Tuesday PM October 9th, 2007
by: Ed Mayberry, October 9, 2007 5:10:00 am
A lawyer for corporate investors ran into tough questioning from U.S. Supreme Court justices today, as the court tries to set boundaries in stockholder lawsuits for securities fraud. The questions came during arguments in a lawsuit brought by Charter Communications shareholders. The court reacted with skepticism to arguments that banks, lawyers and suppliers should be held liable for helping companies deceive investors. Chief Justice John Roberts and Justice Antonin Scalia suggested federal law limits shareholders who want to sue companies and firms--other than the one in which the investors hold stock. Charter investors are suing suppliers Scientific-Atlanta and Motorola, alleging Charter suppliers schemed with Charter executives to mislead stockholders about the company's revenue growth. Lawsuits involving Enron and other investor scandals will be affected by the case. In a similar lawsuit filed against Enron, shareholders are seeking over $30 billion from banks that allegedly colluded with the energy company to hide its debts. At issue is whether banks, lawyers, accountants and suppliers can be held liable for scheming with publicly-held companies that deceive their stockholders. Chief Justice John Roberts and Justice Antonin Scalia suggested federal law imposes strict limits on shareholders' ability to sue companies and firms other than the one in which the investors hold stock. Shareholder attorney Stanley Grossman cited a court precedent from more than 35 years ago helpful to shareholder claims in securities fraud cases. But Roberts said the court "should get out of the business of expanding'' the rights shareholders already have.
The Houston Technology Center hosted its fourth annual showcase at the Hyatt downtown, with over 50 exhibitors displaying new technology. Their businesses are being supported by HTC. NASA developed a technology to enhance astronaut viability in space, which Houston-based Regenetech is commercializing. Regenetech's CEO is Dave Bonner.
"They worked out methods to grow tissue and use stem cells for various treatments of the body, and then we are licensing that technology to people who are doing clinical trials for a number of different treatments—various types of cancer and auto-immune disease treatments—leukemias, myolomas, things of that nature, lupus, Crone's disease, et cetera, MS. HTS has supported us and got us in to the see right people, and so forth. It was an enormous boost for us."
The HTC event honored Gulf Coast region companies that received awards from the Emerging Technology Fund.
The new attorney for a jailed Dynegy executive blames blatant prosecutorial misconduct for the conviction of Jamie Olis. The attorney, civil trial lawyer John O'Quinn, said today he's handling the case for free because he's convinced an innocent man is in prison. Olis is serving six years on his 2003 conviction for helping to foster a multimillion-dollar accounting scheme that prosecutors say cost shareholders $100 million. On Friday, O'Quinn asked a federal court to throw out that conviction and grant Olis a new trial.
The U.S. Supreme Court is allowing a class action lawsuit to proceed against Hewlett-Packard. The lawsuit alleges Compaq Computer sold defective computers. The former Houston-based computer company is now part of HP, sold defective computers. The Supreme Court's action lets stand a 2005 ruling by an Oklahoma state court. Compaq argued in court papers filed with the Supreme Court that a virtually identical lawsuit was brought in Texas in 2000. In that case, the Texas Supreme Court refused to certify a class action, ruling that Texas law shouldn't apply to out-of-state members of the class. Nevertheless, Oklahoma's highest court not only certified the class, but said that Texas law should be applied in the case.
Dell says it's laying off 250 tech support workers at its Tennessee facilities. The Round Rock-based computer maker says the layoffs are part of broad plan announced in May to trim costs and become more competitive. Dell spokesman David Frink says the job cuts are effective immediately. He says affected workers are being given the option to apply for sales positions. Frink says severance packages including outplacement services were being offered to those who don't seek sales jobs. In May, the company outlined a plan to slash about 10 percent of its work force of more than 81,000 employees over the next year. Last week, Dell said it's closing a sales call center in McGregor, near Waco, trimming 260 workers. The workers were being offered jobs at call centers in Round Rock, Oklahoma City and Nashville, Tennessee, or given severance of at least two months pay.