The Securities and Exchange Commission's inquiry into pension fund accounting at several major companies is designed to determine whether they are using the funds to manipulate earnings, SEC Chairman William Donaldson said. Such "cookie jar" reserves could be dipped into to bolster revenue in less profitable times. He declined to name the companies involved. Previously, General Motors, Ford Motor, Delphi, Boeing, Navistar International and Northwest Airlines have acknowledged that the SEC asked them to provide information on their pension and retiree health care plans.
Guilty Plea in NextCard Audit Case
Thomas C. Trauger, a former Ernst & Young partner, pleaded guilty to falsifying records and blocking a regulatory investigation of an Internet credit-card issuer. Trauger was arrested and charged last year with falsifying records related to the firm's audit of NextCard in 2000 and the first half of 2001. NextCard, once the largest issuer of credit cards over the Internet, filed for bankruptcy in 2002 after it was closed by federal bank regulators for failing to identify credit-quality problems.
Several major insurance companies are named in a class-action lawsuit alleging they conspired with California insurance broker Universal Life Resources to steer business the broker's way in exchange for kickbacks. Defendants are Aetna, Metlife, Prudential Financial, Cigna, Life Insurance Company of North America and UnumProvident.
Merck said that the Food and Drug Administration requested more safety and efficacy data before approving Arcoxia, the successor to Vioxx. The pharmaceutical manufacturer pulled Vioxx from the market last month after a study showed it doubled patients' risk of heart attacks and strokes.
Lehman Brothers Holdings agreed to pay $222.5 million to settle a class-action lawsuit alleging that it and other banks and brokerages helped Enron mislead investors. The settlement will be shared among thousands of institutional and individual investors in the failed energy company, according to the University of California, which was lead plaintiff.
World Economic Forum said chief executive Jose Maria Figueres, former president of Costa Rica, resigned after breaking the organization's disclosure rules. Figueres did not disclose that he was working as a consultant while at the forum, the group said.
Conrad M. Black said he would resign as chief executive and chairman of Hollinger, a Canadian holding company, to ease his plan to take the company private. If the privatization is approved, Black would remain the controlling shareholder of Hollinger International, a Chicago-based newspaper publisher that wants to recover about $400 million it says was improperly diverted to Black and associates.
Georgetown University sued Digene in a dispute over patent royalties on a test for a virus related to cervical cancer. In a filing with regulators, the Gaithersburg company said the university contends it is owed more than $2 million in past-due royalties, but Digene said that properly calculated royalties "are far less than the amounts demanded." This month, Digene agreed to pay a New York biotechnology company at least $30.5 million to settle a patent-infringement lawsuit on its cancer-screening product.
ChevronTexaco's third-quarter profit increased 62 percent, to $3.2 billion. Revenue was up 32 percent, to $40.72 billion.
Clear Channel Communications, the largest U.S. radio broadcaster, said third-quarter profit rose 10 percent, to $261.2 million. Revenue rose 4.1 percent, to $2.6 billion.
Bristol-Myers Squibb said third-quarter profit fell 16 percent, to $758 million, as it struggled with expiring patents and increased spending for research and development. Revenue rose 1 percent, to $5.42 billion.
Archer Daniels Midland said its first-quarter earnings increased 77 percent, to $266.3 million. Revenue was up 13 percent, to $8.97 billion.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.