Drugmakers would take a bigger hit under healthcare legislation unveiled in the U.S. House of Representatives on Thursday, while insurers would face mandatory rebates and the loss of their antitrust exemption.
Despite a carefully crafted deal with the White House and senators earlier this year, House lawmakers want pharmaceutical companies to pay more through rebates for Medicare patients also enrolled in the government’s Medicaid program for the poor.
And while they also want to close the gap in drug coverage for elderly and disabled Medicare patients — a move that could get more people to take their medications — House leaders would require the nation’s health secretary to negotiate lower drug prices under the program.
Insurers, already expected to take the biggest whack under any health reform measure, saw most of their worries realized with the House bill eliminating the industry’s exemption to antitrust laws and targeting their profits.
The measure forces insurance companies to give customers rebates if less than 85 percent of enrollees’ fees is spent on actual health care.
The much-anticipated public option also could give insurers stiff competition by keeping prices down with reimbursements potentially as low as Medicare rates as well as requiring providers to opt out against accepting patients with the public plan coverage. The bill also allows for a cooperative insurance exchange for consumers to compare plans.
While the drug and insurance sectors would take a hit, most healthcare companies also would see their income dented, especially when it comes to government reimbursement.
“Pretty much for every industry, provisions are worse in the House bill than in the Senate,” said Ipsita Smolinski, an analyst for investors at Capitol Street.
At the same time, the bill would increase the number of Americans with insurance by 36 million, the Congressional Budget Office estimated payday advance. That would bring new customers for drugmakers, insurers and other providers of health services and products.
The broader S&P Health Care Sector index .GSPA closed up nearly 1 percent, trailing the 2.25 percent increase for the overall market. Health insurer stocks ended sharply higher on Thursday, helped in part by Aetna Inc’s encouraging third-quarter earnings report.
Drugmakers and insurers are expected to fight back against the provisions, especially as Senate leaders prepare to release their own bill as soon as next week.
“Unfortunately, some people are unrealistic in the expectations of what our industry can contribute to healthcare reform without triggering catastrophic job losses and driving critically important (research and development) overseas,” said Ken Johnson, a spokesman for the Pharmaceutical Research and Manufacturers of America.
America’s Health Insurance Plans President Karen Ignagni said that the government public insurance option “would cause millions of people to lose their current coverage” while other consumers could see benefit cuts or higher costs.
For hospitals, the picture appeared somewhat murkier. A greater number of insured patients would help offset losses from mandatory care hospitals provide in emergency rooms, but they would also face lower government reimbursement and possible higher device costs.
Clinical laboratories, hospice providers and other sectors will see their reimbursements cut based on a rate that the American Clinical Laboratory Association said could be between about 1.1 and 1.4 percent annually.
Last time we checked in with Debra Killian, the co-founder of Charter Oak Lending Group in Danbury, Conn. was fighting for her company’s life.
In 2004, 10 employees — or one-third of the mortgage broker’s staff — left to work for CTX Mortgage, a much larger rival. Killian claimed the employees stole 150 pending loans, worth nearly $1 million in fees, along with customer lists and boxes of confidential files. Between 2004 and 2005, Charter Oak’s revenues plummeted from more than $3.5 million to $300,000.
Charter Oak sued CTX and the 10 defectors, claiming conspiracy, unfair trade practices and misappropriation of trade secrets. Four years and some $500,000 in legal bills later, the verdict arrived in July: Charter Oak lost on all counts.
"It was a complete shock," says Killian. "We lost everything that took 10 years to build in one month, because one company stole it. How is that not illegal?"
In his opinion, Connecticut Superior Court judge Vincent Roche wrote that the individual defendants, "independent contractors and ‘at will’ employees not under any contractual restraints with the plaintiff, could seek whatever employment opportunities were available in the marketplace without being conspiratorial about it."
Killian claims that the defendants, who received W-2s and benefits and did not hold their own valid licenses or insurance, were employees, not independent contractors — a point that has driven Charter Oak to appeal the case payday advance.
"The fact that the judge called them ‘at will’ employees and also ‘independent contractors’ — which are mutually exclusive — showed an analysis that was flawed," says New Haven attorney William Gallagher, who is handling the appeal.
A spokesperson for Pulte Homes, which merged with CTX Mortgage’s former parent company, told Fortune Small Business in an e-mail: "We are pleased the judge ruled in our favor in finding that there is no valid claim against CTX Mortgage under Connecticut law. We strongly believe we did nothing wrong and will continue to vigorously defend that position in court throughout the appeal process."
