Kissel, Aetna, Lions Gate, Stanford, Galleon in Court News
The nine jurors unanimously accepted the prosecution’s case that the 46-year-old had planned the Nov. 2, 2003, killing of Robert Kissel, when she gave him a milkshake containing sleeping pills and bashed his head with a lead ornament while he was unconscious.
High Court Judge Andrew Macrae sentenced the Michigan-born mother of three, who nodded and looked straight ahead on hearing the verdict, to a mandatory life term. Kissel won the overturning of her 2005 conviction after Hong Kong’s top court last year found the original proceedings had been tainted by evidence prejudicial to her.
Kissel’s lawyer Edward Fitzgerald asked Macrae to consider her emotional disturbance and psychological distress and to show compassion in writing to Hong Kong’s long-term review board.
“We are carefully considering all the matters with regard to our advice on a possible appeal,” another of her lawyers, Colin Cohen said, adding that he thought the trial had been fair.
Prosecution lawyer David Perry argued during the 47-day trial the late investment banker was a victim of a “highly organized” wife who fell out of love and was having an affair with an electrical technician in Vermont.
Evidence found on Nancy Kissel’s computer showed she had searched the Internet for heart-attack inducing drugs and sleeping pills, prosecutors said.
She used four types of sleeping pills to spike her husband’s milkshake, the prosecutors said. When Robert Kissel passed out in his bed, she delivered five blows to the right side of his head with the lead ornament, according to the prosecution.
The case is HKSAR v. Nancy Ann Kissel, HCCC55/2010 in the Hong Kong Court of First Instance.
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Aetna Sues New Jersey Doctors Over ‘Unconscionable’ Bills
Aetna Inc. (AET) is suing six New Jersey doctors over medical bills it calls “unconscionable,” including $56,980 for a bedside consultation and $59,490 for an ultrasound that typically costs $74, Bloomberg News’s Peter Waldman reports.
The lawsuits could help determine what pricing limits insurers can impose on “out-of-network” physicians who don’t have contracts with health plans that spell out how much a service or procedure can cost.
One defendant billed $30,000 for a Caesarean birth, and another raised his fee for seeing a critically ill patient in a hospital to $9,000 in 2008 from $500 the year before, the insurer alleges in the suits. The Caesarean price was more than 10 times the in-network amount Aetna quotes on its website.
Lawyers for the doctors declined to comment on specific charges in the suits, and said their clients did nothing wrong.
The insurance industry is grappling with how to respond to out-of-network hospital physicians who realize they have pricing muscle, according to Arthur Leibowitz, chief medical officer of Health Advocate Inc., a Plymouth Meeting, Pennsylvania, insurance adviser.
“These doctors can charge whatever they want,” Leibowitz said. “The challenge for the carriers is to come up with an agreeable, acceptable, unbiased judgment as to what a reasonable and customary reimbursement rate is.”
The complaints provide a rare glimpse at the sums physicians earn from an insurer and the huge variations in what different doctors charge and receive for the same services.
The most detailed complaint is against Benyamin Hannallah, a cardiologist at Jersey City Medical Center. Hannallah charged $59,490 for a heart ultrasound in April 2010 and was paid $47,592, the suit says. Aetna reimburses in-network doctors $74 for the procedure at Jersey City hospitals, Michener said.
Aetna said it paid Hannallah a total of $3.2 million in 2008 and 2009, up from $529,503 in the prior two-year period.
Robert Conroy, Hannallah’s lawyer in Bridgewater, New Jersey, said the fees in Aetna’s complaint are “false and/or misleading.” Some charges cited were pre-approved by the insurer, and some were negotiated between Hannallah and a third party representing Aetna, Conroy said.
Conroy said comparisons with some earlier rates are unfair because they represent fees when his client was an in-network doctor. Some of Hannallah’s patients or their employers paid higher insurance premiums for the right to use out-of-network doctors, Conroy said.
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Lions Gate Judge Throws Out One Claim Against Icahn in Suit
A federal judge dismissed part of a lawsuit filed by Lions Gate Entertainment Corp. (LGF) in which the movie studio accuses Carl Icahn of trying to interfere with its plans for the company.
U.S. District Judge Harold Baer in New York March 23 granted Icahn’s motion for dismissal of the claim that his failure to disclosure information about a proposed merger violated federal securities law.
The financier, chairman of Icahn Enterprises LP (IEP), didn’t reveal plans for a possible merger of Lions Gate and Metro- Goldwyn-Mayer Inc. and an agreement to buy Dallas Mavericks owner Mark Cuban’s 5.4 percent stake in Lions Gate, the company claimed.
