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Legal news from Thursday, April 21, 2005 |
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Former Merrill Lynch exec gets 30 months jail for role in Enron barge scam
Amit Patel on April 21, 2005 2:44 PM ET

[JURIST] Former Merrill Lynch [corporate website] executive Daniel Bayly has been sentenced to 30 months by in prison US District Judge Ewing Werlein for his role in an Enron Nigerian barge scam. Bayly will also face six months of supervision after prison and must pay $840,000 in fees and fines. Judge Werlein found the losses caused by Bayly's crimes to be $1.4 million. In sentencing Bayly, Werline said he considered sentences given to other Enron defendants. While awaiting the sentencing, Bayly has been under house arrest in Connecticut for refusing to relinquish control over an $80 million account. The judge is scheduled to sentence Bayly's codefendant James A. Brown, former head of the bank's asset lease and finance group this afternoon. Brown faces upwards of 30 years in prison over conspiracy, fraud, perjury, and obstruction charges. Their three remaining codefendants, bankers Robert Furst and William Fuhs and Enron's Dan Boyle, will be sentenced in May. Bayly and his codefendants have argued that their conspiracy and fraud should be thrown out because they led to no victims, no losses and that the deal was good for Enron [corporate website; JURIST Hot Topic news archive] shareholders. Read the indictment [PDF] against the five involved in the barge deal. The Houston Chronicle has more and continuing coverage of the Enron barge trial.


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Environmental brief ~ Judge rules MTBE lawsuits can proceed against oil companies
Tom Henry on April 21, 2005 1:43 PM ET

[JURIST] In Thursday's environmental law news, US District Judge Shira Scheindlin has ruled [text, PDF] that some 80 lawsuits can proceed against oil companies claiming that a gasoline additive, methyl tertiary-butyl ether (MTBE) [EPA factpage], contaminated groundwater. The suits allege that the oil companies contaminated wells and underground aquifers across the country by adding MTBE to gasoline as a way to reduce air pollution. The suits were brought by a number of water providers, towns, counties, cities, and states. Oil companies, including Exxon Mobil [company website] and Lyondell Chemical [company website], have argued that the lawsuits are unfair and that those directly responsible for any spills should be held liable, not the makers of the product. First filed in state courts, the suits were consolidated last year in federal court in New York. The New York Times has more.
In other news, - The Fairness in Asbestos Injury Resolution Act of 2005 [text] was introduced in the Senate earlier this week, co-sponsored by Sen. Arlen Specter, R-PA, and Sen. Patrick Leahy, D-VT. The bill would bar asbestos victims from suing companies for damages and instead point them to a $140 billion trust fund set up by the government and consisting of money given by a number of asbestos-defendant companies. Critics of the bill say that the pre-determined compensation for different illnesses denies victims their day in court, and that the bill unfairly caps the recoverable attorney's fees for individual claims. The House of Representatives is currently considering a similar bill [text]. The St. Louis Post-Dispatch has more.
- The Washington State House of Representatives passed a bill [text] Wednesday that would adopt most of California's vehicle-emission standards [text,PDF]. The House had passed a prior version of the bill last month which adopted the new California vehicle-emission standards in their entirety, but the bill was amended when it got to the Senate. The amended version includes changes such as banning the purchase of cars from out of state that don't meet the new standards and removing the California requirement that 10 percent of new vehicles meet a zero-emissions standard. Critics of the bill argue that the State is only allowed to follow either the federal vehicle-emission standards or the California standards but cannot cherry-pick bits and pieces from them. If signed by the Governor, the measures will take effect beginning with the 2009 model year and will hinge on the neighboring state of Oregon also adopting the new standards. AP has the full story.
- As already reported in JURIST's Paper Chase, the House voted late yesterday to allow oil drilling in Alaska's Arctic National Wildlife Refuge as part of a broad energy bill. A final vote on the energy legislation is expected by the House today.


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International brief ~ First UN troops arrive in Sudan
D. Wes Rist on April 21, 2005 1:32 PM ET

