Morgan Stanley, ‘Anonymous,’ Dynegy, BofA, GE in Court News
William Bryan Jennings, the Morgan Stanley (MS) U.S. bond-underwriting chief accused of stabbing a New York cab driver of Middle Eastern descent over a fare, pleaded not guilty to assault and hate-crime charges.
Jennings’s lawyer, Eugene J. Riccio, entered the plea on his client’s behalf March 9 before Connecticut Superior Court Judge Robert L. Genuario in Stamford. Jennings wore a blue suit, white shirt and patterned tie to the proceeding, which lasted less than a minute. He and Riccio left the courthouse without speaking to reporters and drove away in a pickup truck. His next court date is April 12.
Jennings, 45, is accused of attacking the driver, Mohamed Ammar, on Dec. 22 with a 2 1/2-inch blade and using racial slurs after a 40-mile ride from New York to the banker’s Darien, Connecticut, home. The hate-crime count brings the same five-year maximum prison sentence as the assault charge.
Jennings, who had attended a bank holiday party at a boutique hotel in Manhattan before hailing the cab, refused to pay the $204 fare upon arriving in his driveway, the driver said. Jennings said “he did not feel like paying” because he was already home, Ammar, 44, told police. The banker offered to pay $50, he said. Jennings told police Ammar demanded $294 and he offered to pay $160.
Ammar, a native of Egypt, said that after the banker refused to pay, he backed out of the driveway of the $3.4 million home to seek a police officer. Ammar said he had tried to call 911 but was hampered by poor mobile reception in the wealthy Fairfield County suburb.
The banker called him an expletive and said, “I’m going to kill you. You should go back to your country,” according to the police report. A fight ensued as they drove through Darien, and Jennings allegedly cut Ammar, police said.
Jennings said the driver cut his hand trying to grab the knife from him, which he said he wielded because he feared he was being abducted, possibly back to the city. Ammar denied he tried to take Jennings back to New York.
Pen Pendleton, a spokesman for New York-based Morgan Stanley, said March 2 that Jennings has been put on leave.
The case is State of Connecticut v. Jennings 12-0176761, Superior Court for the State of Connecticut (Stamford).
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‘Anonymous’ Hacker Won’t Face Prosecution for Gun, Marijuana
Hector Xavier Monsegur, the hacker cooperating with a government probe, won’t face prosecution for several alleged offenses, including attempted drug-dealing and computer crimes dating to when he was a teenager, according to his agreement with the U.S.
The plea agreement, made public March 9, says Monsegur, 28, won’t face federal charges for hacking the website of an online casino, trying to sell four pounds of marijuana in 2003 and one pound in 2010, receiving stolen property, and gun possession.
The U.S. also said Monsegur won’t be prosecuted for using an employer’s credit card to make $15,000 in unauthorized charges. The government said Monsegur’s hacking activities date back to 1999. Some of the alleged criminal acts are too old to be charged or are outside federal jurisdiction, according to the agreement.
Monsegur, a former member of the Anonymous, Internet Feds and LulzSec hacker groups, began secretly cooperating with U.S. investigators after his arrest on June 7, according to a court transcript. After his arrest, Monsegur began working “around the clock” to inform on his colleagues, prosecutors told a judge.
Prosecutors said in the agreement that Monsegur faces possible retaliation from the targets of his cooperation and may require federal witness protection.
Monsegur, who pleaded guilty Aug. 15, began cooperating with U.S. authorities, including Federal Bureau of Investigation agents, after his arrest, Assistant U.S. Attorney James Pastore told U.S. District Judge Loretta Preska at a court hearing in August, an unsealed transcript shows.
Monsegur was charged with computer crimes by U.S. prosecutors in five districts in four states, court records show.
The case is U.S. v. Monsegur, 11-cr-666, U.S. District Court, Southern District of New York (Manhattan).
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Dynegy Transfer of Coal Assets Was Fraudulent, Examiner Says
Dynegy Inc. (DYN)’s transfer of coal-fired power plants from a unit it later put into bankruptcy was fraudulent and harmed creditors, a court-ordered investigation found.
“Throughout the planning and execution of the prepetition restructuring, the Dynegy Inc. board favored paths that benefited Dynegy Inc. and its stockholders to the detriment of Dynegy Holdings and its creditors,” examiner Susheel Kirpalani said in report filed March 9 in U.S. Bankruptcy Court in Poughkeepsie, New York.
Dynegy, based in Houston, put units including Dynegy Holdings LLC into bankruptcy in November with a restructuring agreement backed by a group of bondholders including Franklin Advisors Inc. and Avenue Capital Group, according to court documents. Kirpalani, a lawyer at Quinn Emanuel Urquhart & Sullivan LLP, was appointed in January to investigate a reorganization that took place before the bankruptcy.
The bankruptcy filing came after bondholders sued the company over the reorganization, saying it moved assets out of their reach to benefit shareholders of the Dynegy parent, including billionaire Carl Icahn.
Dynegy had opposed naming an examiner, saying it was an attempt to gain negotiating leverage over the company.