The lesson for other small businesses? Get your paperwork in order.
"Charter Oak didn’t have confidentiality agreements and noncompete contracts," says Milford, Conn., attorney Tim Bishop, who represented Charter Oak in the original lawsuit. "They were a typical small business that grew faster than expected."
In the end, pay czar Kenneth Feinberg’s hardest case was AIG.
The troubled insurer lobbied hard to let three of its executives keep their bonuses.
AIG told Feinberg that three executives, who were entitled to large retention payments, were particularly critical to the company’s long-term financial success and should be able to keep their bonuses.
Feinberg said Thursday that he relented in the case of AIG even though he was able to pare down similar pay clauses at the other six companies in his purview.
Feinberg was appointed by President Obama in June to oversee executive compensation at companies getting bailout funds. On Thursday he unveiled a sweeping plan to rein in pay for top executives at the seven most heavily bailed out companies.
When it came to AIG’s request, Feinberg said he thought long and hard.
In finally agreeing to the special cases, he said that paying those employees bonuses was in the public interest, since they were needed to help AIG pay back the government.
"We listened very, very carefully to [AIG CEO Robert] Benmosche," said Feinberg on Friday at George Washington Law School in Washington. "AIG compensation practices are unique. They are on the cusp. We took into account independent, very credible opinions of others to come up with a package that we think will help AIG thrive."
In exchange for allowing them to keep their retention bonuses, Feinberg trimmed their 2009 salaries for the last two months of the year and for 2010.
"AIG had one very thorny situation," said Feinberg at a media briefing on Thursday. "In that particular case, I gave a it a lot of thought and decided that if AIG wants these contracts enforced in cash, they’re entitled to those contracts enforced in cash."
It appears from a table provided by Feinberg’s office that the three employees will receive bonuses of about $4 million, $5 million and $7 million. Feinberg did not identify the executives by name or salary.
"The fact of the matter is, I met with AIG officials; there is clearly an understanding that the contracts are valid," Feinberg told CNN on Thursday. "Since those contracts are valid, I did take dollars into account for setting compensation for 2009 and 2010."
A spokeswoman for AIG said Thursday the company was still looking into the matter.
CEO pay OK, other bonuses get dropped
In addition to those three executives, Feinberg also ruled on ten others at AIG.
One of them was chief executive Robert Benmosche, who joined AIG in August. The pay czar had already approved the CEO’s pay package on Oct. 2. The new CEO will receive $10.5 million in annual compensation, including $3 million in cash, $4 million in stock options and $3.5 million in annual performance bonuses.
For executives at AIG’s Financial Products division, the unit that was responsible for the insurer’s near-collapse, Feinberg ruled that they should only receive their base salaries and no other compensation "of any kind."
AIG had proposed bonuses for those employees, but Feinberg shot them down.
"The performance of AIG Financial Products has contributed significantly to the deterioration in AIG’s financial health," Feinberg wrote in his letter to AIG explaining his pay decisions. "Accordingly, the Special Master has determined that AIG’s proposed compensation structures for these employees are inconsistent with the public interest."
CEO tells employees pay czar’s reach ‘quite limited’
The news comes a day after Benmosche sought to assure his staff that the pay czar’s reach will be limited, according to a memo that the CEO sent employees late Wednesday.
In the memo, Benmosche said that Feinberg does not have the jurisdiction to adjust the compensation of the vast majority of AIG employees.
Benmosche said early reports on Feinberg’s ruling on AIG’s compensation were inaccurate but did not say which contracts in particular he was referring to.
"It is important for all of you to know that the Special Master’s jurisdiction is quite limited," said Benmosche in the memo. "He specifically has advised us that he is not requiring any retroactive salary adjustments."
Separately, AIG has asked Feinberg to make a recommendation on how to proceed with the remaining $198 million in controversial bonuses to employees of its Financial Products division. There was a great deal of public uproar after AIG paid employees of that division $168 million in bonuses in March, and AIG indicated it wanted the government’s seal of approval for the next payment.
Those bonuses were contracted in late 2008, with half to be paid in 2009 and half in 2010. Even though those bonuses fall outside his jurisdiction, Feinberg has the ability to issue recommendations on bonuses that were contracted before February 2009.
