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Integrated Electrical says reaches settlement with SEC
Legal Career News | 2007/08/31 12:39

Integrated Electrical Services on Friday said it reached a settlement with the U.S. regulators related to an investigation alleging violation of certain accounting laws by the company and six former officers.

The settlement does not require Integrated Electrical to make any monetary payments, the company said in a statement.

A civil complaint was filed by the SEC against the company and its employees alleging improper accounting of certain receivables and inadequate disclosure of its contingent liabilities in certain prior periods.

The complaint also alleged that the company failed to properly disclose a change in its policy for bad debt reserves and the resulting write-down of such reserves in 2003 and 2004.



Court says FirstEnergy cost deferrals problematic
Lawyer Blog News | 2007/08/30 18:14

An Ohio court has ruled that state regulators violated the law by allowing FirstEnergy Corp to raise future distribution rates to offset more than $150 million of fuel costs, the company said on Thursday. In a filing with the Securities and Exchange Commission, FirstEnergy said the Supreme Court of Ohio ruled that the Public Utilities Commission of Ohio (PUCO) violated certain provisions of the Ohio Revised Code because fuel costs are a component of generation service, not distribution service.

In January 2006, PUCO approved the recovery of some of FirstEnergy's fuel costs through a fuel rider and allowed them to recover other fuel costs over a 25-year period beginning Jan. 2009 through distribution rates.

The court also found that said it did not believe PUCO addressed whether the deferral of recovery was anticompetitive. It sent the issue back to the commission for further consideration.

FirstEnergy said it plans to contest the court's interpretation and ask it to reconsider the ruling. It also intends to file a concurrent application with the PUCO, laying out a new plan for recovery of the fuel costs.

It said it would continue deferring the fuel costs until the court hears its motion to reconsider the case.



GOP acts swiftly to make Craig scandal 'go away'
Law & Politics | 2007/08/30 15:09
Sen. Larry Craig's "I'm not gay" declaration met with disdain Wednesday from gay activists, many of whom knew for nearly a year -- long before his recent arrest -- of allegations that the conservative Idaho Republican solicited sex from men in public bathrooms.

They view his case as a prime example of hypocrisy -- a man who furtively engaged in same-sex liaisons while consistently opposing gay-rights measures as a politician.

" He may very well not think of himself as being gay, and these are just urges that he has," said Matt Foreman of the National Gay and Lesbian Task Force. " It's the tragedy of homophobia. People create these walls that separate themselves from who they really are."

The activist, Mike Rogers, went public last October with allegations that Craig engaged in sexual encounters with at least three men, including one who said he had sex with Craig twice at Washington's Union Station.

The Idaho Statesman went even further back into Craig's life, talking to other men who claimed they were solicited by him.

It also mentioned a scandal in 1982, in which a male page reported having sex with three congressmen, and Craig -- although not named by the youth -- issued a statement denying any wrongdoing.

Rogers noted that some politicians, when confronted with evidence about same-sex encounters, have acknowledged their homosexuality -- such as Rep. Barney Frank (D-Mass.) and the late Rep. Gerry Studds (D-Mass.).

Others persist in denial, and Rogers contends they are fair game for exposure if they vote against gay-rights causes.

''I'd love for Larry Craig to come out and be honest with the people of Idaho and run as a Senate candidate and see if the Republican Party is the big tent they claim to be,'' Rogers said.

Craig's political support was eroding by the hour Wednesday as fellow Republicans in Congress called for him to resign and party leaders pushed him unceremoniously from senior posts.

The White House expressed disappointment, and Senators John McCain (R-Ariz.) and Norm Coleman (R-Minn.) both joined calls for Craig to resign.

''My opinion is that when you plead guilty to a crime, you shouldn't serve. That's not a moral stand. That's not a holier-than-thou. It's just a factual situation," McCain said.



