Fidelity Reassigns Trading Chief
Fidelity Investments reassigned stock-trading chief Scott DeSano, whose unit is the focus of investigations into whether Wall Street firms tried to win Fidelity business by plying its traders with gifts and entertainment. DeSano, who headed Fidelity's global equity trading since 1996, will be senior vice president in the strategic new business development group. Fidelity, the world's largest mutual fund company, disciplined 14 traders in December for violations of company policy.
Morgan Stanley Official Quits
Stephen S. Crawford, left, a Morgan Stanley co-president with close ties to former chief Philip J. Purcell, resigned, the company said in a statement. John J. Mack, who replaced Purcell as chairman and chief executive on June 30, is reshaping management. Co-President Zoe Cruz was named acting president. Morgan Stanley disclosed last week that Crawford, 41, could receive $32 million if he resigned before Aug. 4.
McKesson's Ex-CFO Cleared
A federal judge in San Francisco acquitted Richard H. Hawkins, former chief financial officer of McKesson, of criminal charges accusing him of conspiring in an accounting scam that wiped out $9 billion of shareholder wealth in 1999. U.S. District Judge Martin Jenkins cleared Hawkins four months after a non-jury trial ended.
Hawkins is the first of seven former executives charged in the scandal to be cleared of criminal charges. Four other executives have pleaded guilty and two others are fighting the allegations.
Ebbers Deal Advances
U.S. District Judge Denise L. Cote gave preliminary approval to a civil suit settlement under which former WorldCom chief Bernard J. Ebbers would forfeit nearly all his personal assets. The civil settlement springs from a lawsuit by investors who lost billions of dollars in the collapse of WorldCom in 2002.
Executives Settle With IRS
Ninety-five executives have agreed to settlements with the IRS for using an "abusive" scheme to avoid taxes on an estimated $500 million in stock options, the agency said.
An additional 19 executives who underreported their income by more than $400 million passed up a settlement offer the IRS announced in February that included reduced penalties. Those executives face audits or criminal investigations, the agency said. The IRS did not identify any of the executives who used the tax shelter.
Some Enron Losses Covered
Enron employees whose retirement plans vanished when the company imploded may be getting some compensation. The Labor Department, which sued Enron in 2003 on behalf of company employees, said about $356 million will be set aside from the sale of Enron's assets to cover lost retirement benefits. The settlement resolves charges that Enron mismanaged its retirement and pension plans by relying on its stocks to support them and did nothing to protect workers from losses.
The agreement is subject to approval by courts in New York and Texas, and it does not settle separate claims against Enron founder Kenneth L. Lay and former chief executive Jeffrey K. Skilling.
Bear Stearns Restatement
Bear Stearns revised its second-quarter earnings after putting aside an extra $100 million in legal reserves related to a regulatory probe into mutual fund trading. In a filing with the Securities and Exchange Commission, Bear Stearns restated earnings for the three months ended May 31, trimming profit to $298.1 million from $365.1 million.
T-bill rates were mixed. The discount rate on three-month Treasury bills auctioned yesterday fell to 3.135 percent from 3.145 percent last week. Rates on six-month bills rose to 3.355 percent from 3.325 percent. The actual return to investors is 3.204 percent for three-month bills, with a $10,000 bill selling for $9,920.75, and 3.460 percent for a six-month bill selling for $9,830.39. 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 3.52 percent last week from 3.46 percent the previous week.
Compiled from staff and news service reports.