YEAR IN REVIEW BUSINESS Winners and losers in 2003's business whirl

By Michael P. Regan

Associated Press

NEW YORK -- The opening bell of the stock market finally stopped sounding like a funeral chime in 2003, but that doesn't mean everyone was a winner.

Allegations of greedy behavior this year put many high-profile businesspeople on the hot seat -- and on our list of losers. Among the winners, a few made the list not for their impressive portfolios but for their gumption in shaping the various business worlds where they dwell.

Without further ado, here are the good, the bad and the unhappy for 2003:


On the downside

Dick Grasso -- The scrappy chairman of the New York Stock Exchange became the target of a mob of investors and market watchers in August when they learned he had amassed $139.5 million in benefits and savings during his tenure at the NYSE -- and he was cashing it in. Then it turned out he was due another $48 million in vested funds. Grasso defended his blue-chip payout by saying the exchange's board approved every nickel. But by September, so many were calling for his head that he had to resign as the big boss of the Big Board. He hasn't been heard from since.

L. Dennis Kozlowski -- The lavish lifestyle enjoyed by the former head of Tyco International Ltd. went on display this year at Kozlowski's trial. Prosecutors allege he and the company's former financial chief fleeced the firm of about $600 million. Among the most eye-popping allegations: Kozlowski threw the most notorious toga party since "Animal House," decorated his various homes like wings of the Louvre and bought his maid a $6,000 shower curtain -- then allegedly stuck shareholders with most of the tab. Now some people claim that there's a woman to blame. But the Manhattan district attorney says it's Kozlowski's own darn fault.

Lord Conrad Black -- While Lord Black, former CEO of Hollinger International Inc., was finishing up his biography of Franklin D. Roosevelt, he was allegedly cooking up a New Deal of his own: pocketing millions in deal-related fees that angry shareholders say should have gone right to the company. The uproar that ensued sent this British Lord a-leaping from his post as CEO of the newspaper company that owns the Chicago Sun-Times and the Daily Telegraph in London, though he remains its chairman and controlling shareholder. Black later said he'd have to sell "a lot of books" to repay the dough. Lord knows he's right.

Richard S. Strong -- This year we learned the mutual-fund market was open as late as Denny's, but only insiders and big spenders got a seat at the counter. The SEC found that a quarter of the country's largest brokerages knew about after-hours trading that allowed big-shot investors to profit from the spread between a fund's 4 p.m. closing price and its opening price the next day. Other firms allegedly engaged in "market timing," or the rapid trade of fund shares. Richard S. Strong, founder of Strong Financial Corp., was one of the first to resign due to the scandal. He wasn't the only candidate in this category: Runners-up include Lawrence J. Lasser, former chief executive of Putnam Investments, where the scandal started a multibillion drain by fleeing customers.

Sam Waksal -- The founder of ImClone Systems probably wished he could clone himself when it came time to report to prison in July. Waksal was sentenced to seven years behind bars for insider trading after he admitted tipping off his daughter to dump ImClone shares in January 2002, just before the stock took a nosedive. Starting in January, prosecutors will try to prove that Waksal's friend Martha Stewart also traded on insider information when she sold her ImClone shares. Waksal's 82-year-old father has also been charged. To make matters worse for Waksal, his jail sentence came just as ImClone's shares were on the rebound.

47 people you've never heard of -- These are the foreign-currency traders who allegedly had more scams going than the back room of Tony Soprano's Bada-Bing Club. According to prosecutors, some ran old-fashioned "boiler room" fraud schemes, working the phones to dupe investors with bogus trades. Others allegedly collected kickbacks from clients for transactions that ripped off the traders' own employers. Ultimately, the feds nabbed 47 on various charges. But from the sounds of it, you could safely bet 10,000 Suriname Guilders (U.S. $4) that investigators could have rounded up more if they hadn't run out of room in the paddy wagon.

On the upside


Frank Quattrone -- No wonder he's always smiling: Quattrone made many, many millions touting tech stocks during the bubble and slipped quietly away when it burst. Prosecutors say when it came time to carve up some of the juiciest initial public offerings of tech companies, he helped guide the knife. At his obstruction of justice trial, memos put into evidence seemed to back that up. But the key memo -- in which Quattrone told his minions to "clean up" their e-mail boxes -- didn't convince enough jurors, some of whom believed Quattrone when he said he was just reminding workers of company policy on record-keeping. The result: a hung jury. So Quattrone's in the winner's box, and still smiling, at least until a retrial.

Rosie O'Donnell -- She went 10 rounds in court against a major magazine company and came out with a draw. Most people would call that a win. O'Donnell was sued by Gruner + Jahr, which claimed she broke her contract with the company when she abandoned a magazine venture inspired by, and named after, her. She countersued for $125 million, claiming G+J denied her the editorial control she had been promised over Rosie the magazine. Both sides came out looking temperamental and headstrong, so the judge decided neither side deserved anything.

Eliot Spitzer -- There may be nothing scarier to a Wall Street exec these days than being told, "The New York attorney general's on the phone." This year, Spitzer passed out subpoenas among some of the nation's most respected financial institutions. Most recently, he has set his sights on the mutual fund industry, targeting firms that trade shares at the 4 p.m. price after the market closes. He compares it to "betting on a horse race after the horses have crossed the finish line." Speaking of horse races, handicappers are placing odds on the ambitious Spitzer parlaying all the headlines into a governorship in 2006. Or how about vice president next year, or president in 2008?

Linus Torvalds -- Torvalds has long been the hero of computer geeks for developing an operating system some think is better than Windows, especially since it's free. But in 2003, it became clear just how important the project he launched as a teenager in Finland has become to corporate America. The SCO Group this year launched a $3 billion lawsuit against IBM for distributing Linux, claiming it contained code from SCO's Unix, the older OS that inspired it. The tech press hung on Torvald's every word concerning the case and the future of Linux. Wired magazine declared him the "Leader of the Free World." Whatever the outcome of the case, Torvalds is sure to go down in history as one of the most important programming innovators of our time.

Anne Mulcahy -- The Xerox CEO turned the copier company around, shaking it free of investigations into its finances and returning it to profitability. It wasn't painless. The company cut thousands of jobs and sold billions in assets since Mulcahy took over in 2001. What emerged was not a shrunken photocopy of the previous Xerox, but a high-tech outfit with a new menu of printing products for the wired office.

Dick Grasso -- Yes, it's true, he's also in the losers column. But how can he not be a winner, too? After all, he walked away with almost $140 million for his role as head cheerleader of the stock exchange. Not too shabby for a guy who didn't go to college and worked his way up from clerk on the floor of the exchange in the 1960s. Unlike some of the others in the losers column, he apparently doesn't have to worry about any subpoenas landing in his lap.

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