“There is no allegation that defendants are involved in an ongoing criminal investigation related to their dealings with Lions Gate, and they vigorously dispute any special dealings with Cuban or plans for an MGM merger,” Baer said in his opinion.
Icahn argued in his motion that he made necessary disclosures in an amended Schedule 13D filing with the U.S.
The case is Lions Gate Entertainment Corp. V. Carl C. Icahn, 1:10-cv-08169, U.S. District Court, Southern District of New York (Manhattan.)
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Allen Stanford Drops Lawsuit Against Government Lawyers
R. Allen Stanford, the indicted financier, dropped a lawsuit that accused attorneys with the U.S. Justice Department and Securities and Exchange Commission of “abusive” law enforcement.
U.S. District Judge Ewing Werlein in Houston on March 21 granted a request by Steven Cochell, a Stanford attorney, to dismiss the case filed last month. Stanford had sought $7.2 billion in damages.
The case was filed two years after the SEC accused the deposed Stanford Group Co. principal of leading a $7 billion investment-fraud scheme. Stanford, who was indicted on parallel criminal charges in June 2009, has denied all allegations of wrongdoing.
“Plaintiff concludes that the claims in this action will be preserved without the pursuit of this case at this time,” Cochell said in his March 18 filing.
Stanford had alleged the federal government used more than $51 million of his assets to pursue the cases against him. “The agents have engaged in unfair, abusive law-enforcement methods and tactics,” violating Stanford’s rights under the U.S. Constitution, according to the complaint.
Laura Sweeney, a Justice Department spokeswoman, declined to comment, citing a gag order imposed in the criminal case by U.S. District Judge David Hittner. Kevin Callahan, an SEC spokesman, also declined to comment.
The case is R. Allen Stanford v. Stephen Korotosh, 11cv582, U.S. District Court, Southern District of Texas (Houston). The criminal case is U.S. v. Stanford, 09cr342, U.S. District Court, Southern District of Texas (Houston). The SEC case is Securities and Exchange Commission v. Stanford International Bank Ltd., 09cv298, U.S. District Court, Northern District of Texas (Dallas).
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Barry Minkow Is Charged by U.S. With Conspiracy in Miami
Barry Minkow, an ex-convict who founded a fraud-detection firm and became a minister, was charged yesterday by federal officials with conspiracy in a case involving homebuilder Lennar Corp. (LEN)
Minkow, 45, was accused in Miami of conspiracy to commit securities fraud in a charging document known as an information, which typically precedes a guilty plea. The charge carries a maximum prison sentence of 60 months, his attorney, Alvin Entin, said yesterday in an e-mail.
“The criminal activity described in the government’s filing has been a continuing assault on our company for several years,” Lennar Chief Executive Officer Stuart Miller said in an e-mailed statement. “We are pleased that the government is pursuing the responsible parties.”
Minkow is expected to plead guilty in the case, Entin said in a March 16 interview. The fraud charge stems from a dispute in which Minkow’s Fraud Discovery Institute alleged that Miami- based Lennar operated ventures “like a Ponzi scheme,” a report that sent the company’s stock tumbling 20 percent in one day.
“Minkow’s manipulation of the market and his relationship with the FBI for his personal gain caused a severe drop in the stock prices of a large local corporation,” U.S. Attorney Wifredo Ferrer said in an e-mailed statement. “This type of deceit and abuse of trust will not be tolerated.”
The case is U.S. v. Barry Minkow, 11-cr-20209, U.S. District Court, Southern District of Florida (Miami).
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SEC Sues Petters Feeder Fund, Manager Over Alleged Fraud
A Connecticut hedge fund and its manager were sued by the Securities and Exchange Commission for disgorgement of gains made while sending hundreds of millions of investors’ dollars to fraud scheme operator Thomas Petters.
The SEC complaint was filed yesterday against Marlon Quan and his Greenwich, Connecticut-based Acorn Capital Group LLC. The complaint also names as a defendant Stewardship Investment Advisors LLC, another firm controlled by Quan.
Quan “funneled hundreds of millions of dollars to Thomas Petters and his notorious Ponzi scheme” from 2001 through 2008, taking in more than $459 million from about 165 people and sending most of it to Petters entities, according to the complaint in federal court in Minneapolis.
Petters is serving a 50-year federal prison sentence after being found guilty in December 2009 of running the $3.5 billion scam. He was convicted of bilking hundreds of investors who thought they were financing short-term transactions involving consumer electronics that Petters said were destined for big-box retailers.
