Author: jfortenberry@fortenberrylaw.com

An enjoyable article at BusinessWeekOnline–“This SEC Cop Means Business”–gives the inside story on William H. Donaldson, SEC Chairman, who took over on February 18th of this year. Another article at BusinessWeekOnline–“A Conversation with Bill Donaldson”–reports him as stating the following in regards to why he took the job at age 71:

“I ask myself why I took this job at this stage in my life. It’s because we’re at a pivotal point in the reestablishment of faith in the business and financial communities. I would like to be remembered for having an effect on that, for bringing everybody back to a sense of business integrity. There are alot of people out there, not just business people but also some of the gatekeepers — accountants, lawyers — where there has been a shift in ethics and morality, [thinking] that cutting corners a little bit is justified because “everybody else is doing it.” I hope [to] have an impact in righting that.”

Sutherland Asbill & Brennan LLP provides us with this very good article discussing the new incentive stock option proposed regulations issued June 9th by the IRS and discussed in previous posts here.

A very analytical article by David M. Gische and Jo Ann Abramson of Ross, Dixon & Bell LLP at Findlaw.com: “Corporate Fiduciary Liability Claims In The Post-Enron Era.” The article provides a detailed discussion of the class-action litigation that is going on in the ERISA arena against ERISA plan fiduciaries of 401(k) plans. The article gives a rundown of the Enron, Global Crossing, WorldCom, and Qwest cases which are making their way through the courts and provides a discussion about the parallel securities law claims which may provide double exposure for insurers, if the ERISA claims succeed.

Another article by Jason Hoppin for the Recorder at Law.com–“A Matter of Trust: Stung by corporate collapses, workers look to ERISA for relief“–also discusses the “burgeoning arena of ERISA cases filed on behalf of company employees who lose their retirement savings when corporate scandals hit.” He calls it “an oasis for plaintiffs’ lawyers, where you can make new law, the bar is friendly on both sides of the aisle, there are few competitors and, of course, huge recoveries are the norm.”

CorpLawBlog at a post here and Securities Beacon have also reported on the subject today.

This article by Jill Elswick for BenefitNews.com–“DOL develops educational resources for fiduciaries”–comments on the ERISA Advisory Council’s Working Group on Fiduciary Education and Training and its educational initiative to help fiduciaries comply with the myriad requirements of ERISA. The Group’s final report can be accessed here. The article also reports that the Foundation for Fiduciary Studies has released 27 “prudent investment practices”–each substantiated with existing legislation, case law, and regulatory opinion letters and vetted by the American Institute of Certified Public Accountants (AICPA)–into the public domain for comment here. Finally, the article discusses a new program for fiduciary education offered by New York Life Investment Management’s (NYLIM) retirement plan services division which you can read about here.

This article by David Firestone for the New York Times–“Fate of Tax Credits Rests With Houses Divided”–reports on the political and philosophical divide between the Senate and the House regarding bills introduced which would provide tax credits for low-income families.

The words of Federal Reserve Chairman Alan Greenspan at a recent congressional hearing, according to this report by Sue Kirchhoff for USA Today.com: “Aging population makes this deficit scarier.” The article addresses the concerns of economists over rising government deficits in the face of demographic concerns over the aging baby boomer population which will be tapping into Social Security and Medicare in the years to come. The article reports Paul Hewitt, director of the global aging initiative at the Center for Strategic and International Studies, as saying that the USA will have the “slowest rising median age of any country for the next 50 years.” He goes on to say that the “boomers leaving will create a giant sucking sound in the workforce.”

Today’s Federal Register is here.

“Avoiding Pension Plan Time Bombs”: this article by Fei Mei Chan for Forbes.com discusses the pension plan funding issues facing S&P 500 companies.

Vinod Khosla speaks out for stock option expensing in this article for SiliconValley.com: “Expensing options at big firms could boost innovation at startups.”

AccountingWeb.com reports on congressional support for the “Broad-Based Stock Option Plan Transparency Act” which was introduced in March by Rep. David Dreier (R-Calif.) and Rep. Anna Eshoo (D-Calif.): “Congress Gains Support in Stock Option Fight.”

This article by John Snow for the Business Journal–“Humana rolls out swipe card”–reports that Humana Inc., in conjunction with Evolution Benefits Inc., MasterCard International and BankFirst, is offering a combined identification card and prepaid MasterCard for accessing funds in flexible spending accounts. The new program takes advantage of a recent ruling by the Internal Revenue Service, Revenue Ruling 2003-43 (via Benefitslink), which “blesses” such programs. (The ruling was discussed in previous posts here.) The article reports Humana Inc. as stating that a 60% increase in flexible spending account enrollment occurred as a result of adopting the “swipe card” program.

The PBGC provides this Interest Rate Update.

This CCH article discusses comments made by Don McPartland of the IRS’s Large and Mid-Size Business (LMSB) Division during the IRS Research Conference held in Washington, D.C. on June 11: “Stock Options in Cost-Sharing Arrangements Represent Dilemma for IRS.” The article highlights the complexities with stock option expensing for foreign-based operations.

The online edition of the Wall Street Journal (subscription required) has this article by Judith Burns: “Call for More Certifications Leaves Companies Confused.” The article reports on the history behind the confusion over the 906 certification, and reports Paula Dubberly, an associate director in the SEC’s corporation finance division, as stating a “stronger case could be made to certify 11-Ks” than the 8-K which is also under debate as well. The article also reports Dial Corp.’s general counsel, Christopher Littlefield, as saying that they are proceeding as if the 906 certification is required for the 11-K due to comments made by SEC officials at a public meeting in May, even though some outside lawyers said it wasn’t necessary. The 11-K 906 certification issue has been discussed in previous posts which you can access here.

Piper Rudnick has posted an excellent summary and analysis of the Jobs and Growth Tax Relief Reconciliation Act of 2003.