Located in March 4th USA today newspaper http://story.news.yahoo.com/news?tmpl=story&u=/usatoday/20030304/bs_usatoday/4914048 Business - USA TODAY Capital One CFO quits amid SEC scrutiny Tue Mar 4, 9:17 AM ET NEW YORK -- Investor confidence in Capital One Financial, the nation's fifth-largest U.S. issuer of MasterCard and Visa cards, took another bashing Monday after CFO David Willey suddenly resigned amid a Securities and Exchange Commission (news - web sites) inside-trading probe. Willey, the architect of Capital One's aggressive growth strategy since its 1995 spinoff from parent Signet Bank, is suspected of dumping Capital One stock last May ahead of negative news about the Falls Church, Va., bank. ''This is deeply disturbing,'' says former SEC enforcement counsel and federal prosecutor Jacob Frenkel, noting that the sales occurred as Congress was debating the tough new Sarbanes-Oxley Act. ''If there was ever a time when senior corporate officials were on global notice to be in strict compliance with federal securities laws, it was in the spring, summer and fall of 2002.'' Willey, the 42-year-old winner of CFO magazine's 2000 Excellence Award for Risk Management, sold $3.2 million worth of stock for about $62 a share last May, two months before the company disclosed regulators ordered it to increase reserves for loan losses. That news sent the stock down 40% to $30.48 in one day. His wife, Joy, also sold about $1.6 million of stock in May. Spokeswoman Liz Matherson declined to say when Capital One first initiated talks with banking regulators about loan reserves, nor would she say whether Willey's May trades had been cleared in advance by in-house lawyers. Capital One says it learned of the SEC investigation into Willey on Feb. 18. ''This is a matter for Mr. Willey and the SEC,'' Matherson said. Investors clearly did not agree, driving shares down almost 9% to $28.25. The company has recently been subject to shareholder lawsuits alleging it inflated earnings by failing to take adequate reserves for its subprime loans. The SEC declined comment. Willey attorney Richard Morvillo said he plans to defend his client ''vigorously.'' Authorities could bring criminal charges in addition to a potential civil complaint. If found guilty, Willey could face up to 10 years in prison, far short of the maximum penalty of 25 years under Sarbanes-Oxley, which came into law after his stock sales. Only a fraction of inside-trading cases are brought against top corporate executives. Most cases involve outsiders with knowledge of pending corporate earnings or takeovers. But recently, ImClone Systems founder Samuel Waksal has pleaded guilty to inside-trading charges, and the stock trades of Martha Stewart (news - web sites), former Enron CEO Ken Lay and other prominent business leaders are also drawing regulatory scrutiny.
HAA! This further supports my theroy of accounting issues inside crap1. They have a tendency to inflate their balance sheet with false receivables, receive loans, etc on the false assets by using them as collateral and then do things like this. It is only a matter of time before the great wall of Crap1 tumbles, lol.
I agree with you. Does that mean that someone will buy out their cc's or will i miss out on "whats in your wallet."?
I'm more worried about what's in MY wallet (all I need is for someone like Providian to buy the accounts...)
Not so fast. Cap. 1 has been very reluctant to state the percentage of its profits from the "sub-prime" receivables on its books. Therefore, leading many to question the exact mix of sub-prime in its portfolio and the reserves needed to meet that
Here is a thread I wrote about the supposed doings of cap1 and the trouble they are in with the feds. http://consumers.creditnet.com/straighttalk/board/showthread.php?s=&threadid=41270&highlight=theory Interesting stuff that actually happend quite often.
