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Former Tyco (NYSE: TYC) CEO Dennis Kozlowski and former CFO Mark Swartz asked New York's Supreme Court to throw out their convictions on the grounds of insufficient evidence -- Kozlowski had been convicted of grand larceny.

As despicable of a character as Kozlowski is, he doesn't belong in prison: Tyco was a corporate governance train wreck, and he was essentially jailed for being paid an obscene amount of money. Tyco was not a massive securities fraud and, in fact, has produced solid returns for its shareholders.

One of the flaws with the Tyco case -- and it extends into media coverage of corporate governance today -- is that it held an executive responsible for gross negligence on the part of the board of directors. By throwing Kozlowski in jail and writing him off as a crook, the real threat to shareholders was essentially let of the hook: complacent and compliant directors at public companies.

Free Dennis Kozlowski, stop wasting taxpayer money imprisoning someone who was more reflective of an era than evil, and move onto bigger battles.

In the past, I've questioned Barack Obama's views about the roles and responsibilities of public companies and their relationships with the government. I criticized him for his comment that "I do think it would be a shame if Bud is foreign-owned. I think we should be able to find an American company that is interested in purchasing Anheuser Busch if in fact Anheuser Busch feels that it's necessary to sell."

Now I'm here to praise him for his comments on the quasi-governmental publicly-traded train wrecks that are Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). Last week, Obama said (subscription required) that "Long term, what we have to do is go ahead and make a decision. If these are public entities, then they have to get out of the profit-making business, and if they are private entities, then we don't bail them out."

He's absolutely right: before we pump taxpayer money into Fannie and Freddie, we need to assess their role in the world. If Fannie and Freddie exist to create profits for private investors, then they should go to private investors for capital.

Obama is taking an interestingly libertarian stance on the Fannie-Freddie issue, and he comes across as more enlightened than he has in the past when talking about stock market-related issues. Perhaps Obama has been talking with staunch supporter Warren Buffett.

If being the first of the new generation video game consoles to break the $200 price point on the way down means you're the loser, the call Microsoft's (NYSE: MSFT) Xbox 360 the loser.

The Wall Street Journal reports (subscription required) that Microsoft is slashing the price on the basic console from $279 to $199, in an effort to boost sales before the all-important holiday season, when so many gamers (and their friends and relatives) will look to buy games. The move puts Microsoft well below Sony's (NYSE: SNE) Playstation 3 and Nintendo's Wii. According to the Journal, "Xbox 360, with a 60-gigabyte hard drive, to $299 from $349, and lowering a high-end model, with a 120-gigabyte hard drive, to $399 from $450. The company had previously offered a 20 gigabyte Xbox 360 for $299 as it sought to sell through remaining inventories of the now-discontinued product."

It's a good idea for Microsoft to make this move now, before its competitors do -- all of the consoles will come down in price relatively soon, and by being the first mover, Xbox will increase its footprint and Microsoft will benefit from increased software sales during the holiday season. In the current macroeconomic environment, price may be more of a factor in determining sales than it has been in recent console cycles.

Slashing a price by almost 30% is never a sign of success, but Microsoft and its shareholders are far better off making the move now than chasing the market down.

Coca-Cola (NYSE: KO) has offered [subscription required] to acquire Beijing-based China Huiyuan Juice Group Ltd, China's number one 100% juice and nectar company. The deal, which would be the second largest in Coke's history (behind Vitamin Water), would require the approval of Chinese regulators.

Coke says the deal would be accretive to earnings in third year -- but of course there are lies, damn lies, and forward-looking statements. The deal represents a continuation of Coke's efforts to diversify away from the declining soft drink industry and into higher-priced, more natural beverages.

The question is whether Coke will be able to add meaningfully to the value of these brands with its own marketing and distribution power. If Coke is just pumping up its sales by adding brands at high prices, that's probably not a good strategy for long-term shareholder value. Very few companies have been able to create such value through acquisitions, and Coke's shopping spree should be seen as a sign of increasing weakness in the company's current businesses.

Ever since the special partnerships that former Enron CFO Andy Fastow set up to inflate the company's earnings, related-party transactions have been a source of considerable interest and controversy.

St. Louis Dispatch reporter Tim Logan recently took a look at the myriad disclosures of related-party transactions at embattled multi-level marketer YTB International (OTC BB: YTBLA), which I wrote about here.

Here's a quick sampling of the related-party deals at YTB, all of which are disclosed in the company's SEC filings: The company has hired another company, owned by the three of YTB founders, to build a 130 foot tall styrofoam replica of the Statue of Liberty. Executives have also sold a plane, marketing materials and convention-planning services to the company. This is not illegal -- it's all disclosed and the independent members of the company's board of directors approved the deals.

