The Securities and Exchange Commission charged former Qwest Communications chief executive Joseph P. Nacchio and six other executives with concealing the source of billions of dollars in reported revenue from April 1999 to March 2002. In a civil lawsuit, regulators blamed Qwest's problems on aggressive revenue and earnings targets that created enormous pressure on employees to meet those targets. Also charged were former chief financial officers Robert S. Woodruff and Robin R. Szeliga; former chief operating officer Afshin Mohebbi; Gregory M. Casey, a former executive vice president of Qwest's wholesale business; and James J. Kozlowski and Frank T. Noyes, two former finance executives. Nacchio has denied wrongdoing.
WTO Backs U.S. Regional Food Names
The World Trade Organization approved the use of geographic names such as "Florida oranges" and "Idaho potatoes" to describe U.S. products sold in European markets. Ruling on complaints by the United States and Australia that the 25-nation European Union had breached the rules of global commerce by denying U.S. and Australian producers the right to use "geographical indications" while allowing them for European products, the WTO ruling said the E.U. had "not succeeded in rebutting that case." But the trade group hedged on two points, enabling both sides to claim victory: It said that the E.U. was not guilty of wide-ranging breaches, and that E.U. rules could be maintained if foreign producers of other regionally rooted foods could apply for similar protection.
U.S. retail sales rose 0.5 percent, to $352.1 billion, in February, led by increases at department stores, auto dealers and electronics outlets. With the January figure revised from a decline to a 0.3 percent gain, February's increase was the third in a row, the Commerce Department said. In a separate report, the department said business inventories rose 0.9 percent, to $1.29 trillion, in January.
(Jason Janik -- Bloomberg News)
General Motors' Chevrolet Blazer sport-utility vehicle had the highest crash-death rate for drivers in an insurer group's study of 199 vehicles, and DaimlerChrysler's Mercedes E-class car had the lowest. The Insurance Institute for Highway Safety computed the fatality rate per million vehicles from 2000 to 2003 for cars and trucks from the 1999 through 2002 model years. The two-wheel-drive, two-door Blazer's score was 308, more than triple the average of 87. The rate for the E-class was 10. General Motors said the crash-death rate involves more than just the vehicle, including factors such as driver behavior and vehicle use.
Continental Airlines told employees that it would have to make significant cutbacks and job reductions if tentative union agreements are not ratified this month. The carrier, whose unions will vote March 30 on contracts, said it might have to increase reductions in pay and benefit to $800 million from $500 million and sell or sublease 24 planes.
Lockheed Martin said striking union workers at a Georgia aircraft plant accepted a contract offer that eliminates health benefits for some future retirees. About 3,000 machinists began a strike March 8, demanding that benefits be kept.
Two House Financial Services Committee members introduced a bill to crack down on predatory lending practices and to preempt state laws against it. It was endorsed by major lenders, the National Association of Mortgage Brokers, the Bond Market Association and the American Securitization Forum. Consumer-advocacy groups favor a competing bill.
TiVo will make a customized digital video recorder for Comcast cable subscribers, the two companies announced. Comcast plans to begin selling the new DVRs by late 2006. TiVo's stock price rose 75 percent, to $6.70 a share.
Alliance Capital Management Holding said it booked a $5 million charge in 2004 to cover a possible settlement with NASD regarding directed brokerage commissions at its mutual fund distribution unit, reducing 2004 earnings per share to $2.43 from the $2.45 it reported Jan. 27.
Dick Grasso, the ousted chairman of the New York Stock Exchange, sued H. Carl McCall, former head of the exchange's compensation committee, saying McCall should be "held to account" for his actions. Separately, a state trial-court judge dismissed Grasso's defamation suit against the NYSE and its current chairman, John S. Reed. Grasso had said Reed and the exchange defamed him by criticizing corporate governance at the NYSE when Grasso was chairman.
Toys R Us said it would indefinitely delay the release of its fourth-quarter results so it could reflect changes in how it accounts for leases. The delay in the report, which was to have been released on Thursday, was unrelated to plans to restructure the company, a spokeswoman said. The company is considering splitting its toy retailing business from its more lucrative Babies R Us operations.
Securities and Exchange Commission Chairman William H. Donaldson defended an agency proposal on market structure, saying the interest of long-term investors should be paramount. The proposal would apply best-price requirements to electronic trades on all markets, which would have to match or beat a price or bounce the order back to the broker who sent it.
Tyco International's former director of executive compensation testified that chief executive L. Dennis Kozlowski and finance chief Mark H. Swartz deferred millions of dollars of cash bonuses in an effort to reduce the compensation reported in the company's proxy. Donna Sharpless also said she didn't draft any resolutions for Tyco's compensation committee to forgive company loans to the executives in 1999 and 2000 and didn't include information about that forgiveness in the company's proxy in either year. Kozlowski and Swartz are charged with grand larceny, securities fraud and other crimes in connection with bonuses and other compensation they received at Tyco.
Goldman Sachs Group and UBS each earned $30 million for advising Gillette on its pending $57.2 billion sale to Procter & Gamble. Merrill Lynch, which advised Procter & Gamble, was paid $1.5 million for a fairness opinion to the board of directors as well as compensation upon completion of the merger, according to a filing with the Securities and Exchange Commission.
American International Group's credit rating was reduced one level, from AAA to AA+, after Maurice R. Greenberg said he would step down as chief executive. Fitch cut AIG one level, to AA+. Fitch said AIG's rating has been further pressured by government investigations.
The International Monetary Fund will ask Argentina to respect the rights of international and domestic investors as part of any new loan agreement, the fund's managing director said. The IMF is seeking to protect investors after the government restructured $104 billion of debt defaulted on in 2001. Argentina this month persuaded 76 percent of bondholders to exchange defaulted bonds for new securities in the restructuring.
The chief executives of Nextel and Sprint may each be eligible for up to $20 million in bonuses after completion of the wireless companies' planned merger. In amendments to their employment agreements, filed yesterday with the Securities and Exchange Commission, Gary D. Forsee of Sprint and Timothy M. Donahue of Nextel, will receive $10 million each in the first year and a "performance-based" bonus estimated at $10 million in the second year.
Time Warner clarified recent comments by Ted Leonsis, vice chairman of America Online and president of AOL Audience Business, about Dulles-based AOL's 2005 advertising growth. The company said AOL expects its 2005 ad growth to be in line with the U.S. Internet industry average, estimated at 20 percent to 25 percent
Liberty Media, the media holding company that owns half of Silver Spring-based Discovery Communications, said it narrowed its fourth-quarter loss to $2 million, from $931 million in the comparable quarter a year earlier. Revenue rose 15 percent, to $2.34 billion.
Lehman Brothers Holdings said its profit in its fiscal first quarter rose 31 percent, to $875 million. Revenue for the quarter ended Feb. 28 rose 21 percent, to $3.81 billion.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.