In Thursday's corporations and securities law news, American International Group Inc. (AIG) announced a federal grand jury in Indiana is investigating the company's contract with cell phone distributor Brightpoint Inc. The probe centers on products that AIG sold that companies, including Brightpoint, might have used to make their earnings look better. AIG has already paid $10 million to settle charges with the SEC related to this conduct. AIG still faces SEC and US Justice Department investigations into charges that it helped PNC Financial Services Group Inc. inflate profits by moving bad loans off its books. Read the AIG press release pertaining to the grand jury investigation here. Reuters has more.
In other news, telecommunications company Qwest Communications International Inc. agreed Thursday to pay a $250 million fine to the SEC to settle a claim that the company engaged in fraud by improperly booking $3.8 billion in revenue and misleading investors about it. Read the SEC press release here. Read the SEC litigation release summarizing the charges here. Read the Qwest press release announcing the settlement here. AP has more.... Ford chairman Bill Ford says the auto giant will cooperate with the SEC over its accounting practices related to pension costs. AP has more. In a related story, Northwest Airlines defended its accounting practices for its pension and post-retirement benefit plans in the face of the same SEC inquiry. AP has more.... The chairman of Lazard LLC, the world's largest privately held investment bank, approved a plan to sell shares in bank on the condition that Bruce Wasserstein, who runs the firm, resign if the IPO fails. Bloomberg has more.... A leading employment law professor, acting as an expert witness for Disney shareholders in their suit seeking a return of former Disney president Michael Ovitz's $140 million payoff, said Ovitz seemed to have no understanding at all of the basic responsibilities of an executive in his position. Trial proceedings can be viewed live at Courtroom Connect. The Financial Times has more.... As previously reported on JURIST's Paper Chase, Martha Stewart's defense team has appealed her conviction on charges of lying to federal investigators to the US Second Circuit Court of Appeals, saying that several problems with the prosecution's case "tainted" her trial. JURIST's Paper Chase has ongoing coverage of the Martha Stewart case. Read Stewart's appellate brief here [PDF]. Stewart comments on her appeal on her website here. AP has more. In related news, Stewart's former broker, Peter Bacanovic, has asked the US Second Circuit Court of Appeals to overturn his conviction because he was forced to stand trial alongside Stewart. Read the indictment against Stewart and Bacanovic here. Reuters has more.... Viacom Inc. and Disney Corp. have agreed to settle allegations with the FCC that their respective children's cable networks violated federal advertising restrictions in children's programing. Reuters has more.