According to a recent report from Neil Barofsky, the special inspector general of the $700 billion bailout program, Feinberg has recommended to AIG that the full $198 million not be paid out in full.
Feinberg has not yet made a specific recommendation to AIG about how much the insurer should reduce the payments, according to Barofsky.
–CNNMoney’s Jennifer Liberto contributed to this report.
China’s economic growth picked up last quarter as expected as a combination of breakneck investment and buoyant bank lending more than made up for a slump in exports.
But the 8.9% growth rate fell short of some of the more optimistic predictions in the market, and the government promptly said it would stick to the ultra-loose policies it has been following for the past year.
Andy Rothman, a macro strategist for brokerage CLSA in Shanghai, described the figure as strong but not strong enough to trigger a policy tightening, which he said was unlikely until the second half of 2010 at the earliest.
"China has begun, however, to implement its ‘exit strategy’, which is a gradual reduction in the level of stimulus (credit and infrastructure spending) in response to rising private investment and consumption," Rothman said in a note to clients.
Last quarter’s year-on-year growth exactly matched the forecast of a Reuters poll and was up from 7.9% in the April-June period and just 6.1% in the first three months of 2009 in the depths of the global downturn.
Goldman Sachs said quarter-on-quarter growth had in fact slowed to around 10.2% from the second quarter’s annualized pace of 16.5%.
But with GDP expanding 7.7% in the first nine months, the government said it would now easily reach its target of 8% average growth for the year as a whole, widely regarded as the minimum needed to keep a lid on unemployment.
"We can say with certainty that achieving 8% GDP growth this year is completely assured. Without doubt," said Li Xiaochao, the spokesman of the National Bureau of Statistics, which released the figures.
Li, though, quickly reaffirmed the policy status quo.
"We have stressed a proactive fiscal policy and appropriately relaxed monetary stance to keep consistency and stability in economic policy — according to my understanding, that means no change in policy," he said, restating the thrust of a cabinet statement issued on Wednesday.
A breakdown of growth so far this year showed just how effective Beijing’s 4 trillion yuan ($585 billion) pump-priming package has been in galvanizing investment and putting the once-fanciful 8% growth goal target easily in reach.
Capital spending contributed 7.3 percentage points to headline growth of 7.7% in the first three quarters, while consumption accounted for 4.0 percentage points. Net exports, meanwhile, subtracted 3.6 percentage points.
With the United States and Europe emerging from recession with huge debt burdens that will weigh on consumption, global policymakers are looking to China to pull more weight by expanding domestic demand.
Thursday’s data showed China doing just that.
Fixed-asset investment in urban areas, which has been the main driver of China’s double-digit growth of recent years, rose by a third in the first nine months.
Whereas investment in the first half of the year was overwhelmingly government-led, capital spending by mostly private real estate developers is now surging in response to the ready availability of credit and growing confidence in the economy.
That confidence is being buoyed by rising incomes. Urban Chinese had 10.5% more disposable income in the first nine months, after adjusting for inflation, than a year earlier.
Retail sales rose 15.5% in the 12 months to September, accelerating from August’s reading of 15.4% and exactly in line with market forecasts.
Industrial production growth quickened to 13.9% in the 12 months to September from 12.3% in August, beating the median market forecast of 13.3%. Daily steel output in September matched August’s record, while iron ore production scaled a new high.
"Good figures. Economic growth has picked up very swiftly. said Wang Hu, an analyst at Guotai Junan Securities in Shanghai.
Stronger next year?
Most economists expect even stronger growth in 2010 given this year’s relatively low base of comparison, the likelihood of a partial recovery in net exports and the fiscal stimulus already in the pipeline.
The median forecast of a Reuters poll published on Oct. 18 was for 9% growth in 2010, but several banks have since taken an even rosier view.
In the currency market, non-deliverable forwards (NDF) over the past week had priced in a faster pace of yuan appreciation, partly in anticipation of a sparkling set of data.
But the yuan lost a little ground in the NDF market after the figures and the Shanghai stock market was also underwhelmed. The main index ended the morning down 0.05 percent.
Although the economy has perked up, China is still mired — technically — in deflation. The consumer price index fell 0.8% in September from a year earlier, while producer prices were down 7%. Both figures were exactly as expected.
Both gauges have shown prices rising steadily month on month since July, but Li, the NBS spokesman, said inflation was not a problem for now.
Google will soon allow users to to listen to music and buy songs on its search results page, according to several news reports.