The boards of both Dynegy and Dynegy Holdings “take the examiner’s findings seriously and intend to review the full report, once it is made available, to determine its impact,” the company said March 9 in a statement.
Katy Sullivan, a Dynegy spokeswoman, declined to comment further in a telephone interview March 9, saying the company’s lawyers haven’t yet been able to read the entire report.
The case is In re Dynegy Holdings LLC, 11-38111, U.S. Bankruptcy Court, Southern District of New York (Poughkeepsie).
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BofA Accuses MBIA of Harassment in Fight Over CEO Deposition
MBIA’s attempt to depose Moynihan is intended to impose “unnecessary burdens” on Bank of America and the CEO, the Charlotte, North Carolina-based lender argued in seeking a protective order to block the deposition.
“We have evidence this effort to depose Brian Moynihan is for harassment purposes,” Jonathan Rosenberg, a lawyer for the bank, said March 9 at a hearing in Manhattan. “It is clearly disruptive to Bank of America’s business.”
MBIA sued Bank of America’s Countrywide Financial unit in 2008 over mortgage loans. MBIA agreed to guarantee payments to investors that bought securities backed by pools of the lender’s loans, which MBIA claims didn’t live up to their promised quality.
MBIA, based in Armonk, New York, said in court papers that Bank of America’s request for a protective order is “frivolous” and called Moynihan an appropriate witness with knowledge relevant to the company’s claims.
New York State Judge Eileen Bransten didn’t rule on the dispute at the hearing.
The case is MBIA Insurance Corp. v. Countrywide Home Loans Inc., 602825-2008, New York State Supreme Court (Manhattan).
MBIA’s Brown Conducted ‘Improper’ Stock Trading, Lawyer Says
MBIA Inc. Chief Executive Officer Jay Brown conducted improper stock trades, a lawyer for banks suing the insurer alleged in a Manhattan federal court hearing.
Brown started buying MBIA stock in November and December 2008 after learning New York’s insurance regulator had changed its view about a restructuring of the company, Robert Giuffra, a lawyer for the banks, said at the hearing March 9.
When the restructuring was announced, the stock “popped,” Giuffra said, adding: “That trading was improper.” Marc Kasowitz, a lawyer for MBIA, called Giuffra’s claim “irresponsible.”
After the hearing, Giuffra, a partner at Sullivan & Cromwell LLP, declined to elaborate on his accusation. Both sides were in court over a dispute regarding the exchange of evidence in lawsuits filed over the 2009 restructuring.
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Cantor Fitzgerald Sued by Pension Fund Over BGC Debt Deal
Cantor Fitzgerald LP was sued by a pension fund investor in its BGC Partners unit over debt and stock offerings that it claims enriched Cantor’s Chief Executive Officer Howard Lutnick at the expense of shareholders.
International Painters and Allied Trades Industry Pension Fund said that the company made a $150 million debt transaction at an “unfair interest rate” that diluted the shareholders’ stock, according to a complaint filed March 9 in New York State Supreme Court.
BGCP (BGCP), then known as eSpeed Inc., was spun off as a public company by Cantor in 1999. After a merger in 2008, the company became BGC partners. The $150 million debt deal was made at the time of the merger at a 5.19 percent interest rate. That debt was later replaced by notes at an 8.79 percent rate that could be converted into stock, thus diluting the shares, according to the complaint.
Cantor owns 56 percent of BGC Partners’ Class A stock and 100 percent of its Class B shares, according to the suit. BGCP is an electronic brokerage company based in New York.
The complaint also names Cantor directors Stephen Curwood, John Dalton, Barry Sloane and Albert Weis as defendants.
Sandra Lee, a spokeswoman for New York-based Cantor, didn’t reply to messages seeking comment on the suit.
The case is International Painters and Allied Trades Industry Pension Fund v. Cantor Fitzgerald LP, 650736-2012, Supreme Court of the State of New York.
Buffett’s NetJets Countersued by U.S. for Unpaid Taxes
NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.
Claiming the federal Internal Revenue Service wrongfully assessed a so-called ticket tax -- an excise tax on payments made in exchange for air transportation -- to private aircraft owners maintaining their own planes, the Columbus, Ohio-based company demanded refunds and abatements.
The federal government, in a revised answer and countersuit filed March 9 in federal court in Columbus, rejected NetJets’ claims and alleged that four of the company’s units owe unpaid taxes and penalties.
NetJets Aviation Inc. owes more than $302.1 million, and another unit, NetJets International, is liable for $52.9 million, the U.S. said. Executive Jet Management Inc. owes $10 million while NetJets Large Aircraft owes $1.19 million, the U.S. claimed.
NetJets had no immediate comment on the countersuit.
The case is NetJets Large Aircraft Inc. v. U.S., 11-cv-01023, U.S. District Court, Southern District of Ohio (Columbus).
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Ex-GE Manager Claims Insanity in Death of Employee’s Husband
Hemy Neuman, a GE Energy manager, put on a fake beard, drove a rented minivan to a suburban Atlanta day care center and shot an ex-JPMorgan Chase & Co. (JPM) banker dropping off his son, defense lawyers said.
