Archive for October, 2010

Progress Energy’s 3Q profit rises 46 percent

Friday, October 29th, 2010 | Finance News

RALEIGH, N.C. – Progress Energy Inc. said Friday that its profit jumped 46 percent in the third quarter versus the prior year, when the utility booked a $101 million charge related to a litigation verdict.

The company, which runs utilities in Florida and the Carolinas, reported net income of $361 million, or $1.23 a share, for the three months ended Sept. 30. That compares with net income of $247 million, or 88 cents a share, in the same period last year.

The most recent results missed the $1.27 a share analysts were expecting, on average, according to a survey by Thomson Reuters.

Revenue grew to $2.96 billion from $2.82 billion. Analysts had forecast revenue of $3 billion.

Progress Energy noted that favorable weather in the Southeast and lower depreciation and amortization in Florida helped drive earnings in the latest quarter.

"The economy in the Carolinas and Florida continues to show modest but steady signs of recovery, and we remain focused on managing costs and improving operations and execution," said Bill Johnson, chairman, president and CEO.

The company narrowed its estimate for 2010 adjusted earnings per share to a range of $3 to $3.05, at the high end of its previously announced guidance, citing continued strength in weather.

Progress Energy shares added 4 cents to $44.99 in aftermarket trading after rising 5 cents to $45 during the regular session.

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Ex-BofA, Morgan Stanley trader gets 1 year prison

Friday, October 29th, 2010 | Finance News

NEW YORK (Reuters) – A former stock loan trader at Morgan Stanley (MS.N) and Bank of America Corp (BAC.N) was sentenced to one year and one day in prison after pleading guilty to a conspiracy charge over a scheme to steer orders to other brokerage firms in return for kickbacks.

The defendant, Salvatore Zangari, was sentenced on Friday by U.S. District Judge John Gleeson in Brooklyn, New York, a spokesman for U.S. Attorney Loretta Lynch said.

The sentence was shorter than the 1-1/2 to two years recommended under federal sentencing guidelines. Zangari could have faced as much as five years in prison.

"This is what happens when a good person does a bad thing," Zangari's lawyer Randy Zelin said in an interview. "While the sentence was shorter than recommended by the guidelines, one of the goals of sentencing is deterrence, and the judge, justifiably so, pronounced the sentence to deter future criminal conduct."

There have been at least 32 convictions, including former traders at 13 brokerages, in the Eastern District relating to a probe into alleged bribes and kickbacks in the stock loan industry, where brokerages act as intermediaries between buyers and sellers seeking to borrow securities.

The probe focused on stock loan traders at several brokerages who were accused of funneling millions of dollars of illegal "finder's fees" to others in exchange for cash bribes or other payments.

The U.S. Securities and Exchange Commission had brought a related civil lawsuit against Zangari. It said the defendant left Morgan Stanley in May 2005, then worked at Bank of America until October 2006, and then worked at UBS AG (UBSN.VX) (UBS.N) until July 2009.

The criminal case is U.S. v. Zangari, U.S. District Court, Eastern District of New York, No. 10-00255.

(Reporting by Jonathan Stempel in New York; Editing by Bernard Orr)

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Toyota secretly bought back faulty vehicles: lawyers

Friday, October 29th, 2010 | Finance News

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LOS ANGELES (AFP) – Japan's top world automaker Toyota secretly bought back some of the faulty vehicles it sold on the market in a bid to hide their defects from the public, the lawyers of clients suing the automaker said Friday.

One complaint filed in California and obtained by AFP said that, contrary to the company's statements, Toyota technicians have replicated the sudden unintended acceleration (SUA) problem that led to the recall of millions of its vehicles months ago.

"Upon the technicians replicating a SUA event, Toyota decided it was in the customer's 'interest' for Toyota to buy back the vehicle, meaning in reality that Toyota decided to remove this vehicle from the market since it was experiencing SUA incidents that could not be blamed on the driver," said the complaint.

"And, to further conceal the defect, Toyota required as a condition of the vehicle repurchase that the owner sign a confidentiality agreement and agree not to sue," it added.

The complaint said Toyota deliberately withheld the information from the National Highway Traffic Safety Administration (NHTSA) and from its testimony at congressional hearings.

"The deeper we dig into the facts that surround Toyota, the more damning the evidence that Toyota was aware of the issue, and failed to act responsibly," lawyer Steve Berman said in a statement.

"The revelation that they bought up the cars in question and prevented the owners from talking about their experience is curious at best, nefarious at worst," he added.

In a separate statement Toyota said it "quickly and thoroughly investigates any customer reports of unintended acceleration in its vehicles," and that its "engineers were unable to duplicate the (SUA) condition."

The company in the past has admitted to repurchasing faulty vehicles from clients, but only to carry out what it said were complementary technical analyses.

The new complaints filed Wednesday in a federal court of Santa Ana, California, complete the class action lawsuit brought against the company in the United States.

At the height of Toyota's crisis in late 2009 and early 2010, the auto giant made a series of mass recalls of around 10 million vehicles worldwide, undermining the company's once stellar reputation.

It led to US congressional investigations and a record 16.4 million dollar fine to settle claims it hid accelerator pedal defects blamed for dozens of deaths.

Since then Toyota has seen its US market share shrink by 1.4 points to 15.2 percent for the first nine months of this year.

On October 21, Toyota announced yet another safety recall of about 1.5 million vehicles worldwide to fix a brake fluid leak that it warned can gradually diminish braking performance.

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