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To: Bear Down who wrote (9969)	6/7/2002 3:03:32 PM
From: StockDung	Respond to of 19428

New Hampshire regulators talking to SEC about Tyco BOSTON, June 7 (Reuters) - In a possible sign of deepening troubles at Tyco International Ltd. <TYC.N>, New Hampshire securities regulators said on Friday they are holding talks with the U.S. Securities and Exchange Commission about the conglomerate. "I can tell you we are in discussions with the SEC," New Hampshire Director of Securities Regulation Mark Connolly told Reuters when asked if his office was investigating Tyco, which is run from offices in Exeter, New Hampshire, although the company is based in Bermuda. "We're in contact with the SEC but we are not undertaking any investigation of Tyco at this time. I'm not able to comment further," he added. Tyco shares plunged almost 30 percent to their lowest level in nearly six years in morning trade on the New York Stock Exchange, down $4.21 to $10.39. The drop accelerated a precipitous decline that has erased nearly $100 billion in shareholder money since the beginning of the year -- more than was lost in the collapse of energy giant Enron Corp. <ENRNQ.PK>. 06/07/02 14:42 ET

To: Bear Down who wrote (9969)	6/7/2002 5:10:31 PM
From: StockDung	Read Replies (1) \| Respond to of 19428

Adelphia kept 2 sets of books, inflated subs-WSJ NEW YORK, June 7 (Reuters) - Investigators have found that Adelphia Communications Corp. <ADELA.PK> kept two sets of accounting books and inflated its subscriber data, raising concerns the firm's questionable accounting practices may be broader than originally thought, the Wall Street Journal reported. The inquiry is also focusing heavily on the role Deloitte & Touche 1/8DLTE.UL 3/8 played as Adelphia's auditor, the report added, with regulators taking a close look at what Deloitte knew about certain transactions that led to the company's plunge. On its online edition Friday, the Journal said investigators had uncovered evidence that Adelphia, the No. 6 U.S. cable company, kept two sets of books for its capital expenditures, one of which was shown to Wall Street and boosted the amount the company spent to upgrade its cable systems. Citing people familiar with the situation, the Journal said Adelphia inflated the number of its cable television subscriber by between 400,000 and 500,000, or as much as 10 percent of the company's total customer base. One source told the Journal that the SEC is concerned that Deloitte "knew things and didn't bring them to the board's attention," this person said. Adelphia shares were delisted on Monday following months of uncertainty after disclosing in March multibillion-dollar off-balance sheet financing deals involving the founding Rigas family. With the bankruptcy ghost haunting Adelphia, the company is currently being probed by the Securities and Exchange Commission (SEC) and two federal grand juries over possible accounting irregularities. 06/07/02 03:58 ET

To: Bear Down who wrote (9969)	6/7/2002 6:49:10 PM
From: StockDung	Read Replies (1) \| Respond to of 19428