The search leader has partnered with streaming music sites Lala.com and iLike.com to give searchers the ability to stream music directly from Google. If a listener wants to purchase the song, links will take them to Apple’s (AAPL, Fortune 500) iTunes Store or Amazon.com (AMZN, Fortune 500) to buy the music, the reports said, citing sources.
Google (GOOG, Fortune 500) did not return requests for comment for this story.
The music results will appear at the top of Google’s search results page, displayed similarly to results for weather forecast searches and movie searches. The music search initiative is expected to launch next week.
All four major record labels — Warner Music Group (WMG), EMI Group, Sony Music Entertainment (SNE) and Universal Music Group — have licensed their music to Google for the music search results.
Google is not expected to get any direct revenue from the purchases or streams.
Oil edged off a peak just above $80 a barrel on Tuesday as investors an eight-day rally cooled.
U.S. crude for November delivery fell down 52 cents and settled at $79.09 a barrel, after reaching $80.05 earlier in the session.
Oil has ended higher for the past eight days, but analysts have questioned whether the recent rally is justified as crude market fundamentals remain weak. Supply has climbed steadily in recent months, while demand remains unclear pending a broader economic recovery.
Additionally, investors were looking ahead to an inventory report from the Energy Information Administration on Wednesday. Research group Platts predicted crude supplies increased by 2.2 million barrels last week.
Stocks tumbled in midday trading after DuPont (DD, Fortune 500) and Coca-Cola (KO, Fortune 500) reported weaker revenue that missed forecasts 24 hour payday loan. Crude prices have tended to move in tandem with the stock market lately, because it is considered a barometer for the overall economy and a gauge for when oil demand will recover.
The currency market also pressured oil prices, as the dollar reversed direction to gain versus the euro and the yen. A firmer greenback tends to sink crude because oil is priced in dollars around the world.
According to Reuters, OPEC Secretary-General Abdullah al-Badri said on Tuesday that oil prices at $80 a barrel were "a bit high."
Google said Thursday the worst of the recession has passed, as it reported quarterly profit and sales that rose from year-earlier results and easily trounced Wall Street’s forecasts.
"Google had a strong quarter — we saw 7% year-over-year revenue growth despite the tough economic conditions," said Eric Schmidt, Google’s chief executive, on a conference call with investors. "While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future."
Google’s strong third quarter could be a good sign for the economy, as the company’s ad clicks serve as a kind of barometer of consumers’ willingness to spend. The more people click on ads, the more willing they are to buy things.
"It’s all good news from our perspective," said Schmidt. "I’m very proud of our management team in what could have been a very significant downturn for Google."
By the numbers: The Mountain View, Calif.-based search giant’s net income was $1.64 billion, or $5.13 per share, in the third quarter, up 27% from the same period last year.
Excluding one-time charges, including $95 million from a Google Books settlement with the Authors Guild, Google reported earnings of $1.88 billion, or $5.89 per share. Analysts polled by Thomson Reuters, who typically exclude one-time charges from their forecasts, expected earnings of $5.42 per share.
Sales rose 7% to $5.94 billion. Excluding advertising sales that Google shares with partners, a figure also known as traffic acquisition costs, the company reported revenue of $4.38 billion, which beat analysts’ forecast of $4.24 billion.
Google makes the vast majority of its sales from online advertising, a market that has struggled over the past year. But two important indicators of advertising market health improved: The number of paid clicks, which include clicks on ads served on Google sites and its partners, rose 4% from the previous quarter and 14% from the same period last year.
The average amount paid to Google per click also increased about 5% from last quarter. That figure was down about 6% from the same period a year ago, but the company said that much of that discrepancy had to do with currency fluctuations.
Both measures improved from the second quarter, when paid clicks were down sequentially and cost-per-click was down by a double-digit percentage from a year earlier.
Shares of Google (GOOG, Fortune 500) rose more than 2% in after-hours trading.
Looking ahead: Schmidt said the companies new investment would come in the form of "people and innovation." He reiterated a statement that he made last week, saying that the advertising recession had ended, and the company has ramped up its hiring as a result. Last quarter, the company shed 121 employees.
The company hasn’t quite returned to its typical purchase rate of about one company a month. But Schmidt said Google has many small, innovative companies in its sights, and the company plans on increasing the number of acquisitions it makes in the coming months.