Ex-Goldman Sachs Worker Pleads Guilty
Lawyer Blog News | 2007/08/29 15:35

A former Goldman Sachs analyst pleaded guilty Tuesday to conspiracy to commit securities fraud and insider trading, admitting he participated in a scheme that helped earn more than $6.7 million. Eugene Plotkin, 28, entered the plea in federal court in Manhattan and apologized for his actions.

"Words can't express how sorry I am for the harm I have caused to others, especially my family," Plotkin said.

Plotkin was charged in 2006 in a scheme that involved David Pajcin, another Goldman Sachs analyst, and Stanislav Shpigelman, who met Plotkin in college and worked as an analyst at Merrill Lynch & Co. Inc.'s mergers and acquisitions division.

Assistant U.S. Attorney Helen Cantwell said the trio conspired on some of the most innovative and complicated insider-trading schemes since those of the 1980s.

In one instance, a New Jersey grand juror leaked information so Plotkin and Pajcin could learn details of an investigation of accounting fraud accusations against Bristol-Myers and several of its executives.

In a second plot, Pajcin and Plotkin arranged for a man to become a forklift operator at a printing plant so he could steal early copies of a market-moving column in BusinessWeek magazine.

Prosecutors say Shpigelman provided Plotkin and Pajcin with information on deals to give them an advantage in their trading.

In exchange for information on six different pending mergers or acquisitions, Shpigelman received cash and promises of future payments based on a percentage of profits, authorities said.

Although the charges carry a potential maximum prison term of 165 years, Plotkin signed a plea agreement in which he promised not to appeal any sentence between four years and nine months and five years and 11 months in prison.



Storm builds around Idaho senator's arrest
Lawyer Blog News | 2007/08/29 13:30

Idaho Sen. Larry Craig isn't sticking to the script about how sex scandals play out in the nation's capital. In fact, he's following it backward. The rich history of powerful figures accused of misbehavior shows they tend to deny it indignantly, try to ride out the storm with tortured explanations, then give in to contrition if cornered. Not Craig. First, an admission of guilt; now, a defiant protestation of innocence.

Seeking to salvage his reputation and quell a media storm stirred by his guilty plea to disorderly conduct charges, the Republican senator Tuesday denied making a sexual advance to an undercover officer in a Minneapolis airport men's room two months ago.

"I am not gay and never have been," Craig declared at a Boise news conference with his wife, Suzanne, at his side.

But even as he denied making an advance, the case sent shock waves through Republican circles. Senate Republican leaders called for an ethics investigation and vowed to consider other sanctions.

Former Massachusetts Gov. Mitt Romney, whose Idaho presidential campaign was headed by Craig until the charges came to light, compared the senator's behavior to former President Clinton's encounter with a White House intern and to former Rep. Mark Foley, R-Fla., who resigned last year in a scandal involving male House pages.

The charge grew out of a June 11 incident at Minneapolis-St. Paul International Airport in which an officer investigating lewd-conduct complaints about activity in the restroom arrested Craig for allegedly making a sexual advance. The arrest and the senator's Aug. 1 guilty plea became public Monday, when they were reported by the Capitol Hill newspaper Roll Call.

Craig, 62, was ordered to pay $575 in fines and fees and given one year's probation. A sentence of 10 days in the county workhouse was stayed.

At the news conference, Craig, a leading voice on issues affecting the West and a consistent opponent of gay-rights legislation, apologized for his handling of the incident, saying he regretted his guilty plea.

He said he had retained a lawyer to review the plea, although he signed court papers declaring he had read the police report and understood the nature of the crime and paid the fine — which defense experts said would make a challenge difficult.

Craig said he pleaded guilty because his hometown newspaper, The Idaho Statesman, had been conducting an eight-month investigation into his sexual orientation. He said he hoped that resolving the case quietly — without telling his family, friends, staff or colleagues — would settle the matter without bringing it to light for what he called the newspaper's "witch hunt."

"I overreacted in Minneapolis, because of the stress of The Idaho Statesman investigation and the rumors it has fueled around Idaho," said Craig, who took no questions.

