"His personality is friendlier than Greenberg's." --AIG board member Eli Broad on the company's new CEO, Martin Sullivan
It seems Kenneth Langone can't avoid controversy. The head of investment firm Invemed Associates is on the board of data broker ChoicePoint (CPS), which was recently duped into giving criminals access to its database of consumers' personal information.
On Mar. 8, Langone and ChoicePoint settled suits involving data purveyor Henry Asher, founder of info seller Seisint. Asher alleged Langone trashed him and Seisint to potential buyers so ChoicePoint could snap it up on the cheap. Asher, an admitted former drug runner, claimed Langone told bidders "'the books were cooked' [and] that Seisint was run by 'bad people,"' says the suit. Asher sold Seisint to LexisNexis for $775 million.
ChoicePoint and Asher also settled charges in another suit claiming that Asher violated a noncompete pact by starting Seisint after ChoicePoint bought an earlier company of his.
Meanwhile, nine suits have been filed against Choice-Point, execs, and directors, alleging securities laws violations involving false information about the status of the company. One issue is the timing of stock sales by CEO Derek Smith and President Douglas Curling. The ChoicePoint board discussed plans for the pair to sell stock for a $16.6 million profit after the security breach was discovered by some execs but before it was made public. The two say they were unaware of the breach at the time.
Langone, who heads the governance committee, says he, too, was unaware of the breach. A Langone spokesman says the stock sales were O.K.'d by a compensation committee on which Langone doesn't serve.
Langone is already embroiled in a suit over his role as a former director of the NYSE and ex-head Richard Grasso's $188 million pay package. On Feb. 8, Lagone resigned from GE's (GE) board to devote his energy to defending against the suit.
Is Lands' End (S) up for sale? With Kmart (KMRT) Holding's $11 billion acquisition of owner Sears Roebuck (S) expected to close at the end of March, potential buyers believe so. Former Lands' End CEO Michael Smith says that he has been approached about heading the company by three different private equity groups interested in acquiring the purveyor of casual clothes. "There is at least the expectation that it is going to be on the block," says Smith, who declined to identify the investment firms.
In 2002, Sears paid $1.9 billion for the cataloger. But Lands' End has done poorly in Sears' stores, and its catalog sales have fallen, too -- by mid-single digits in 2004. UBS Securities (UBS) analyst Gary Balter estimates Lands' End could fetch $1 billion to $1.5 billion -- money Kmart Chairman Edward Lampert could use to pay down his $6.2 billion debt or buy back stock. A spokesman for Lampert declined to comment.
Investors would be attracted to the brand and prospect of operating the catalog better. Smith says he passed because the quality and brand have suffered under Sears. "It's going to be a real project to turn around." On Feb. 22, Sears slashed 375 Lands' End jobs. Housecleaning before a sale?
The phrase "sexual harassment" didn't exist in the Chinese language a decade ago. Now lawmakers are hoping to eliminate the actions it describes. On Mar. 4, female Communist Party leaders introduced legislation to make sexual harassment illegal.
The problem has become widespread in China as more women join the workforce. In a recent newspaper survey, 86% of women say they have been hassled by co-workers. In 2003, male officials in Sichuan Province were barred from having female assistants in order to curb incidents.
There is no specific law under which victims can get redress, so most sexual harassment suits in China are dismissed. The only two plaintiffs to win cases -- one a man -- did so by citing a law protecting their "human dignity." Each got $250 and an apology.
The proposed law -- expected to be enacted in July -- also would compel companies to prevent workplace bad behavior. Of course, changing mind-sets is harder than changing laws.
Auto makers and buffs love "halo cars" -- the dream vehicles companies build to cast a glow across their lineup. Think Dodge Viper. But what happens when the halo dims? Ford's (F) $143,000, 550-horsepower GT supercar harks back to the race car that beat Ferrari at Le Mans in 1996. Alas, the GT has been waved into the pit repeatedly since its October, 2004, debut. The car has been plagued by two recalls and at least six repair notices, ranging from faulty fuel tanks to seat belt flaws. Worst was Ford's "do not drive... under any circumstances" in December, warning owners of a defect that could cause a loss of steering control. Buyers seem to consider it the price of owning an icon -- GTs sell for up to $100,000 over sticker price.