The company also said another encouraging sign is that advertisers have expressed a desire to spend more money with Google. As a result, Google is continuing to develop new products to assist with that interest.
For instance, the company said its new DoubleClick Ad Exchange will improve advertisers’ ability to put display ads onto Web sites. Google also said it is making improvements to Google Maps, making it easier for companies to connect with customers online on a local level.
Bruce Wasserstein, chief executive of asset management firm Lazard, died Wednesday. He was 61 years old.
He was hospitalized with an irregular heartbeat on Monday, according to reports, but the cause of death was not immediately known.
The Lazard board of directors named vice chairman Steven J. Golub interim chief executive officer effective immediately.
The board said Wasserstein "has put into place a long term-strategy as well as a broad and deep leadership team, in whom we have confident and who will sustain his vision."
Wasserstein headed Lazard (LAZ) since 2002, taking the firm public in May 2005. The investment banker was known for his ruthless, high-stakes dealmaking. He initiated many hostile takeovers and redefined how mergers and acquisitions could be accomplished.
Wasserstein’s most high-profile deal was Kohlberg Kravis Roberts’ 1988 leveraged buyout of RJR Nabisco, on which he advised. The takeover was the subject of the book "Barbarians at the Gate."
During his career, Wasserstein famously advised activist investor Carl Icahn in his attempted takeover of CNNMoney.com parent company Time Warner (TWX, Fortune 500) in 2006.
"Wasserstein taught a generation how to do deals, and was a big brother of sorts to so many investors nationwide," said Michael Williams, dean of Touro College’s Graduate School of Business in New York. "He established the model for mergers and acquisitions. He was just remarkable."
Prior to his tenure at Lazard, Wasserstein was the co-head of investment banking at The First Boston Corp., and he served as an attorney at Cravath, Swaine & Moore. Wasserstein graduated from Harvard Business School and earned a law degree from Harvard Law School.
Wasserstein also was chairman of Wasserstein & Co., a private merchant bank, and he owned a group of media publications, including New York Magazine and TheDeal Magazine.
Airfares are at their lowest levels in years, so airlines are trying to find new ways to make money. And that means extra fees — more than $1 billion from last year alone, according to the Department of Transportation.
The latest add-on is a $10 surcharge for flying on some of the busiest travel days of the year, most of which fall right around the holidays:
The extra charge applies to three days: Nov. 29, which is the Sunday after Thanksgiving, and Jan. 2 and 3. The carriers have added 10 more peak days through 2010.
Five carriers, including U.S. Airways (LCC, Fortune 500), AMR Corp.’s (AMR, Fortune 500) American Airlines,UAL Corp.’s (UAUA, Fortune 500) United Airlines, Continental Airlines (CAL, Fortune 500) and Delta Air Lines (DAL, Fortune 500), recently added the surcharge to holiday flights.
Airlines have historically raised their fares during the holiday season, rather than impose additional charges. But experts say that adding a fee is less disruptive than a fare increase.
"It’s interesting that they’re doing it this way," said Anne Banas, executive editor of travel site SmarterTravel. "I think they’re just easing the consumers into paying more incrementally. They’re inching it up, like they did with baggage."
The holiday surcharge joins the slew of fees that many airlines began charging in 2008 for once-free amenities such as checked baggage, curbside check-in, pet travel, ticket re-scheduling and oversized bags, as well as food, soda and juice.
Prepaying for checked baggage
For passengers who are willing to prepay baggage fees in a big lump sum, United recently unveiled a tweaked version of its baggage fees.
Its Premier Baggage Subscription costs $249 a year, and covers the first two checked bags for a single traveler, and up to eight friends or family members included in the ticket purchase, according to United Airlines spokesman Rahsaan Johnson.
"If you’ve got a family of nine going to a family reunion, you could save the $249 [in one flight]," he said.
Normally, United charges $15 for the first bag and $25 for the second. So a single traveler with two checked bags would have to travel seven times in one year to save money with the subscription.
Business travelers who have to foot their own travel bills could benefit, according to said George Hobica, founder of the Airfarewatchdog.com, but he doubted that too many fliers fit the family profile described by Johnson.
Paying more for priority boarding
In another bid to make money, some airlines are selling optional benefits to upgrade service.
United’s Premier Travel program now extends its Premier membership benefits, such as priority boarding and security line access, to passengers who pay $47 for one day.
United passengers can also buy into its Red Carpet Club for a day. For $50 at the door or $39 online, they wait in a luxury lounge with passengers who pay $525 for the annual membership.
