Business Briefly
Published 9:00 pm Thursday, December 18, 2003
Alliance Capital Management agreed Thursday to a $600 million settlement, including a 20 percent reduction in its fund fees for the next five years, to resolve federal and state accusations it permitted improper trading of its mutual funds. An agreement jointly negotiated by the Securities and Exchange Commission and New York Attorney General Eliot Spitzer calls for the company to pay $250 million in restitution and take new steps to improve its corporate governance and prevent trading abuses. The payment is the largest ever by a mutual fund adviser, the SEC said.
Federal regulators sought $8.4 million in civil fines and the return of millions more in severance benefits Thursday from two ousted Freddie Mac top executives for their role in the mortgage giant’s $5 billion accounting scandal. The regulators, in filing administrative charges against the two, are seeking to strip former chief executive Leland Brendsel of $24.4 million in severance benefits and stock awards that he received after being forced out by the company’s board in June. The Office of Federal Housing Enterprise Oversight also seeks to remove $750,000 in departure benefits from former chief financial officer Vaughn Clarke. In addition, the agency is seeking restitution of $3.8 million from Brendsel and $537,000 from Clarke.
A key economic forecasting gauge rose a solid 0.3 percent in November, and the government reported a drop in claims for jobless benefits Thursday, presaging what economists believe could be strong growth in 2004. In New York, the business-funded Conference Board said its Composite Index of Leading Economic Indicators advanced 0.3 percent in November to 114.2, suggesting that the economic recovery will gain momentum next year. Last month’s performance – which was in line with analysts’ expectations – followed a revised increase of 0.5 percent in October to 113.9. The index had shown no change in September.
Wal-Mart Stores Inc. launched a bare-bones Web site Thursday to test its new 88-cents-per-song online music service, hoping that its cheaper price will lure listeners from more expensive competitors. Other sites, such as Apple Computer Inc.’s iTunes Music Store, charge 99 cents per song. Wal-Mart said its site has “hundreds of thousands” of songs, available in Windows Media Audio format, which can be transferred to compatible portable devices, burned to a CD or played on Windows PCs. The company plans to see what customers like and don’t like about the service in the months ahead and formally launch it in the spring.
From Herald news services
