Submitted by webadmin on Fri, 2004-06-18 00:00

June 18, 2004

SEC Reviewing Needs For Oversight Of Credit Rating
Agencies

A top SEC official said yesterday that the commission may need
additional legislative authority to strengthen its oversight of credit
rating agencies whose assessments of companies' financial health affect
regulatory actions, lending decisions and investment trends,
face='Times New Roman'>CongressDaily reported. The credit rating
system has drawn criticism in the wake of the Enron collapse and other
financial scandals. As required under the 2002 Sarbanes-Oxley corporate
governance law, the SEC is conducting a long-term review of credit
rating agencies' role in the operation of the securities
markets.

Pensions Face Huge Asset Gap

More than 1,000 large private pension plans, many in the
airline and steel industries, were underfunded by an aggregate of $278.6
billion at the end of last year, the government's pension insurance
agency said yesterday, the Washington
Post reported. The figures are actually a slight improvement over
the situation at the end of 2002, when underfunding stood at $305.9
billion. But they stand in sharp contrast to 1999, when 166 plans were
underfunded by a total of $18.4 billion. The underfunded plans had
$641.8 billion in assets to cover $920.3 billion in liabilities, for an
average funded ratio of less than 70 percent.

Government Rejects $1.6 Billion Loan Guarantee for
United

A federal loan board rejected United Airlines'
application for $1.6 billion in federal loan guarantees yesterday,
saying that it thought the airline could survive on its own without
government help, the New York Times
reported. United was the last to apply for a loan guarantee under a $10
billion program established by Congress to aid the airline industry
after the September 2001 attacks. It has been operating under bankruptcy
protection, and the board's decision was not expected to have any
immediate impact on travelers or the airline's employees. But United's
plans for emerging from bankruptcy depended heavily on winning the loan
guarantees, and the board's decision was a major setback. It now faces
the task of winning more concessions from its 67,000 workers and finding
new financing on its own, the newspaper reported.

U.S. Airwaves To Be
Auctioned in Early 2005

Valuable wireless airwaves in many U.S. markets will
likely be auctioned in January, a sale that could rake in billions, a
source familiar with the matter said on Thursday, Reuters reported. The
Federal Communications Commission plans to auction 155 licenses covering
about 60 markets that bankrupt NextWave Telecom Inc. returned, along
with another 79 other licenses that failed to sell previously or were
returned or reclaimed, the source said. However, some of the licenses
will likely be designated for use only by certain entities, like small
businesses, which could make it harder for the big carriers to get their
hands on those licenses, the newswire reported.

Accounting Still Vague 2 Years
After Reforms-Study

Nearly two years after U.S. authorities decided to
improve corporate reporting following a series of scandals, many
companies' financial statements still fail to paint a clear picture of
their condition, a study released on Thursday said, Reuters reported. In
fact, an 'alarming' 75 percent of the 120 companies studied by
independent research firm RateFinancials persist in using off-balance
sheet financing. The disintegration of energy trader Enron Corp. in 2001
owed a lot to complex off-balance sheet transactions that were hidden
from investors.

The study, which looked at about one-quarter of the
members of the Standard & Poor's 500 index, estimates that about a
third of big public companies still practice 'obfuscating financial
reporting.' Sixty-four percent made unreasonable assumptions of pension
fund liabilities and 28 percent used 'aggressive' revenue-recognition
techniques, the study said, the newswire reported.

ENRON

California Sues Enron for Market
Manipulation

California's attorney general
said on Thursday he is suing Enron and several subsidiaries for
allegedly manipulating the market during the state's 2000-01 energy
crisis and costing Californians hundreds of millions of dollars, the
Associated Press reported. Bill Lockyer said the lawsuit, filed in state
court, seeks restitution and other, unspecified damages from the
Houston-based energy giant whose trading practices are under
investigation by the U.S. Justice Department, the newswire
reported.

FERC Seeks To Include Enron Tapes In Cases Against
Company

The U.S. Federal Energy
Regulatory Commission directed its staff Thursday to evaluate whether
the commission should include recently released recordings from Enron
Corp. traders in proceedings against the company pending before the
commission. Commissioners also called on Congress to give FERC more
authority to pursue civil and criminal penalties against companies that
violate federal energy law. The recordings include conversations between
Enron energy traders during the 2000-2001 California power crisis in
which they discuss efforts to drive up wholesale power prices in the
state.

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Andersen Loses
Appeal In Enron-Related Obstruction Case

Arthur Andersen LLP learned
Wednesday it lost its appeal two years after the former Big Five
accounting firm was convicted of destroying and altering Enron
Corp.-related documents, according to an Associated Press article.
Andersen, a shadow of its former self since the firm was indicted, was
convicted June 15, 2002 after a six-week trial that included 72 hours of
jury deliberations spread over 10 days. In an opinion released
Wednesday, the 5th U.S. Circuit Court of Appeals upheld the jury's
decision. While the first criminal case to involve actual former Enron
employees is scheduled for August this year, Andersen was one of 'many
members of its supporting cast,' the court said in a 38-page opinion
written by Judge Patrick Higginbotham.

Delta Pilots to Seek Talks

The pilots' union at Delta
Air Lines Inc. decided yesterday to seek a resumption of contract
negotiations with the company, using updated objectives, Bloomberg News
reported. The union's top council passed a resolution during a special
meeting in Los Angeles after getting a financial update from economic
experts and investment bankers. The company made its latest proposal in
January and no substantive talks have taken place this year. 'Delta is
under considerable pressure due to increasing fuel costs and declining
yields,' the union, a unit of the Air Line Pilots Association, said in a
message to pilots. Delta, which has posted $3.6 billion in losses since
2000, is asking pilots for pay cuts and has said a bankruptcy filing is
possible unless it can stem losses, the newswire reported.

Defense Lawyer Calls Adelphia Charges a 'Rush to
Judgment'

John J. Rigas, the founder of Adelphia Communications
fell victim to a 'rush to judgment' by federal prosecutors who have
failed to prove their fraud case against him, his lawyer argued
yesterday, Reuters reported. The lawyer, Peter Fleming Jr., said
allegations that Rigas wasted company money to pay for personal
extravagances were laughable. Rigas, two of his sons and
another former company executive, Michael C. Mulcahey, are charged with
stealing millions of dollars from Adelphia to buy stock and assets. They
face charges on 24 counts of wire, bank and securities fraud and
conspiracy. The Rigases have said that the money came from legitimate
loans taken out on the recommendation of outside financial advisers.
Adelphia filed for chapter 11 bankruptcy protection in June 2002 and put
itself up for sale in April 2004.

Alstom Warns of Potential for More Restructuring Moves

Alstom
SA's stock declined Friday after the French engineering
company warned of the potential for further restructuring moves and
associated costs if orders don't improve, which could have a 'material
adverse effect' on its results, the Wall
Street Journal reported. Alstom's shares were down 5.3 percent at 71
European cents (86 U.S. cents) in mid-afternoon trading in
Paris.

June 182004

Accounting Still Vague 2 Years After Reforms-Study

Accounting Still Vague 2 Years
After Reforms-Study