Corporations and securities brief ~ Coke: DOJ ends probe, company settles with SEC

[JURIST] Leading Monday's corporations and securities law news, Coca-Cola Co. [corporate website] has announced that the Justice Department (DOJ) [official website] has closed its investigation relating to allegations raised in a whistleblower lawsuit of accounting irregularities at the company. The DOJ will not take any action. The investigation relates to a 2003 lawsuit filed by former Coke manager Matthew Whitley [complaint, PDF], who said he was fired in retaliation for reporting fraud and accounting irregularities to senior management. Coke had denied most of the allegations but later settled Whitley's lawsuit for $540,000 [Coca-Cola press release]. Also today, Coca-Cola reached a settlement with the SEC over its business practices in Japan. The SEC had found Coca-Cola had implemented an undisclosed business practice whereby Japanese bottlers were offered extended credit terms to induce them into purchasing quantities of beverage concentrate they would not have otherwise purchased. Coca-Cola will take remedial actions in corporate compliance and disclosure as part of the settlement. The company will not pay a fine and not admit or deny any wrongdoing. Read the Coca-Cola press release and chairman Neville Isdell's communication [PDF] distributed to Coca-Cola employees today commenting on the settlement. Read the SEC press release and administrative proceeding [PDF]. AP has more.

In other news...

  • Jury selection in the trial of five former Enron [corporate website; JURIST Hot Topic news archive] executives began today. The five executives are accused of 170 counts of conspiracy, wire and securities fraud, insider trading, and money laundering related to lying to investors and the public about the value and capabilities of the business. US District Judge Vanessa Gilmore has taken the unusual step of allowing the prosecution and defense an hour each to question potential jurors because of concerns about bias in Enron cases. Trials in federal court usually require the judge to ask all the questions. Read the indictment [PDF] against the five. The Houston Chronicle has more and continuing coverage of the Enron trials.

  • The five men convicted in Enron's Nigerian barge scam [Houston Chronicle coverage] in November are seeking lighter sentences according to court documents made public on Friday. The five claim their sentences should be light because their conspiracy and fraud had no victims, no losses and that the deal was good for Enron shareholders. Former Merrill Lynch [corporate website] banker James A. Brown says he should receive probation with community service or a minimum prison time rather than the 30 years in prison the government seeks. Brown is scheduled to be sentenced on Thursday with former Merrill Lynch banker Daniel Bayly. Their three co-defendants, bankers Robert Furst and William Fuhs and Enron's Dan Boyle, are to be sentenced in May. Read the indictment [PDF] against the five involved in the barge deal. The Houston Chronicle has more.

  • The Financial Times is reporting [subscription req'd] Nasdaq Stock Market Inc. [corporate website] will buy electronic trading company Instinet Group [corporate website] for about $1.8 billion. Reuters has more.

  • Adobe Systems Inc. [corporate website], will buy Macromedia Inc. [corporate website] for about $3.4 billion which will allows it to animate and add interactivity to Web pages. The move is a response to the looming challenge from Microsoft [corporate website] which plans to include more document features in its next version of Windows. Read the Macromedia press release. Bloomberg has more.

  • The Wall Street Journal is reporting [subscription req'd] former American International Group Inc. (AIG) [corporate website] reinsurance chief Christian Milton may have misled the New York State Insurance Department over information given that underestimated AIG's ties to an offshore reinsurer. Milton was dismissed last month because of his lack of cooperation with state and federal probes into AIG. Reuters has more.

  • Les Moonves [Wikipedia profile] and Thomas Freston [Viacom biography], the co-chief operating officers of Viacom [corporate website], received almost $20 million in pay and bonuses. The figure is supplemented by tens of thousands of dollars each received as reimbursement for staying in their own homes while in New York and Los Angeles for business. CNN has more.
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