Citigroup is being probed by a German regulator for possible manipulation in the European government bond futures market, related to trades in August that led to losses at some competitors. Citigroup has apologized for a $13 billion sale of European government bonds that caused prices to fall. The New York bank sold about 200 securities in two minutes through an electronic trading system and bought back some bonds later, profiting on the drop in prices, according to people who compete with Citigroup and were involved in the trades.
White House Publicly Backs SEC Chief
The White House publicly stated its support for Securities and Exchange Commission Chairman William H. Donaldson, whose ouster has been sought by business groups seeking less enforcement of corporate governance rules. The Wall Street Journal reported that the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Wholesalers-Distributors have been lobbying against Donaldson. But White House spokesman Scott McClellan told reporters that "the president appreciates the job Chairman Donaldson is doing." McClellan added, "He has been someone who has worked hard to help us crack down on corporate wrongdoing."
Members of Washington hotel workers' union Unite Here Local 25 rallied in front of several downtown hotels to protest the lack of a new contract three months after the old one expired Sept. 15. The workers called on the 14 major hotels they are negotiating with to meet their demands to be treated better, to protect health benefits for current and future workers, and for a contract that will expire the same year as those in other cities.
(Katherine Frey -- The Washington Post)
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The public will have 30 days to comment on proposed changes in stock trading rules that would require brokers to obtain the best possible price for customer orders. The Securities and Exchange Commission voted 4 to 1 to open the matter to comment. It originally had planned to decide on the measure yesterday, but complaints from financial services firms led the agency to put off a final vote. If the plan passes, all U.S. stock markets will have to be technologically equipped to quickly find the best price.
Prosecutors defended secret government recordings that they say link former HealthSouth chief executive Richard M. Scrushy to massive fraud. The recordings are a key part of the government's criminal case against Scrushy, who has pleaded not guilty in what prosecutors say was a conspiracy to overstate earnings by $2.6 billion. The defense argues that glitches in the recordings mean jurors shouldn't be allowed to hear them.
Fidelity Investments said federal regulators are investigating whether its traders took improper gifts in exchange for directing business to brokers at outside firms. The Securities and Exchange Commission and the NASD are examining evidence that brokers may have given Fidelity employees trips to the Super Bowl and Wimbledon, golf outings and expensive wine in an effort to win trading commissions. The Boston-based mutual fund company's ethics rules preclude employees from taking gifts from vendors worth more than $100.
Enron's interim chief executive, Stephen Cooper, who led the company through one of the most complex and expensive bankruptcies in history, must wait until next November for a hearing on his request for a $25 million "success fee." The fee would be in addition to the $63.4 million Cooper and his firm have received as of June 30. Enron hired Cooper in January 2002.
The Federal Energy Regulatory Commission may step in to regulate wholesale electricity prices charged by Southern, Entergy, Alliant Energy, American Electric Power, Duke Energy and Kansas City Power & Light in regions where their market share is too large to guarantee competition. The utilities have failed a test that gauges whether they control too large a share of generating capacity in their regions, the commission said.
United Airlines said in a regulatory filing that it anticipates a $725 million operating loss if it is unable to secure additional labor concessions. The projection matches the amount the airline, under Chapter 11 protection, has said it needs in further labor savings, on top of $2.5 billion in annual givebacks that were negotiated in 2003.
Tyson Foods, a meat processor, said it will pay $1.5 million to settle charges by the Securities and Exchange Commission that it didn't adequately report $1.7 million paid to Don Tyson, its former senior chairman. The former executive would also pay a civil penalty of $200,000 to settle the charges, the Springdale, Ark., company said in an SEC filing.
Calpers, the nation's largest public pension fund, voted to oppose the Bush administration's proposals to partially privatize Social Security. The board of the California Public Employees Retirement System said such a plan would increase the deficit, cost retirees more and potentially jeopardize retirement savings.
Walgreen will stop accepting American Express cards Jan. 14 because they carry higher service fees than Visa or MasterCard, the nation's largest drugstore chain said. Meanwhile, No. 2 chain CVS is moving in the opposite direction, saying it will use a new American Express payment system that doesn't require a signature.
Retailers are running short of Apple Computer's iPod digital music player. Amazon.com has sold out of a 20-gigabyte model while such electronics stores as Circuit City, Best Buy and Tweeter say they are having difficulty meeting demand. Merrill Lynch analyst Steven Milunovich last month said Apple might sell 4 million iPods this quarter, compared with 733,000 a year ago.
A bankruptcy judge approved a $100 million loan to Trump Hotels & Casino Resorts and cleared the way for the casino operator to use the cash in its coffers to reorganize under bankruptcy protection. The company's plan to exit bankruptcy leaves Donald Trump as chairman while giving bondholders a controlling equity stake in the company and new notes in exchange for their debt.
A hacker who broke into the national computer system of Lowe's hardware stores and tried to steal customers' credit card information was sentenced to nine years in federal prison. Brian Salcedo, 21, of Whitmore Lake, Mich., pleaded guilty in August to conspiracy and other hacking charges. The government said it is the longest prison term ever handed down in a U.S. computer crime case. Two other men are awaiting sentencing in the Lowe's case.
