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Thursday, January 20, 2005

Corporations & securities brief ~ Enron trial of Skilling, Lay to stay in Houston
Amit Patel at 2:53 PM ET

[JURIST] Leading Thursday's corporations and securities brief, US District Court Judge Sim Lake has decided against former top Enron [corporate website; JURIST Hot Topic] executives Ken Lay [wikipedia profile], Jeff Skilling [wikipedia profile], and Rick Causey in their attempt to move their trial outside of Houston. Skilling and Causey both face more than 30 charges, including fraud and conspiracy over allegations they manipulated Enron's bottom line to not only increase the company's stock price but also enrich themselves. Lay faces seven counts of fraud and conspiracy and four counts of bank fraud which will be tried separately. All three defendants have pleaded not guilty to all counts. The three executives had asked in November that the trial be moved out of Houston because the city was too deeply altered by the scandal and the press had prejudiced the jury pool. Although the judge, in making his ruling, did cite to several instances of the media making fun of the defendants, he indicated, "isolated incidents of intemperate commentary about the alleged crimes and their perpetrators do not rise to the level of 'inflammatory' where, as here, for the most part, the reporting appears to have been objective and unemotional." The next issue in this case is when the trial will take place which prosecutors and Lay want to start as soon as possible. Skilling is asking for a start of September 2005 while Causey wants an even later date. Read Judge Lake's opinion in its entirety [PDF]. Read the Lay, Skilling, and Causey indictment [PDF] and the SEC complaint [PDF]. The Houston Chronicle has more and continuing coverage of the Enron scandal.

In other news...

  • SCO Group [corporate website] won a victory Wednesday as a federal judge ordered IBM [corporate website] to provide increased access to the code of its AIX and Dynix computer operating systems. SCO is seeking at least $5 billion in damages over claims IBM has used code from SCO-owned UNIX operating system in its applications developed for Linux operating system. SCO has more information on its lawsuit against IBM here. CBSMarketWatch has more.

  • Google [corporate website] has lost a trademark dispute in France as a court ruled the search engine must not use the trademarks of European resort chain Hotel Meridian [corporate website] to trigger keyword ads. Google must stop linking to the hotel trademarks by Monday or face a daily fine of 150 euros and also pay all court fees and a 2,000 euro fine. CNET News has more.

  • Massachusetts Secretary of State William Galvin [official website] announced his office has subpoenaed Morgan Stanley [corporate website] for information related to the investigation into brokerages failing to disclose payments received from insurers to sell variable annuities. The subpoena asks for information regarding which insurers' variable annuities Morgan Stanley sells and any payments made to promote certain products. The NASD [official website] is also conducting a review of Morgan Stanley's variable annuities sales practices. AP has more.

  • Aramark Corp. [corporate website], a provider of vending services at sports stadiums, said in a SEC filing that a New Jersey jury has ordered it to pay $105 million in damages for serving alcohol to a fan at a football game who was later involved in a car accident which crippled a toddler. The company will pay $30 million in compensatory damages and $75 in punitive damages. Reuters has more.

  • Citigroup [corporate website] announced its earnings slipped 5% last year after putting aside $5 billion in legal and regulatory problems. Read the Citigroup press release. The Financial Times has more.
Click for previous corporations and securities law news.





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