Sallie Krawcheck is on the fast track. On Sept. 27, the 39-year-old chief executive of Citigroup's (C) Smith Barney unit swapped jobs with Citi Chief Financial Officer Todd Thomson. Krawcheck has been called to the corporate suite to get to know Citi's overall global operations, say insiders. Some believe that she may be being groomed for a higher post down the road. As recently as the late '90s, Krawcheck was an analyst at research boutique Sanford C. Bernstein, where she was consistently ranked No. 1 among her peers covering the securities brokerage industry. She proved spirited and sometimes antagonistic -- especially when sparring on conference calls with execs at the largest company she covered, Citigroup. Her smarts soon won her the CEO post at Bernstein, where she was recruited by Citigroup then-CEO Sanford Weill. He needed someone to clean house at his retail brokerage and stock research shop. She apparently met the challenge, hence her new promotion.
McDonald's (MCD), which lately has cheered investors with its turnaround, gave them reason to worry anew on Sept. 28. The world's biggest burger chain said CEO Charles Bell has returned to the hospital to correct complications from surgery last May for colon cancer. In a statement, Bell said he underwent a second surgery in August to remove a blockage but has had to go back again for additional treatment. Bell, 43, took over McDonald's in late April after CEO James Cantalupo died of a heart attack. Under Cantalupo, Bell had been the clear No. 2 as chief operating officer. But while some nervous investors have urged Bell to name his own deputy, he has resisted, insisting he'll be around for the long haul.
Henry Silverman is back in the deal business. On Sept. 29, his travel and real estate company Cendant (CD) announced a $1.25 billion cash deal to acquire online travel operator Orbitz. The move helps Cendant, until now an also-ran on the Web, move into the big leagues competing against the likes of Barry Diller's IAC/InterActive (IACI), which owns Expedia. "You have two companies that generate a ton of cash and two astute financial buyers running them," says Timothy Fidler, director of research at Ariel Capital Management, which holds 12.9 million Cendant shares.
The crackdown against improprieties in the mutual-fund business shows no signs of letting up. On Sept. 27, Charlotte (N.C.)-based Wachovia (WB) disclosed that investigators at the Securities & Exchange Commission may recommend enforcement action against its retail brokerage unit for improper fund trading. At issue: an alleged deal between a Wachovia Securities broker and a former employee at its Evergreen mutual-fund unit who made excessive trades for a client in the bank's Evergreen Mid Cap Growth fund between December, 2000, and April, 2003. In August, Wachovia said the SEC was also investigating possible improper short-term trading by a former manager of Evergreen Precious Metals fund. Wachovia, the nation's fifth-largest bank, said it intends to respond to the SEC and will argue that enforcement action is not warranted.
Things just got worse for Richard Scrushy. On Sept. 29, federal prosecutors filed a new indictment accusing the former HealthSouth (HLSH) CEO of perjury and obstruction of justice -- adding to existing charges of fraud and conspiracy. The Justice Dept. now contends Scrushy lied to an SEC attorney when he claimed statistics in a 2001 financial report filed by the rehabilitation chain were accurate, and that he hadn't ordered anyone to alter figures. Scrushy has pleaded not guilty to all charges stemming from a $2.6 billion accounting scandal at HealthSouth. He also says other executives committed accounting irregularities without his knowledge.
-- Computer Associates (CA) will lay off 5% of its workers.
-- Martha Stewart will do her time in West Virginia, not Connecticut, as she hoped.
-- Wal-Mart (WMT) is buying back $10 billion worth of shares.
Caterpillar (CAT), riding what it called an "unprecedented" rise in demand for its machines and engines, on Sept. 28 hiked its 2004 sales forecast and said '05 results would be higher still. Shares of the bellwether stock hit $80.50 on Sept. 29, a two-day increase of 8%.