BUSINESS BRIEFS
Business Briefs: Saturday, June 28, 2008

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Published: June 28, 2008

Consumers not notified after security breach

NEW YORK — An old name in retail was hit by a modern scourge — a hack of its customers' credit card numbers — but didn't inform the consumers, revealing how data breaches might be heavily undercounted even with new notification laws.

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Richard "Dickie” Scruggs, center, leaves federal court in Oxford, Miss., on Friday with his wife Diane, left, and attorney John Keker after being sentenced to five years in prison for conspiracy to bribe a judge. Associated Press

At least 51,000 records were exposed in the breach at the parent company of Montgomery Ward. The venerable Wards chain that began in 1872 went out of business in 2001, but in 2004 a catalog company, Direct Marketing Services Inc., bought the brand name out of bankruptcy. It now runs a Wards.com Web site along with six other sites, including three with Sears brands it has acquired: SearsHomeCenter.com, SearsShowplace.com and SearsRoomforKids.com.

Direct Marketing Services immediately informed its payment processor and Visa and MasterCard. Notification laws in nearly every state generally require organizations that have been hacked to come clean to the affected consumers, not just to the financial industry.

Pitney Bowes retains business unit

STAMFORD, Conn. — Pitney Bowes Inc. is keeping a business unit it once considered selling or spinning off.

The Stamford-based mail and document-managing company announced Friday that it will keep its management services business, which provides mailroom and copy center services to corporations, federal agencies and law firms.

Chief Executive Murray Martin said that many customers of management services renewed or increased their contracts.

Lawyer given jail time for taking bribe

OXFORD, Miss. — Richard "Dickie” Scruggs, who became one of the wealthiest civil lawsuit attorneys in the country by taking on tobacco, asbestos and insurance companies, was sentenced Friday to five years in prison for conspiring to bribe a judge.

U.S. District Judge Neal Biggers Jr. called Scruggs' conduct "reprehensible” and fined him $250,000, plus the cost of his incarceration. The judge handed down the full sentence requested by prosecutors despite arguments from the defense for half that time in prison.

Scruggs, wearing a dark suit and blue tie, appeared to nearly faint as the federal judge scolded him for his conduct. Some people in the packed courtroom gasped as Scruggs started to sway side to side and his attorney grabbed his arm to steady him.

He had to be seated for a time before the sentence was read but later stood back up.

AT&T moving headquarters to Dallas

SAN ANTONIO — Telecommunications carrier AT&T says it is moving its corporate headquarters from San Antonio to Dallas to get better access to its customers and operations around the world. AT&T Inc. said Friday the move will begin in the coming weeks and is expected to be complete around the end of the year.

The company expects the move to involve about 700 of its nearly 6,000 San Antonio-based employees.

Carrier opens rules on phone use

NEW YORK — MetroPCS Communications Inc. has become the largest U.S. wireless carrier to say it will let customers bring cell phones from other carriers, which it will then reprogram for use on its own network.

This week's announcement by the Dallas-based regional carrier is one of a series of moves in the industry that amount to a gradual opening of the U.S. wireless market, giving consumers more choice over what phones to use on what networks.

Carriers generally sell phones that are locked to their own service.

This protects their business model, which is based on subsidizing the cost of the phone by hundreds of dollars, then making that money back on monthly service fees.

MetroPCS's move threatens these traditional rules. It allows customers with certain models of phones from Sprint Nextel Corp., Verizon Wireless, Alltel Corp. and a few other carriers to bring their phones to MetroPCS stores, where they will be reprogrammed.

Rising costs blamed for casino layoffs

MASHANTUCKET, Conn. — The tribe that owns Foxwoods Resort Casino in eastern Connecticut said it has laid off some staff because of rising gas and food prices.

The Mashantucket Pequots say the layoffs of middle managers and some hourly employees — representing less than 2 percent of its work force — are part of an organizational review that began in January.

The job cuts represent "considerably less” than 2 percent of the 10,000 casino employees, Lori Potter, a tribal spokeswoman, said Friday. She would not disclose the exact number of layoffs.

The Associated Press