TOP STORIES -- June 12-17

Tyco Ex-Execs Guilty of Stealing From Firm

L. Dennis Kozlowski and Mark Swartz, two of corporate America’s highest-paid executives during the 1990s, were convicted of stealing tens of millions of dollars from their former company, scoring another victory for the government in its battle against corporate crime.

After a four-month trial and 11 days of deliberations, a New York state jury convicted each man of 22 of 23 counts of grand larceny, conspiracy, securities fraud and falsifying business records. The men face as many as 30 years in prison.

Kozlowski and Swartz once were among the country’s most successful executives, building Tyco International Ltd. into an industrial conglomerate through mergers. The two took home legitimate pay of almost $300 million from 1999 to 2001.

But the Manhattan district attorney’s office alleged that they stole $150 million more to finance lifestyles that were sumptuous even by the outsize standards of corporate titans.

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Oil at Record High on Unrest in Nigeria

Oil prices soared to a record high Friday as embassy shutdowns in Nigeria sparked fear of supply disruptions.

Near-term crude futures rose to $58.47 a barrel in New York trading from $56.58 on Thursday, eclipsing the April 1 record of $57.27, as investors reacted to reports that U.S. and British consular offices in Lagos were closed temporarily as a security measure.

A decision by OPEC earlier in the week to lift its official production levels had failed to keep the price of crude from rising.

The increase in the output ceiling, by 500,000 barrels a day to 28 million as of July 1, was viewed as mostly symbolic, because the Organization of the Petroleum Exporting Countries already is pumping well in excess of its new official quota.

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Supreme Court Declines to Hear FCC Media Case

In a setback for the nation’s big news and broadcast companies, the Supreme Court put the incendiary issue of expanded media ownership back in the lap of the Federal Communications Commission, forcing officials to take another crack at revamping their rules.

The action means FCC commissioners will have to rewrite policies that govern how many TV and radio stations companies can own, which they moved to dramatically loosen in 2003. They also must better justify the rationale for wanting to ease restrictions on companies owning TV stations and newspapers in the same market.

The high court’s rebuff means a 1975 ban on owning both a newspaper and a television or radio station in the same market will continue. A company may own a maximum of two stations if there are eight other independent TV stations in the area.

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State Shows Modest Gain in Jobs in June

California’s job-creation engine remained in cruise control in June, producing a modest net gain of 17,600 jobs, the state Employment Development Department reported.

The increase, slightly below the revised 18,300 gain in April and 21,000 in March, suggests that the state’s economy continues to grow at a steady pace, economists said.

The state is being helped by many of the same factors fueling national economic growth: relatively low interest rates, resilient consumer spending, a booming housing market and rebounding business investment. Some California industries, such as tourism and aerospace, are perking up.

However, the Golden State -- like the nation -- still is not producing enough jobs to keep up with population growth. Employers continue to show caution in hiring, seeking to boost productivity of workers whenever possible.

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Run-Up in Home Prices Showing Signs of Easing

Southern California home prices rose to new highs again last month, but the rate of appreciation remained at its slowest pace in more than three years, data showed.

Further, price gains in Orange and San Diego counties, which had been the hottest segments of the six-county Southland market, fell below 10% for the first time in at least four years. But the Inland Empire continued to clock increases of more than 20%.

The median price paid for a Southern California home rose 15.2% on a year-over-year basis to a record $456,000 in May, according to DataQuick. The pace of the increase equaled that of April, which was the lowest percentage gain since March 2002.

It is a further sign that the region’s housing market is chilling out a bit, analysts said. The big price jumps of a year ago simply can’t be sustained, they said.

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JPMorgan Chase Settles University’s Enron Suit

After reaching a settlement with Citigroup Inc., the University of California agreed to a $2.2-billion payout from JPMorgan Chase & Co. on behalf of shareholders who lost money in the collapse of Enron Corp.

The settlement is the sixth and the largest stemming from the Houston company’s stunning downfall in 2001. It brings the total recovery pool to $4.7 billion.

JPMorgan Chase did not admit wrongdoing in the settlement; the bank said its aim was solely to eliminate the burden of “further protracted litigation.” The company said it would take a special charge of about $2 billion in the current quarter to increase its legal reserves.

UC and other former Enron stock and bond holders still have claims pending against eight investment banks and several other defendants that are accused of helping the energy trader carry out a massive fraud before its accounting scheme unraveled.

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CEO of Morgan Stanley Decides to Resign

Morgan Stanley Chairman and Chief Executive Philip J. Purcell succumbed to a months-long effort to oust him, saying he would step down to prevent more damage to the venerable investment bank.

Purcell had tried to insulate himself by promoting loyal underlings and firming up his support on the board. But the continued exodus of securities traders and investment bankers bred a public relations firestorm and spawned doubt about whether Morgan could maintain its perch among Wall Street’s preeminent firms.

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Viacom Board OKs Plan to Split Firm in Two

In the face of a sagging stock price, Viacom Inc.’s board unanimously approved a plan to split the nation’s third-largest media giant into two publicly traded companies, one focused on fast-growing cable programming and the other on the more mature broadcasting business.

Chief Executive Sumner Redstone will be chairman and controlling shareholder of both companies after the division occurs in the first quarter of 2006.

Under the plan, Viacom shareholders would receive stock in a new company that would retain the Viacom name. That company, which will include cable channels as well as Paramount Pictures, will be run by Viacom co-President Tom Freston.

The other public company will be called CBS Corp. Headed by co-President Leslie Moonves, it will include the broadcast TV network, TV stations, outdoor advertising group and Infinity Radio as well as assets originally owned by Viacom, such as the UPN network, cable channel Showtime and publisher Simon & Schuster Inc.

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Chiron to Ship Less Flu Vaccine Than Promised

Chiron Corp. said it would not deliver as much flu vaccine this year as promised, heightening the possibility of another season of shortages.

The Emeryville, Calif.-based company caused public health concern in October when it failed to ship 50 million doses from its troubled factory in Britain, cutting off half the anticipated U.S. supply.

Chiron said continuing problems at its plant in Liverpool meant it would ship 18 million to 26 million doses this year to the U.S., down from its previous estimate of 25 million to 30 million.

Hospitals and vaccine distributors reacted with concern, but many said they had placed vaccine orders with drug firms in addition to Chiron to guard against devastating shortages.

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Hotel Strife Over, Focus Turns to L.A. Tourism

Los Angeles Mayor-elect Antonio Villaraigosa and other officials used the ratification of a new hotel labor contract to jump-start the city’s convention and visitors business, which had been hurt by a union-led boycott and fears of a disruptive work stoppage.

Flanked by union, hotel and tourism leaders at a news conference, Villaraigosa announced the contract ratification and said he would personally urge groups to bring their events to L.A.

The union said dozens of groups canceled events here during the 14-month conflict, costing millions of dollars in tourism revenue for an industry recovering from terrorism fear and economic problems abroad.

Slightly more than half of Unite Here Local 11’s 2,500 members voted, 98% to 2%, to ratify the agreement, which guaranteed free healthcare and gave hourly hotel employees a 65-cents-an-hour raise over the life of the contract, which expires Nov. 30, 2006.

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For a preview of this week’s business news, please see Monday’s Business section.