LEGAL

LEGAL

Lay Autopsy Finds Heart Disease

Enron founder Kenneth L. Lay had three severely clogged arteries and had experienced at least two heart attacks before he died, according to an autopsy report that blamed severe coronary artery disease for his death. The Lays were vacationing near Aspen, Colo., when he died.

Lay, left, and former Enron chief executive Jeffrey K. Skilling were convicted in May of fraud and conspiracy for lying to investors and the public about the financial health of Enron before the energy company collapsed in 2001. Lay's lawyers are seeking to have his conviction nullified.

Merrill Must Face Bias Claims

Merrill Lynch must respond to new and more detailed racial bias claims, a Chicago judge ruled. U.S. District Judge Robert Gettleman granted Merrill Lynch broker George McReynolds's request for permission to file a revised complaint in his year-old lawsuit. The new complaint claims that Merrill Lynch has no black brokers in 25 of the 50 U.S. states and that 70 percent of the firm's black brokers are in the bottom two-fifths of Merrill Lynch's rankings that determine distribution of benefits. McReynolds, who is black, has been a Merrill Lynch broker since 1983. He is seeking class-action status for the suit, which his lawyers say could expand the number of plaintiffs to more than 100.

Merrill Lynch's attorney, Lori Lightfoot, argued in papers opposing the filing of the amended complaint that it lacked additional legal claims and appeared to be written for the news media.

Possible Insider Trading on Petco

The Securities and Exchange Commission said it suspects insider trading in connection with last week's $1.68 billion purchase of Petco Animal Supplies by the buyout firms Texas Pacific Group and Leonard Green & Partners. The SEC said one or more investors used financial institutions in Switzerland and Britain to buy Petco call options from June 27 to July 13. The options were out of the money, meaning the stock price would have had to rise for the buyers to make a profit.

KPMG Trial Postponed

A federal judge postponed until January the trial of 16 former KPMG executives accused of selling illegal tax shelters, saying prosecutors failed to promptly turn over documents to the defense. U.S. District Judge Lewis Kaplan said he would consider imposing sanctions against the government if it doesn't agree to turn over additional documents to the defense.

The former executives, including former deputy chairman Jeffrey Stein, are charged with knowingly selling illegal tax shelters that cost the U.S. government at least $2 billion in tax revenue. KPMG, which earned about $115 million in fees from the tax-shelter sales, agreed last August to pay $456 million and cooperate with the government under a deferred prosecution agreement.

EARNINGS

Unisys reported a wider-than-expected loss in the second quarter -- $194.6 million compared with $27.1 million a year earlier -- and said it would cut more jobs. Revenue fell 2 percent, to $1.41 billion. The results included a pretax charge of $141.2 million to cover previous job cuts. The company said it would lay off 1,900 more people, bringing global job losses to 5,500 since October. The layoffs, amounting to 15 percent of total workforce, would save Unisys at least $325 million annually by the second half of next year.

Bank of America , the No. 2 U.S. bank, said its second-quarter profit rose 18 percent, to $5.48 billion, in large part because of its acquisition of credit card issuer MBNA. Revenue rose 25 percent, to $18.23 billion. The $35 billion acquisition of MBNA made Bank of America the nation's largest credit card issuer and has brought in about 20 million new customers.

J.P. Morgan Chase , the No. 3 U.S. bank, said second-quarter profit more than tripled, to $3.54 billion, though last year's results were reduced by $1.2 billion to cover a legal settlement over the bank's role in the collapse of Enron. Revenue rose 19 percent, to $14.94 billion.

Southwest Airlines said its second-quarter profit more than doubled, to $333 million, from $144 million a year earlier. Revenue rose 26 percent, to $2.45 billion. Southwest has been the only major carrier to report a profit for every quarter since the Sept. 11, 2001, terrorist attacks.

AMR, the parent of American Airlines, reported second-quarter profit of $291 million, from $58 million a year earlier. Revenue rose 12.5 percent, to $5.98 billion. The jump in revenue was enough to offset high fuel prices.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.