Business briefs for May 8, 2002

Wednesday, May 8, 2002 | 11:02 a.m.

Energy trader faces SEC probe

HOUSTON -- Dynegy Inc., one of the largest U.S. energy traders, said the Securities and Exchange Commission will request a formal investigation into the accounting of a natural-gas transaction.

Dynegy is cooperating with the investigation, the company said in a statement.

Last month, Dynegy said the SEC inquired about an agreement by one of the company's partnerships to buy gas over five years from ABG Gas Supply LLC. Dynegy had recorded $300 million in cash from the transaction, "Project Alpha," in its financial statements, along with $80 million in tax benefits.

Dynegy said it's reclassifying $300 million in cash as coming from financing rather than operations. The company's accounts had been audited by Arthur Andersen LLC, which it has since fired. Andersen is on trial over shredding documents of Enron Corp., once the biggest energy trader.

Eleven more sued over alleged cable piracy in Vegas

Las Vegas cable television operator Cox Communications Inc., which accused 39 Las Vegas Valley residents last March of cable theft, has stepped up its anti-cable piracy campaign with a second lawsuit that targets 11 more alleged cable pirates in the Las Vegas area.

Cox, in a U.S. District Court lawsuit Tuesday, accused the 11 defendants of violating the federal Communications Act -- which prohibits the unauthorized reception of cable television programming -- when they allegedly used bootleg "pirate" converter-decoder devices to steal its services.

Meanwhile, a federal judge denied a request to dismiss Cox's earlier lawsuit by Jesse Gomez, one of the 39 sued earlier. Gomez challenged Cox's cable theft claims, saying the company failed to specify the specific dates of the alleged theft.

But U.S. District Judge Kent Dawson, in a ruling Tuesday, said Gomez's request was "premature" because discovery hasn't been conducted.

"Gomez's request for dismissal based on a failure to articulate actual damages must fail as such is not required by the Communications Act," Dawson wrote.

Interest rates unchanged

WASHINGTON -- With new data suggesting that inflation will remain under control, the Federal Reserve voted unanimously Tuesday to hold its benchmark interest rate unchanged at a 40-year low, saying the durability of the economic recovery remains uncertain.

On a day when the Labor Department reported a bigger-than-expected surge in the growth rate of productivity -- evidence that companies might be able to restore their depressed profit margins without having to jack up prices -- the central bank reiterated that it is not in any rush to raise interest rates despite a sharp upturn in economic growth in the first quarter.