Former Rite Aid vice chairman Franklin C. Brown was sentenced to 10 years in prison and fined $21,000 for his role in accounting fraud at the pharmacy chain. Attorneys for Brown, who received a pacemaker last week, said the punishment was a "de facto death sentence" because he is 76 and ill. U.S. District Judge Sylvia H. Rambo said she would recommend that Brown be placed in a federal medical facility. Brown was among six executives charged in a scheme to artificially inflate Rite Aid's value. Five pleaded guilty and cooperated with prosecutors, and four of them got jail or prison sentences. Brown took the case to trial and was convicted last year of conspiracy, obstruction, lying to federal regulators and witness tampering.
European Union Won't Lift Tariffs Yet
The European Union said it was too soon to lift punitive tariffs on U.S. goods after final passage in Congress of a bill repealing corporate subsidies ruled illegal by the World Trade Organization. E.U. trade spokeswoman Arancha Gonzalez said the E.U. was concerned about the bill's transition period, until 2007, for ending the subsidies as well as grandfathering clauses allowing some beneficiaries of the breaks to continue receiving them. U.S. Trade Representative Robert B. Zoellick called on the E.U. to "move quickly" to lift its sanctions.
Bank of America was ordered by a California judge to pay at least $284 million in damages and $80 million in interest for improperly deducting fees from bank accounts containing customers' Social Security payments, a lawyer said. The final award in the case may be as high as $1.7 billion, said James C. Sturdevant, a San Francisco attorney who represents the customers. The judge ordered Bank of America to pay $1,000 for pain and suffering to the customers, who may number 1.3 million and "are all elderly or mentally disabled, Sturdevant said. Bank of America said it will submit objections to the ruling before a hearing next month.
Ex-Enron chief financial officer Andrew S. Fastow, who has pleaded guilty to fraud, never promised Merrill Lynch a risk-free purchase of three energy-generating barges in a 1999 call about a sale that prosecutors claim was a sham, said former Enron executive Daniel O. Boyle, one of six former employees of the two firms charged with conspiracy and fraud in the December 1999 transaction. Under cross-examination, Boyle later supported the government's case when he said that, five months after the conference call, he had changed his mind about whether there was a secret buyback agreement. "I did not believe in December 1999 that there was an oral agreement," Boyle said. "It crystallized in my mind when I received an e-mail from [then-Enron treasurer] Ben Glisan that we were obligated to take Merrill Lynch out."
SunTrust Banks said the Securities and Exchange Commission started an informal inquiry into its announcement that it would restate profit for this year's first two quarters because it mistakenly inflated its reserve for loan losses. SunTrust says it "intends to cooperate and will provide information and documents to the SEC on a voluntary basis," according to a statement.
PeopleSoft would "love" for an investor to buy enough of the company to block Oracle's hostile takeover bid, director A. George Battle told a Wilmington, Del., court. Battle, testifying at the trial of Oracle's suit to eliminate PeopleSoft's takeover defenses, said the company had talked to potential investors since Oracle's initial bid in June 2003 but hadn't found its "white squire."
Morgan Stanley said it will restate its financial reports for first three quarters of 2003 to alter its accounting of stock-based compensation. The investment bank said the changes would not affect its full-year earnings.
Northwest Airlines and its pilots reached tentative agreement on a two-year contract that would cut pay by $265 million a year, the Air Line Pilots Association said. The airline is seeking labor concessions worth $950 million a year. Northwest is also negotiating with ground workers, and contracts for mechanics and flight attendants open for negotiation next year.
The Federal Communications Commission won't block Sinclair Broadcast Group's plan to air a documentary attacking Democratic presidential nominee John F. Kerry on its 62 television stations two weeks before the election. FCC Chairman Michael K. Powell said he didn't "know of any precedent in which the commission could do that." Eighteen Democratic senators asked the commission in a letter to intervene.
Intel canceled plans to release a four-gigahertz version of its current Pentium processor for desktop computers, saying it will instead release a chip with more built-in memory. A spokesman said the company is focusing on performance factors other than "clock speed."
Fidelity Investments cut the cost of online stock trades by a third for most of its customers to match Charles Schwab, the largest online broker.
Initial U.S. jobless claims rose last week while remaining near the range considered favorable for job creation, a government report showed. New applications for unemployment benefits rose by 15,000, to 352,000 for the week ended Oct. 9, the Labor Department said.
Pan Am Airlines' attempt to transfer its passenger service to a subsidiary has been halted by a judge, who called the move "a direct attempt to destroy a union." The judge ordered that pay and working conditions for pilots and crews be restored to what they were in July. He also barred Pan Am from having its nonunionized subsidiary fly large jets on routes that have been flown by Pan Am.
Chicago Board of Trade officials dropped a rule banning food in the pits. "The pits will be closely monitored for cleanliness," their memo said, advising against leaving food wrappers, peanut shells and other trash.
Mortgage rates fell this week, Freddie Mac said. The mortgage giant said 30-year mortgages were 5.74 percent this week, compared with 5.82 percent last week. Rates on 15-year, fixed-rate mortgages dropped to 5.14 percent, down from 5.24 percent. Rates on one-year, adjustable-rate mortgages declined to 4.01 percent, from 4.08 percent.
Royal Ahold's former chief executive and former chief financial officer, as well as two former board members, were charged with fraud in an Amsterdam court. The former executives are being prosecuted in connection with the Dutch food retailer's improper use of side letters, supplementary written agreements accompanying some joint-venture contracts.
A court in Britain is requiring Internet service providers to disclose the names and addresses of 28 people who allegedly downloaded music over the Web illegally, an industry group said.
Dow Jones said third-quarter profit fell 58 percent, to $12.1 million, as technology and financial advertising plunged at the Wall Street Journal. Knight Ridder, the fourth-largest U.S. newspaper publisher, said third-quarter profit rose 11 percent, to $76.9 million, because of a tax benefit and more classified sales. E.W. Scripps, owner of the Food Network cable-television channel, said profit rose 6.9 percent, to $55.6 million.
Citigroup and Bank of America said third-quarter profit rose, boosted by lending and higher fees from consumer banking. Profit at Citigroup jumped 13 percent, to a record $5.31 billion from $4.7 billion in the corresponding period a year ago. Profit at Bank of America soared 29 percent, to $3.76 billion.
BB&T said third-quarter profit more than tripled, to $412.9 million from $115.0 million in the same quarter a year earlier, as loan and fee income increased.
Netflix said third-quarter profit rose to $18.9 million from $3.3 million in the same quarter a year ago as it benefited from lower-than-expected usage, a change in amortization policy for back-catalogue DVDs and a reduction in salvage value, as well as revenue growth.
UnitedHealth Group said third-quarter profit rose 47 percent, to $698 million from $476 million in the same period a year earlier, after it controlled costs and gained customers through the July purchase of Oxford Health Plans. The health insurer's revenue rose 36 percent.
Southwest Airlines said third-quarter profit rose 12 percent, to $119 million from $106 million in the same quarter a year earlier, as the company flew more passengers and purchase contracts helped reduce the effect of record jet fuel prices. Revenue rose 7.8 percent.
Sun Microsystems lost $174 million in its first quarter, narrower than the loss of $286 million in the same period a year ago. The company, which provides products and services for network computing, said sales rose 3.6 percent, to $2.63 billion.
Cnet Networks, owner of such technology sites as Cnet.com and ZDNet.com, swung to a profit in its third quarter as advertising sales increased. Profit was $1.1 million, compared with a loss of $5.8 million in the same quarter a year earlier.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.