"I'm proud of my son." -- Gregory Lebed, a New Jersey father, speaking of his 15-year-old, Jonathan, who was ordered by the SEC to return $280,000 after allegedly manipulating stock prices through online chatsEdited by Robert McNattReturn to top
AOL's Very Own Cecil B.?
As if AOL didn't have enough on its plate with the pending Time Warner merger, the online giant is now looking into extending its reach into online digital movies. America Online believes that Internet flicks may be the future, and it's backing up its faith by letting one of its executives quit his day job to prove it.
Forget that high-profile POP.com, with such backers as Paul Allen and Steven Spielberg, went belly-up or that virtually none of the dozens of Web sites that show films and shorts makes money. Andrew Jarecki--who sold his ticket-and-listing service, Moviefone, to AOL last year for $388 million--now has a new assignment for the mother ship. Jarecki says he is set "to explore and analyze the world of digital and Internet films."
Aside from talking to filmmakers and exploring the technology, his mission is so far undefined. Jarecki will remain Moviefone's chairman, but is stepping down as CEO. He says that he is just like others in the nascent e-film biz: "Everyone is making it up as they go along."
So why risk it? In a word, content. Says Abhishek Gami of William Blair & Co.: "The company is a distributor of content, so anything that can flow over their pipes is a natural for AOL."By Joan Oleck; Edited by Robert McNattReturn to top
CPAs Hitch a Ride with Truckers
The big accounting firms desperately want Arthur Levitt Jr.'s Securities & Exchange Commission off their backs, now that the SEC plans to bar accountants from consulting at the same companies they audit. So the number-crunchers are playing legal hardball, throwing in their lot with truckers suing the Environmental Protection Agency over its 1997 pollution emissions guidelines. The accountants aren't pro-smog. They're just watching out for their profits--and want a helpful legal precedent.
On Sept. 11, the American Institute of Certified Public Accountants, Arthur Andersen, Deloitte & Touche, and KPMG filed a friend-of-the-court brief in a pending Supreme Court case brought against the EPA by the American Trucking Assn. The suit argues that the EPA overstepped its authority with the stricter clean-air regs, which Congress should have approved first.
The CPAs figure that if the court rules against the EPA, they can use the precedent in any legal fight to block the SEC's plans. The truckers have already won a previous round in appeals court, so the challenge is considered a serious one. "The legal question has nothing to do with clean air," says Mark Perry, a Gibson, Dunn & Crutcher lawyer for the accountants--and everything to do with self-preservation.By Lorraine Woellert; Edited by Robert McNattReturn to top
Kellogg Spurts into the Lead
Why are your favorite Olympians on a box of Kellogg's Frosted Flakes this year instead of on Wheaties? It seems that Wheaties may be rich in vitamins, but when it comes to Olympics promotion, it may be plain cheap.
Not only is Kellogg the official cereal of the U.S. Olympic team in Sydney, the 2002 Winter Olympics in Salt Lake City, and the 2004 Summer Games in Athens, but it has also locked up deals with such high-profile Olympians as gold-medal sprinter Marion Jones--already on Frosted Flakes boxes. Kellogg declined to say how much its Olympic marketing cost, but one marketing expert suggests it totaled $6 million.
General Mills, Wheaties' maker, says it was a "strategic business decision" to stop its Olympics sponsorship. But unwillingness to match what Kellogg was paying the athletes may have been a factor. One agent, who declined to be identified, said Wheaties offered athletes "a very modest amount...It was a nickel: Take it or leave it."
Wheaties also wouldn't guarantee that athletes would have their pictures on the box. Kellogg did better in both areas. As a result, in the promotion games, the breakfast of champions will warm the bench.By Jay Weiner; Edited by Robert McNattReturn to top