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Byline: -- Staff and Wire Services

Skilling denied bid for freedom

HOUSTON -- A federal appellate court denied former Enron Chief Executive Officer Jeffrey Skilling's request to remain free during his appeal Tuesday and ordered him imprisoned immediately.

Judge Patrick Higginbotham of the 5th U.S. Circuit Court of Appeals wrote in his two-page order that ``Skilling raises no substantial question that is likely to result in the reversal of his convictions on all of the charged counts.''

As a result, Higginbotham denied Skilling's request for bail pending his appeal and vacated an earlier order staying his prison report date. Skilling is now required to report to a low-security federal prison in Waseca, Minn., to begin serving his 24-year sentence on 19 counts of conspiracy, fraud and insider trading.

Although Higginbotham's order notes ``serious frailties'' in Skilling's convictions, it says those problems fail to raise a ``substantial question'' likely to result in the overturning of all Skilling's convictions, as would be required to grant bail during appeal.

Business probes face new limits

WASHINGTON -- The Justice Department put new limits on prosecutors seeking confidential data from corporations Tuesday after critics leaned on the government to back off tough tactics authorized during the Enron-era scandals.

Deputy Attorney General Paul McNulty said the new guidelines won't hinder prosecutors from aggressively going after companies accused of fraud and other white-collar crimes.

Whistle-blowers called the changes a setback for shareholders and employees who risk losing billions in pensions and savings if scandal-tainted corporations aren't fully investigated.

A coalition of allies who had demanded the changes offered only lukewarm support. The new rules bar the government from charging businesses solely on the basis of their refusal to hand over corporate attorney-client communications or their continuing to pay lawyer's fees for employees under investigation.

Fannie Mae sues ex-auditor KPMG 

SAN FRANCISCO -- Fannie Mae sued KPMG on Tuesday, claiming negligence by its former auditor forced the mortgage giant into a massive accounting restatement that cost more than $1 billion.

Fannie is seeking compensation of at least $2 billion, according to a copy of the suit, which was posted on the company's Web site.

KPMG spokesman Tom Fitzgerald said the accountancy firm planned to fight back.

Fannie stopped filing financial statements with the Securities and Exchange Commission in 2004 after the company was hit by an accounting scandal.

Goldman Sachs profits surge

NEW YORK -- Goldman Sachs Group Inc., the biggest investment bank on Wall Street, said Tuesday its fourth-quarter profit almost doubled from last year on record takeover activity and robust stock market trading.

The New York-based financial company was the first to report results in what is expected to be a record year on Wall Street. Goldman reported profit attributable to common shareholders for the three months ended Nov. 24 of $3.1 billion, or $6.59 per share, compared with $1.63 billion, or $3.35 per share, in the year-ago period.

This easily surpassed Wall Street projections for earnings of $6.04 per share on $8.96 billion of revenues, according to analysts polled by Thomson Financial.