Corporations and securities brief ~ Lay fights spring trial date for personal fraud charges
Amit Patel at 11:16 AM ET
[JURIST] Leading Thursday corporations and securities law news, ex-Enron [corporate website; JURIST Hot Topic news archive] Chairman Ken Lay [Wikipedia profile] filed a motion with US District Court Judge Sim Lake asking for his trial on personal bank charges be moved to next year. Lay opposes the prosecutors with the Enron Task Force proposal for the trial to start in May or June. Prosecutors had used Lay's own comments [Lay press conference transcript] that he wanted a speedy trial in asking for the spring date. However, Lay feels a spring trial would be wasteful and inflammatory in light of the fraud charges [Indictment, PDF; SEC complaint, PDF] he faces in the bigger trial including ex-CEO Jeff Skilling [Wikipedia profile], and former top accountant Rick Causey. That trial is expected to take months to complete. Lay faces four personal bank fraud charges which allege he lied to banks about the use of $75 million in loans. Lay also wants his banking charges to be tried by Lake himself while the jury decides the Enron fraud case. Lay could face up to 30 years in prison for each of the bank fraud charges. Read the Lay motion [PDF] to have the trial moved. The Houston Chronicle has more and continuing coverage of the Enron trials.
In other news...
Click for previous corporations and securities law news.
- The SEC [official website] announced enforcement director Stephen Cutler will step down in a month to return to private practice as a lawyer. Cutler headed the SEC unit which brought civil actions against securities law violators since 2001. His unit led the investigations into companies including Enron, WorldCom, Adelphia, Qwest, Tyco, and HealthSouth. Read the SEC press release. Reuters has more.
- Energy company Kerr-McGee Corp. [corporate website] headed off a proxy battle with billionaire investor Carl Icahn [Wikipedia profile] by authorizing a tender offer to buy back $4 billion in stock, sell some assets and expand its hedging. The action is a result of talks between the two sides. Read the Kerr-McGee press release. Kerr-McGee will also drop its federal lawsuit against Icahn and his associates which alleged violations of federal antitrust laws and the company's bylaws in their efforts to buy more stock in Kerr-McGee and nominate their own directors to the company's board. Read the Kerr-McGee press release. AP has more.
- The Wall Street Journal is reporting [subscription req'd] British financial giant HSBC PLC [corporate website] has notified at least 180,000 people who used MasterCard credit cards to make purchases at Polo Ralph Lauren Corp. [corporate website] that criminals may have obtained their credit-card information. HSBC said the General Motors Corp.-branded MasterCard [corporate website], which is one of the most widely held credit cards in the US, should be replaced. This is the latest incident where personal information has been stolen from financial institutions. Dow Jones has more.
- Australian Prudential Regulation Authority (APRA) [official website] said it will investigate the Austrialian unit of Berkshire Hathaway Inc.'s [corporate website] General Re over its reinsurance practices. Specifically, the agency will investigate General Re's complex financial products in relation to financial and finite reinsurance and the marketing and promotion of those products. US regulators are already investigating General Re [corporate website] in connection with a reinsurance transaction with American International Group [corporate website]. Read the APRA press release. Reuters has more.
- GlaxoSmithKline PLC (GSK) [corporate website] could face an investor class-action lawsuit over allegations that the company covered up problems with its antidepressant drug Paxil [informational website], hurting some shareholders. The suit seeking class-action status will be filed in the US Distric Court for the Southern District of New York on the behalf of people who bought GSK shares between February 21, 2001 and August 5, 2004. Reuters has more.
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