Headlines

Jul 16 2001

FIRED UNDER FIRE As regulators examine how Wall Street banks allotted IPO shares to clients in exchange for inflated commissions, one firm figuring prominently in the probe, Credit Suisse First Boston, dismissed three brokers. The brokers worked in CSFB's technology unit, headed by Frank Quattrone.

CAN'T TURN ON EU European antitrust officials rejected General Electric's last-minute proposal to purchase Honeywell. GE still had hope for its $42 billion takeover bid and tried to address concerns that it would only buy planes with Honeywell gear for aircraft leasing. Honeywell also offered to lower its price by $1.8 billion, but GE's Jack Welch nixed the plan, saying it made no sense for shareholders. The European Commission's final decision is due July 12.

GREAT POWERS Federal Energy Regulatory Commission negotiations between California and power generators including Duke Energy, Enron, Reliant Energy and Williams began early last week. The Golden State claims it was overcharged $9 billion for power; the companies allege California hasn't paid for some sales. If they can't settle after 15 days, the FERC will weigh in.

WRITERS' DAY IN COURT Publishers reproducing articles by freelancers online and in databases without permission are infringing on authors' rights, the Supreme Court ruled. The decision may lead to better terms for writers when negotiating for electronic use. The National Writers Union brought suit against the New York Times Co., Lexis-Nexis and others. The New York Times publisher responded that the paper would begin removing portions from its "electronic historical archive."

FEDEX CAN'T ESCAPE The top air-express shipper became the latest victim of the economic slowdown, announcing spending cuts, a hiring freeze and a 54 percent shortfall in quarterly profits. The company's U.S. daily volume declined 6 percent from last year's quarter, while international deliveries grew just 2 percent. FedEx still surpassed lowered expectations and saw its stock price rise slightly.

TRADE DEAL Online broker Ameritrade restructured operations to woo individual investors with bolstered services and direct-access trading. It also plans to partner with 401 providers and financial firms, and to offer companies employee benefit programs if they use Ameritrade's services. Competitor E-Trade is close to settling with securities regulators over its controversial ads, reports said.

YOU'VE GOT RE-UP America Online and AT&T Wireless expanded last year's partnership with an agreement to develop cobranded services, including e-mail and instant messaging, over AT&T's wireless networks. The services will be available in 2002 and will be promoted through AOL Time Warner properties.

CLICK TRICKS The Center for Digital Democracy and Privacy International released a report lambasting viewer-tracking technology for interactive television. The report drew on marketing material from several companies to show how user habits can be quietly recorded for advertisers. The groups are urging state and federal legislators to investigate and pass new privacy laws to protect viewers.

NOTED Nokia's infrastructure arm will cut roughly 1,000 jobs by year's end, while Lucent spinoff Agere will slash 4,000 positions and take a charge of up to $900 million. ... Following AOL's lead, No. 2 ISP EarthLink raised its dialup rates to $21.95. ... The Wall Street Journal reported Netscape and SGI founder Jim Clark is in talks to join the VC firm of former Netscape CEO Jim Barksdale.