What should investors make of it? YTB is a small company and appears to be an uncommonly egregious example of self-dealing, but the fact is that you probably have many companies in your portfolio that have disclosed related-party transactions. Here are two tips for evaluating them and deciding whether they should be of concern:

A good indication that a company lacks a future: its business model is lampooned by The Onion, a satirical news parody site, in a video featuring it as a "historical attraction." Blockbuster (NYSE: BBI) meets that fate in the video below.

This video should be required viewing for anyone contemplating an investment in the company's stock. I know, the company is attempting to transform itself into another Netflix (NASDAQ: NFLX), but the reality is that Blockbuster has no particular competitive advantage there, and its weak financial position makes it unlikely that it will survive and thrive in a price war.

I've been bearish on Blockbuster for a long time, and I just don't see any reason to think things will turn around.

Barron's takes a blistering look (subscription required) at Bidz.com (NASDAQ: BIDZ) and its executives' long history of relations with shady characters and, possibly, organized crime. You can read the Barron's piece for all the details but here are some key words: fencing, gambling, fencing, strip clubs, "oral copulation with a person under 14 through force or fear," porn shops, prostitution, etc.

But wait: does any of that really matter? There's an argument to be made that if the company is solidly profitable, which it appears to be, and has reasonably sound corporate governance practices, then all those past relationships are just noise that, if anything, present a buying opportunity.

The problem, to me at least, is that there's plenty of other stuff at Bidz that doesn't quite add up. Back in March, ex-con turned fraud fighter Sam E. Antar raised questions about the company's accounting on his blog, and Andrew Left also seems to focus on the company's inventory issues.

Without getting into financial jargon, I can't figure out what makes Bidz so special: it reports strong sales and earnings -- much stronger returns than industry leader Blue Nile (NASDAQ: NILE) -- and Bidz's website is incredibly unimpressive. When you look at the quality of the site and then compare it to the impressive financials, something smells bad. Caveat emptor.

The Wall Street Journal reports (subscription required) that a number of prominent value investors have unloaded their stakes in beaten down financials, booking hefty losses in the process. The highly-respected Ariel Focus Fund has dumped its stake in Citigroup (NYSE: C), booking a 24% loss over three years. Weitz Partners Value Fund has dumped stakes in Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). Read the Journal piece for more examples.

It's impossible to look at these sales without wondering if it's a sign of a bottom. When the most patient investors have thrown in the towel, who is left to sell? Contrarians might look at this is a sign that it's time to dive into badly beaten financial stocks with subprime exposure, but I'm not so sure.

The reason that so many prominent value investors are bailing is that there is a complete lack of visibility and transparency at so many of these names -- the solvency of the company depends on the accuracy of the valuations listed on the balance sheet, and those valuations are in question.

It might well be that the brave few who buy these names will do quite well, but it wouldn't call it investing: buying something you don't really understand is speculating, and I don't think there are too many people who really understand the financial statements of companies like Fannie and Ambac (NYSE: ABK).

In that latest sign that the company is desperate for cash, General Motors (NYSE: GM) is suing some of its employees and retirees, alleging that they improperly granted the company's family discount to non-relatives, costing the company $450,000 in sales.

Now hold up: last month GM announced that it was extending the employee/family discount to everyone, and it's simultaneously suing a handful of employees for extending the discounts to friends. Cognitive dissonance, anyone?

Given all of the problems the company has -- like billions in losses and a rapidly deteriorating balance sheet -- you'd think they'd have better things to do than chase down workers for a few thousand dollars in discounts. And then there's the fact that it's unclear whether GM really lost anything: would people have bought the cars without the discount?

It's puzzling -- and amusing -- that GM is going after employees who did exactly what the company is doing, but on a much smaller scale.

But in the world of farce and inadvertent parody, GM is the gift that keeps on giving.

With designers like Isaac Mizrahi, Target (NYSE: TGT) has done the unthinkable: establish itself as a big box discounter that's also a place you can shop for clothing without feeling ashamed. Now the company is taking it to the next level with plans to open four "Bullseye Bodega" stores in Manhattan on September 12th, timed to coincide with the end of fashion week.

While a few boutique stores certainly won't add materially to the company's sales, that's not reall the point: for a cost that's tiny for a company of Target's size, the company is generating priceless publicity, and strengthening its brand as a leading clothier for the fasionable but budget-conscious. The fact that The New York Times did a story on the new stores speaks to the value of the plan.

Target's stock has taken a beating of late, as its increasingly upscale product mix hasn't fared as well in the current environment as Wal-Mart (NYSE: WMT). But when the economic tide turns -- as it always does -- Target should be well-poised to capitalize.

Super-investor William Ackman has a considerable paper-loss on his huge investment in Target, but he recently prepared funds to buy more. Investors may do quite well following him.

In the past, I've written about Overstock.com's (NASDAQ: OSTK) habit of issuing press releases to announce minor procedural victories in the deluge of lawsuits the company is a party to.