Quan concealed evidence of Petters’s fraud, including by engaging in $187 million in “round-trip” transactions designed to hide the scheme, the SEC said.
Phones at Acorn Capital Management weren’t answered yesterday and Quan couldn’t immediately be located for comment. Robert Gottlieb, a Manhattan attorney who represented Quan and Acorn in a 2008 lawsuit, said yesterday they are no longer his clients.
The case is U.S. Securities and Exchange Commission v. Quan, 11-cv-00723, U.S. District Court, District of Minnesota (Minneapolis).
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Rengan Rajaratnam’s Call to Brother Raj Bolsters Insider Case
Prosecutors turned to a wiretapped telephone call between Galleon Group LLC’s Raj Rajaratnam and his brother Rengan to bolster their criminal insider-trading case against the hedge fund co-founder.
Yesterday morning, Rajiv Goel, who had worked in Intel Corp. (INTC)’s treasury group, returned to the witness stand to testify that he leaked secret information to his friend Raj Rajaratnam. His testimony centered on his alleged 2008 tip that Intel would invest $1 billion in a new wireless network company formed by Clearwire Corp. and Sprint Nextel Corp. Prosecutors played several recordings of Goel telling Rajaratnam about the deal.
To counter possible claims by defense lawyers that the news Goel leaked was already public, prosecutors also played a tape from March 25, 2008, of a conversation between Raj and Rengan Rajaratnam. The Raj-Rengan discussion took place six days after Goel was recorded telling Rajaratnam about the venture and Intel’s investment -- and just moments after the Wall Street Journal posted an online story about the Sprint-Clearwire deal.
“It’s all over the Wall Street Journal,” Rengan Rajaratnam told his brother at 8:22 p.m., according to the wiretapped recording played for jurors in Manhattan federal court. “They’re short on details, but they kind of say, you know, they’re looking to raise as much as $3 billion.”
The brief telephone call is designed to show that Goel’s tips to Raj Rajaratnam, beginning on March 19, did in fact contain confidential information and included news that hadn’t appeared in the press. Prosecutors have said that Rengan Rajaratnam, founder of hedge fund Sedna Capital Management, conspired with his brother to trade on inside information. Rengan hasn’t been criminally charged.
Raj Rajaratnam, 53, is the central figure in the largest crackdown on hedge-fund insider trading in U.S. history. The Sri Lankan-born money manager is accused of making $45 million from tips leaked by corporate insiders such as Gupta. He denies wrongdoing, saying he based trades on research.
The case is U.S. v. Rajaratnam, 1:09-cr-01184, U.S. District Court for the Southern District of New York (Manhattan).
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Glaxo Accuses Abbott of Stifling Competition on AIDS Drug
A GlaxoSmithKline Plc (GSK) lawyer told a federal court jury that Abbott Laboratories sought to stifle competition and maintain an illegal monopoly over HIV drugs when it quadrupled the price of its AIDS medicine Norvir in 2003.
Glaxo has argued at a trial in Oakland, California, that the price increase meant that other drugmakers couldn’t compete with Abbott’s Kaletra AIDS medicine, which includes Norvir, a boosting agent for other HIV drugs.
The London-based drugmaker claims it lost an estimated $570 million in profit on sales of its drug Lexiva, which uses Norvir, because it sold at half the rate the company expected. Glaxo is seeking damages of about three times its lost profits on Lexiva.
“This was about money for Abbott and they wanted to make sure Kaletra stayed on top,” Brian Hennigan, Glaxo’s lawyer, said yesterday in his closing argument.
Abbott says it increased Norvir’s prices for legitimate business purposes. Even with the higher price, Kaletra lost market share and had only 30 percent of the market for similar drugs, the company has said.
Abbott increased the wholesale price of a Norvir capsule containing 100 milligrams from $1.71 to $8.57, the Abbott Park, Illinois-based company said in court documents.
The case is SmithKline Beecham Corp. v. Abbott Laboratories (ABT), 07-5702, U.S. District Court, Northern District of California (Oakland).
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Aalberts 100.8 Million-Euro Cartel Fine Voided by EU Court
The EU General Court in Luxembourg yesterday said Aalberts subsidiaries didn’t participate in a copper cartel during the period they were owned by Aalberts.
The European Commission, the 27-nation EU’s executive agency, in 2006 fined 30 companies a total of 314.7 million euros for unlawfully colluding on prices of copper fittings used in plumbing and heating. Aalberts’s fine was 6 percent of its 2010 revenue of 1.68 billion euros.
