The Government’s noose around neck of Jeffrey Skilling and Kenneth Lay got a bit tighter today as Kevin P. Hannon, former chief operating officer of Enron Corp.’s heavily promoted telecommunications unit, became the latest former Enron executive to plead guilty to criminal charges.
Mr. Hannon, 44, pled in U.S. District Court in Houston to one count of conspiracy to commit securities and wire fraud, and agreed in the plea bargain to cooperate with the Enron Task Force’s continuing criminal investigation and prosecution of other former Enron executives. One of those undoubtedly will be Mr. Skilling, who was heavily involved in the promotion of Enron’s telecommunications unit. The deal also provides that Mr. Hannon faces up to five years in prison, the payment of $3.2 million in forfeitures and penalties, and the settlement of a related SEC civil suit.
In the late 1990s, Enron’s top executives touted Enron Broadband as one of the company’s best growth opportunities. Enthusiasm among investors for the broadband operation helped increase Enron’s stock price despite the fact that the unit never came close to meeting either company or market expectations.
As part of his plea agreement, Mr. Hannon admitted that he overstated Enron Broadband’s accomplishments. In particular, during a January 2001 conference with securities analysts, Mr. Hannon admitted in the plea bargain that he took part in a presentation that “was intentionally misleading and falsely portrayed the company as a commercial and business success. I conspired with other Enron employees to achieve this improper purpose.”
Meanwhile, the beginning of the trial of the Nigerian Barge case is now less than three weeks away.
Daily Archives: August 31, 2004
Don’t pinch the Stros, they might wake up
Brandon Backe hurled six shutout innings in only his third start as a starting pitcher and JK pummeled to yaks as the red hot Stros blasted the Reds in Cincy at the Great American Ballpark, 8-0.
The win was the Stros’ fifth straight and 13th in their last 17 games. Incredibly, the win brought the Stros within three games of the Cubs, who are currently in the lead for the National League Wild Card playoff spot. What a run!
Backe gave up only three hits in his six frames as he continues his unlikely journey from backend reliever to a potential fourth or fifth starter. Stros relievers Chad Qualls, Mike Gallo and Dan Wheeler allowed a combined three hits over the final three innings to secure the Stros’ 11th shutout of the season.
In addition to JK’s two crank jobs, Beltran, Bags and Berkman had some fun in the fifth when they hammered back-to-back-to-back taters. The Reds pitching is so bad that even that uprising did not prompt the removal of starter Aaron Harang.
The Stros have a good chance of keeping it going in tomorrow’s Businessman’s Special as Roy O goes for his 16th win against Paul Wilson (9-4), who is the Reds’ best starter. After a well-deserved off day on Thursday, the Stros and the Rocket start a weekender with the Pirates at the Juice Box on Friday night.
Merck reels from Zocor study
This Wall Street Journal ($) article reports on the reaction of pharmaceuticals giant Merck & Co. to the disappointing study involving Zocor, its top-selling cholesterol drug.
The study found that high doses of the drug did not benefit patients at high risk of a heart attack compared with both placebo and less-aggressive Zocor treatment. Researchers presented the 4,500-patient Zocor study at the annual meeting of the European Society of Cardiology in Munich, Germany, and it also was published online by the Journal of the American Medical Association.
Even before this news, Merck had been losing in the competition with Pfizer‘s Lipitor, which is the world’s biggest-selling statin drug with sales of $9.2 billion in 2003. A clinical trial reported earlier this year that Lipitor was was much better than another statin — Bristol-Myers Squibb Co.’s Pravachol — at reducing the risk of death, heart attack or other serious complications within two years of treatment. Here is an earlier post on that study.
The 4,500-patient study tested an aggressive cholesterol-lowering strategy compared with a moderate approach for patients hospitalized with severe unstable chest pain. The aggressive treatment was 40 milligrams of Zocor for a month followed by 80 milligrams for the next 23 months. The moderate approach was four months of a placebo followed by 20 milligrams of Zocor.
In the earlier Lipitor/Pravachol study, Lipitor at a dose of 80 milligrams proved significantly more effective in reducing LDL and the risk of serious heart problems than Pravachol at 40 milligrams. The benefit for Lipitor was evident within 30 days of starting the drug and the study was an important reason why cardiology experts are now recommending that doctors consider aggressive therapy with statins to enable patients at very high risk of a heart attack to reduce their levels of LDL to below 70. Previously, the target for such patients was below 100.
Cardiologists expected aggressive treatment with Zocor to reflect the Lipitor findings, especially because the control group was treated with a placebo during the first four months of the two-year trial. But even though their LDL levels fell to 62, aggressively treated patients at the end of four months had no difference in heart attacks, death from heart attacks, or strokes for heart problems than patients on placebo whose LDL was twice as high. After two years, 14.4% patients on aggressive therapy had suffered negative outcomes compared with 16.7% on the moderate regimen, but the difference was not considered statistically significant.