IN THE COURTS

HOLLINGER INTERNATIONAL CAN PROCEED WITH BLACK SUIT

Hollinger International Incorporated can proceed with a fraud lawsuit against its former chief executive, Conrad Black, over allegations that he and other defendants looted the company, a federal judge ruled. District Judge Blanche Manning in Chicago denied on March 11 a request by Mr. Black and his business associates to dismiss the suit, which seeks $425 million in damages, according to court papers. Hollinger International is the publisher of the Chicago Sun-Times newspaper. The decision comes as shareholders in Hollinger Incorporated, the newspaper chain’s parent, are set to vote March 31 on Mr. Black’s $48 million bid to take the company private. Hollinger International officials, shareholders, and the Securities and Exchange Commission allege that Black and other executives wrongfully diverted proceeds from the sale of some of the chain’s papers through so-called non-compete payments.

– Bloomberg News

QWEST FORMER CHIEF NACCHIO ACCUSED OF FRAUD BY SEC

Qwest Communications International’s former chief executive, Joseph Nacchio, and six other ex-officials were accused of orchestrating a $3 billion fraud in a lawsuit by the Securities and Exchange Commission. Nacchio and executives including a former president and two ex-chief financial officers misreported sales at Qwest, the no. 4 American local-telephone company, from 1999 to 2002, the SEC said in court papers. Other former executives would settle fraud accusations, a person familiar with the matter said last week. Mr. Nacchio and associates may be forced to give back what the SEC called “ill-gotten” gains, including $516 million of salaries, bonuses and proceeds from stock sales. Should the government prevail, the officials would be permanently barred from serving as officers or directors of a public company. The lawsuit culminates a three-year investigation into allegations that the company used sham transactions to mislead investors. Nacchio, who amassed a $26 billion debt load, was ousted in 2002 as the accounting probe began. Nacchio in the past has denied wrongdoing. His spokeswoman, Marcia Horowitz, had no immediate comment.

– Bloomberg News

ECONOMY

RETAIL SALES RISE 0.5% IN FEBRUARY

Retail sales, bolstered by a rebound in demand for autos, rose a healthy 0.5% in February, the Commerce Department reported yesterday. In addition to a solid sales performance last month, the government revised sharply higher its estimate for sales activity in January, showing a gain of 0.3% rather than the original estimate that sales had fallen by 0.3% at the beginning of the year. Taken together, the two months showed that the consumer buying spree that began with a 1.3% sales surge in December was continuing in the new year despite stormy winter weather and rising energy prices. For February, auto sales rose by 0.7%,recouping part of the 2.1% plunge in sales that occurred in January. That decline reflected a reduction in the attractive incentives that auto dealers had offered in December in a successful effort to reduce their inventories of unsold cars.

– Associated Press

MARKETS

U.S. STOCKS DROP ON ANTHRAX REPORT, OIL PRICES; AIG DECLINES

American stocks fell after anthrax was detected at a Pentagon mailing center and oil prices rose above $55 a barrel. The Dow Jones Industrial Average, dragged down by American International Group, erased its gain for the year. Computer-chip makers including Intel fell as Merrill Lynch said the shares are too expensive, based on earnings prospects for the second half of the year. The Dow average lost 59.41, or 0.6%, to 10,745.10.The Nasdaq Composite Index, which gets 41% of its value from computer-related companies, dropped 16.06, or 0.8%, to 2034.98, its fifth decline in six days. The Standard & Poor’s 500 Index slid 9.08, or 0.8%, to 1197.75. The S&P 500 earlier gained as much as 0.3% after Lehman Brothers Holdings reported record earnings and economic data showed an increase in retail sales and manufacturing activity. About two stocks fell for every one that rose on the New York Stock Exchange. Some 1.5 billion shares changed hands on the Big Board, in line with the three-month daily average.

– Bloomberg News