Oracle charged that PeopleSoft's ousted chief executive, Craig A. Conway, lied to analysts in telling them that the Oracle takeover bid was no longer a factor in PeopleSoft's ability to write new business. In the opening of Oracle's legal challenge of PeopleSoft's takeover defenses, an Oracle attorney questioned PeopleSoft director Steven D. Goldby as to why Conway was fired last week, suggesting that the company was concerned about a deposition in which Conway said he didn't tell the truth at an analyst conference. Goldby said the deposition contributed to the decision to fire the chief executive but was not the sole cause.
AIG Releases May Lead to Charges
American International Group disclosed that it may face additional charges by the Securities and Exchange Commission for issuing false or misleading news releases about the scope of an investigation. SEC and Justice Department officials are investigating whether the insurance giant broke securities laws by arranging transactions that helped PNC Financial Services Group inflate earnings and hide more than $750 million in bad loans. AIG issued three news releases about the investigations that failed to tell investors that five other questionable deals sold to two unnamed clients also were under regulatory scrutiny, the company said. AIG denied that the news releases were false or misleading.
The Supreme Court refused to impose new limits on punitive damages, letting stand a $9 million award against State Farm Mutual Automobile Insurance in a policyholder dispute. The court, which last year overturned a $145 million award in the case, turned away State Farm's arguments that the smaller figure is still too large to pass muster under the Constitution. The Supreme Court's 2003 ruling said the circumstances of the case "likely would justify a punitive damages award at or near the amount of compensatory damages" -- or about $1 million. In awarding $9 million, the Utah Supreme Court called that language from the nation's highest court "words of prediction, not direction."
U.S. factory orders unexpectedly fell 0.1 percent in August, to $370.5 billion, as commercial aircraft orders plunged 43 percent following a 1.7 percent surge in July, the Commerce Department said. Bookings for durable goods, which account for more than half the orders, fell 0.3 percent. But bookings outside of transportation rose 1.3 percent, their biggest gain since March. New orders for consumer goods climbed 1.4 percent.
Krispy Kreme Doughnuts said it hired two independent directors to oversee a committee that will look into accounting matters flagged by the SEC. The SEC in July started an informal inquiry into Krispy Kreme's lowered earnings forecast and the way the company buys back franchises. The new directors are Michael H. Sutton, who was chief accountant for the SEC from 1995 to 1998, and Lizanne Thomas, a senior corporate and administrative partner in the Atlanta office of international law firm Jones Day.
T-bill rates were mixed. The discount rate on three-month Treasury bills auctioned yesterday fell to 1.685 percent from 1.710 percent last week. Rates on six-month bills rose to 1.990 percent from 1.950 percent. The actual return to investors is 1.716 percent for three-month bills, with a $10,000 bill selling for $9,957.41, and 2.038 percent for a six-month bill selling for $9,899.39. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 2.20 percent last week from 2.14 percent the previous week.
Jurors began deliberating but didn't reach a verdict in the case of Larry F. Stewart, who is accused of lying at the trial of Martha Stewart when he said he performed an examination of a stock worksheet. The ink expert lied about his involvement because he wanted to be in a high-profile trial, a prosecutor said in closing arguments of the perjury trial. But defense lawyer Judith Wheat said that Larry F. Stewart told the truth and that the perjury charge grew out of a "three-year feud" between Stewart and a subordinate.
Frank P. Quattrone should go to prison while he appeals his obstruction-of-justice conviction because the investment banker cannot prove that the judge in the case made faulty decisions or was biased against him, federal prosecutors told an appeals court. The U.S. Court of Appeals for the 2nd Circuit has scheduled an Oct. 19 hearing on the issue.
Sun Microsystems infringed on technology Eastman Kodak acquired when it bought Wang Laboratories' imaging software business for $260 million in 1997, a federal jury said. The two-year-old patent-infringement lawsuit over Sun's Java programming language moves to the penalty phase this week, with Kodak seeking $1.06 billion in lump-sum royalties.
Honeywell International will pay $2.15 million to settle an age-discrimination suit by workers who were fired or demoted in 1997 at AlliedSignal, which Honeywell bought in 1999, the Equal Employment Opportunity Commission said. While Honeywell denied wrongdoing, the EEOC said AlliedSignal fired or demoted veteran sales representatives because of their age while younger workers with less experience were offered those positions.
Office Depot ousted chairman and chief executive Bruce Nelson, naming director Neil R. Austrian as interim chief executive. Nelson's strategy of targeting business customers by adding more technology products such as notebook computers failed to spur growth. Office Depot, which lost its top industry ranking three years ago to Staples, said it plans to find a permanent replacement for Nelson by early next year.
Bank United's bid to collect at least $100 million from the federal government for breaking a promise of special regulatory treatment during the 1980s savings and loan crisis was rejected by the Supreme Court. The justices, without comment, let stand an appeals court decision that Washington Mutual unit Bank United and investment firm Hyperion Partners deserve $4.9 million in damages. Bank United said it spent more than $100 million to adapt to 1989 rule changes that altered capital requirements for thrifts.
Charles Schwab Corp. said that its brokerage arm will lower retail equity trade commissions and that the pricing changes may reduce revenue for the next year while enhancing its competitive position.
A federal judge in California ruled in favor of two Swarthmore College students who sued Diebold for falsely accusing them of violating copyright laws by posting information on the Internet about possible flaws in its touch-screen voting machines. Security concerns and operational flaws led to a ban on the use of some machines in parts of California and Ohio during the November elections. The judge has not yet set damages.
Gasoline prices rose for the third straight week to reach a national retail average of $1.94 per gallon of regular-grade unleaded, the Energy Department said. That is up 2.1 cents from the week before and 36.5 cents from the same period last year. The highest prices, as usual, were on the West Coast, at $2.15 per gallon. The lowest were on the Gulf Coast, at $1.84 a gallon.
WorldCom employees who lost tens of millions of dollars from their 401(k) retirement plans when the company collapsed may proceed as a class against the former plan trustee, Merrill Lynch, a U.S. judge ruled.
Lockheed Martin said the Postal Service selected a team led by the company to provide managed network services across its 37,000 locations under a contract worth up to $3 billion that will cover six years and includes four three-year options.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.