Telecom Earnings Update

AT&T earnings beat the Street by 4 cents -.54 actual earnings Per Share versus the expected .50.

- Revenues - $30.9 billion for the period. - Two million increase in total wireless subscribers - highest third-quarter net gain in the company's history. - 4.3 million postpaid 3G integrated wireless devices added to AT&T's network, the largest quarterly increase in the company's history; integrated device growth included 3.2 million iPhone activations. - 33.6 percent increase in wireless data revenues to $3.6 billion. - 240,000 net gain in AT&T U-verseSM TV subscribers — up from 232,000 added in the year-earlier third quarter — to reach 1.8 million in service. - 18.7 percent growth in wireline IP data revenues driven by AT&T U-verse expansion and growth in advanced business products. - $9.7 billion cash from operating activities in the third quarter and $25.5 billion year to date."

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C. Cohn
Cohn-Reilly Report / News Flash

Hedge Fund Fraud: Collateral Damage

The founder of Galleon, Raj Rajaratnam is charged by the SEC with insider trading of massive proportions, along with 6 other cohorts. The SEC complaint asserts that Rajaratnam used his high-end connections and corporate relationships to gain access to insider information about earnings reports ahead of announcements and merger activities on several high profile companies. A Wall Street Journal article quoted the SEC chairman, Mary L. Shapiro, as saying “Raj Rajaratnam is not the astute study of company fundamentals , or marketplace trends that he is widely thought to be. Raj Rajaratman is not a master of the universe, but rather a master of the rolodex.” Several sources close the Rajaratnam tipped the SEC about the fraudulent activities at the hedge fund.

Meanwhile, Galleon, which was founded in 1997, will have to begin the process of winding-down the 3.7 billion in assets, as investors struggle to divest their portfolios. Given the involvement of many other firms, it is difficult to tell how far the web of fraud will spread.

Others charged in the complaint are as follows

Danielle Chiesi: — a portfolio manager, New Castle Funds / NYC
Rajiv Goel: — a managing director,Intel Capital -Intel subsidiary /CA
Anil Kumar: — a director, McKinsey & Company /Saratoga, CA
Mark Kurland: — a Sr Managing Director & Partner, New Castle /Upstate N.Y.
Robert Moffat: — a senior vice president, IBM/ Ridgefield, Conn.
New Castle Funds LLC — a New York-based hedge fund

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K. Reilly
Cohn-Reilly Report / News Flash