Off the Books

The SEC's ''scandal scorecard'' during the tenure of departing chief accountant Donald Nicolaisen.

Donald Nicolaisen, chief accountant for the Securities and Exchange Commission, is stepping down this month to return to the private sector.

He has served during one of the most active periods in the history of the SEC. During his tenure, Nicolaisen played a prominent role in the implementation of Section 404 of the Sarbanes-Oxley Act of 2002, especially in the SEC’s decision to postpone the effective date several times. He also backed the Financial Accounting Standards Board’s controversial efforts to require the expensing of stock options.

Nicolaisen says that, though he is pleased with the work he has done, there is still unfinished business at the SEC. “[There is a] need to reduce the complexity of virtually every aspect of financial reporting, and to increase transparency,” he says, noting that such reform will require support from both FASB and the Public Company Accounting Oversight Board.

Nicolaisen’s decision to step down was influenced by his wish to eliminate his weekly commute from his home in New Jersey, he says. The chief accountant, who was appointed by former SEC chairman William Donaldson in 2003, following a rash of corporate scandals, looks back on his contribution with pride. “I was delighted to be part of the team that helped calm that situation,” he says. “I think we’ve been successful in returning a degree of confidence to the capital markets and improving financial reporting.” — Craig Schneider

Scandal Scorecard
Who, Former Position Status Prison Sentence
WorldCom
Bernard Ebbers
CEO
Guilty verdict 25 years
Scott Sullivan
CFO
Pleaded guilty 5 years
David Myers
Controller
Pleaded guilty 1 year, 1 day
Buford Yates
Accounting Director
Pleaded guilty 1 year, 1 day
Enron
Kenneth Lay
Chairman
Awaiting trial
Jeffrey Skilling
CEO
Awaiting trial
Andrew Fastow
CFO
Pleaded guilty 10 years
Lea Fastow
Assistant Treasurer
Pleaded guilty 1 year
Michael Kopper
Managing Director
Pleaded guilty Awaiting sentencing
Adelphia
John J. Rigas
Founder
Guilty verdict 15 years
Timothy Rigas
CFO
Guilty verdict 20 years
Michael Rigas
EVP
Not-guilty verdict*
James R. Brown
VP Finance
Pleaded guilty Awaiting sentencing
Michael C. Mulcahey
Assistant Treasurer
Acquitted
Tyco
Dennis Kozlowski
CEO
Guilty verdict 8 1/3 to 25 years
Mark Swartz
CFO
Guilty verdict 8 1/3 to 25 years
Mark Belnick
General Counsel
Acquitted
HealthSouth
Richard Scrushy
CEO
Acquitted
Malcolm McVay
CFO
Pleaded guilty Home detention**
Weston Smith
CFO
Pleaded guilty 2 years, 3 months
William T. Owens
CFO
Pleaded guilty Sentencing 11/10
Michael Martin
CFO
Pleaded guilty 1 week
Aaron Beam Jr.
CFO
Pleaded guilty 3 months
Emery Harris
VP Finance
Pleaded guilty 5 months
*Found not guilty on conspiracy and wire fraud. Will be retried on 15 other charges.
**Sentence has been appealed by the federal government.

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