[JURIST] Leading Thursday's international brief, the first troops of the UN peacekeeping force assigned to Sudan [JURIST report] arrived in Khartoum Thursday to prepare the way for the more than 10,000 troops to follow. The 44 peacekeepers that arrived in the Sudanese capital were mainly staff officers sent to set up command and control elements for the next wave of peacekeepers. Bangladeshi UN Force Commander General Fazle Elahi Akbar, in charge of the military aspects of the entire peacekeeping operation, arrived with the staff officers and is planning to visit several different regions in Sudan [government website] to "assess ground preparation for UN troop deployment." JURIST's Paper Chase has continuing coverage of Sudan [JURIST news archive]. South Africa's News 24 has local coverage.
In other international legal news ... - The UN High Commission on Refugees [official website] announced Wednesday that thousands of Rwandans fleeing to neighboring Uganda [government website] were claiming that they were escaping from 'arbitrary arrests' in Rwanda [government website]. The UNHCR noticed a higher level of refugees from Rwanda to neighboring countries such as Uganda and Burundi beginning in March. While the UN refugee agency has not released an official statement of what is behind the increase in refugees, workers in the area said that many of the refugees are fleeing the Gacaca courts [backgrounder] that began operation in March. The Gacaca courts are traditional, tribal judicial bodies that are being used to help try individuals suspected of participating in the 1994 genocide [Rwanda government backgrounder] between the Hutu and Tustsi. IRIN has more.
- Former Nepalese Foreign Minister Prakash Man Singh, a member of the Dueba cabinet removed by royal mandate [JURIST report], was arrested Thursday by officials from the Royal Commission for Corruption Control at his home in Chhetrapati. Singh had previously refused to appear before the Commission to testify, saying that the RCCC's creation by royal decree [JURIST report] was unconstitutional. Family and supporters of Singh reportedly scuffled with the RCCC security officials and the plainclothes officers arresting the former minister. JURIST's Paper Chase has continuing coverage of Nepal. Kantipur Online has local coverage.
- South Korean President Roh Moo-hyun [official profile] called on prosecutors Wednesday to voluntarily give up some of their powers of office in order to restore public trust in the Ministry of Justice [government website]. Roh said that the state prosecution agency still had authoritarian powers that created a mistrust of the agency by the general public. Roh warned that if prosecutors failed to give up power voluntarily, the government would take steps to officially remove those powers. Roh also urged the state prosecution agency to work effectively on a current discussion on how to properly limit the independent investigatory powers of the national police. Chosun Ilbo has local coverage.


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Corporations and securities brief ~ NYSE merges with Archipelago; to go public
Amit Patel on April 21, 2005 11:24 AM ET

[JURIST] Leading Thursday's corporations and securities brief, the New York Stock Exchange (NYSE) [corporate website] announced it will merge with rival Archipelago Holdings Inc. [corporate website] in a move which transforms the NYSE into a for-profit, publicly traded company. The NYSE, known for its busy trading floor, takes on all-electronic Archipelago to effectively compete with the Nasdaq Market Inc. and other global competition. The NYSE will not entirely forego its floor-based operation but will instead run it alongside the electronic option. Read the NYSE press release [PDF] and statement by CEO John A. Thain. Read a statement by Archipelago CEO Jerry Putnam. NYSE has a webcast of the proceedings. AP has more.
In other news... - The EU Court of First Instance [official website], the EU's second highest court, ruled PepsiCo [corporate website] cannot use Ruffles as a brand name in the EU for its potato chips, fine pastry and confectionery products affirming the original decision taken by the Office of Harmonisation in the Internal Market (OHIM) [corporate website]. Pepsi had applied to use the Ruffles name in the EU but was opposed by German rival Intersnack Knabber-Geback [corporate website], who sold potato chips under the Riffels brand name. Read the opinion. Reuters has more.
- SEC Chairman William Donaldson [SEC biography] told a House Financial Services Committee [official website] hearing that the SEC is looking at ways to make the financial reporting requirements of the Sarbanes-Oxley Act [text, PDF] more efficient and effective. Donaldson called requests to weaken the requirements of the act because of potential costs to companies unjustified. CBSMarketWatch has more.
- BearingPoint Inc. [corporate website], a consulting services company, announced in a SEC filing [text] that the SEC has launched an informal inquiry into the company. The agency has asked for documents related to internal control deficiencies and prior-period financial adjustments. The company will cooperate in the probe. Dow Jones has more.
- The US government has filed an appeal in a tax-refund case stemming from capital loss deductions and tax credits taken by Goodrich Corp.'s [corporate website] former subsidiary, Coltec Industries Inc. Last November, a federal court ruled in favor of Coltec, ordering the government to refund tax payments of $82.8 million. The Charlotte Business Journal has more.
- The SEC [official website] announced it has charged Guillaume Pollet, a former managing director of investment bank SG Cowen & Co. [corporate website], with insider trading and fraud. Pollet has been charged for his role in short-selling shares in companies based on non-public information ahead of 2001 private stock offerings in 10 companies thereby generating $4 million in trading gains for his company. Read the SEC press release and litigation release.
- Time Warner Inc. [corporate website] and Comcast Corp. [corporate website] announced bankrupt cable operator Adelphia Communications Corp. [corporate website] has accepted a buyout offer valued at $17.6 billion. Time Warner and Comcast beat out rival Cablevision Systems Corp. [corporate website] which bid $17.1 billion. Under the deal Adelphia receives $12.7 billion in cash and a stake in the new company. Time Warner is expected to take on $11 billion in net debt to finance the deal. The deal needs approval from the boards of directors of Adelphia, Time Warner and Comcast, the companies' shareholders, Adelphia's bankruptcy judge and federal regulators. Read the Time Warner press release and the Adelphia press release [PDF]. Reuters has more.
- French drinks group Pernod Ricard [corporate website] has offered £7.4bn ($14 billion) to buy UK rival Allied Domecq [corporate website]. The deal, which would bring together the world's second and third largest drink companies, would be one of the industry's biggest takeovers. Allied's board has already approved the deal. Read the Pernod Ricard press release and the Allied Domecq press release [PDF]. BBC News has more.
- Representative Rob Portman [official website], President Bush's nominee to be the US Trade Representative [official website], told the Senate Finance Committee [official website] that if confirmed, he would implement a tougher approach toward China starting with a review of the various trade complaints against China. The comments come as the US has a record trade deficit of $162 billion with China and pressure on China from the US administration to stop pegging its currency, the yuan, to the dollar. AP has more.
- Conrad Black [Wikipedia profile] and business partner David Radler have resigned from private holding company, Ravelston, placing the company into the hands of a receiver. The pair resigned to facilitate a filing for bankrupcy protection, which was already granted by a Canadian court. Ravelston owns about 78 percent of Hollinger Inc. [corporate website] through various holding companies. The Guardian has more.
Click for previous corporations and securities law news.


