All but one of 36 former colleagues called upon by the NatWest Three to speak in their defense has refused to meet with defense lawyers, according to the Times of London. David Bermingham, Giles Darby and Gary Mulgrew are being tried in Houston in October on Enron-related charges. But the lone former colleague willing to meet with their attorneys is reluctant to travel to the United States. The three defendants have argued that they cannot get a fair trial in the U.S., and potential witnesses are wary of referring to information that could be used against them by aggressive U.S. prosecutors. The former bankers are under house arrest in Houston, each charged with seven counts of fraud. They are alleged to have conspired with former Enron finance director Andy Fastow to execute a financial scam that cheated NatWest out of several million dollars. Last month, an inquest heard that Neil Coulbeck, another former colleague of the NatWest Three, killed himself over fears of being extradited to face trial over the Enron scandal, despite FBI assurances that he was in the clear.
Swiss banker UBS will pay the estate of Enron $115 million to settle legal claims it was given a better deal than other creditors. UBS will also withdraw a $5.5 million claim it had against Enron. UBS said it believed it had valid defenses to all of Enron's claims, but chose to settle the case to eliminate uncertainties. This is the third recent equity transaction case to be settled, following deals with Credit Suisse and Lehman Brothers. One other equity transaction case remains pending against The Bear Stearns Companies. The Enron Creditors Recovery Corporation has now been successful in arriving at settlements with eight of the ten banks against whom it was pursuing litigation.
A former Enron lawyer is asking a U.S. judge to throw out a lawsuit by the Securities and Exchange Commission accusing him of helping Enron founder Ken Lay mislead investors by approving false financial statements, according to the Houston Chronicle. Enron's former deputy general counsel Rex Rogers timed certain legal transactions to minimize the impact on regulatory filings and maximize profits, according to the SEC. Rogers denies wrongdoing.
The Arkansas Supreme Court has ordered state regulators, not a lower court, to hear a complaint against CenterPoint Energy. The complaint accuses the Houston-based natural gas utility and its affiliates of a fraudulent selling scheme. Justices granted a request to prevent the Miller County Circuit Court in Texarkana, Arkansas, from exercising jurisdiction over the lawsuit. Miller County resident Weldon Johnson filed the complaint in 2004. He accused CenterPoint and others of being involved in a "high-low'' selling scheme for natural gas that creates huge profits for the company at the expense of residential customers. The Miller County Circuit Court had rejected the company's motion to dismiss the lawsuit. The judge ruled that the Arkansas Public Service Commission lacked the authority to regulate the actual cost of natural gas.
First-time applications for unemployment benefits dipped for a second straight week. The Labor Department reports initial jobless claims were down by 1,000 last week--to 309,000. That's the lowest level in three weeks and an indication that the labor market remains healthy despite a yearlong slowdown in economic growth.
Things were a little better for retailers last month than they were in April--but not by much. In fact, the early results are raising questions about how strong consumer spending will be in the months ahead. Wal-Mart, the world's largest retailer, is reporting sales in stores open at least a year--known as same-store sales--were up 1.3 percent in May, just shy of analysts' forecasts. Costco Wholesale, meanwhile, saw sales jump seven percent, well above the expectation of 5.6 percent. Limited posted a three percent gain, almost twice as big as the advance analysts had projected. According to results tracked by Thomson Financial, 13 retailers missed expectations, while seven beat projections. Two retailers met the forecasts.
Long-term mortgage rates have risen to their highest levels in ten months. Freddie Mac says the average for the 30-year fixed-rate mortgage stands at 6.53 percent this week--an increase of nine basis points from last week. The 15-year loan is averaging 6.22 percent, compared with 6.12 percent a week ago. Freddie Mac Vice President and Chief Economist Frank Nothaft says the increase came on concerns about a tight labor force and wage growth.