The three British ex-bankers who admitted to stealing millions of dollars from their former employer in a scheme with former Enron finance chief Andy Fastow are to be sentenced today in a Houston federal court. David Bermingham, Giles Darby and Gary Mulgrew pleaded guilty to wire fraud in December. U.S. District Judge Ewing Werlein postponed approval of their plea agreement to hear from federal probation authorities on whether the proposed punishment is appropriate. The three agreed to serve 37 months in prison, as well as repay the $7.3 million they received in the scheme with Fastow. They admitted cheating the Royal Bank of Scotland—now Greenwich NatWest—by advising the bank to sell its interest in a Fastow partnership for $1 million although its value had grown. Fastow had arranged for Enron to pay more than $19 million for Greenwich NatWest's stake.
A maker of pumps and valves must pay more than $10.5 million over illegal kickbacks through the U.N. Oil-for-Food program. The Justice Department announced the penalty involves Irving-based Flowserve. Flowserve will pay $4 million in an agreement with the Justice Department and $6.5 million under a settlement with the Securities and Exchange Commission. Flowserve acknowledged employees and agents of a subsidiary--Flowserve Pompes--paid kickbacks to the Iraqi government to obtain contracts. The agreements involved the sale of water pumps and parts for use in Iraqi refineries. The time frame was July 2002 and February 2003. Flowserve President Lewis Kling says the company cooperated and the settlements are in line with the accruals disclosed in its third-quarter financial statements.
A gauge of future economic activity has dropped for the fourth consecutive month in January, suggesting the U.S. economy could weaken further in the near future. The Conference Board said Thursday its Index of Leading Economic Indicators fell 0.1 percent last month, after a revised 0.1 percent drop in December and a 0.4 decline in November. The index is designed to forecast the direction of the U.S. economy over the next three to six months. Persistent, pronounced declines over several months could signal a recession is in store. The report comes a day after the Federal Reserve released its updated forecast for slower economic growth, higher unemployment and higher inflation.
The Labor Department reports that the number of newly laid off workers filing claims for unemployment benefits fell last week, but the larger-than-expected drop was seen as only a temporary improvement. The Labor Department reported that the number of jobless claims dropped by 9,000 to a total of 349,000. But analysts noted that claims offices in California were open for only four days last week because of a state holiday. The four-week average for claims, which gives a better picture of labor market trends, rose to 360,500. That was the highest level since claims spiked in October 2005 in the aftermath of Hurricane Katrina.
The American Institute of Architects' Architecture Billings Index was down in January after a three-month rise, according to the Houston Business Journal. That's despite an increase in demand for design services. The rating was down to 50.7 from 55.4 in December. New project inquiries rose to 59.5 in January from 58.1 the previous month. The institute's index shows an approximate nine- to 12-month lag between architecture billings and construction spending.
Oil prices have fluctuated after a government report showed that the nation's crude oil supplies rose more than expected last week while heating oil inventories fell more than forecast. The Energy Department's Energy Information Administration says crude inventories rose by 4.2 million barrels last week. Supplies of distillates, which include heating oil, fell by 4.5 million barrels, much more than forecast. The mixed report didn't help resolve an ongoing battle between a group traders who think oil prices have more room to rise after two days of record-setting rallies, and those who think prices are destined to fall as supplies rise while demand slides.
Continental Airlines posted a net loss of $32 million for its fourth quarter, compared to a net loss of $26 million for the same period a year ago. For the year, net income was $459 million, compared with net income of $343 million in 2006.
Continental has added 27 aircraft to its firm order positions at Boeing, including eight new 777 and 19 new next-generation 737NG aircraft. The aircraft orders help Continental replace less efficient aircraft and prepare for growth.
Cell-phone carrier T-Mobile USA is going to try its hand at being a landline phone company. T-Mobile is offering wired phone service for $10 a month, plus taxes and fees, to its wireless subscribers in the Seattle and Dallas-Fort Worth areas. The service, called talk forever home phone, will provide unlimited local and domestic long distance calls. It will piggyback on the customer's high-speed Internet connection, in much the same way voice-over-Internet providers like Vonage sell phone service. Customers will need to buy T-Mobile's Internet router for $50 when signing up. The router has two phone jacks where standard corded or cordless home phones can be plugged in. An existing home number can be transferred to the new service. Subscribers will also need to be signed up for a wireless plan costing at least $39.99 a month.
Rowan Companies has been awarded a $201 million, three-year drilling contract offshore Saudi Arabia from Saudi Aramco, according to the Houston Business Journal. The company is moving a jack-up drilling rig currently in the Gulf of Mexico to the Middle East.
ConocoPhillips plans to build a technology and corporate learning center in the Denver suburb of Louisville, Colorado, according to the Houston Business Journal. The site was purchased in January for $55.6 million. The company plans to bring thousands of employees to the center for training each year. The center will also be the hub for research and development of renewable energy and carbon fuels recovery.
A Dallas-area test preparation company says it's being bullied by the owner of the SAT and PSAT college entrance exam programs. The College Board is suing Karen Dillard College Prep for copyright infringement, saying the company tries to provide an unfair edge on the tests by illegally obtaining "live'' copies to help students practice. Dillard says the board has broken a promise not to sue if her company cooperated in an investigation. Now, she says the board is trying to drive a test prep competitor out of business. The College Board's lawsuit said some students' scores could be canceled if--though through no fault of their own--they were allowed to practice on a test form that was later part of their scored exam. The suit filed in federal court in Dallas alleges Karen Dillard College Prep got a copy of the PSAT administered in October from a Plano high school principal whose brother works at the company.
The Research Partnership to Secure America has chosen seven proposals to share its $3.2 million small-producer program grant, according to the Houston Business Journal. The Sugar Land nonprofit consortium supports developers of environmentally-safe technology for the oil industry. The seven include: two proposals each from the New Mexico Institute of Mining and Technology and the University of Kansas, Texas A&M University, University of Missouri and the Lawrence Berkeley National Laboratory.
Department store retailer J.C. Penney says its fourth-quarter profit fell 10 percent due to a shorter quarter. It also predicts 2008 earnings below Wall Street expectations, amid a weak consumer spending environment. Plano-based J.C. Penney co. says net income slipped to $430 million from $477 million a year ago. The latest period included 13 weeks, versus 14 weeks a year ago. Sales fell four percent to $6.39 billion from $6.66 billion. Analysts surveyed by Thomson Financial revenue of $6.39 billion.
Jeweler Zale says its fiscal second-quarter profit dropped 31 percent on declining same-store sales, but still beat analysts' estimates. The Irving-based company says net income declined to $60.8 million from $88.1 million a year earlier. Zale says income from continuing operations slipped to $52.7 million from $77.1 million. Quarterly sales fell seven percent to $827.8 million from $891.5 million. Analysts polled by Thomson Financial expected of $841.3 million. Zale says second-quarter same-store sales dipped 7.3 percent.