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APRIL 24, 2006
Edited by Harry Maurer Skilling's Story Finally, the Enron trial moment everyone has been waiting for. On Apr. 10 ex-CEO Jeffrey Skilling took the stand, saying "my life is on the line" and denying all 28 charges of conspiracy, fraud, and insider trading. In perhaps the most critical testimony so far for the defense, Skilling said he never saw the "Global Galactic" memo, which detailed deals between the company and former CFO Andrew Fastow. The government claims Skilling knew his lieutenant was secretly guaranteed a return and that the sole point of the partnerships was to help Enron hide its debt and boost its profits illegally. Skilling also said he thought the company was in great shape when he quit in August, 2001, after just six months as CEO, attributing the exit to his being "emotionally tired" and not having spent enough time with his family. And he claimed no recall of his attempt to unload 200,000 shares in September, 2001, weeks before the company went under. Prosecutors may get their shot at him on Apr. 17. Immigration Imbroglio As hundreds of thousands of pro-immigrant marchers chanted "Today we march, tomorrow we vote," the White House and GOP leaders scrambled to salvage legislation that collapsed in the Senate on Apr. 7. A compromise that would have created a new guest-worker program and a path to citizenship for illegal workers failed after coming up short of the votes needed to choke off a filibuster. Business lobbyists hope Senators John McCain (R-Ariz.) and Edward Kennedy (D-Mass.) can broker a new deal that would make fewer immigrants eligible for legalization but protect the guest-worker plan.   Vioxx Pain Gets Worse The jury sure didn't buy what Merck (MRK ) was selling. On Apr. 11 the drugmaker got whacked with $9 million in punitive damages -- on top of $4.5 million in compensatory damages -- in a closely watched Vioxx trial. The case involved a 77-year-old man who had a heart attack after taking the painkiller. Merck plans to appeal. The decision sharply raises the stakes for the company: Nearly 10,000 Vioxx lawsuits have already been filed. See "Why Merck Remains Unsettled" Disney's Latest Download Magic They'll need plenty of pixie dust to make this one fly. On Apr. 10, the Mouse House said it will begin testing a setup that allows people to download from ABC.com the same shows that Disney (DIS ) provides to cable companies and ABC affiliates. The two-month experiment will include such hot programs as Lost. Cable outfits and the affiliates are grumbling loudly. See "Disney's Internet Adventure" NASDAQ Isn't Giving Up His $4.2 billion offer to buy the London Stock Exchange got the cold shoulder, but NASDAQ CEO Robert Greifeld still covets those foreign listings. Greifeld on Apr. 11 disclosed that NASDAQ paid $782 million for just under 15% of the LSE's stock to become the bourse's biggest shareholder. Observers say he may be trying to thwart a tie-up between the LSE and Euronext, a Paris-based exchange, or orchestrate a three-way deal. See "NASDAQ Takes A Slice Of the LSE" Having It His Way The revolving door at Burger King has swung again -- at the worst possible time. After less than two years on the job, the chain's fired-up CEO, Greg Brenneman, announced on Apr. 7 that he was departing to become a private consultant. It's the 11th time since 1989 that the occupant of the corner table has changed. Burger King was quick to anoint John Chidsey, its 43-year-old president and chief financial officer, as Brenneman's successor, but the exit comes just as the company is planning to hit the road to whet appetites for its upcoming initial public offering -- which is already shaping up to be a hard sell. See "Burger King's Appetitite For CEOs" Loss Of Face In France The good news: France is tranquille again after President Jacques Chirac yanked a youth employment law that touched off two months of angry protest. The bad news: The crisis, which humiliated Chirac and Prime Minister Dominique de Villepin, has killed any chance of major economic reform before the 2007 presidential elections, which is worrisome given that growth languishes below 2% and unemployment is stuck near 10%. See "France Sacks Youth Labor Law" Bentonville National Bank? To Wal-Mart Stores, (WMT ) it's about tiny credit-card processing fees. To rivals, it's about a sea change in American banking. The two sides testified before the FDIC on Apr. 10-11 about the retail behemoth's application for a charter to create an industrial loan corporation -- a type of bank. Wal-Mart pledged it would not open storefronts to take consumer deposits. Unions and community banks aren't buying that line and protested to the feds. Another hearing will be held later this month. Biomet Up For Grabs With returns from pharma looking sickly, executives and investors in health care figure implanted medical products might be a smarter bet. Biomet (BMET ) will now test that notion. The maker of artificial joints confirmed on Apr. 6 that it was exploring a sale, less than two weeks after its co-founder and sole CEO, Dane Miller, suddenly quit. The last implant company on the block didn't do badly: Guidant (GDT ), which makes stents and pacemakers, went to Boston Scientific (BSX ) for $25 billion after a bidding war with Johnson & Johnson (JNJ ). Analysts think Biomet would pull in at least $10 billion. An Online Safety Cop MySpace.com is trying to make its corner of cyberspace less perilous. The fast-growing social network said on Apr. 11 that it's hiring former federal prosecutor Hemanshu Nigam to be its first chief security officer. That came a day after the site, along with other News Corp. (NWS ) Web sites and TV channels, announced a campaign of public-service ads promoting online safety. The moves may appease parents, schools, and officials who fret that MySpace makes it easy for sexual predators to target kids. See "From MySpace To Safer Space" Criminal Case Of The Week On Apr. 11 the U.S. Attorney for the Southern District of New York, Michael Garcia, unveiled charges against three men who allegedly got an early look at BusinessWeek by infiltrating a Wisconsin plant where the magazine is printed. The three then allegedly traded stocks mentioned in the Inside Wall Street column. No BusinessWeek employees were involved. The Securities & Exchange Commission simultaneously brought a case alleging that the three -- one a Merrill Lynch (MER ) analyst -- plus a global ring of 10 other conspirators, profited to the tune of more than $6 million by obtaining advance word on mergers. The insider-trading case is one of the most far-reaching in years. A retired seamstress in Croatia netted $2 million, the feds say. People have been prosecuted several times since the late 1980s for trading on early access to BusinessWeek. A spokeswoman for the magazine's publisher, The McGraw-Hill Companies (MHP ), says it has "taken significant steps to assure the integrity and privacy of our stories."
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