[JURIST] In Tuesday's corporations and securities law news, the SEC announced American International Group Inc. (AIG), the world's largest insurance company, has agreed to pay $126 million to settle charges it helped companies fraudulently inflate earnings. AIG will pay a fine of $80 million and repay $46 million in ill-gotten gains plus interest and also agreed to appoint an independent consultant to review business transactions. The settlement covers the Justice Department's related criminal investigation. Read the SEC press release here. Read the AIG press release here. Read the SEC litigation release and complaint [PDF] in the matter. Reuters has more.
In other news, the SEC has upgraded its investigation into Pro-Pharmaceuticals from an informal inquiry to a formal probe. The investigation relates to accusations that false and misleading statements about the company were made, perhaps by its own officials. Read Pro-Pharmaceuticals reaction to the change in the investigation here [PDF]. AP has more…. As previously reported on JURIST's Paper Chase, the SEC announced the extension of its deadline for smaller companies to get into compliance with one of the key provisions of the Sarbanes-Oxley Act [PDF]. Read the SEC press release here. The Street.com has more. In other Sarbanes-Oxley news, as previously reported on JURIST's Paper Chase, a federal district judge has upheld the constitutionality of the Sarbanes-Oxley Act [PDF] against a challenge by former HealthSouth CEO Richard Scrushy, the first executive charged under the act last year for his alleged oversight of a scheme to restate the companies by almost $2.7 billion. View the indictment [PDF] against Scrushy, who is free on $10 million bond. Filings in the case are available here. AP has more…. Federal authorities handed down indictments against three former El Paso Corp. workers, one former Dynegy employee and one from Reliant Energy for collusion in reporting fictitious trading data to trade publications which artificially moved the price of natural gas up and down. The Houston Chronicle has more…. Bankruptcy Judge Judith Fitzgerald approved Halliburton's KBR unit's $1.5 billion agreement with insurance companies which will allow the subsidiary to emerge from bankruptcy by year's end. Read the KBR press release announcing the approval here. The Houston Chronicle has more…. As previously reported on JURIST's Paper Chase, the US Supreme Court ruled that the damages cap of $1,000 on recoveries under the Truth in Lending Act remained unchanged when Congress changed other TILA terms in 1995. Read the opinion here [PDF]. AP has more.
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