Apparently that only applies to victories. Last Tuesday, Online Media Daily reported that "Utah's highest state court has tossed a lawsuit accusing SmartBargains of engaging in unfair competition by displaying pop-up ads to Overstock.com visitors."

The Utah Supreme Court stated that "Overstock failed to show that SmartBargains' pop-ups, labeled with the SmartBargains' logo and appearing in a separate window on the top of Overstock's website, are deceptive, infringe a trademark, pass off SmartBargains' goods as those of Overstock's goods, or are likely to cause confusion."

Here's my question for Overstock and its controversial (to put it politely) CEO Patrick Byrne: why did Overstock issue a press release when it was dismissed from an antitrust lawsuit, but didn't make a similar announcement when a lawsuit it filed was dismissed. Even more hypocritical, Overstock issued a press release when it first filed the lawsuit back in 2004. If the filing of the lawsuit was material, isn't the dismissal equally material? It seems like a classic case of selective disclosure -- not illegal, just scummy.

The Financial Times reports on Wal-Mart's (NYSE: WMT) new Marketside store format, which the company describes as a "small community grocery store" (15,000 square feet). Wal-Mart is testing the format out in Arizona but has speculated that, if successful, the chain could grow to 1,500 stores with $10 billion in annual sales.

A look at the Marketside website is illustrative of what Wal-Mart's trying to do here: scanning around on the site, I can find exactly one reference to Wal-Mart, and even that one appears to be qualified: "Marketside is a small community grocery store owned by Wal-Mart Stores, Inc." In disclosing the ownership, Wal-Mart distances itself from its offspring.

Wal-Mart's purchasing power will give the new stores the same competitive advantage it has with its big box locations: lower prices. It remains to be seen whether the small size/lower sales will give Wal-Mart the scale it needs to earn out-sized profits. You have to think there's a reason Wal-Mart's been slow to test out smaller scale formats, opting instead to move into the uber-big box category with its Supercenter locations. This new format may be indicative of the company's pessimism about long-term domestic growth prospects with its bread and butter, and this diversification may be a sign of weakness rather than strength.

Wal-Mart's talent lies in logistics, not in building a great local grocery brand. I'll go out on a limb and predict that we won't hear too much more about Marketside after the initial push. I certainly wouldn't hold my breath waiting for one to open in a town nearby.

Mattel (NYSE: MAT) scored a big victory when it sued MGA Entertainment over the origin of the wildly popular Bratz dolls, and won. But it looks like the victory won't be as big as the parent company of Barbie would like.

Mattel was seeking $1.8 billion in damages but, on Tuesday, a jury awarded Mattel just $100 million in damages, but The Wall Street Journal explains that that award "could be further reduced by U.S. District Judge Stephen G. Larson because it contains duplicate damages for the same offense, according to Thomas Nolan, an attorney for MGA." Still to be determined is who will have the right to continue marketing the Bratz brand.

This is a big loss for Mattel. The company spent millions pursuing the litigation -- the amount was large enough that Mattel said it materially affected earnings, and Mattel is a $30 billion company.

This has definitely been one of the more entertaining lawsuits in business news of late and it looks like there will be a few more rounds to go, with MGA Entertainment planning to file an appeal.

With irresponsible borrowing and excessive leverage threatening the financial well-being of so many families, at least one county may be joining them in the soup line.

Jefferson County, Alabama, with a population of 662,047, according to the 2000 U.S. Census, is preparing for a possible bankruptcy filing, according to The New York Times.



The culprit? $3 billion in bonds with rapidly escalating interest rates resulting from the exact same short-sighted financial planning that got so many home owners into trouble: adjustable rate loans (In this case, auction rate securities) that require higher interest payments as interest rates move up. The current turmoil in the credit market has sent the county's rates as high as 10%.

If you recently sent your CEO packing in the wake of $17.4 billion in writedowns, you need to do something to stop the outflow of cash.

For some that might mean eliminating the dividend or cutting back on out-sized executive pay. For Citigroup (NYSE: C), that apparently means cutting back on color copying and BlackBerry use. The Associated Press reports that John Havens, the head of the company's institutional clients group, sent a note to employees admonishing them that "color copying and printing should only be used for client presentations," and "presentations should be printed double-sided to reduce unnecessary paper usage."

That's right: when you're pulling that stunt that involves sitting on the copier and printing 20 shots of your derriere, use the black and white machine, thank you very much. BlackBerry use will also be more closely monitored, and there will also be a cutback on outside management consultants and training, and functions held outside of the company's offices.

Of course the savings from measures like this are a pebble in the sand of hideously bad mortgage investments, but it's good to see that the company is clamping down on the waste of shareholder resources.

But doesn't it seem a bit, I don't know, hypocritical to be yelling at employees about wasting paper when the failed CEO left the company with a 9-digit parting gift?