“We are celebrating that this dishonest fine is finally” annulled, Jan Aalberts, the chief executive officer of Aalberts, said in a telephone interview. “We never made provisions for the fine on our balance sheet because it was such a completely unfair fine.”
IMI Plc (IMI)’s 48.3 million-euro fine and Legris Industries SA’s 46.8 million-euro fine were upheld by the court. Tomkins Plc, the auto-parts maker bought by the Canada Pension Plan Investment Board and Onex Corp in September, won a 1 million- euro reduction of its fine to 4.25 million euros.
A message left with the CEO of Rennes, France-based Legris, which is now owned by Parker Hannifin Corp. (PH), wasn’t immediately returned. An IMI spokeswoman in London declined to comment. Phone messages left with Tomkins weren’t immediately returned.
The rulings largely upheld “the existence of anti- competitive conduct in the copper fittings sector,” Amelia Torres, a spokeswoman for the Brussels-based commission said in an e-mailed statement. “The commission will carefully examine” the cases where fines were cut.
The cases are T-375/06, Viega v. Commission; T-376/06, Legris v. Commission; T-377/06, Comap v. Commission; T-378/06, IMI and Others v. Commission; T-379/06, Kaimer and Others v. Commission; T-381/06, FRA.BO v. Commission; T-382/06, Tomkins v. Commission; T-384/06, IBP and International Building Products France v. Commission; T-385/06, Aalberts Industries and Others v. Commission; T-386/06, Pegler v Commission.
Billionaire Ho Gives Family Macau Casino Stake to End Dispute
Billionaire Stanley Ho gave up almost all his stake in the parent of SJM Holdings Ltd. (880), Asia’s biggest casino company, to resolve a family dispute that pitted some of his children against him and led to lawsuits.
Managing Director Angela Leong On Kei, mother of Ho’s youngest children, will get 6 percent of Sociedade de Turismo e Diversoes de Macau SA, with other family members getting 25.538 percent, SJM said in a statement yesterday. Ho will retain 0.117 percent, it said.
The 89-year-old tycoon earlier said daughters Pansy Ho and Daisy Ho and other family members seized his 31.7 percent stake in STDM, as the parent is known, forcing him to sue to reclaim his assets. SJM, which posted an almost fourfold jump in 2010 profit, runs most of the casinos in Macau, where gambling revenue is more than four times that of the Las Vegas Strip.
Ho has 16 surviving children from four women. Leong previously owned about 1 percent to 2 percent of STDM, according to Redford’s Lam.
The dispute started when Chan Un-chan, whom Ho refers to as his third wife, and children Pansy, Daisy, Maisy, Josie and Lawrence took control of Lanceford Co., which holds the biggest stake in STDM, according to statements in January.
The transfer was against the wishes of Ho, who had wanted to divide his assets equally among the family, his lawyer Gordon Oldham said. Closely held STDM also has investments in construction, hotels and Macau’s airline.
The settlement “has no effect on the company and there will be no change in management or strategic direction of the company,” SJM said in the statement. The statement doesn’t name the other family members who benefited.
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Abramovich Ordered to Pay $1.25 Million in Berezovsky Fees
Roman Abramovich, the Russian billionaire who owns Chelsea Football Club, was ordered to pay 774,000 pounds ($1.25 million) in legal fees to his ex-business partner Boris Berezovsky in a case over OAO Sibneft shares.
The amount was set yesterday by a three-judge panel at the Court of Appeal in London, which then dismissed Abramovich’s bid to challenge the fees over possible calculation errors. The same court last month upheld a March 2010 ruling that Berezovsky’s $3.5 billion lawsuit over shares of the Russian oil company can go to trial.
“The supposed error in principle by the judge was not an error at all,” Justice John Laws said at the hearing.
Berezovsky claims in the suit that Abramovich used “threats and intimidation” to force him to sell Sibneft shares at a fraction of their value. Berezovsky sold Abramovich the Sibneft stake for $1.3 billion between 2001 and 2003. Then in 2005, Abramovich sold Sibneft to state-run OAO Gazprom for $13.1 billion. Berezovsky claims he lost as much as $4 billion on the deal.
Lucinda Orr, an associate at Skadden, Arps, Slate, Meagher & Flom LLP in London, which represented Abramovich, declined to comment.
The case is Berezovsky v. Abramovich, 07-942, High Court of Justice, Queen’s Bench Division, Commercial Court.
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