Craig has confronted sexually related accusations before. In 1982, he denied involvement in a congressional-page sex scandal.

The Statesman on Tuesday reported on rumors that Craig had engaged in restroom sexual encounters with other men. The newspaper began its inquiry after a gay activist blogger, Mike Rogers, published a claim that Craig had sex with men. Rogers cited anonymous sources.

The Statesman quoted an anonymous man who claimed he had sex with Craig in a restroom at Union Station in Washington, D.C. The newspaper, which interviewed 300 people, described other allegations but did not name those who made them.

In a May interview that the newspaper published Tuesday, Craig denied having had gay sexual encounters and specifically denied restroom encounters.

"I'm going to have to leave it up to other people to weigh the care we took. I'm a bit disappointed" with Craig's complaints, said Vicki Gowler, the newspaper's top editor. "We were quite responsible, and we took great care with the story."

Craig already was under pressure from Republicans to give up the seat he has held since 1991 rather than risk handing Democrats what has been a safe seat. He said he'll announce next month whether he will seek re-election.

Pressure accelerated Tuesday. The mug shot from Craig's arrest was broadcast on CNN accompanied by a headline: "Senator's Bathroom Bust." The Drudge Report went with the headline "Brokeback Bathroom." And the detailed arrest report was available on the Internet.

Greg Smith, an Idaho pollster who has worked for Craig, said it was "almost certain" the senator would not seek re-election.

David Adler, a political-science professor at Idaho State University, noted that GOP leaders would be unlikely to support any interest Craig might have in trying to hold his seat "since they would fear losing a seat that has been safe for so long."

Adler said Craig's swift resignation as co-chair of Romney's presidential campaign in Idaho provides a "good measure of the fever that has been inflicted."

Patrick Sammon, president of the Log Cabin Republicans, the largest organization for gays in the GOP, said Craig's ability to continue serving is "in serious doubt."

If Craig resigns, Republican Gov. C.L. "Butch" Otter will appoint a successor, most likely a Republican, to serve the remainder of the term.

A former Democratic congressman, Larry LaRocco, is campaigning to replace Craig. LaRocco was elected to the House in 1990 but lost the seat in the 1994 GOP takeover.

LaRocco said he believes a Democrat can win even though none has been elected to the Senate from Idaho since Frank Church, who lost the seat in 1980. "People are in a plate-throwing mood out here, regardless of what happened with Larry Craig," LaRocco said.

Craig now is fighting a multifront battle, first and foremost a longshot bid to undo his guilty plea and the likely ethics probe, while also trying to shore up support among constituents should he decide to seek a fourth six-year term.

In his guilty plea, according to court records, Craig acknowledged engaging in physical "conduct which I knew or should have known tended to arouse alarm or resentment of others." Criminal-defense lawyers said it would be difficult for the senator to have the case reopened.

Successful motions to withdraw guilty pleas usually meet a high threshold, such as showing the person was misled into entering the plea, his constitutional rights were violated or there was wrongdoing by prosecutors, Minneapolis criminal-defense lawyer Peter Wold said.

But Craig's written plea specified the charges related to the airport incident, that he knew the judge couldn't accept a guilty plea from a person who felt he was innocent and that he was making no claim of innocence.

If he's successful in overturning his plea, Craig likely will have to face a public trial, Wold said.



McGraw Hill's Bahash Faces Purported Suit
Headline News | 2007/08/29 12:42

O'Rourke Katten & Moody said it filed a lawsuit against McGraw-Hill Cos.'s chief financial officer Robert J. Bahash on behalf of shareholders who bought the company's common stock between July 25, 2006 and Aug. 15. The law firm alleged that Bahash violated federal securities laws and that his misleading statements or omissions concerning the company's business and operations, particularly that its Standard & Poor's unit assigned "excessively high" ratings to bonds backed by subprime mortgages, artificially inflated its stock.

McGraw-Hill is a New York-based financial and education information services company. McGraw-Hill had no immediate comment because it said it wasn't aware of the suit.



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