The Securities and Exchange Commission may not legally be allowed to require chief executives and chief financial officers to swear to the accuracy of their companies’ financial results, the Wall Street Journal reported, citing lawyers.
Some members of the American Bar Association’s committee on securities regulation say the SEC can only require CEOs of companies under investigation to certify results, the paper said, citing a letter sent to SEC Chairman Harvey Pitt. The letter was sent by Dixie Lynn Johnson of Fried Frank Harris Shriver & Jacobson in Washington and Stanley Keller of Boston-based Palmer & Dodge.
The SEC order, which has an Aug. 14 deadline, may violate corporate officers’ due-process rights because it was adopted without giving notice, the paper said, citing other lawyers.
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Corporate officers have refused to publicly challenge the order to take an oath because they fear a negative reaction from investors and regulators, the paper said. (Bloomberg News)
Putnam Investments returns
to naming fund managers
Boston-based Putnam Investments returned to a policy of using fund managers’ names in mutual fund documents, three months after trying to put the focus on a team approach by striking the names, the Boston Globe reported.
The names of Putnam fund managers were posted to the company’s Web site late last month and the names will be restored to all fund documents filed after May 31, the paper said, citing a posting on Putnam’s Web site.
The Boston-based investment firm had cut out the names of individual managers from fund prospectuses beginning in March, saying the funds were team-managed, the report said.
The decision to return to naming the managers was based on feedback from brokers and shareholders, the paper said, citing an unidentified senior Putnam executive. (Bloomberg News)
Second quarter sales up
12 percent for TJX
The TJX Companies, Inc., based in Framingham, Mass., reported eek that sales for the second quarter ended July 6 hit $1.073 billion, a 12 percent increase over the same period last year.
Consolidated store sales for the second quarter were three percent above last year.
For the first half of the year the company reached $4.667 billion, an increase of 15 percent over last year.
"We are pleased with our June sales performance and strong margins which were driven by excellent inventory management and a good flow of merchandise," said Edmond English, president and CEO of TJX. "Each of our divisions ended the month with inventories in excellent shape."
TJX operates T.J. Maxx, Marshalls, HomeGoods and A.J. Wright, among other off-price retail stores worldwide.
Southwest Airlines profit
falls 42 percent on lower fares
Dallas-based Southwest Airlines Co., the only major U.S. carrier to stay profitable after the Sept. 11 attacks, said second-quarter earnings fell 42 percent as more travelers bought tickets at discounted prices.
The low-fare carrier, which operates out of T.F. Green Airport, saw net income declined to $102.3 million, or 13 cents a share, from $175.6 million, or 22 cents, a year earlier, the Dallas-based company said. Sales fell 5.2 percent to $1.47 billion from $1.55 billion.
Southwest said it expects profit this quarter to be lower than in the second quarter because of fare discounts. The airline for the third quarter was expected to earn 15 cents a share, the average forecast in a Thomson First Call survey of analysts.
“We are carrying a significantly greater proportion of customers traveling on lower-yielding discounted fares,’’ Chief Executive Officer James Parker said in a statement.
Southwest and other airlines cut fares after the September attacks to try to revive air-travel demand. Southwest’s second-quarter traffic rose 1.8 percent from a year earlier. Its average fare per mile flown slid 9.3 percent as fewer people bought full-price tickets. (Bloomberg News)
Hancock to pay $19.5 million
stemming from lawsuits
Boston-based John Hancock Financial Services Inc. said it will have $19.5 million in costs to settle litigation alleging the insurer overcharged customers who paid premiums in installments.
The Boston-based company said about 1.5 million of its customers are eligible to participate in the settlement. The $19.5 million cost is being treated as a non-operating item in the second quarter, the company said. Analysts say John Hancock probably earned 71 cents a share in second-quarter operating income, according to Thomson First Call. The company reports earnings Aug. 1.
The settlement covers John Hancock’s liability in 21 class-action lawsuits filed against a number of life insurance companies, the company said.
“If eligible under the agreement, these customers may receive a settlement death benefit of $800, $1100 or $1400, depending on their specific circumstances,’’ the company said in a statement. (Bloomberg News)
(Compiled from news reports and releases.)
