Business & Finance

Computer Associates International is the latest big company whose revenues have come under scrutiny by the Justice Department and Securities and Exchange Commission (SEC), The Wall Street Journal reported. The investigation reportedly focuses on a $500 million overstatement for fiscal years 1998 and 1999. The overstatement later was corrected, but not before three top executives received stock incentives worth $1 billion. Islandia, N.Y.-based Computer Associates is the world's third-largest independent software company, after Microsoft and Oracle.

Duke Energy Corp. acknowledged "round-trip" trading – selling electricity to another company and then buying it back at the same price, a practice for which several other traders are under investigation by the SEC. A spokesman for Charlotte, N.C.-based Duke said its transactions bearing similarities to such trades were conducted legitimately to determine "a market price" for power and, over a three-year period, amounted to about $1.1 billion, or 1 percent of its revenue volume – less than others in the industry have disclosed.

Buyout specialist Kohlberg Kravis Roberts (KKR) and a group of high-profile partners made an unexpected early exit from the race to take over Qwest Communications' directories business, The Wall Street Journal reported. The newspaper said the KKR group offered "about $8 billion," well below the high end – $10 billion – of the range Qwest was seeking for its Yellow Pages in 14 states. It was not clear whether KKR would come back with a higher bid. Qwest's accounting practices are under investigation by the SEC, and the company is selling the directories business to raise cash.

Southwest Airlines wasn't commenting on a published report that it has offered a two-year contract extension to its unionized pilots, featuring a minimum 20 percent pay raise. The Wall Street Journal said the proposal would bring the earnings of Southwest's 4,100 pilots closer to those of larger airlines. Southwest hasn't lost money in 29 years. Still, its offer is seen as unusual, considering that most other carriers are trying to cut costs amid the current recession in the industry. The union board is scheduled to meet June 10-11 to decide whether to recommend ratification of Southwest's offer.

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