When her lawyers failed to act, the U.S. District Judge David Hittner ordered that jury selection begin for the criminal trial of Enron's former assistant treasurer her, set for February 10.
"We're a little disappointed," said Enron Task Force director Leslie Caldwell as she left the Houston federal courthouse Friday afternoon on her way to the airport, according to the Chronicle. Caldwell added that the plea deal could be revived at any time.
"These plans ran into a buzz saw in the person of Judge Hittner when the judge said: 'Do it my way or tee up for trial,' " said Houston defense attorney David Berg. Nonetheless, Berg believes that "Lea Fastow will pull the ultimate Blanche DuBois and trust herself to the kindness of the court."
Rite Aid CFO Accepts Demotion
Rite Aid Corp. announced that it asked chief financial officer Chris Hall to relinquish his position after Hall proposed a settlement with the Securities and Exchange Commission stemming from alleged violations during his service as CFO of another company.
John Standley has been named chief financial officer, effective immediately, while continuing to serve as senior executive vice president and chief administrative officer. He previously served as Rite Aid's CFO from December 1999, when he joined the company, until June 2002, when he became chief administrative officer.
Hall will now serve as senior vice president for real estate and planning.
The SEC has accused Hall of violating books-and-records provisions and internal accounting control provisions stemming from activities while he was CFO at Ralphs Grocery Co. in 1998.
Fred Meyer Inc. acquired Ralphs in 1998, then merger with Kroger in 1999. In 2001, Kroger restated earnings for the period from 1998 to 2000 due to accounting irregularities at Ralphs.
Rite Aid stressed that the issues raised by the SEC and the proposed settlement do not involve Rite Aid, any other employees at the company, or Hall's employment there. The company added that it was appropriate for Hall to assume another position, since the issues raised by the SEC do not pertain to Rite Aid and the proposed settlement would not require any action affecting his position at the company.
"Chris Hall has been and continues to be a valuable member of our management team," said Mary Sammons, Rite Aid president and chief executive officer. "He consistently performed with the highest integrity as CFO and worked diligently with the rest of the Rite Aid management team to implement the strict financial controls we've put in place at Rite Aid."
The proposed settlement would not require Hall to admit or deny any wrongdoing. The proposed offer of settlement, while agreed to by the SEC staff, is subject to the final approval by the SEC's five-member commission.
SEC Looking into Transaction Between Dollar General and IBM
The Securities and Exchange Commission is considering bringing civil action against IBM Corp. and Dollar General Corp. regarding a transaction between the companies several years ago.
In that transaction, Big Blue paid Dollar General $11 million for used equipment as part of a sale of IBM replacement equipment in Dollar General's 2000 fourth fiscal quarter. In early 2002 the transaction was part of a restatement by Dollar General of its results for fiscal years 1998 through 2000.
IBM announced that it received a Wells Notice related to Dollar General's accounting for the transaction, "by participating in and aiding and abetting Dollar General's misstatement of its 2000 results." Big Blue has the opportunity to respond to the SEC before the regulatory agency makes a formal recommendation regarding whether any action should be brought against IBM.
Dollar General stated that it has been cooperating in the SEC's investigation by providing documents and other information to the SEC staff and that has settled the shareholder class action and derivative lawsuits related to the restatement.
IBM stated that it continues to cooperate fully with the investigation relating to Dollar General as well as a separate SEC investigation relating to the recognition of revenue by IBM in 2000 and 2001, primarily concerning certain types of customer transactions, which is not the subject of the Wells Notice.
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