Nation roundup for July 22
Marine freed in war crime case
SAN DIEGO (AP) — The U.S. Marine Corps released a sergeant Friday whose murder conviction was overturned in a major blow to the military’s prosecution of Iraq war crimes.
Sgt. Lawrence Hutchins III, of Plymouth, Mass., walked out of the brig at the Marine Corps Miramar Air Station in San Diego after having served more than half of his 11-year sentence.
“The emotions I am feeling right now are hard to describe,” Hutchins said in a statement issued through his attorney. “I am overcome. This is all I ever wanted.”
Once his release paperwork was processed, Hutchins was to be transported by Marine Corps officials to Camp Pendleton, where he would check in to his new unit at the base’s headquarters, said Marine Corps spokesman Lt. Col. Joseph Kloppel.
Hutchins led an eight-man squad accused of kidnapping an Iraqi man from his home in April 2006, marching him to a ditch and shooting him to death in the village of Hamdania.
Hutchins has said he thought the man — who turned out to be a retired policeman — was an insurgent leader.
None of the other seven squad members served more than 18 months.
The Court of Appeals for the Armed Forces overturned Hutchins’ conviction on June 26, supporting his claims that his rights were violated when he was held in solitary confinement without access to a lawyer for seven days during his 2006 interrogation in Iraq.
The move was the latest in a series of twists for Hutchins, whose case was overturned once by a lower court three years ago only to be reinstated in 2011 by the same court that agreed with his latest petition.
Under the military justice system, Hutchins could not be freed until the court ruled on a Navy motion in response to the June 26 decision.
Prosecutors asked the court to reconsider its decision to toss out the conviction, saying Hutchins waived his right to counsel at the time and willfully told his side of the story without coercion.
The court Thursday denied that request and issued a mandate that he be released.
The case, however, is not closed. The Navy can order the case be retried or prosecutors can appeal to the Supreme Court.
SEC files charges over hedge funds
WASHINGTON (AP) — The Securities and Exchange Commission leveled its most direct shot against billionaire hedge-fund manager Steven A. Cohen on Friday by filing civil charges that accuse him of failing to prevent insider trading.
The SEC alleged that Cohen, who founded and runs SAC Capital Advisors, failed to prevent two of his portfolio managers from illegally reaping profits and avoiding losses of more than $275 million. Both managers provided information to Cohen in 2008 that suggested they had access to inside information, the SEC said. But rather than raise any red flags, Cohen praised one of the managers and rewarded the other with a $9 million bonus, the SEC said.
Cohen, 57, faces possible fines and could be barred from managing investor funds.
Cohen’s firm, which once managed more than $15 billion in assets, is at the center of one of the biggest insider-trading fraud cases in history. Four employees have already been criminally charged with insider trading — two of whom have pleaded guilty. And an SAC affiliate has agreed to pay $615 million to settle SEC charges of insider trading.
But legal experts said the SEC’s action against Cohen on Friday suggests that the government may not have enough evidence to charge him with insider trading.
And rather than seek higher penalties in a federal lawsuit, the SEC chose to bring the case against Cohen before an administrative law judge at the regulatory agency, where the legal burden of proof is lower.
“They’ve opted for the home court advantage,” said John Coffee, a securities law professor at Columbia University.
GE shares rise to post-crisis high
NEW YORK (AP) — An improving outlook for the U.S. economy and signs of stabilization in Europe sent General Electric shares to their highest level since 2008 despite modest quarterly results.
“Orders in the U.S. were the strongest in some time,” CEO Jeff Immelt said on a conference call with investors following the release of the company’s second-quarter results Friday.
Immelt said the U.S. economic environment remained “mixed,” but his outlook marked an improvement from recent quarters, when he expressed more caution about the U.S. market.
GE, based in Fairfield, Conn., has a broad view of the global economy because it sells a wide variety of industrial equipment and appliances around the world, including jet engines, medical diagnostic equipment, oil and gas drilling equipment and washing machines.
GE’s net income rose 6 percent in the first half of the year, and the improved outlook raised hopes of even better growth in the second half.
GE shares rose $1.09, or 4.6 percent, to close at $24.72 Friday.
They went as high as $24.95, the highest intraday level since September of 2008, when the shares were in the midst of a plunge brought on by the financial crisis.
The recovery in GE shares is not quite complete — shares would have to rise another 15 percent to reach the roughly $30 per share they were trading at before the financial crisis hit.
But the improvement in the company’s share price represents confidence in the company’s transformation to a more focused industrial conglomerate. GE is dramatically shrinking its banking division — the giant financial services arm that threatened to pull the company apart during the financial crisis — and shed media and other non-industrial businesses.
“A GE back to its core roots is a very compelling investment story,” wrote Scott Davis, an analyst at Barclays. “This is the GE we grew up with.”
At the same time, the company has beefed up divisions that industrial equipment such as gas-fired turbines and oil and gas drilling equipment.
GE earned $3.13 billion in the second quarter, up from $3.11 billion a year earlier. On a per share basis, the company earned 30 cents, up from 29 cents. Revenue fell 4 percent, to $35.12 billion from $36.5 billion.
Adjusted to reflect earnings from continuing operations, GE earned 36 cents per share. That’s 2 cents less than adjusted earnings last year, but one cent better than analysts polled by FactSet had expected.
GE said orders for new equipment and services grew 20 percent in the U.S. during the quarter. In Europe, orders grew 2 percent after falling 17 percent in the first quarter, helped by oil and gas orders in the North Sea and aviation equipment and services.
“In the GE world at least (Europe) seems to have stabilized,” Immelt said.
Emerging markets remained strong, he said.
The company’s total orders for new business rose $7 billion, or 4 percent, last quarter to a record $223 billion. Orders for oil and gas drilling equipment and energy management equipment showed especially strong growth; orders for transportation and power and water equipment fell.
Profit margins for industrial segments rose 0.5 percent in the quarter and remain on track to post growth of 0.7 percent for the full year, GE said. GE Capital earnings fell 9 percent for the year.
Christian Mayes, an analyst at Edward Jones, called the quarter “ho-hum” but noticed some encouraging signs for GE. Revenue slipped at the company’s power and water division, which sells and services gas-fired turbines, wind turbines, and water treatment equipment, but the division’s profits returned to more normal levels after a first quarter he called “a mess.”
He was also encouraged by the improved outlook for the U.S., echoing recent comments by other industrial companies, and by GE’s push to further improve profit margins later this year.
“The back half of the year should be better for GE,” he said.
Follow Jonathan Fahey on Twitter at http://twitter.com/JonathanFahey .
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