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Legal news from Monday, September 12, 2005 |
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Corporations and securities brief ~ Freddie Mac settles accounting scandal
James Murdock on September 12, 2005 7:05 PM ET

[JURIST] Leading Monday's corporations and securities law news, the Office of Federal Housing Enterprise Oversight (OFHEO) [official website] has announced that it has entered into a consent order with Freddie Mac [corporate website] over the company's multi-billion dollar accounting scandal [Forbes report]. The OFHEO, which maintains government oversight of Freddie Mac and Freddie Mae, announced the settlement in a press release and said that the settlement calls, in part, for Freddie Mac to assist the government in pursuing charges against former CEO Leland Brendsel and CFO Vaughn Clarke for their roles in the scandal. Freddie Mac agreed to a $125 million civil fine [Washington Post report] in 2003 for the accounting fraud, which took place from 2000-2002. Reuters has more.
In other corporations and securities law news... - The chief accountant at the Securities and Exchange Commission [official website] announced he will leave the commission next month for the private sector. Donald Nicolaisen, who joined the SEC in 2003 [SEC press release], joins former SEC Chairman William Donaldson [JURIST report] and other high-ranking officials in the agency who have left the commission in recent months. Dow Jones has more.
- Citing a $10 million discrepancy in severance packages, the union representing Northwest's mechanics cut off talks to end the union's now 3-week-old strike [JURIST report]. In response, Northwest [corporate website] has announced its plans to hire permanent replacement mechanics. Despite allegations of serious mechanical problems [JURIST report] and Northwest's canceling its New York-Tokyo flights [Northwest press release], the airline insists that it is still operating its early fall schedule [press release] and that the replacement mechanics are safely preparing the aircraft. In a press release [PDF], the mechanics' union said that it was willing to work towards the now $203 billion in cuts the airline is asking for, but that the severance package offered by the airline for the 3181 employees who would be laid off was too short at 16 weeks. MarketWatch has more.
- The New York Times is reporting that Oracle CEO Lawrence Ellison [Wikipedia profile] has settled a shareholder lawsuit alleging he participated in insider trading. The derivative lawsuit accused Ellison of selling $900 million of shares in Oracle before news that the company would not meet its earning target. The unusual terms of the settlement call for Ellison to donate $100 million to charities of his choice over the next 5 years, as well as paying $22 million in legal fees for the shareholders' lawyers. The settlement must still be approved by the court and Oracle's board of directors. Reuters has more.


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Environmental brief ~ Senate could overturn EPA mercury rules
Tom Henry on September 12, 2005 6:30 PM ET

[JURIST] In Monday's environmental law news, the US Senate could vote tonight on a proposal that would set aside the Environmental Protection Agency [official website] cap on mercury emissions from coal-burning power plants. The agency's rule [official website], which was finalized in March, sets a nationwide cap on mercury emissions and puts a ceiling on allowable pollution for each state beginning in 2010. Individual plants can buy pollution credits from plants that are under allowable levels through a cap-and-trade system, similar to those used with other air pollutants. The Senate proposal would call for a floor vote on the agency rules, allowed by a 1996 law that has been successfully used only once to repeal Clinton administration workplace ergonomics regulations in 2001. A majority of the Senate must to agree to hold a vote on the proposal, before a separate vote on the proposal can occur. Should it pass the Senate, it would go the House and onto the White House where the Administration has already threatened a veto. Marketwatch has more.
In other environmental law news... - The US Department of Agriculture (USDA) [official website] has designated counties [press release] in California, Kansas, Minnesota, Oregon, Texas and Virginia as primary agricultural disaster areas. The designation allows certain farmers, ranchers and other agricultural producers in the counties to be eligible for low-interest emergency loans from USDA's Farm Service Agency (FSA) [official website]. The disaster is generally due to flooding in the west and north, and drought in the south. USDA has more on federal agriculture disaster assistance here.


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US considers new 'networked munitions', rejects treaty banning landmines
Tom Henry on September 12, 2005 2:13 PM ET

[JURIST] US Pentagon officials are in the final stages of determining whether to implement a new weapons program that would mandate the production of a new era of landmines, dubbed "networked munitions", in the face of international opposition to such weapons. Doreen Chaplin, division chief for network munitions in the Army, said the new program, entitled "Spider", is a better alternative to persistent mines [US landmine policy] because the new mines are controlled by humans and either shut themselves off or their batteries expire after 30 days, leaving them inactive. Munitions used in the Spider program can also operate like a traditional minefield, without any human control, but officials have insisted that would not be its primary use. Human Rights Watch [advocacy website] has voiced its opposition saying the mines' capability to detonate without operator control violates international consensus on such weapons. 143 countries have ratified the Ottawa treaty [text] which bans the use, production, stockpiling and transfer of anti-personnel mines, and requires that mined areas be cleared within 10 years. The US, China and Russia are among 51 countries that have refused to sign on to the treaty. A final decision on whether to start munitions production will be made in December 2005. AP has more.


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UN summit talks break down over human rights, management reform differences
Holly Manges Jones on September 12, 2005 11:40 AM ET

[JURIST] Intensive talks directed at salvaging a consensus draft document for the 2005 United Nations World Summit [official website] broke down Monday over differences on human rights and management reform, according to a spokesman for the US UN mission [official website]. Rick Grenell said that Egypt, China, Russia, and Pakistan have objected to a US-supported requirement of a two-thirds majority vote of the UN General Assembly to select a member of the new human rights council. The four countries are instead lobbying for a simple majority vote, and also disagree with the council becoming a permanent aspect of the UN. The proposed reforms to the standing Human Rights Commission were prompted by allegations that that body is run by countries with a history of abuse and driven by political bargaining which does not allow effective action on human rights. Grenell said that management reforms were also a major point of difference, with the US supporting more management powers being shifted to the Secrtary-General's office, and away from the General Assembly. Secretary-General Kofi Annan himself invoked a sense of urgency over the state of the summit document Monday, and encouraged all parties involved to continue negotiations [UN news report] AFP has more.


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Texas high court allows relocated Katrina attorneys to practice in state
Holly Manges Jones on September 12, 2005 9:55 AM ET

[JURIST] The Texas Supreme Court [official website] has issued an order [text, PDF] allowing lawyers from Louisiana, Mississippi and Alabama displaced by Hurricane Katrina [JURIST news archive] to practice law in Texas for 30 days. The temporary order will put a hold on normal state licensing requirements monitored by the Texas Unauthorized Practice of Law Committee (UPLC) [official website]. Texas Supreme Court Justice Dale Wainwright described the decision by saying, "What we're doing is helping people who have been affected by an incredible disaster and at the same time keeping an eye on the integrity of the bar as well." But the 7,500 displaced attorneys do not expect to be able to return to their own states to resume practicing with the month, and representatives from the UPLC and the State Bar of Texas [official website] anticipate that the 30-day order will need to be reevaluated in coming weeks. President Bush also signed legislation last week that enables federal courts in New Orleans to operate outside their district boundaries [JURIST report]. Monday's National Law Journal has more.
Meanwhile, attorneys who were displaced to Georgia can continue to serve their clients for the time being, but those who want to remain permanently will have to take the state bar exam to obtain a license, since reciprocity agreements allowing displaced attorneys to forgo the bar exam do not exist between Georgia and Louisiana, Mississippi and Alabama. General counsel William P. Smith III of the State Bar of Georgia [official website] has said there are no current plans to allow the hurricane victims to be exempted from the exam. The National Law Journal has more.


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