TWO FORMER AOL EXECS CHARGED WITH STOCK FRAUD: Two former executives at America Online were among six people charged Monday with stock fraud and other offenses as part of the federal government's ongoing investigation into illegal accounting practices at AOL. The other four individuals charged were executives at a defunct Las Vegas software firm called PurchasePro. Prosecutors say the two companies entered into secret deals to help PurchasePro inflate its revenues in early 2001. Monday's indictment brings to 12 the number of individuals charged during the government's multiyear investigation of AOL and PurchasePro. Six other former PurchasePro executives, including the co-founder, have previously pleaded guilty. The indictment charges Kent Wakeford, 36, of New York City, former executive director at AOL's business affairs unit, and John Tuli, 37, of Weston, Mass., a former vice president in AOL's NetBusiness unit, with securities fraud, making false statements to auditors and wire fraud.
GATES RESIGNS FROM DRUG COMPANY BOARD: Microsoft Corp. Chairman Bill Gates will resign from the board of drug developer ICOS Corp. to focus his attention on his board seat at Warren Buffett's Berkshire Hathaway Inc., according to a regulatory filing Monday. Gates said he would resign from ICOS effective Feb. 9. The Bothell, Wash., company codeveloped erectile dysfunction treatment Cialis. In a letter sent to ICOS Chairman Paul Clark last Tuesday, Gates explained his resignation. "Given my friendship with Warren and my interest in helping out in any way he ever asks, Berkshire is now my highest priority for board membership," Gates said in the letter. ICOS shares closed Monday at $26.85, down 2 cents, on the Nasdaq Stock Market.
KRAFT REVISES REPORTING STRUCTURE: Kraft Foods Inc. said Monday it has realigned the financial-reporting structure for its North American businesses following the agreement to sell its Altoids, Life Savers and other candy brands. The nation's largest food company has restated volume, net revenue and operating income for 2002, 2003 and the first three quarters of 2004, reflecting the new segment structure and the change in its "sugar confectionery" brands, which include Altoids and Life Savers. Kraft, whose products include Nabisco cookies and crackers and Oscar Mayer meats, said there are five North American segments under the new structure: beverages, cheese, convenient meals, grocery, and snacks and cereals. New York Stock Exchange-listed shares of Kraft closed Monday at $34.43, down 3 cents.
GM PLANS TO REDUCE WORK FORCE, AGAIN: General Motors Corp., the world's biggest automaker, plans to trim its U.S. work force again in 2005, part of an ongoing effort to reduce costs, chairman and chief executive Rick Wagoner said Monday. GM has trimmed its U.S. payroll every year since 2000, company figures show. Wagoner, speaking to reporters at the North American International Auto Show, declined to place a number on targeted reductions, but he said the pattern likely would follow that of recent years. Through the third quarter of 2004, GM reduced its U.S. hourly work force by about 6 percent versus the same period in 2003 _ from 119,000 to 112,000, GM figures show. For the same period, its smaller, salaried work force declined by 5 percent _ from 40,000 to 38,000. The bulk of the reductions were through attrition and retirements, GM said.
LISTERINE TO SPEND $2-MILLION TO REMOVE LABELS' FLOSS CLAIM: The maker of Listerine mouthwash will spend $2-million to replace what a judge called misleading advertising suggesting the product is as effective as flossing at fighting plaque and gingivitis. About 4,000 workers will be deployed around the country to place stickers over the claim on Listerine bottles and to remove similar advertisements that hang on bottlenecks, a lawyer for Pfizer Inc. told a federal judge Monday. Television, print and medical-journal ads using the campaign are also being pulled, and the as-effective-as-floss campaign has also been removed from the Listerine Web site, lawyer Tom Smart said. U.S. District Judge Denny Chin of Manhattan ruled Friday that the advertising poses a public health risk and could undermine the message of dental professionals. McNeil-PPC Inc., a subsidiary of Johnson & Johnson, sued Pfizer over the campaign, which began in June, saying it posed an unfair threat to its sales of dental floss.
BROWARD COUNTY STARBUCKS MANAGERS LEAD OVERTIME SUIT: A federal court is allowing two Starbucks Corp. managers to invite others who were similarly employed in the past three years to join their lawsuit that contends the coffee chain denied them overtime in violation of federal law. The plaintiffs, Sean Pendlebury and Laurel Overton _ managers at Starbucks stores in Broward County _ were authorized last week by the court to ask others to join. It may take up to four months to send out notices to others who were managers and worked more than 40 hours a week.