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American Morning
Minding Your Business: Who's Next in Scandal Watch?
Aired June 17, 2003 - 07:48 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Sam Waksal is the first corporate titan to go to jail. Who might be next out there?
Andy Serwer is "Minding Your Business" today. He joins us for an update.
ANDY SERWER, "FORTUNE" MAGAZINE: Do you want some gum?
HEMMER: No, I'm taken care of. I'm fine.
SERWER: (UNINTELLIGIBLE). That's some excellent gum this morning, really. I'm feeling pretty good here this morning with my gum.
HEMMER: How are you, pal?
SERWER: I'm doing OK. We'll just keep a little distance here, though.
HEMMER: (UNINTELLIGIBLE).
SERWER: No, that's right. Easy does it here.
Anyway, before there was WorldCom, before there was Enron, there was RiteAid. You might have forgotten about this scandal back in late 1990s, the third largest drugstore chain, 340 stores after Walgreens -- they're No. 1 and CVS is No. 2. The CEO, Martin Grass, allegedly perpetrated a $1.6 billion accounting fraud. Well, gee, we've heard that kind of stuff before.
Interesting here -- there is Mr. Grass. Now, what was going to happen is there was going to a trial, a very high-profile trial with a jury. A lot of people on Wall Street watching this very closely, Bill, because it was going to be the first time that one of these accounting frauds had been brought to a jury trial. Not going to happen.
Today, Grass apparently is going to go before Judge Sylvia Rambo (ph) and cop a plea, 35 -- this is in Harrisburg, Pennsylvania -- 35 counts of securities fraud, wire fraud, lying to the SEC.
So, like you said, Sam Waksal was first. Martin Grass could be next. And we might start to get a running count here.
Of course, Jack Cafferty and I have been talking about this for months and months. How many times have we seen this? When are those guys going to go to jail? We've seen No. 1. Maybe we're going to start to see No. 2 here.
HEMMER: I don't think I'd want to face Judge Rambo (ph) out there.
SERWER: Sylvia Rambo (ph).
HEMMER: Yes.
SERWER: I would not want to face her.
HEMMER: Quickly, the markets, they are booming right now.
SERWER: Yes, they really are.
HEMMER: And you said yesterday this was going to happen, by the way. It may happen for the next two weeks.
SERWER: Right. That's right. Because, of course, portfolio managers don't want to look bad at the end of the quarter, they don't want to hold a lot of cash. There we can see yesterday over 200 up on the Dow, 11-month high. The S&P 500 over 1,000.
HEMMER: Got it. See you next hour.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Aired June 17, 2003 - 07:48 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Sam Waksal is the first corporate titan to go to jail. Who might be next out there?
Andy Serwer is "Minding Your Business" today. He joins us for an update.
ANDY SERWER, "FORTUNE" MAGAZINE: Do you want some gum?
HEMMER: No, I'm taken care of. I'm fine.
SERWER: (UNINTELLIGIBLE). That's some excellent gum this morning, really. I'm feeling pretty good here this morning with my gum.
HEMMER: How are you, pal?
SERWER: I'm doing OK. We'll just keep a little distance here, though.
HEMMER: (UNINTELLIGIBLE).
SERWER: No, that's right. Easy does it here.
Anyway, before there was WorldCom, before there was Enron, there was RiteAid. You might have forgotten about this scandal back in late 1990s, the third largest drugstore chain, 340 stores after Walgreens -- they're No. 1 and CVS is No. 2. The CEO, Martin Grass, allegedly perpetrated a $1.6 billion accounting fraud. Well, gee, we've heard that kind of stuff before.
Interesting here -- there is Mr. Grass. Now, what was going to happen is there was going to a trial, a very high-profile trial with a jury. A lot of people on Wall Street watching this very closely, Bill, because it was going to be the first time that one of these accounting frauds had been brought to a jury trial. Not going to happen.
Today, Grass apparently is going to go before Judge Sylvia Rambo (ph) and cop a plea, 35 -- this is in Harrisburg, Pennsylvania -- 35 counts of securities fraud, wire fraud, lying to the SEC.
So, like you said, Sam Waksal was first. Martin Grass could be next. And we might start to get a running count here.
Of course, Jack Cafferty and I have been talking about this for months and months. How many times have we seen this? When are those guys going to go to jail? We've seen No. 1. Maybe we're going to start to see No. 2 here.
HEMMER: I don't think I'd want to face Judge Rambo (ph) out there.
SERWER: Sylvia Rambo (ph).
HEMMER: Yes.
SERWER: I would not want to face her.
HEMMER: Quickly, the markets, they are booming right now.
SERWER: Yes, they really are.
HEMMER: And you said yesterday this was going to happen, by the way. It may happen for the next two weeks.
SERWER: Right. That's right. Because, of course, portfolio managers don't want to look bad at the end of the quarter, they don't want to hold a lot of cash. There we can see yesterday over 200 up on the Dow, 11-month high. The S&P 500 over 1,000.
HEMMER: Got it. See you next hour.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