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UN rights body approves Sudan resolution, rejects Cuba call for Gitmo probe
Amit Patel on April 21, 2005 8:06 AM ET

[JURIST] The UN Human Rights Commission [official website] Thursday passed a resolution condemning rights abuses in Sudan. The final text, supported by the US, the EU, other African nations and even Sudan itself, only passed after a compromise was reached on wording that also praised the Sudanese government's efforts to improve the situation in Darfur [BBC profile]. The resolution condemned in general terms "the continued, widespread and systematic violations by all parties of human rights and international humanitarian law" in Darfur and specifically condemned "the violence against civilians and sexual violence against women and girls, destruction of villages, widespread displacement and other violations." AP has more. Also Thursday, the Commission rejected Cubas bid for an international investigation of US treatment of detainees at Guantanamo Bay [official website]. The vote against Cubas resolution was 22-8, with 23 nations abstaining. China, Zimbabwe, South Africa, Sudan, Malaysia, Guatemala and Mexico also supported the resolution. The resolution would have required the US to authorize an independent fact-finding mission to determine the human rights conditions for detainees at Guantanamo. Cuba introduced the resolution after the Commission approved a resolution [UN press release] to report on the human rights situation in Cuba. AP has more.


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Legal agenda and live webcasts ~ Thursday, April 21
Chris Buell on April 21, 2005 12:01 AM ET

[JURIST] Here's a run-down of law-related events, expected developments and live webcasts on JURIST's docket for Thursday, April 21.
The US Senate [official website] convenes at 9:30 AM ET today. It will begin an executive session at 10:30 AM ET to consider the nomination of John Negroponte [official profile] as National Intelligence Director, and then resume consideration of H.R. 1268 [bill summary], the Iraq/Afghanistan Supplemental Appropriations bill. Watch a live webcast of the session. The Senate Foreign Relations Committee [official website] is holding a hearing at 9:30 AM ET to review the anti-corruption strategies of the African and Asian Development Banks and the European Bank on Reconstruction and Development. Watch a live webcast of the hearing. The Senate Judiciary Committee [official website] Intellectual Property Subcommittee is holding a hearing at 2:30 PM ET today on the patent system currently and in the future. Watch a live webcast of the hearing.
The US House [official website] convenes at 10 AM ET today. Watch a live webcast of the session. The House Judiciary Committee [official website] Crime, Terrorism and Homeland Security Subcommittee is holding a hearing at 10 AM ET today to review the implementation of the USA PATRIOT Act [PDF text]. Watch a live webcast of the hearing. The Immigration, Border Security and Claims Subcommittee is holding a hearing at 1 PM ET today on the October 2005 deadline for visa waiver program countries to produce security passports. Watch a live webcast of the hearing.
Supreme Court Justices Sandra Day O'Connor, Antonin Scalia and Stephen Breyer [Legal Information Institute profiles] will participate in a "Constitutional Conversation" at 7 PM ET at the National Archives. Watch a live webcast of the event via C-SPAN 3.
The Heritage Foundation [official website] is holding a forum titled "The Agony of an American Wilderness: Loggers, Environmentalists, and the Struggle for Control of a Forgotten Forest" at Noon ET today. Watch a live webcast of the event.
At the UN, the General Assembly [official website] will hold its 93rd plenary session at 10 AM ET today, in which it will hear a report on the financing of the UN mission in Sudan. The Security Council [official website] convenes at 10 AM ET today, when it will consider the situation in the Middle East. Watch a live webcast of both sessions.
The Eleventh UN Congress on Crime Prevention and Criminal Justice [official website] continues today in Bangkok, Thailand. View the agenda for the session.
At the International Criminal Tribunal for the Former Yugoslavia,the trial of Enver Hadzihasanovic and Amir Kubura [ICTY case backgrounder] continues at 9:30 AM local time [3:30 AM ET]. Watch a webcast of proceedings.


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