The one-day Premier Travel offer could work for travelers who "know they’re going to go through a busy airport with lots of security lines" and want to streamline the process, Hobica said.
He added that the Red Carpet Club could also be useful if you’re suddenly confronted with a canceled or delayed flight. "If the airport is in chaos because of weather, I would definitely do the [Red Carpet,] because it’s much more comfortable waiting."
Southwest Airlines recently added an optional $10 early-bird priority boarding fee, according to company spokeswoman, Brandy King, who said this will allow passengers to check in 36 hours ahead of the flight, instead of the typical 24.
"I can’t imagine that they’ll make much money from that," said Banas. For most travelers, she said early boarding fees are just not worth it.
Hobica dismissed the plan as "a timid effort to raise their fees without offending anyone."
Deals are still out there
One fee that is coming down is pet transport. Hobica said that United reduced the cost to $125 from $175 in August, and Delta lowered its fees to $100 from $150.
"United had some of the highest fees, and that’s why they took them back," he said, noting that United also eliminated its fee for booking frequent flier tickets 21 days or less ahead of a flight.
Airlines "can’t really charge for much more, to be honest," according to Rick Seaney, Chief Executive of Farecompare.com.
But 2009 is still a great year to fly, he noted, pointing out that fares are 15% cheaper than they were last year. "Domestic flights are as low as they’ve been since we started tracking them seven or eight years ago," he said.
Given those low fares, Hobica said the fees have become a necessity for the struggling airline industry.
"What does the public expect?" he said. "Do they want them to go out of business? The airline industry is in crisis right now and I think they need to cut them slack and let them make some money."
The fees come with an inherent public relations problem, which happens anytime you charge for something that used to be free said Seaney. But those fees can add up to as much as 7% of an airline’s revenue, he said, which is well worth the flack.
Former Enron CEO Jeffrey Skilling will be given a hearing before the Supreme Court in his effort to overturn his 2006 convictions on securities fraud and other charges.
The justices accepted his appeal and will hold oral arguments early next year over the culpability of Skilling’s corporate duties.
Skilling’s attorney, Daniel Petrocelli, said "pervasive media coverage" prevented his client from receiving a fair trial from a Houston, Texas, jury.
Skilling, 55, is currently in federal prison. He was convicted of 19 counts of fraud, conspiracy, and insider trading relating to the collapse of the Texas-based energy services giant in late 2001.
He had been a longtime executive at what became the world’s largest wholesaler of gas and electricity, with $27 billion traded in a single quarter at Enron’s height. Skilling was named CEO in February 2001, but resigned under pressure six months later as the company began to collapse financially. Thousands of investors and company employees lost their savings and their jobs in a case that became emblematic of corporate corruption cases during the past decade.
Skilling and Enron’s top executive, Kenneth Lay, were accused of spearheading a massive campaign to mislead investors and shareholders with an aggressive investment strategy aimed at suppressing the company’s shaky financial footing.
Both men were convicted in May 2006. Skilling was sentenced to more than 24 years in prison and fined $45 million. Lay died in July 2006 before being sentenced. Skilling’s conviction was upheld by a federal appeals court.
Skilling’s attorney claims all 19 convictions should be overturned because Skilling was improperly convicted of withholding his "honest services" from Enron’s shareholders, a violation of federal law dealing with fiduciary responsibilities. Petrocelli said the government never proved his client’s conduct was designed to achieve "private gain," as the law required, as opposed to advancing the company’s interests. He also said the "honest services" requirement is too vague.
"The government did not contend, and the record did not suggest in any way, that Skilling intended to put his own interests ahead of Enron’s," the appeal noted.
And Petrocelli claimed, "The widespread, persistent, and scathing demonization of Skilling by the Houston media far exceeded the editorial commentary" allowed by the high court in similar cases, said the appeal. Questionnaires submitted by potential jurors "confirmed the breadth and intensity of the hostility toward Skilling."
There was no immediate reaction from the Justice Department, which had told the court Skilling’s claims were all without merit, and urged the justices to let the conviction and sentence stand.
Petrocelli, a Los Angeles, California-based trial attorney, told CNN in May when the appeal was filed that questions raised by this case had current relevance, given the ongoing financial meltdown. "The issues presented in this appeal cry out for resolution by the Supreme Court," he said.
The case is Skilling v. U.S. (08-1394).
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