Corporations and securities brief ~ 20 NYSE floor traders indicted
Amit Patel at 12:40 PM ET
[JURIST] Leading Tuesday's corporations and securities law news, the Wall Street Journal is reporting [subscription req'd] that 20 former NYSE traders who oversaw stock auctions were indicted on charges they traded stocks which benefited their firms at the expense of their customers. Read the NYSE press release. Read the SEC press release and administrative proceeding release [PDF]. The Journal is also reporting that the SEC will file and settle civil charges against the NYSE [corporate website] for not properly policing the traders. The settlement will have the NYSE paying $20 million over several years and require it to strengthen its market-surveillance and regulatory programs. Read the SEC press release and administrative proceeding [PDF]. Read the NYSE press release. AP has more.
In other news...
Click for previous corporations and securities law news.
- As previously reported on JURIST's Paper Chase, publisher and data broker Reed Elsevier Group PLC [corporate website] announced close to 310,000 people had their profiles stolen from its legal and business information service LexisNexis' [corporate website] recently acquired Seisint unit. The initial breach was initially reported to be only 32,000. Information including names, addresses, Social Security and driver license numbers were taken. Federal authorities are investigating the breach. Read the Reed Elsevier press release and a LexisNexis press release. AP has more.
- Verizon Communications Inc. [corporate website] announced it has filed a registration statement with the SEC relating to its proposed acquisition of MCI Inc [corporate website]. The statement includes a proxy card MCI will send to its shareholders to vote on the merger and also registers 132 million Verizon common shares to be delivered to MCI shareholders. Read the Verizon press release. AP has more.
- Prosecutors in the Enron [corporate website; JURIST Hot Topic news archive] internet division criminal trial told US District Judge Vanessa Gilmore that they would take approximately two months to try the five defendants. Five former executives and midlevel employees from Enron Broadband Services are charged with conspiracy and fraud and three are also charged with insider trading. Prosecutors say they lied to investors and the public about the value and capabilities of the business. Read the indictment [PDF] against the five. Former co-CEO Ken Rice and former COO Kevin Hannon have already agreed to plea bargains. Read the indictment against Rice and Hannon [PDF]. Read Rice's plea bargain [PDF] and Hannon's plea bargain [PDF]. The Houston Chronicle has more.
- In other Enron news, US District Judge Melinda Harmon heard arguments on the proposed $168 million settlement in a shareholder lawsuit against some former Enron directors. Lawyers for two former Enron Corp. executives, including Chief Financial Officer Andrew Fastow [Wikipedia profile], are fighting the proposal saying it would deplete funds to pay their legal fees. Judge Harmon gave no indication when she would make a ruling. Reuters has more.
- Internet search engine Mamma.com Inc. [corporate website] announced the SEC has changed its informal probe into the company into a formal probe. The investigation relates to alleged stock manipulation at the company last year. Read the Mamma.com press release. AP has more.
- As previously reported on JURIST's Paper Chase, US District Judge Karon Bowdre said she would throw out three perjury counts against former HealthSouth Corp. CEO Richard Scrushy [Wikipedia profile] but did indicate the corporate fraud trial will move forward on other additional charges. The Northern District of Alabama has additional information about the trial. AP has more.
- The former chairman and CEO of American International Group Inc. (AIG) [corporate website] Maurice "Hank" Greenberg [Wikipedia profile] has invoked his constitutional rights against self-incrimination when asked questions related to the insurance giant's reinsurance deal with General Re which is at the center of an investigation in AIG. This comes one day after Warren Buffett [Wikipedia profile] confirmed to regulators that Greenberg knew about the deal. AP has more.
- Global Crossing Ltd. [corporate website] and three former executives have settled with the SEC over an investigation related to the company's swaps of fiber-optic network capacity with other companies which Global Crossing then used to artificially boost revenue by hundreds of millions of dollars. Under the settlement the company pays nothing but former CEO Thomas Casey, ex-chief financial officer Dan Cohrs and former executive vice president of finance Joseph Perrone each pay a $100,000 civil fine and none are required to admit to any wrongdoing. Read the Global Crossing press release. Read the SEC litigation release and complaint [PDF] against the three executives. AP has more.
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