NHTSA Starts Prius Investigation
The government has opened an investigation of the hot-selling hybrid Toyota Prius due to reports of the engine stalling without warning. The National Highway Traffic Safety Administration said the preliminary investigation will involve about 75,000 cars from the 2004 and 2005 model years. The agency said it has received 33 complaints of alleged engine stalling. Toyota Motor Sales USA said in a statement that it was "an early stage inquiry to determine if further analysis is warranted, not a recall."
SEC Files Suit Against Amerindo
The Securities and Exchange Commission filed a civil lawsuit against Amerindo Investment Advisors and its two founders, Alberto Vilar and Gary Tanaka, who were jailed last week and accused of stealing client funds. The SEC asked a judge to appoint a person to take control of the advisory firm. The agency also seeks an accounting of the firm's finances.
Scrushy Judge Denies Read-Back
The judge in the fraud trial of HealthSouth founder Richard M. Scrushy denied jurors' written request to have excerpts of testimony read back to them. "For me to read a small portion of the testimony to you from the lengthy transcript could unduly emphasize one bit of testimony to the exclusion of all other testimony," the judge wrote back to the jury. The panel, which ended its ninth day of deliberations without a verdict, is weighing charges that Scrushy inflated HealthSouth profit by $2.7 billion.
Sihpol Trial Comes to Close
Theodore C. Sihpol III, left, a former Bank of America broker, was a "fraudster" who helped a hedge fund illegally trade in mutual funds, a prosecutor said in closing arguments at Sihpol's fraud trial. Sihpol is accused of helping the now-defunct Canary Capital Partners trade in mutual funds after the New York Stock Exchange had closed. The fund would trade at that day's closing price instead of waiting for the market to reopen the next day, when the prices may have changed, prosecutors said. Sihpol's lawyers have said late trading was legal and that Sihpol never intended to commit a crime.
Qwest Ex-CEO Protests Charges
Former Qwest Communications chief executive Joseph P. Nacchio asked a federal judge to dismiss fraud charges against him, arguing that the allegations amount to "enforcement by hindsight." In a brief filed in U.S. District Court, Nacchio's attorneys argued that the SEC improperly based its case against Nacchio on statements he made about Qwest's business and future market conditions. "It is impossible to verify objectively these subjective remarks," his attorneys wrote. The SEC alleges that Nacchio helped orchestrate a massive fraud that concealed the source of billions of dollars in revenue later wiped off the books.
Enron Juror Dismissed
A juror was dismissed in the trial of five former executives of Enron Broadband Services, which is in its seventh week in a Houston federal court. The juror needs emergency surgery. Two alternates will step in. Last month, two jurors asked to be released because of economic hardship, but both ended up staying.
No More 'Organic' Soap
The government will no longer grant the "USDA Organic" seal to soaps, cosmetics and other personal-care products. The USDA also suspended use of the seal on pet food until new standards are adopted.
Car Seats Make Improvements
Child safety seats are easier to use and have made strides with clearer labels and instructions, the government said. About 80 percent of the 2005 child safety and booster seats tested by the National Highway Traffic Safety Administration received its top overall grade. The government rated 92 safety seats from 14 manufacturers.
WALT DISNEY CO.
Directors' Suit Called Flawed
Walt Disney Co. former directors Roy E. Disney and Stanley P. Gold can't prove the company's board misled investors about the thoroughness of its search for chief executive Michael D. Eisner's successor, Disney lawyers said. Disney attorneys urged a Delaware judge to dismiss the former directors' suit, which challenges a board vote. That vote elevated company President Robert A. Iger to Eisner's post.
The New York Times Co. will start distributing a free weekly tabloid next week in New York with classified advertisements and previously published articles from some Times sections.
Neiman Marcus Group said third-quarter profit rose 16 percent, to $79.8 million. The company, which is being acquired by two private-equity firms, said revenue for the period ended April 30 rose 7 percent, to $933.4 million.