Transportation and Technology Companies Face Investigations and Lawsuits

Strategic Insights -

Federal authorities have been investigating several transportation and technology companies on suspicion of price fixing and anti-competitive practices. FedEx and UPS have received federal subpoenas, while American Airlines, United Airlines, British Airways, Lufthansa, Air France-KLM, Scandinavian Airlines System, and Japan Airlines are also under scrutiny for allegedly colluding to raise fuel surcharges and other fees. In the technology sector, 35 states have filed a lawsuit against memory chip makers, including Samsung Electronics and Micron Technology, over price-fixing allegations. Additionally, Broadcom, a chipmaker, has admitted to backdating stock option grants, resulting in a restatement of financial results.

Key Takeaways:

  • FedEx and UPS received federal subpoenas in a price-fix probe related to air transportation and cargo companies.
  • Seven major airlines, including American Airlines, United Airlines, and Lufthansa, are under investigation for alleged price fixing.
  • 35 states have filed a lawsuit against Samsung Electronics, Micron Technology, and five other memory chip makers over price-fixing allegations.
  • Broadcom, a chipmaker, admitted to backdating stock option grants, which understated compensation expenses by $750 million.
  • The company plans to restate financial results from 2000 to Q1 2006.
  • EMC, a data storage provider, reported 10% revenue growth to $2.57 billion, but its shares fell 1.5% due to inventory shortages.

Statistics:

  • 7 airlines are under investigation for alleged price fixing.
  • 35 states have filed a lawsuit against Samsung Electronics, Micron Technology, and five other memory chip makers.
  • $730 million in fines were imposed on Samsung, Elpida Memory, Infineon, and Hynix Semiconductor as a result of a federal probe.
  • Broadcom's audit committee found instances of backdating stock option grants resulting in reduced compensation expenses of $750 million.
  • EMC revenue rose 10% to $2.57 billion.

Sources:

  • Bloomberg: "FedEx, UPS Tied to Price-Fix Probe"
  • Reuters: "US states sue chip makers in price-fixing probe"
  • Wall Street Journal: "Broadcom Finds Backdating of Stock Options"
  • Bloomberg: "EMC Matches Lowered Guidance; Revenue Rises 10%"