Neuman’s lawyers have told jurors in Georgia state court in Decatur that their client was temporarily insane and unable to stop himself from killing Russell Sneiderman, 36, the husband of a female subordinate at GE. Prosecutors in the trial, which has drawn intense local attention, contend Neuman was aware he was committing murder in front of the Dunwoody Prep preschool.
According to testimony last week by Adriana Flores, a forensic psychologist, Neuman was sexually obsessed with Sneiderman’s wife, Andrea, 35. He believed he was acting on orders from an angel with the voice of singer Olivia Newton John and a demon who sounded like Barry White, Flores said.
Neuman, 49, is charged with premeditated murder and possession of a firearm during the commission of a felony. DeKalb County District Attorney Bob James has said he will seek a life sentence without parole. Neuman’s lawyers finished presenting witnesses March 8.
A psychiatrist testifying March 9 for the prosecution, Pamela Crawford, told the jury that some of Neuman’s symptoms, such as a memory lapse, were “consistent with lying.”
Neuman hasn’t testified during the trial. He sat as another defense forensic psychiatrist, Tracey Marks, described the affair that Neuman believed he had with Sneiderman. Marks said the belief was a sign of mania.
Andrea Sneiderman testified earlier that she didn’t have an affair with Neuman. She didn’t return calls seeking comment on the trial this week. Seth Kirschenbaum, her lawyer, didn’t return a call seeking comment March 8 on the case.
The case is State v. Neuman, 11CR1364-5, Georgia Superior Court, DeKalb County (Decatur).
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Wal-Mart Wins South African Lawsuit Contesting Massmart Deal
A South African appeal court endorsed Wal-Mart Stores Inc. (WMT)’s purchase of a controlling stake in Massmart Holdings Ltd. (MSM), a deal the government challenged on the grounds it may cause jobs cuts and hurt local manufacturers.
Judge Dennis Davis, president of the Competition Appeal Court, handed down the decision at a hearing in Cape Town March 9.
“The evidence indicated that consumers will indeed benefit from lower prices and that these lower prices may, in turn, generate greater job creation than the job losses that may result,” Davis said. “There was insufficient evidence to conclude that the detrimental effects of the merger would outweigh the clear benefits to consumers.”
Three government ministries and a retail workers’ union contested a May 31 decision by South Africa’s Competition Tribunal that authorized Wal-Mart to buy a 51 percent stake in Johannesburg-based Massmart, South Africa’s biggest food and general-goods wholesaler. Approval was subject to the companies promising to refrain from firing employees for two years and setting up a 100 million-rand ($13.3 million) fund to assist local suppliers and manufacturers.
The government welcomed the court’s approach, saying its concerns had been recognized and could be addressed by the study. There was scope for different conditions to be imposed on the takeover, it said.
While Wal-Mart and Massmart “respectfully disagree” with the court on a link between the job cuts and the transaction, the process to rehire the workers has started, Massmart spokesman Brian Leroni said at the court.
“Wal-Mart and Massmart welcome the ruling,” he said. “All three arms of the competition authority have now endorsed the merger. The process has been rigorous. We welcome the idea of a study as a good way to help us understand how to deploy these funds.”
The case is South Africa Commercial, Catering and Allied Workers Union v. Wal-Mart Stores Inc. and Massmart Holdings Ltd., 111/CAC/Jul11.
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Sernam Must Repay 642 Million Euros in French Aid, EU Says
Sernam SA, a French rail and road transport operator, must repay 642 million euros ($849 million) in illegal aid given by the French state to the former unit of state-owned railway operator Societe Nationale des Chemins de Fer Francais, or SNCF.
Sernam was ordered to pay back 41 million euros in 2004 and didn’t, prompting European Union regulators to open an investigation in 2008 that also covered the company’s spinoff in 2005, for which the French state provided 503 million euros to help in the restructuring, the European Commission said.
“The French authorities failed in their obligation to recover the 41 million euros in illegal aid,” the European Commission said March 9 in a statement. Sernam must “reimburse that amount as well as all other aid which Sernam benefited from, or a total of over 642 million euros” plus interest.
Spokeswomen for the French Finance Ministry and Sernam declined to comment immediately on the decision.
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Kinder Morgan Buyout Was Most Popular Docket on Bloomberg
A lawsuit over Kinder Morgan Inc.’s proposed $21.1 billion buyout of rival pipeline operator El Paso Corp., was the most-read docket on the Bloomberg Law system last week.
A lawyer for El Paso investors argued the deal should be barred because it was tainted by Goldman Sachs Group Inc. (GS)’s conflicting interests in the deal. Goldman Sachs, which holds a 19 percent stake in Houston-based Kinder Morgan, served as an adviser to El Paso on the acquisition offer.
Delaware Chancery Court Judge Leo Strine rejected that argument Feb. 29.
The case is In re El Paso Corp. Shareholder Litigation, Consolidated 6949-CS, Delaware Chancery Court (Wilmington).
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To contact the editor responsible for this story: Michael Hytha at email@example.com.