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Companies must now expense stock options Accounting rule-makers issued a standard last week that forces companies to expense employee stock options starting in June, ending 10 years of political wrangling and backpedaling. The Financial Accounting Standards Board now will require companies to deduct from earnings the cost of giving employees the right to buy stock at a predetermined price within a certain time frame. Despite the vote, the future of the rule remains in doubt. Opponents of stock-option expensing say they will continue to pressure Congress, the Securities and Exchange Commission and the Bush administration to ensure that the rule does not impede economic growth and job creation. Record prison time for Lowe’s computer hacker One of three Michigan men who hacked into the national computer system of Lowe’s hardware stores and tried to steal customers’ credit card information was sentenced last week to nine years in federal prison. The government said it is the longest prison term ever handed down in a computer-crime case in the United States. Brian Salcedo, 21, of Whitmore Lake, Mich., pleaded guilty in August to conspiracy and other hacking charges. Salcedo was sentenced by U.S. District Judge Lacy Thornburg in Charlotte, N.C. A second defendant received two years. Summary judgments set stage for WorldCom trial The litigation over WorldCom Inc.’s historic accounting fraud took a major step forward last week as a federal judge decided summary judgment motions in the case. Southern District of New York Judge Denise L. Cote set the stage for a Feb. 28 trial that pits aggrieved investors against 16 investment banks defending their role in bond offerings totaling $17 billion made by WorldCom. Investors allege that both the 2000 $12 billion offering, and the $5 billion offering the following year, were successful because public filings on the offerings contained material omissions about the financial health of the soon-to-be bankrupt company. Those omissions, they claim, hid enormous financial problems at WorldCom. Thus, J.P. Morgan and the other underwriters should be held liable for their losses, they say. Rebel without a cause A man who was fired for refusing to stop displaying Confederate flags in his workplace has lost his bid to revive a suit that said he was discriminated against on the basis of his religion and his national origin as a “Confederate Southern-American.” The 3d U.S. Circuit Court of Appeals upheld a ruling by a U.S. district court, which dismissed the Title VII suit filed by Curtis Blaine Storey, finding that “Confederate Southern-American” did not qualify as a national origin under Title VII, and that Storey had not established that the display was essential to maintaining a sincerely held religious belief. Storey v. Burns Int’l Sec. Servs., No. 03-2246. Miami’s Boyd & Greene: breakup or reshuffling? The Miami-based managing member of Boyd & Greene is seeking the dissolution of the law firm and has alleged that the firm’s Atlanta-based managing member threatened to slander him to clients. W. Todd Boyd filed the suit in Miami-Dade County Circuit Court last month seeking to dissolve Boyd & Greene, and to enjoin Atlanta managing member Steven S. Greene from slandering or libeling him. But in an interview last week, Boyd downplayed any strife within the firm, and said Boyd & Greene was simply reorganizing. He claimed that he filed the slander and libel allegations because he was “just trying to get things moving along.” He declined to comment on the slander and libel allegations. Greene last week said he “wouldn’t say the firm is splitting up,” but he declined to comment further on the litigation. 9th Circuit revives suit over vexatious litigants A unanimous panel of the 9th U.S. Circuit Court of Appeals has revived a suit against California Chief Justice Ronald George over the constitutionality of a state statute banning vexatious litigants. The decision overturns a U.S. district court ruling that had tossed the case. The suit alleges that the statute violates the First Amendment and equal protection and due process clauses. Though the panel agreed with the lower court that George and other judges sued have judicial immunity, it ruled that the chief is not shielded from litigation over actions he takes as an administrator. Wolfe v. Strankman, No. 04 C.D.O.S. 10954.

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