Business Digest

BUSINESS DIGEST

August 15, 2007

Nation : Technology

Microsoft issues security patches

Microsoft Corp. issued fixes for nine security flaws, including four meant to keep hackers from breaking into computers through Web pages, during a regularly scheduled update yesterday. Microsoft gave the four Web browsing-related patches its most severe "critical" rating. The updates affect many versions of Windows, Server and Office software - including Windows XP and Windows Vista - and are meant to prevent hackers from breaking into Web surfers' computers using specially crafted Web pages. The other two critical updates target holes in the Excel spreadsheet program and in technology that lets users see downloaded images from e-mails or social networking Web sites.

Courts

BDO Seidman to pay damages

A jury ordered BDO Seidman, the nation's No. 5 accounting firm, to pay more than $351 million in punitive damages in a negligence case, bringing BDO's potential liability in the case to about $521 million, an amount the chief executive said threatens its operations. The jury had found BDO negligent for failing to find fraud in its audits of a financial services company backed by a Portuguese bank. The amount will be added to the same jury's award of $170 million in compensation to the bank, Banco Espirito Santo. In court filings, BDO Seidman had warned a loss of $170 million could trigger extensive layoffs and cause the company to lose its standing as the fifth-largest accounting firm. The jury was barred from issuing damages that could destroy a company. BDO Seidman said it will appeal the jury's verdicts, so BDO Seidman will post a $50 million bond as it appeals. This is the second trial in the dispute, with the first ending in a mistrial in March. The fraud also led to prison time for former E.S. Bankest executives.

Ex-Sprint manager pleads guilty

A one-time Sprint Corp. manager admitted Monday that she fed insider information to a consulting firm to give it an advantage in contract negotiations with Sprint. Mary Elizabeth Drew, 44, pleaded guilty in federal court in Kansas City, Kan., to conspiracy to commit wire fraud. She faces up to five years in prison and a $250,000 fine.

Airlines

Frontier names new chief executive

Sean Menke stepped back into Frontier Airlines Holdings Inc. yesterday with a new job as chief executive and fresh ideas aimed at boosting revenue from an a la carte fare strategy to diversifying operations beyond its Denver hub. Menke, a chief operating officer at Frontier until 2003, will replace Jeff Potter, 47, who is resigning effective Sept. 6 to become CEO of Exclusive Resorts, a privately held luxury destination club. Both men will serve on the company's board. Menke, 38, rejoins the airline as the industry is addressing key issues such as high fuel costs.

Earnings

TJX profit falls by more than half

TJX Cos. said yesterday that its second-quarter profit was cut by more than a half as the discount store operator recorded a $118 million charge because of costs from an extensive breach of customer data. TJX reported net income of $59 million for the May-July period, or 13 cents per share, down from $138.2 million, or 29 cents per share, in the corresponding period a year ago. Sales rose 9 percent to $4.31 billion from $3.99 billion. The $118 million after-tax charge from the data breach shaved 25 cents per share from earnings. Not counting that expense, TJX's profit equaled 38 cents per share.

This column was compiled from dispatches by the Associated Press, McClatchy-Tribune and Bloomberg News.

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