Ex-Hollinger Official Pleads Guilty
Hollinger International's former chief operating officer, F. David Radler, pleaded guilty to a federal fraud charge and agreed to cooperate with a Justice Department probe of his former boss, Conrad M. Black. Prosecutors will recommend that Radler serve 29 months in jail and pay a $250,000 fine for his role in a $32 million fraud at the newspaper publisher. He'll remain free on a $500,000 bond until all proceedings in the case are concluded.
Black is fighting a lawsuit from the Securities and Exchange Commission and a $425 million civil lawsuit by Hollinger that claims he looted the company through excessive, undisclosed payments to himself and associates.
Tenet Expects Katrina Losses
Tenet Healthcare said it expects to suffer significant losses from Hurricane Katrina, which damaged six of its hospitals in Louisiana and Mississippi and caused the evacuation of five of them.
Tenet said in a filing with the Securities and Exchange Commission that the extent of damage still isn't known but that it is insured for up to $1 billion for each "occurrence," and a spokesman said the hurricane and later levee breaks might be two separate occurrences. However, even in that case, coverage against flood losses is limited to $250 million, company officials said.
GM Vows 20 MPG in New SUVs
General Motors will be the first automaker to average at least 20 miles per gallon in fuel efficiency with a large sport-utility vehicle, its sales executives said. Gary White, GM's vice president of North American truck operations, said GM has redesigned its Chevrolet Tahoe with a more efficient engine and aerodynamic shape. GM also plans to introduce hybrid versions of its Tahoe and Suburban SUVs that get 25 MPG in 2007.
Resentencing in HealthSouth
Former HealthSouth finance chief Michael Martin was sentenced to a week in prison for his role in a $2.7 billion accounting fraud. U.S. District Judge U.W. Clemon had sentenced Martin to probation but imposed the week-long term after the case was sent back by the U.S. Court of Appeals for the 11th Circuit, which ruled Clemon didn't adequately explain the sentencing.
The appeals court also sent back the sentencing of former senior vice president Richard E. Botts, who pleaded guilty to conspiracy, mail fraud and falsifying records, but Clemon sentenced him again to probation.
Clemon said he rejected prosecutors' request for substantantial terms for both Martin, who pleaded guilty to conspiracy, securities fraud and other counts, and Botts because the former executives had helped the FBI's investigation.
Witt Resigns as Allstate Lobbyist
James Lee Witt, an adviser to Louisiana Gov. Kathleen Babineaux Blanco (D) and a former head of the Federal Emergency Management Agency, has quit lobbying for Allstate to avoid any appearance of conflict, a Witt spokesman said. "We're not working for anyone in Louisiana except the state of Louisiana," said Barry Scanlon, a spokesman for District-based James Lee Witt Associates.
Scanlon said the contract with Allstate, the second-biggest U.S. home and auto insurer, was signed a month before Hurricane Katrina hit the Gulf Coast and the former FEMA director was hired Sept. 13 to advise Blanco.
Glaxo Settles Drug Price Case
GlaxoSmithKline will pay $150 million to settle claims it overcharged the government for two anti-nausea drugs. The Glaxo settlement is the latest in a series of whistle-blower claims that have resulted in $2.4 billion in payments from drug companies. Prosecutors said they are looking into 150 cases of drug price fraud
Glaxo engaged in a scheme to inflate the price of Zofran and Kytril for the Medicare and Medicaid programs, the government said. Glaxo admitted no wrongdoing as part of the settlement. "We believe that our price reporting was lawful and was done in good faith, but we've agreed to this settlement to avoid the delay, expense and uncertainty of litigation," said Mary Anne Rhyne, a company spokeswoman.
Eli Lily Settles Most Zyprexa Suits
Eli Lilly is to pay $700 million to settle most lawsuits claiming that the company failed to warn of risks related to Zyprexa, a schizophrenia and bipolar disorder drug. The suits claimed Zyprexa caused diabetes and other disorders. Eli Lily does not admit any wrongdoing in the settlement.
Goldman Sachs Group said its third-quarter profit climbed 84 percent from the comparable quarter a year earlier, to $1.62 billion, on strong fixed income trading and a surge in fees from the company's merger-and-acquisition business. Revenue grew 81 percent, to $12.33 billion.
Compiled from staff and news service reports.