When Options Count, Profit Slump Widens: Taking Stock (Update2) By Perri Colley McKinney and Rob Urban New York, June 7 (Bloomberg) -- Cisco Systems Inc. reported $21 million in income from operations last year. The biggest networking-equipment maker would have had a loss of $2.8 billion had it included the cost of stock options granted to employees, according to research by Lehman Brothers Inc. Now relegated to footnotes in annual reports, option expenses may be included in corporate bottom lines -- slashing profits for many companies. Federal Reserve Chairman Alan Greenspan and investors including Berkshire Hathaway Inc.'s Warren Buffett are among those pressing for more rigorous accounting. The U.S. Senate is considering a bill that would require companies to record the cost of executives' options. Standard & Poor's said last month it will count all employee options when it calculates earnings for S&P 500 Index members. ``The American shareholder has paid a big price'' for corporate option programs, said John C. Bogle, founder of mutual fund company Vanguard Group and president of Bogle Financial Markets Research Center. ``The idea that stock options shouldn't be expensed is so absurd it takes your breath away.'' Options give employees the right to purchase company stock in the future at a fixed price, allowing them to benefit from increases in the shares. Yahoo! Inc., Texas Instruments Inc. and Cisco had almost $5 billion in combined option costs last year. Had companies subtracted the cost of stock options from profits in 2001, S&P 500 earnings would have slumped 21 percent rather than 18 percent, according to a study by Charles Reinhard and Jeffrey Applegate, strategists at Lehman. That's bad news for a market dogged by concern that stock prices already reflect an overly optimistic view of earnings. The S&P 500 is headed for its third annual decline, with a year-to- date loss of 10 percent. Wider Losses The S&P 500 sells for 23 times 2001 earnings, according to Thomson First Call profit data used by Reinhard. The valuation increases to 26 when options costs are included, he said. Yahoo would have posted an operating loss of $1.6 billion last year rather than $96 million if the owner of the world's most- used group of Internet sites had included options, according to the Lehman study. The 2001 loss for semiconductor maker Texas Instruments would have doubled from $582 million, and data-services seller Unisys Corp. would have had almost 20 times the $5 million loss it reported, according to the Lehman study. Fifteen S&P 500 companies had stock-option expenses that exceeded operating income, and 12 were technology or telecommunications companies, Lehman said. Cisco was the most extreme example. Options costs represented 13,000 percent of operating income. Requirements S&P 500 companies granted options on 6.3 billion shares in 2001, at a cost of $72 billion, Lehman's Reinhard said. That's up from $57 billion of options expense in 2000 and $32 billion in 1999. While granting stock options doesn't generally cause an out- of-pocket expense to companies, the options reduce per-share profits by increasing the number of shares outstanding at the time they are exercised. Companies including Microsoft Corp., Oracle Corp. and Home Depot Inc. have opposed reporting the costs in earnings, saying the options are difficult to value because many never turn into shares. In 1994, the Financial Accounting Standards Board held public hearings on a proposal that would have required companies to expense stock options. After aggressive lobbying by high- technology companies and a threat by Congress to take away FASB's rule-making authority, the group passed a compromise rule that requires companies to include option costs in the footnotes of annual reports. Only two S&P 500 members, grocer Winn-Dixie Store Inc. and planemaker Boeing Co., factor options into per-share earnings. Neither had options expenses last year. Changes Coming Whatever the difficulty, Goldman Sachs Group Inc. Chief Executive Officer Henry Paulson said this week he expects U.S. companies will have to expense employee stock options as standards are tightened to restore investor trust. Accounting scrutiny snowballed after the collapse of energy trader Enron Corp. Federal Chairman Greenspan has also made the case, and senators Carl Levin and John McCain introduced a bill earlier this year that would deny tax benefits to companies that don't expense stock options. Reinhard and Applegate say changes aren't far away. They predict FASB will require all U.S. companies to subtract stock options from earnings within the next two years. Standard & Poor's said last month it will evaluate companies by their ``core earnings,'' which will include the cost of options and exclude pension gains. The changes came in response to ``investors' concern about the reliability of corporate reporting,'' said David Blitzer, chief investment strategist. Options costs alone could lower core earnings by 10 percent, according to Standard & Poor's. The hit to earnings could worsen an already dwindling profit outlook. Analysts surveyed by Thomson First Call have trimmed their 2002 S&P 500 earnings-growth forecast to 14.7 percent from 16.5 percent as of April 1, as the economy's rebound slows. The good news for shareholders is that once stock options appear on income statements, companies may be stingier in granting them, investors say, forcing executives to focus more on improving their business rather than driving up their stock price.

To: Bear Down who wrote (9969)	6/10/2002 9:47:03 AM
From: StockDung	Respond to of 19428

Former Member of Securities & Exchange Commission Management Becomes First Ex-SEC Manager to Call for Present SEC Chairman Harvey Pitt to Resign MIAMI, June 10 /PRNewswire/ -- In a move breaking ranks with the long-standing closed club of attorneys who are management veterans from the US Securities & Exchange Commission, Florida attorney Gary Langan Goodenow of Miami, Florida, became the first such veteran to call publicly for present SEC Chairman, Harvey Pitt, to resign. In an Op/Ed article in the June 7, 2002 edition of The Miami Herald, Goodenow alleged that Pitt's private meetings with his former high profile clients in his SEC office, clients presently under investigation by the SEC Division of Enforcement, improperly compromises the deterrence of securities fraud. Pointing out that the SEC is a small agency that cannot ever prosecute all fraud, Goodenow highlights that the ability of a SEC staff attorney to investigate and prosecute a case against any former client of Mr. Pitt's, is grossly compromised by either the appearance or reality that those former clients have direct access to meet privately with Mr. Pitt. Goodenow contrasted these private meetings with Mr. Pitt's actions at a recent "investors' summit". There, Mr. Pitt would only take written questions from the investing public and then he decided those he would deign to answer. While at the SEC enforcement division in Miami, Mr. Goodenow climbed the ranks from staff attorney, to branch chief, to Senior Litigation Counsel and finally to Senior Counsel, where he made the final recommendation on those cases the office would investigate or prosecute, and those it would decline. He is presently in private practice, and he can be reached at goodenow@bellsouth.net and 305-757-5235. The article is available at The Miami Herald web site (http://www.miami.com/mld/miami/3416593.htm). Contact: Gary Langan Goodenow, 305-757-5235 goodenow@bellsouth.net This release was issued through eReleases.com - Your Source for Affordable PR. For more information, visit ereleases.com. MAKE YOUR OPINION COUNT - Click Here tbutton.prnewswire.com SOURCE Gary Langan Goodenow CO: Securities & Exchange Commission ST: Florida SU: LAW prnewswire.com 06/10/2002 08:44 EDT