July 16, 2005
Enron Settlement Reached
Enron will pay as much as $1.52 billion to settle claims with the State of California and other parties. The payout is expected to be approximately 20 cents to the dollar for claims filed against the company. See Article Here
July 15, 2005
Houston Law Firm Accused of Sandbagging Federal Court
Yesterday the Wall Street Journal ran an editorial discussing the decision by Judge Janis Graham Jack of the U.S. District Court for the Southern District of Texas to declined to exercise jurisdition over approximately 10,000 silicosis cases brought as class action lawsuits. After conducting an extensive review of the medical diagnosis of the plaintiff class, Judge Jack concluded that the majority of the diagnosis had been manufactured by the plaintiffs' bar and a handful of doctors for purposes of litigation. Whether her decision to decline subject matter jurisdiciton over the cases and remand them to Mississippi state court will be the end of the line for these cases remains a matter of some speculation (see ABA article). Among the sanctions imposed by Judge Jack was the requirement that the law firm of O'Quinn, Laminack & Pirtle pay $8,250 in legal fees accrued by the defendants. (Note, corrected 7/19/05 per WSJ correction).
The US Gov't as Private Market Participant
The July/August 2005 Business Law Today's lead article, "Private Suppliers in a Public Role" focuses on the growing participation of the US government in private markets. The US government currently spends $76 billion in the private market each year. The article cites three reasons for the increase in private spending in the government; 1. New procedures for spending that allow for faster acquisition of products and services, 2. Reconstruction efforts in Afghanistan and Iraq have created a large market for private firms to participate in the rebuilding, and 3. The Bush administration's aggressive use of private markets to increase competition within government agencies.
July 14, 2005
Verdict is in for Ebbers: 25 years
Bernard Ebbers, the former CEO of MCI, was sentenced to 25 years in prison for his part in the accounting fraud and scandal that lead to the demise of WorldCom. Business Week's July 13th article, "Ebbers Verdict" discusses the implications of the verdict on white collar crime.
July 13, 2005
Oxley Says Some SOX Reforms ’Excessive’
In a recent Financial Times article, U.S. Representative Michael Oxley claims that some measures of SOX were "excessive" and could have been introduced "more responsibly". (See Recap of Article here).
July 12, 2005
$32 Million for 3 months of work
In the New York Times today, an article discusses the compensation package for Stephen S. Crawford, the departing Co-President of Morgan Stanley. Mr. Crawford worked at Morgan Stanley for 3 months, but his severance package will pay as if he had worked two years. See Article Here
July 11, 2005
Stock prices remain steady after Hurricane Dennis
Analysts fears were calmed after Hurricane Dennis missed key oil refineries along the Gulf Coast, and no major damage was inflicted on the oil supply. The price of oil had steadily risen last week, and analysts were concerned the rise would lead to a decrease in consumer spending. See Article here.
July 10, 2005
Goldman considering ICBC investment
An article from FT.com, "Goldman Sachs ponders ICBC stake", looks at Goldman's possible investment in ICBC (Industrial and Commercial Bank of China). Other companies bidding for ICBC (American Express, Credit Suisse and others) are expected to challenge Goldman's participate due to Goldman's advisory role in the initial public offering of the Bank of China.