REGULATORY

PERLE, EX-PENTAGON AIDE, MAY FACE SEC SUIT OVER HOLLINGER ROLE

The Securities and Exchange Commission has warned former Pentagon adviser Richard Perle that it may sue him for his role in the alleged looting of Hollinger International Incorporated, the Chicago-based company once controlled by Conrad Black.

Mr. Perle, 63, a Hollinger director, said in a telephone interview that he received and responded to a so-called Wells notice, a formal warning that the agency’s enforcement staff has determined that evidence of wrongdoing is sufficient to bring a civil lawsuit.

The SEC staff, which has reviewed Mr. Perle’s response, plans to urge the regulatory body’s commissioners to authorize a suit against him, according to people familiar with the matter.

Hollinger International officials, shareholders, and the SEC allege that Mr. Black and former Hollinger President David Radler wrongfully diverted proceeds from the sale of some of the chain’s newspapers for their personal use. Mr. Perle was a member of Hollinger International’s three-member executive committee, with Messrs. Black and Radler, from 1996 to 2003.

“We did receive a notice some months ago and we responded at some length,” said Mr. Perle, who was the leading architect of American nuclear arms-control policy as assistant secretary of defense from 1981 to 1987, during the administration of President Reagan. In the 2000 presidential campaign, Mr. Perle was foreign policy adviser to George W. Bush.

Mr. Perle said he never profited from the Hollinger deals that investigators have scrutinized.

“I didn’t benefit from any of the transactions that they looked at,” Mr. Perle said.

– Bloomberg News

ADELPHIA OFFERS TO PAY $725M TO SETTLE CHARGES

Adelphia Communications Corporation, the fifth-largest American cable-television operator, offered to pay $725 million to settle federal fraud investigations in what would be the second-highest penalty ever imposed by regulators.

Settlement talks are ongoing, and the offer covers both Securities and Exchange Commission and Justice Department proceedings, the Greenwood Village, Colo.-based company said yesterday in a regulatory filing.

A settlement would bring the chief executive, William Schleyer, a step closer to reshaping the company after the ninth-largest bankruptcy in American history. A deal also may help him complete a sale of the cable systems to raise money to repay creditors. Comcast Corporation and Time Warner Incorporated, the two biggest American cable-TV companies, in January jointly bid more than $17 billion.

– Bloomberg News

IN THE COURTS

J &J PATENT INFRINGED BY BOSTON SCIENTIFIC, JURY SAYS

A federal court jury decided a Johnson & Johnson patent for stents used to prop open coronary arteries was infringed by competitor Boston Scientific Corporation.

The verdict today in Wilmington, Del., came after a week-long retrial of an eight year-old lawsuit in which another jury in 2000 ordered Boston Scientific to pay Johnson & Johnson’s Cordis unit $324 million for infringement. After review, Chief U.S. District Judge Sue L. Robinson had ordered a new trial in the case.

“We do plan to appeal the verdict,” said a Boston Scientific spokesman, Charles Rudnick. “While we’re disappointed, it only applies to a stent that Boston Scientific no longer markets” and doesn’t affect sales of its newer drug-coated stents, he said.

Johnson & Johnson, the world’s biggest maker of medical devices, is second to Boston Scientific in the stent market, which has $5 billion in annual sales. Johnson & Johnson is awaiting American antitrust review on its plan to buy another stent maker, Indianapolis-based Guidant Corporation, for $25.4 billion.

– Bloomberg News