Law Firm Proclaims Innocence
New York law firm Milberg Weiss Bershad & Schulman issued a statement saying it had been unfairly implicated in a case of illegal payments made to a client, Seymour Lazar, who was indicted by a grand jury last week on charges of conspiring to obstruct justice, mail fraud and money laundering.
The firm, which specializes in shareholder fraud suits, was not named in the case. Prosecutors said in the indictment that a "New York law firm" made as much as $44 million in fees from lawsuits in which it represented Lazar and that through intermediaries it paid Lazar about $2.4 million. Milberg Weiss has represented Lazar in more than a dozen shareholder suits, according to court documents. The firm said it never made illegal payments to Lazar.
Scrushy Jury Still Deliberating
Jurors in the fraud trial of former HealthSouth chief Richard M. Scrushy, left, deliberated for a 20th day without reaching a verdict. It was the jurors' fourth day of deliberations since the judge in the case replaced a sick member with an alternate and told the group to start over.
HUD Weighs New Mortgage Rules
Department of Housing and Urban Development Secretary Alphonso Jackson revived efforts to reform mortgage-lending rules to make loan costs more transparent. The agency plans to hold six meetings from July 14 to Aug. 18 seeking comment on changes to a 30-year-old consumer-protection law known as Respa, the Real Estate Settlement and Procedures Act, he said.
IBM's Options Policy Scrutinized
The Securities and Exchange Commission started an informal investigation into statements by International Business Machines about its first-quarter earnings and stock-option expenses. The SEC has informed IBM, the largest provider of computer-related services, that the probe is not an indication that any violations of law have occurred. A week before releasing its first-quarter results in April, IBM said it would begin treating options as an expense and urged analysts to reduce profit estimates to reflect the change.
HealthSouth Restates Finances
HealthSouth restated its finances for the final years of a huge fraud and said it hoped to be current on its financial statements by the end of 2005. In a filing with the Securities and Exchange Commission, HealthSouth said actual revenue in 2000 and 2001 was $7.1 billion -- about $1.5 billion less than previously reported. The rehabilitation and medical services chain said it lost $364 million in 2000 and $191 million in 2001 rather than making the $481 million total originally reported for those years.
Nike Profit Up 15 Percent
Nike's fiscal fourth-quarter profit grew 15 percent, to $349.5 million. Sales for the period ended May 31 were $3.72 billion, up 7 percent from $3.49 billion the previous year. For the full year, Nike profits rose 28 percent, to $1.21 billion. Revenue increased 12 percent, to $13.74 billion, in 2005, led by strong performance in Asia, where Nike reported $1.9 billion in sales.
Walgreen Earnings Rise 20.1%
Walgreen's fiscal third-quarter profit jumped 20.1 percent, to $411 million from $342.3 million a year earlier as the drug retailer improved gross margins and filled 8.8 percent more prescriptions than in fiscal 2004's third quarter. Revenue for the three months ended May 31 increased 13.1 percent, to $10.83 billion.
Key Supplier Scaling Back
Lear, the world's largest maker of automotive interiors, will close plants and cut thousands of jobs in response to production cuts from its biggest customers, including Ford and General Motors. The Southfield, Mich.-based company said as many as 7,700 workers, about 7 percent of its global workforce, will lose their jobs and more than 20 plants may be closed or consolidated.
T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday rose to 3.08 percent from 2.965 percent last week. Rates on six-month bills rose to 3.22 percent from 3.175 percent. The actual return to investors is 3.147 percent for three-month bills, with a $10,000 bill selling for $9,922.14, and 3.319 percent for a six-month bill selling for $9,837.21. 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 3.4 percent last week from 3.39 percent the previous week.
Compiled from staff and news service reports.