At the Bell

SEC brings actions in 7 fraud cases

The Securities and Exchange Commission brought actions last week for financial-reporting fraud against seven public companies, including McKesson HBOC, a Fortune 100 company in San Francisco.

The actions come as much of the accounting industry is trying to fight an SEC proposal aimed at ensuring that accounting firms are independent from the companies they audit by preventing them from doing consulting work for audit clients.

The SEC alleged a variety of accounting abuses that the agency said were designed to fraudulently mislead investors about the state of the companies’ financial health.

Three people, including the two top officers of HBO & Co. of Atlanta, which merged with McKesson Corp. in 1999, were charged with inflating the company’s revenue and net income since 1997.

The U.S. attorney in San Francisco also brought criminal charges against the two former executives, Jay Gilbertson and Albert Bergonzi, who the SEC said were the architects behind a scheme to “cook the books.”

Miller pulls ahead of the S&P 500

Bill Miller, manager of Baltimore’s Legg Mason Value Trust, headed for the end of the third quarter slightly ahead of the Standard & Poor’s 500 stock index’s year-to-date return.

The $12.5 billion Value Trust closed Thursday with a gain of 0.15% year-to-date, ahead of the S&P by a mere twelve-hundredths of a percentage point.

Mr. Miller, the only fund manager to beat the S&P for the last nine years straight, lagged behind the S&P at midyear. Since then, he’s been gaining steadily.

Assante drops acquisition plans

Assante Corp., the Canadian financial services company, confirmed that it has laid aside plans to acquire majority stakes in dozens of independent U.S. fee-based financial advisory businesses (InvestmentNews, Aug. 14).

The retrenchment coincides with the departures of John Bowen Jr., president and CEO of the company’s San Jose, Calif., asset management unit, and Jeffrey Roush, senior vice president for U.S. corporate development. Mr. Bowen, 45, had overseen the effort, which had earmarked $100 million for planner acquisitions.

Mr. Roush has joined Donaldson Lufkin & Jenrette Securities Corp.’s DLJdirect Inc. unit as director of institutional corporate development.

Assante, of Winnipeg, Manitoba, also announced it is consolidating its U.S. and Canadian money management operations under executive Patrick Keating in Winnipeg. Mr. Bowen will continue as a consultant to Assante through his newly launched Creating Equity Group LLC, a San Jose business development consultancy.

Lincoln National drops U.K. unit sale

Lincoln National Corp. has dropped plans to sell its U.K.-based life insurance operations after a potential buyer broke off talks. Analysts had expected the unit would fetch at least its book value, which stood at $542.3 million though June.

The Philadelphia insurer said it plans to continue managing the business while it explores reinsurance and other financial options.

Lincoln also announced the transfer of its more than 1,000-member U.K. sales force to Inter-Alliance Group PLC. As a result of the transfer, Lincoln expects to take $64 million to $83 million in restructuring charges. About $46 million of those charges are to be taken in the third quarter.

Northern Trust

adds a growth fund

The Northern Funds, a division of the Northern Trust Co. in Chicago, will introduce the Northern Growth Opportunities Fund as the latest addition to its family of no-load funds.

The new fund will pursue long-term capital appreciation by investing in the stocks of rapidly growing companies of all sizes, with an emphasis on small and midsize companies.