Court Suspends New SEC Rules
A federal court again suspended the Securities and Exchange Commission's new corporate-governance rules for mutual funds until a lawsuit opposing the measures has been heard.
The U.S. Court of Appeals for the D.C. Circuit granted a request by the U.S. Chamber of Commerce to delay enforcement of the rules, which require that the chairman of a mutual fund board and 75 percent of its directors be independent. The agency said it would abide by the court's ruling.
After the court rejected the rules the first time, then-SEC Chairman William H. Donaldson cast the deciding vote to push them through, ignoring wide-ranging criticism that the agency was rushing the vote to prevent Donaldson's successor from reconsidering the rules.
Ex-WorldCom Official Sentenced
Former WorldCom controller David F. Myers was sentenced to one year and one day in prison for his role in the company's $11 billion accounting fraud. Myers, 47, was the third-highest-ranking company official charged in the fraud. He pleaded guilty to conspiracy and securities fraud nearly three years ago.
Former chief executive Bernard J. Ebbers has been sentenced to 25 years in prison, and former chief financial officer Scott D. Sullivan is scheduled to be sentenced today. Myers was a witness at Ebbers's trial this year.
MERGERS & ACQUISITIONS
Whirlpool Raises Maytag Bid
Whirlpool raised its bid for Maytag for the third time, offering $1.79 billion in cash and stock for its rival appliance maker, up from the $1.62 billion it offered Monday. The $21-per-share proposal also includes assumed debt of about $977 million. Investment group Triton Acquisition Holding has offered $14 a share, or about $1.13 billion, in cash for Maytag. The Maytag board could decide to let shareholders vote on the Triton offer next week and proceed with the Whirlpool deal if shareholders vote Triton down.
Krispy Kreme Executives Faulted
Most of the blame for the financial woes of Krispy Kreme Doughnuts lies with former chief executive Scott Livengood and former chief operating officer John Tate, who tried to "manage earnings" to meet Wall Street's expectations, according to a special committee headed by two independent directors. The report recommended that the Winston-Salem, N.C., company restate past earnings by $25.6 million.
Krispy Kreme is the target of a federal criminal inquiry in New York and a Securities and Exchange Commission probe into financial irregularities.
Delta Plans Larger Shuttles
Delta Air Lines plans to announce today that it will begin phasing in larger aircraft on its New York shuttles on Nov. 1. The MD-88 planes will have 134 seats, compared with the 120 seats on the Boeing 737s Delta currently uses.
The planes will be used on flights between Washington's Reagan National and New York's LaGuardia airports and between LaGuardia and Boston's Logan International Airport.
Delta spokeswoman Benet Wilson said the change, which will be completed by next spring, was prompted by strong demand for shuttle flights.
Sihpol Retrial Moved to October
The retrial of former Bank of America broker Theodore C. Sihpol III, originally scheduled for this month, has been postponed until at least October. In June, a jury acquitted Sihpol of 29 charges related to late trading of mutual fund shares. A judge declared a mistrial on the four counts, giving New York state Attorney General Eliot L. Spitzer the option of retrying or dropping the charges.
Federated Department Stores said second-quarter profit climbed 90 percent from the comparable quarter a year earlier, to $148 million, on lower costs and sales of private-label apparel. Sales in the quarter ended July 30 increased 1.2 percent, to $3.62 billion, said the Cincinnati-based owner of Macy's and Bloomingdale's.
News Corp. said profit rose 67 percent in its fiscal fourth quarter, to $717 million. It credited advertising sales at Fox News Channel and other cable TV networks. Sales advanced 11 percent, to $6.1 billion.
Interpublic Group, the world's third-largest advertising company, said it is delaying filing second-quarter results until Sept. 30 so it can determine whether restatements of prior periods are necessary. Interpublic also hasn't filed 2004 or first-quarter results after discovering accounting errors. The company has until Sept. 30 to file all pending results or face default on $2.15 billion in debt.
Compiled from staff and news service reports.