As the first quarter of 2003 saw more fraud and anti-competitive business practice cases prosecuted it seemed that the old issues of corporate malpractice were still contemporary.

The legal fallout of accounting scandals continued. In February the Securities and Exchange Commission filed civil fraud charges against eight current and former officers and employees of Qwest Communications International Inc., alleging that they inflated the company's revenues by approximately $144 million in 2000 and 2001 in order to meet earnings projections and revenue expectations. 25 The same month Merrill Lynch announced that it had agreed to pay a total of $80 million in disgorgement, penalties and interest to the Securities and Exchange Commission to resolve the investigation regarding two transactions between Merrill Lynch and Enron in 1999. 26 The National Association of Securities Dealers (NASD) also took action, censuring and fining J.P. Morgan Securities, Inc. to pay $6 million for "unlawful profit sharing activities that took place at Hambrecht & Quist LLC prior to its acquisition in 2000." NASD found that Hambrecht & Quist received millions of dollars in inflated commissions from more than 90 customers who sought and received allocations of "hot" initial public offerings (IPOs) from the firm. 27

The practices of pharmaceutical companies were also challenged during the first quarter. Two of the world's leading drug companies, GlaxoSmithKline (GSK) and Pharmacia, were sued by the state of New York in February for allegedly helping doctors overbill the state for medicines bought by doctors. According to the suit, that price, reported to the government, often is much higher than the price actually charged to doctors, who then bill the government at the higher reimbursement rate, allowing physicians to pocket the difference at taxpayers' expense. 28 GSK were also being investigated in Italy for giving of perks given to Italian doctors by the pharmaceuticals giant GlaxoSmithKline allegedly in return for prescribing more of their drugs. 29 Meanwhile, Bristol-Myers Squibb agreed to a $670m settlement to claims that it used illegal tactics to suppress generic competitors for its patented drugs and therefore to inflate its profits. 30 The Economist considered pharmaceutical company marketing to be sufficiently concerning for a special report with Transparency International. 31