Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Wizard who wrote (13301)	8/4/2002 3:23:17 PM
From: Bill Harmond	Respond to of 57684

nytimes.com

To: Wizard who wrote (13301)	8/5/2002 2:46:13 AM
From: stockman_scott	Respond to of 57684

Policing Wall Street Lead Editorial The New York Times August 5, 2002 The White House and Congress have done an abrupt about-face about corporate malfeasance this summer, belatedly recognizing the need to crack down on financial chicanery in the executive suite. Whether the rush to reform is translated into a new era of stricter law enforcement now depends largely on whether the Securities and Exchange Commission can snap out of the coma it fell into during the first year of the Bush administration. The S.E.C., created in the aftermath of the 1929 market crash to protect the integrity of financial markets, was aptly described as "the investor's advocate" by William O. Douglas, a chairman of the commission in the 1930's before becoming a Supreme Court justice. When energetically managed, it serves both as Wall Street's cop and rule maker, regulating the stock markets and ensuring that companies that sell stock to the public provide accurate and timely financial reports. The commission can, and should, strike fear in the boardroom, as it did in the 1970's when Stanley Sporkin, a hard-charging chief of enforcement, brought high-profile cases against United Brands, Lockheed and Robert Vesco, an international financier. Until the recent wave of corporate abuses, President Bush and his S.E.C. chairman, Harvey Pitt, were singing from the deregulation hymnal and doing their best to weaken the commission. The S.E.C. today is badly in need of an infusion of money and manpower. Its 3,000 staff members represent a growth of 20 percent in the last decade, a time when its workload, by most measures, has more than doubled. The agency has been devastated by high turnover rates. It wasn't until last month — after the collapse of Enron and WorldCom and all the other corporate disasters — that Mr. Bush asked Congress for a still-insufficient $100 million increase to the S.E.C.'s budget. Mr. Pitt, who worked alongside Mr. Sporkin as the S.E.C.`s general counsel and later became a highly paid lawyer for the accounting industry, has presided over a flurry of enforcement activity in reaction to the scandals, but he has been far too timid in addressing some of the systemic problems that led to the betrayal of so many investors. Mr. Pitt has ordered the chief executives of major corporations to certify their companies' financial reports by Aug. 14. That's fine, but it doesn't begin to make up for his lax approach in regulating the practices of Wall Street firms and the accounting industry. We continue to believe that Mr. Pitt is ill suited to lead the S.E.C. during these critical days, but if Mr. Bush sticks with him, one measure of Mr. Pitt's leadership will be found in whether he appoints tough regulators to the new accounting oversight board created by Congress. Mr. Pitt must also strongly support the work of the commission's four operational divisions, all led by capable directors. The corporate finance division, charged with reviewing the filings of 15,000 public companies, is particularly overwhelmed. As the front line in detecting accounting irregularities, it needs a substantial increase in staff. Last year it reviewed only 16 percent of corporate reports it received. The market regulation division, which oversees the exchanges and brokers, needs to be more vigorous in fighting Wall Street's glaring conflicts of interest. These involve the corrupt allocation of initial public offering shares and the hyping of stocks by analysts to please banking clients. The investment management division regulates all types of investment vehicles. It should tighten oversight of the secretive world of hedge funds and require greater transparency on the part of mutual funds. The enforcement division investigates securities law violations and can bring civil cases. Its director, Stephen Cutler, is highly respected, and Mr. Pitt must allow him to vigorously pursue all cases, even such sensitive ones as the inquiry into Halliburton's accounting practices during Dick Cheney's tenure as chief executive. The corporate reform law's toughened criminal liabilities on executives who mislead investors will mean little if the S.E.C. fails to pursue such cases or does not refer them to federal prosecutors. At a time when more than half of American households are invested in the stock market, and a loss of faith in the integrity of Wall Street is a drag on the economy, it is imperative that the S.E.C. truly act as "the investor's advocate." nytimes.com

To: Wizard who wrote (13301)	8/7/2002 3:08:34 PM
From: stockman_scott	Respond to of 57684

Even in paradise, business barons end up jousting By Peter Delevett Mercury News Posted on Wed, Aug. 07, 2002 siliconvalley.com Ever wonder what Silicon Valley's rich do with all their money? Well, in at least one instance, they fly to Hawaii, build enormous mansions -- and sue each other. Gather round for a morality tale that's got tech tongues wagging. It all started when Sanford ``Sandy'' Robertson, perhaps the valley's most lauded investment banker, plunked down $3 million a few years back for an acre of oceanfront on the island of Hawaii. Robertson's plot was part of an exclusive enclave being carved out of the Rockefeller family's old Mauna Kea Resort. Before the late-1990s dot-com bubble burst, the resort's owners began auctioning off a handful of lots to the rich and famous. Besides Robertson -- who took public such valley heavyweights as Sun Microsystems and National Semiconductor -- homeowners in the area include Bob Wayman, Hewlett-Packard's chief financial officer; Jack Gifford, head of chip maker Maxim Integrated Products; and a gaggle of venture capitalists, including Norm Fogelsong of Institutional Venture Partners. ``It's a little bit Silicon Valley West,'' explains one homeowner. Robertson planned to build a cozy weekend getaway -- some 6,000 square feet, with five bedrooms, seven bathrooms, two swimming pools and a four-car garage. Estimated price tag: $10 million. And Robertson hired renowned Mexican architect Ricardo Legoretto, who designed San Jose's Tech Museum, to draw up the plans. The best-laid plans But though Robertson's dream digs got a thumbs up from Mauna Kea's design committee, the house was panned by Gifford and Fogelsong, who own lots on either side. So last summer, before Robertson broke ground, the duo sued, claiming Robertson's blueprint violated Mauna Kea's aesthetic guidelines. Among their beefs: The house would have a flat, not peaked, roof and would be painted burnt yellow instead of earth tones. Small stuff, seemingly. The suit was dismissed earlier this year after an arbitration panel ruled in Robertson's favor. Work on his home is under way. ``It's an unbelievable story of hubris gone bad,'' says one leading venture capitalist. ``Do you sue your neighbor because you don't like the house they're going to build?'' Another person says the three combatants have known each other for years and done deals together. Maybe the sudden hostility was due to a few too many mai tais. Gifford didn't return calls, and Robertson and Fogelsong both declined to comment. ``The terms of the settlement must remain confidential,'' sniffed Fogelsong, an early investor in Compaq Computer. Someone close to Robertson estimates he spent more than $700,000 on legal fees to defend himself. He's now suing Mauna Kea Properties to recoup those fees. (Mauna Kea officials were unavailable to comment.) And he counter-sued Gifford, who he claimed had also violated design guidelines, and won that case in arbitration. No hard feelings? Robertson's confidant says he has patched things up with Gifford, one of the valley's highest-paid executives, who recently completed his own $9 million home in Mauna Kea. Things are said to be chillier with Fogelsong, who in his suit said his Hawaiian home and lot would cost more than $10 million. But Fogelsong offered an odd olive branch. Shortly after the suit was dismissed, he asked Robertson to invest in a $100 million deal his venture firm was putting together, two people familiar with the situation say. Robertson declined, perhaps not surprisingly. But you've got to admire Fogelsong's chutzpah. ``The rich are different from you and me,'' F. Scott Fitzgerald wrote. Maybe some have so much money -- and are so used to getting what they want -- that they have to resort to lawyers instead of talking things out with their neighbors. -------------------------------------------------------- Peter Delevett's column appears Sunday and Wednesday. If you've got a scoop, e-mail pdelevett@sjmercury. com or call (408) 271-3638.