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Byline: - Staff and Wire Services

Homestore CEO begins his trial

The founder of Homestore.com Inc. made more than $8 million selling stock in the Westlake Village company at a time when he knew its revenues had been inflated, a prosecutor told a federal jury Thursday.

Stuart Wolff, who founded the online real estate listings company and served as its CEO until his departure in early 2002, went on trial Thursday morning on 19 criminal counts, including conspiracy to violate securities laws, insider trading and falsifying accounting books.

In his opening statement, Assistant U.S. Attorney Michael Wilner alleged Wolff ``greenlighted'' a plan to make the company appear to be continuing to increase its yearly revenue at a quick pace. The plan involved deals with outside companies that seemed on their face to bring in more than $60 million in advertising revenue in 2001, the prosecutor said.

In reality, Wilner said, Homestore - which last month changed its name to Move Inc. - was paying outside vendors, who were in turn routing the money through other companies, including AOL, before it was returned to Homestore.

The deals were the basis for statements to investment analysts and in Securities and Exchange Commission filings that indicated the company was meeting its revenue expectations, the prosecutor said.

But Wolff's attorney, Lawrence Barcella, told the panel his client is a ``geek'' with an engineering background, who relied on people he hired to take care of the Internet-based company's finances.

Those people, Barcella claimed, ``let him down.''

The attorney also contended Wolff didn't know the SEC filings he signed contained false information.

In addition to the criminal case, Wolff also faces civil charges filed by the SEC.

Nasdaq pulls ou of bid for London

LONDON - Nasdaq Stock Market Inc. abruptly dropped its 2.4 billion pound ($4.2 billion) bid for London Stock Exchange PLC without explanation on Thursday, sending shares in the bourse sharply lower.

The decision was the latest in a long line of bids for the LSE that have ended in collapse - Australia's Macquarie Bank Ltd., Germany's Deutsche Bourse AG and Sweden's OM Gruppen have all failed in their tilts at Europe's largest and oldest exchange.

New York-based Nasdaq said in a statement it reserved its right to make another bid for the LSE within the next six months if the London exchange's board agreed to an offer or if a rival bidder emerged.

Nasdaq said it had nothing to add to its brief statement and the LSE also had no comment.

U.S., EU hit China in trade dispute

WASHINGTON - The United States and the European Union on Thursday filed a trade case against China in a dispute involving auto parts as the Bush administration moved to deal with rising concern over a soaring deficit with China.

The complaint alleges that China is imposing high taxes on imported auto parts in violation of commitments it made when China joined the WTO in 2001.

The action was the latest sign that the administration is stepping up pressure on China in an effort to hold back a tide of protectionist sentiment in Congress.

GM's Isuzu stake may be for sale

TOKYO - General Motors Corp. said Thursday it is in talks to sell its stake in Isuzu Motors Ltd. as the troubled company jettisons assets to raise badly needed cash and hang onto its title as the world's biggest automaker.

Disposing of GM's 7.9 percent stake in the Japanese truck maker would mark the latest retreat for a company besieged by staggering losses, labor problems and mounting competition, especially from archrival Toyota Motor Corp.

The move would also highlight GM's rapid pullout from Japan. Earlier this month, Detroit-based GM sold 17 percent of its stake in Suzuki Motor Corp. for about $2 billion, leaving it with a 3 percent stake.

That followed last year's sale of GM's entire 20 percent stake in Fuji Heavy Industries, the maker of Subaru cars.

Economy slow at the end of '05WASHINGTON - The economy was lethargic in the final quarter of 2005, but fresher readings suggest a rebound since then.

Gross domestic product grew at an annual rate of just 1.7 percent in the ctober-to-December quarter, the Commerce Department reported Thursday. It was the most sluggish showing in three years but still a tad better than the 1.6 percent estimated a month ago.

The slight upgrade reflected stronger inventory building by businesses than previously thought.

Private analysts predict growth during this period will clock in at a brisk pace of 4.5 percent or higher, to be followed by a period of moderation, a 3.4 percent pace, in the April-to-June quarter.

Best Buy profits rise 13% in Q4

MINNEAPOLIS - Robust sales of flat-panel televisions, digital music players and laptop computers propelled Best Buy Co. Inc. to a 13 percent increase in fourth-quarter profits, the nation's largest consumer electronics retailer said Thursday.

Best Buy said online sales jumped by 50 percent and customers at its stores ran up larger bills, offsetting a slight drop in customer traffic.

Best Buy also announced that it would open its first test store in China by this time next year, marking its first retail foray into a country where it already has three offices for buying goods.

Earnings for the quarter ending Feb. 25 rose to $644 million, or $1.29 per share, from $572 million, or $1.13 per share, the previous year. That matched the consensus of analysts polled by Thomson Financial.