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MAY 10, 2004
Edited by Ira Sager Talk Show "Being disciplined means knowing when it is time to walk away. That time is now." -- Brian Roberts, Comcast CEO, withdrawing his company's bid to buy Disney The Double Life Of Barry Witz The Web site of the Securities & Exchange Commission Historical Society lists Barry Witz as one of 42 "distinguished representatives of the financial community" who serve on its advisory council. But that's not the only recognition bestowed upon the 63-year-old Beverly Hills lawyer, a longtime stock promoter. On Apr. 19, Witz pleaded guilty to securities fraud conspiracy for scamming investors in an Internet stock. It's a bit murky how an admitted pump-and-dump microcap fraudster, a subject of bad publicity and lawsuits since the early 1990s, wound up alongside such luminaries as Robert Glauber, chief executive of the NASD, and Richard Ketchum, chief regulator at the New York Stock Exchange. "It was a group process" at the society, says Carla Rosati, its executive director. Witz, she says, was a "donor and supporter" since the group was founded in 1999. Witz's lawyer, Lawrence Feld, says he will cite Witz's council service in pleading for a light-er sentence. But he'll have to hurry. After learning of Witz's recent fate from a reporter, Rosati says that while the society's leaders "wish him well," they decided his services are no longer needed. By Gary Weiss   Cisco's Code War Widens Cisco Systems (CSCO ) may have found that Huawei Technologies copied more of its software than it thought. On Apr. 27, Cisco filed a sealed motion asking the U.S. District Court in Marshall, Tex., to enforce a deal it struck with the Chinese networking company to stop using its intellectual property, BusinessWeek has learned. It's the latest twist in a closely watched legal spat. In early 2003, Cisco sued Huawei, accusing it of stealing software for use in its Quidway routers, which manage corporate networks. Huawei pulled the products off the market and promised not to copy more Cisco code. In October, Cisco agreed to drop the suit, pending a six-month review of Huawei's products. The new motion could mean Huawei didn't pass the review, says a source close to the proceedings. But Cisco is still willing to drop the suit. On Apr. 1, it extended the deal with Huawei by six months. Huawei's outside attorney Robert Haslam says, "Huawei believes it has abided by both the terms and spirit of the agreement." Cisco's lawyers declined to comment. The U.S. has long accused Chinese companies of not doing enough to stop intellectual-property violations. If Cisco's claims stand, those concerns may grow. By Peter Burrows  Putnam Aspires To Purity As part of his continuing cleanup of troubled Putnam Investments, CEO Ed Haldeman has quietly killed efforts to get into the hedge-fund business. In March, Haldeman scuttled a unit that was testing several hedge funds. The issue of one fund company housing two types of funds is contro-versial because of the potential for conflicts of inter-est. If a fund man-ager has a good investment idea, where will it go -- to the hedge fund, which gets 20% of any capital gain, or a mutual fund, which earns much smaller management fees? Congress is considering ways to address the potential for abuse. "We just want to be as pure as one can be in this area," Haldeman says. Several firms that offer mutual funds, including Merrill Lynch (MER ) and Gabelli Asset Management (GBL ), also run hedge funds. They claim that if they didn't, good managers would bolt since hedge funds are more lucrative. Putnam parent Marsh & McLennan (MMC ) may offer hedge funds. If it does, they would be run by MMC Capital (MMC ), a private-equity subsidiary, steering clear of Putnam. By Faith Arner, with Amy Borrus Laser Guidance Why didn't the chicken cross the runway? At France's Montpellier airport near Marseilles, you can credit the world's first laser designed to keep birds from straying onto the tarmac and flying into planes. The robot-guided beam scans the 1.6-mile landing strip, painlessly disturbing the birds by vibrating water molecules in the air. It's helpful in preventing nighttime accidents, when birds are harder to spot. At $120,000, the laser isn't cheap, but it's preventing some of the airport's usual 70 bird collisions a year, each of which can cost far more in engine repairs. Airports in the U.S. and Switzerland are now hankering for their own laser français. By Rachel Tiplady The Second Coming Of ImClone From the schadenfreude department: On Apr. 27, shares of ImClone Systems (IMCL ) briefly broke the $80 mark, before settling around $70. The biotech outfit's first-quarter revenues quintupled on the arrival of its cancer drug Erbitux. That's the same Erbitux that, in late 2001, sparked insider trading ahead of a negative FDA report. As a result, ImClone founder Sam Waksal received a seven-year prison term and pal Martha Stewart was found guilty of lying. Stewart sold her 3,928 shares at $60. It pays to buy and hold. By Brian Hindo Benedikt Taschen: A Book You Can Bench-Press  It's one of the biggest gambles in publishing history. On Apr. 15, German entrepreneur Benedikt Taschen released GOAT: A Tribute to Muhammad Ali, a limited-edition photo book about the boxing legend -- with a $3,000 price tag. (The title stands for "Greatest of All Time.") At 75 pounds, it's so heavy that picking it up gave Taschen a hernia that required surgery in mid-March. "We're including a note inside that says always have two people lift it," he says.Taschen, 43, prides himself on shaking up the stuffy world of coffee-table books. Sumo, his four-year-old photo book by the late Helmut Newton, weighed 66 lb. GOAT took four years and $12 million to produce. Taschen, who used to get up in the middle of the night to watch Ali fights, figures he needs to sell two-thirds of the 10,000 copies to turn a profit. That's a feat some compare with going 12 rounds with Ali in his prime. By Christopher Palmeri And The Champion Coders Are... In software, no country is hotter than India. But at the Apr. 16 TopCoder Collegiate Challenge, software's world championship in Boston, the programming powerhouse was all but invisible. A 22-year-old Pole, Tomasz Czajka, won the $25,000 prize for the second year in a row, edging out rivals from the U.S., Canada, and Australia. Indians barely ranked as also-rans: 58 Indian students were among 705 competitors in the early rounds, but none made it into the 24-person programming final. The country consistently trails. Officials at TopCoder, the Glastonbury (Conn.) company that runs the contests, have ranked competition results of 36,000 programmers over three years. University of Warsaw ranks highest, with its students in the 97th percentile. Massachusetts Institute of Technology students finish, on average, in the 86th. Indian Institute of Technology is far behind, in the 56th percentile. Topcoder officials say the contests reflect pure math skills. But G. Sivakumar, head of computer science at IIT Bombay, says students need training for the contests because they're races against the clock. He says the Chinese already provide courses, and that India will likely follow. Companies such as Yahoo! (YHOO ) and Intel (INTC ) sponsor the contest and use it as a recruiting tool. While India is sure to keep landing its share of software jobs, look for recruiters to keep banging on doors in places such as Boston and Warsaw, too. By Stephen Baker They'd Rather Pay Than Pray There are few more popular ways to catch a tax-time break than taking a deduction for charitable giving. Almost 40 million people did so in 2001, according to the latest data from the Internal Revenue Service. But as a more liberal tax policy has increased giving, religious attendance has fallen. In a National Bureau of Economic Research paper, economist Jonathan Gruber of Massachusetts Institute of Technology finds that Americans view donations as a substitute -- if you can't pray, pay. Gruber analyzed government surveys on donations and religious attitudes over 30 years. The data show that for every 1% rise in giving spurred by tax subsidies, attendance at services drops 1.1%, implying a "strong substitutability." Religious leaders say the biggest donors are regular attendees, but Gruber says tax changes most affect those who aren't regulars. Does having people in the pews outweigh the benefits of more cold, hard cash? On that point, Gruber remains agnostic. By Brian Hindo 
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