Many high-tech and other professional workers want a collective voice in their workplace -- just not a traditional labor union. A poll presented at a recent conference put on by the AFL-CIO's Professional Employees Dept. (DPE) found the union goal of winning better salaries and benefits was a low priority.
The poll canvassed 1,200 nonunion nurses, tech workers, and university faculty. The message, says DPE head Paul Almeida, is "labor needs to reshape itself with new models of organization like associations" to reach professionals.
Who's afraid of high living? Not Donald Trump -- or at least, not anymore. The celeb developer just signed off on his final plans for Trump Tower Chicago, a condominium/hotel that now will soar to 1,360 feet and rank second only to Chicago's Sears Tower as the tallest building in the Western Hemisphere.
Never known for subtlety, Trump originally planned a 150-story tower that, at up to 2,000 ft., would have been the world's tallest. But within weeks of September 11, he halved the height, to 78 stories and 1,073 ft., recognizing that few people would want a home in what might become a new terrorist target.
Those fears apparently are over. With plenty of people putting down deposits, Trump has upped the tower to 92 floors and planted a 235-ft. spire on top, putting it within 90 ft. of the Sears Tower. "I like height," says Trump. "It gives you the view. It gives you the drama. It gives you the architecture." And, of course, more buyers.
The perils of a high-tech world keep getting worse. Spam is growing more sophisticated. Viruses plague PCs. And cell phones, PDAs, and voice-over-Internet protocol (VoIP) networks, used to make inexpensive calls over the Web, are being targeted by hackers. Now even more insidious threats may be on their way.
-- Pharming. It's a new twist on "phishing," where e-mails from fake banks and credit-card companies try to entice Web surfers to give up their passwords. Pharming plants malicious code on users' computers by e-mail. So when they visit a trusted Web site and are least likely to expect a scam, the malcode goes to work logging keystrokes -- or delivering fake pop-up windows that appear as if they're from that Web site -- to pilfer personal data.
In the past month, says security firm Proofpoint, pharms known as "Banker" and "Goldun" have surfaced. Last year, "Korgo" hit 4,000 U.S. Web surfers, says the SANS Internet Storm Center.
-- Bluesnarfing & Bluebugging. Exploiting Bluetooth, the wireless standard that links cell phones and headsets, is the new craze. A fairly benign version called "bluejacking" involves sending text messages to unwitting owners of cell phones and PDAs.
The latest variant: sending viruses, or bluebugging. Users in the U.S. and Europe have been hit. The problem could get worse. On Mar. 10, Finnish security firm F-Secure identified "Commwarrior" as the first virus that can spread through Bluetooth and cell-phone networks. What's next? Bluesnarfing: hijacking the cell phone and PDA data.
Halting this new onslaught of hackers may be tough. Says Gary Steele, head of Proofpoint: "Whether it's e-mail, VoIP, or the Web, they'll come after you." In a digital world, there's no place to hide.
TV news programs often run segments on diseases such as AIDS. But now a weekly show on CNBC will be devoted to a disease: diabetes. dLife Media is producing dLife, a 30-minute show on Sundays at 7 p.m. starting on Mar. 20.
Some 15 million Americans have diabetes, with diagnoses growing about 10% a year. The key to getting a disease its own show, says dLife CEO Howard Steinberg, a diabetic, is advertisers with tangential interest. Diabetics have special skin-, oral-care, and dietary needs. Colgate-Palmolive (CL) (oral care), Atkins Nutritionals (low-carb food), Beiersdorf (skin care), Becton Dickinson (BDX), and Novo Nordisk (NVO) (diabetes supplies and drugs) are sponsors.
The show's hosts all have diabetes. Besides news, features, and interviews, Steinberg says celebrity guests will "come out" as diabetics on the show.