Debt-Defying Act

Known as techdom's "other Bill" -- and as revered in Silicon Valley as Gates is in Redmond, Wash. -- Bill Joy's departure from Sun Microsystems (SUNW) on Sept. 9 is a symbolic blow to the beleaguered computer maker.

Joy single-handedly created the computer code that helped launch Sun in the early '80s. He championed efforts such as the Java language and other open-source technology, always stoking Sun's rep as a company on the leading edge.

But Joy's departure will have little impact. For years he has worked with a small team in Aspen, Colo., and was rarely seen in Sun's Silicon Valley (Calif.) offices. Sun has little to show from his most recent efforts.

So why is he leaving now? "You should ask why I stayed so long," says Joy, who first thought about leaving in 1987. "I'm ready to take a break after 30 years."

Joy won't say what's next. But he's thinking about completing a book about the dangers posed by emerging technologies, such as nanotechnology and biotech, and even left open the possibility of starting his own company. The Justice Dept. landed a high-level conviction in its case against Enron, but the catch won't necessarily lead to bigger fish. Appearing in U.S. District Court in Houston on Sept. 10, former Enron Treasurer Ben Glisan Jr. pleaded guilty to federal conspiracy and will spend the next five years in prison. Glisan, 37, gave up nearly $940,000 in ill-gotten profits, but he won't be testifying against former Enron Chairman Kenneth Lay, CEO Jeffrey Skilling, or even indicted CFO Andrew Fastow. Justice officials say Glisan refused to cooperate in their investigation of the energy trading company. Glisan admitted a role in arranging illegal transactions for two off-balance-sheet Enron partner- ships in an effort to falsify the company's financial picture. His attorney did not return phone calls. International Paper (IP) said on Sept. 9 that President John Faraci, 53, will become chairman and CEO after John Dillon, 65, steps down next month. Faraci takes over as the Stamford (Conn.) paper and forest-products company copes with falling prices across the industry. On Sept. 10, the company said it's scaling back its workforce. While Dillon has hardly had a stellar record, International Paper has endured tough times under his watch, and analysts credit the 38-year veteran with streamlining the company through more than $3 billion in asset sales. There's more trouble for embattled New York Stock Exchange Chairman Richard Grasso, whose $140 million payday has been widely condemned. The NYSE disclosed on Sept. 9 that he's entitled to an additional $48 million that he'll forgo in an effort to defuse the controversy. The latest news is likely to crank up the pressure on Grasso. Normally pliant exchange members are going public with criticism, but Grasso still has support from his handpicked directors, who approved his lavish package in 1999. Grasso, who says he has no plans to resign, raked in $87 million in pay and bonuses from 1995 to 2002. Fannie Mae (FNM) and Freddie Mac (FRE) are likely to get a new regulator now that Treasury Secretary John Snow has agreed to establish a Treasury bureau to oversee the housing-finance giants. The odds were boosted as well when Senate Banking Committee Chairman Richard Shelby (R-Ala.) agreed. Snow told a House panel on Sept. 10 that Congress should make the bureau stronger than the existing Office of Federal Housing Enterprise Oversight by allowing it to set capital standards, rather than follow those now mandated by law. He also wants Treasury to approve any new Fannie or Freddie ventures and suggested Congress end the President's right to name Fannie and Freddie board members. The Federal Home Loan Bank System, he said, also should come under the new regulatory umbrella. Schering-Plough (SGP) CEO Fred Hassan has put one legal headache behind him. On Sept. 9, the drugmaker said it had settled an SEC probe into whether Schering disclosed nonpublic information to big investors in meetings in 2002. Schering will pay a $1 million fine, while former CEO Richard Kogan will pay $50,000. Under the pact, Schering and Kogan did not admit or deny the charges; Kogan's attorney said Kogan did not buy or sell stock or profit from what took place at the meetings. Schering still faces other legal troubles, including a federal criminal probe into some of its marketing and pricing practices. -- An FDA panel recommended approval of Genentech's psoriasis drug, Raptiva.

-- The Federal Communications Commission blessed a deal aimed at speeding adoption of high-definition TV sets.

-- Microsoft warned of a new security hole in its Windows operating system software. Capital One Financial (COF)'s credit-card customers must be feeling better -- and now so are its shareholders. Charge-offs of bad debt fell sharply to 5.18% in August, down from 5.87% in July, the McLean (Va.) issuer of MasterCard and Visa said. The report sent Capital One's stock up 5.1% on Sept. 10.

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