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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: SEC-ond-chance who wrote (11290)	3/18/2003 5:35:56 PM
From: StockDung	Respond to of 19428

NYPOST.COM:NOT ONE RED CENT By ERIC MOSKOWITZ March 18, 2003 -- Regulators aren't the only ones playing hardball with Wall Street's top investment banks. Insurers are saying "get lost" to banks aiming to pass on massive fraud liability. Both the insurers and the banks are hinting they'd like to settle their differences over current and future fines, which could cost $5 billion altogether, say lawyers close to the situation. Wall Street firms may put in insurance claims for as much as $2 billion of that - but insurers are saying they won't give the firms a penny. The insurance companies are planning for a multi-year showdown with banks, who hope to get reimbursed for fines paid to state and federal regulators for a host of IPO and research infractions. "Investment banks are expecting to recoup much of these fines, but in our mind their conduct was intentional and therefore not insurable," said lawyer John McCarrick, a partner at Duane Morris, which is representing Lloyd's of London. Lloyd's recently quit the Wall Street insurance business, where it insured Credit Suisse First Boston, Morgan Stanley, Lehman Bros. and Thomas Weisel Partners, among others. But the bank may still receive claims from the four firms under their policies, he said. While there are a number of lawsuit land mines out there for Wall Street firms - like Enron - many firms face two looming payouts: one for issuing conflicted research on underwriting clients, and one related to widespread IPO laddering and spinning antics. The research settlement language is being hammered out, and regulators say it should be finalized by the end of March. The prospective agreement calls for 10 Wall Street firms to separate banking and research and pay a total $1.435 billion in fines - though securities firms quietly say they hope to recoup up to 40 percent of that fine. Wall Street firms will then have to focus on the 300-plus civil lawsuits that have been lumped together in federal court under Judge Shira Schendlin. The big three bull market underwriters - CSFB, Morgan Stanley and Goldman Sachs - and, to a lesser extent, Merrill Lynch, could be responsible for as much as 70 percent of the settlement amount when all is said and done, say insurers. CSFB, Merrill Lynch and Morgan Stanley declined to comment, as did lawyers for CSFB and Morgan Stanley. Calls into the two other major Wall Street insurers - American International Group Inc. and Chubb - were not returned. The battle between the banks and insurers may, in the long run, make it harder for Wall Street firms to get insurance for themselves or "D&O" policies for their directors and officers. "These firms already are dangerous insurance risks," said McCarrick. "If Wall Street is aggressive in terms of seeking policy recoveries, they may discover that insurers won't provide any type of insurance to the banks, including D&O insurance." Wall Street's mum on its plan of attack, but insurers think they know what to expect. "Banks are probably thinking the reimbursable pot is so large that if [they] beat up on insurers and get even 20 percent, it will be worth it," said one securities-industry insurance executive, who requested anonymity. "We're ready for them."

To: SEC-ond-chance who wrote (11290)	3/19/2003 10:43:22 AM
From: StockDung	Respond to of 19428

HealthSouth, Chief Scrushy Accused of `Massive' Fraud by SEC By Judy Mathewson Washington, March 19 (Bloomberg) -- HealthSouth Corp., the nation's biggest U.S. operator of rehabilitation hospitals, and Chief Executive Officer Richard M. Scrushy committed a ``massive'' accounting fraud, the Securities and Exchange Commission charged. The SEC alleged in a lawsuit today that since 1999, HealthSouth overstated its earnings by at least $1.4 billion at Scrushy's insistence in order to meet or beat Wall Street earnings expectations. The false increases in earnings were matched by false increases in HealthSouth's assets, according to an SEC press release. Scrushy also ``knew or was reckless in not knowing'' that the companies' financial statements were wrong when he certified them, the SEC said. Scrushy's lawyer could not immediately be located for comment. HealthSouth's spokesman Jason Brown did not immediately return a call seeking comment. ©2003 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.