tipped off his two brothers, Michael Sudol and Richard Sudol to pending acquisitions when he worked as a high-level manager at Cisco Systems Inc. Read the SEC litigation release and complaint [PDF]. The San Francisco Chronicle has more.
- MCI Inc. [corporate website] announced it will reopen merger talks with invited Qwest Communications Inc. [corporate website] after Qwest had raised its bid to nearly $9 billion. MCI had agreed to Verizon Communication's [corporate website] bid of $7.5 billion earlier this week. Qwest has not commented on the move and it is unclear whether the company will stick to the April 5 deadline it had set for MCI to accept its offer. Read the MCI press release. AP has more.
- Japan and Mexico will follow the European Union [official website] and Canada in imposing higher taxes on certain US goods after Congress failed to repeal the Byrd Amendment [text]. Under a WTO [official website] ruling, which found the amendment to be illegal [JURIST story], Japan has the right to impose extra taxes totalling $116 million. The two countries have not decided against which goods they will retaliate. Bloomberg has more.
- A source close to the American Insurance Group (AIG) [corporate website] investigation said regulators are looking at up to 20 different transactions, and that more deals could be added to the list. Regulators are said to be looking at other parties to deals AIG has made. AP has more.
- Peter Berman, the former comptroller of sports retailer Just for Feet Incorporated, agreed to pay $51,000 to settle charges with the SEC that he participated in a scheme that inflated income at the company. Berman agreed to accept a ban to serve as an offer or director of a public company. AP has more.
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