NATIONAL

MUSIC INDUSTRY GROUP SUES HUNDREDS OVER PIRACY

A music industry group sued hundreds of users of Grokster and other peer-to-peer file sharing Web sites a week after an appeals court ruled the Web sites weren’t responsible for piracy by individuals who used their software.

The Recording Industry Association of America, a Washington-based trade group representing the major record labels, sued individual users in nine states after the 9th U.S. Circuit Court of Appeals said peer-to-peer networks aren’t liable for copyright infringement committed by their users.

The industry claims that illegal downloads cost billions of dollars in annual sales. RIAA has now sued about 4,600 people since last September in an effort to discourage people from copying songs through networks like Kazaa and eDonkey. In addition to the lawsuits, the group is trying to promote legal online music services on college campuses.

“Just as enforcement strategies for street piracy adapt with changing circumstances, the same goes for combating piracy online,” said the RIAA’s president, Cary Sherman, in a statement.

The suits against 744 unnamed individuals were filed in courts ranging from Covington, Ky., to New York. The RIAA plans to learn the identities of the song downloader’s through court-issued subpoenas. Another 152 people, who were previously sued, were identified in amended lawsuits.

About 840 people have settled the suits for amounts averaging about $3,000, said Jonathan Lamy, spokesman for the RIAA.

– Bloomberg News

WILLIAMS-SONOMA 2ND-QTR NET RISES 55%; SHARES SOAR

Williams-Sonoma Inc. said second-quarter earnings rose 55%, boosted by the addition of Pottery Barn stores and sales of tables and sofas. The company’s shares had their biggest gain in more than two years after profit beat analysts’ estimates.

Net income climbed to $27.6 million, or 23 cents a share, from $17.8 million, or 15 cents, a year earlier, the San Francisco-based company said in a statement. Sales at the retailer of upscale kitchen and home furnishings rose 19% to $689.6 million in the quarter ended Aug. 3.

Williams-Sonoma, which opened 33 stores in the last year, benefited from growing demand for higher-priced furniture, such as $800 dining tables. Chief Executive Edward Mueller, 57, boosted sales at Pottery Barn stores open at least a year by 10 percent amid record existing American home sales in May and June.

“Everything was better than expected for the quarter,” said Jonn Wullschleger, who helps manage $400 million of assets at Kansas City, Missouri-based Mitchell Capital Management, including shares of Williams-Sonoma. “It seems like some of the higher-end retailers are doing better right now than some of the lower-end retailers.”

Profit exceeded by four cents the average estimate of 19 cents by 18 analysts surveyed by Thomson Financial.

Shares of Williams-Sonoma, which also operates the Hold chain 9.97% to in New York Stock Exchange composite trading. They had dropped 9.4% this year.

The company increased its revenue forecast to $719 million to $735 million this quarter from $709 million to $725 million. It left its earnings forecast unchanged at 21 cents to 23 cents a share.

“We are continuing to be cautious in our economic outlook,” the chief financial officer, Sharon McCollam, said on a conference call. The company isn’t raising its third-quarter forecast because of economic and geopolitical uncertainties, she said.

– Bloomberg News

REGULATORY

FORMER ENRON EXECUTIVE TO PAY $1.5 MILLION IN SEC SUIT

Former Enron Corp. executive Mark Koenig will pay almost $1.5 million to settle securities regulators’ allegations that he spread false and misleading information about the energy company’s business.

Mr. Koenig also agreed to be barred from serving as an officer or director at any public company, according to a statement from the Securities and Exchange Commission in Washington. He neither admitted nor denied the allegations as part of the settlement.

Mr. Koenig, 49, served as Enron’s director of investor relations and approved scripts for analyst calls and earnings releases. In 2001 he knew the company’s energy services unit had lost hundreds of millions of dollars and that Enron had moved large portions of it into Enron Wholesale, the company’s most profitable unit, to hide them, according to the SEC’s complaint in the case.

Still, Mr. Koenig approved earnings releases and scripts for conference calls where Enron executives touted the energy services unit as “outstanding,” according to regulators. The SEC said Mr. Koenig himself misled investors as to the nature of the funds transfer.

“We just took the risk-management functions and combined them because we just – we were trying to get some more efficiency out of management of the overall risk-management function,” the SEC’s complaint quoted Mr. Koenig as telling analysts in a July 12, 2001, conference call.

Enron filed for bankruptcy protection in December 2001 after shares of the Houston-based company lost $68 billion in value from their peak in August 2000. Enron was forced to restate $586 million in earnings because of improper accounting.

– Bloomberg News

JB OXFORD SUED BY SEC FOR IMPROPER MUTUAL FUND TRADES

JB Oxford Holdings Inc., a Beverly Hills-based discount brokerage firm, was sued by the Securities and Exchange Commission for allegedly allowing thousands of improper trades in more than 600 mutual funds.

The complaint accused JB Oxford, its National Clearing Corp. unit, and James Lewis, 39, the company’s former president, of permitting the trades, the SEC said in a statement. The suit also names Kraig Kibble, 44, National Clearing’s operations director, and James Lin, 46, a vice president at National Clearing.

Yesterday’s action was part of a yearlong crackdown of trading and sales abuses in the $7.6 trillion mutual fund industry. Companies, including Alliance Capital Management Holding LP, have paid more than $2.3 billion in sanctions and JB Oxford is at least the third processor of mutual fund orders to run afoul of regulators.

– Bloomberg News