In the Region CompuDyne wins Air Force contract for...

BUSINESS DIGEST

February 12, 2002

In the Region

CompuDyne wins Air Force contract for security system

CompuDyne Corp. said yesterday that it won a $1.7 million contract to provide a fiber-optic security system for an Air Force facility in Southwest Asia.

Specifics of the facility and the location were not disclosed.

The Hanover company makes a variety of security products, including inmate-management software for prisons and attack-resistant doors and windows that are frequently used in American embassies.

Elsewhere

Union chief predicts United's mechanics will reject pact today

UAL Corp.'s United Airlines mechanics probably will reject a contract today that was recommended by a presidential board because it fails to guarantee pay and benefits, their union leader said.

The union likely "will turn it down," Thomas Buffenbarger, president of the Machinists union, said yesterday. The union's main objection is presidential board proposal requiring mechanics to match any wage concession plan agreed to by the airline's other unions.

United's mechanics are being asked to vote on both the contract and to give union leaders authority to call a strike. A rejection of the contract by the 12,800 mechanics and cleaners would give the airline and Machinists a week to reach another accord before workers would become free to strike Feb. 20.

Court allows woman to sue on no-annual-fee promise

A federal appeals court has ruled that consumers can sue banks over alleged "bait and switch" credit card plans that promise no annual fees but end up imposing them later.

The ruling Friday by a three-judge panel of the 3rd U.S. Circuit Court of Appeals in Philadelphia says cardholders can sue under the Truth in Lending Act. The decision reverses a ruling by U.S. district judge who dismissed a lawsuit against Fleet Bank.

The lead plaintiff, Paula Rossman, said she responded to a Fleet solicitation for a credit card with no annual fee, but the company added a $35 annual fee six months later.

Fleet's lawyer, Burt M. Rublin, said the cardholder agreement clearly spelled out that Fleet reserved the right to change the terms at any time.

Qwest gets SEC subpoena in probe of Global Crossing

Qwest Communications International Inc. said yesterday that it has received a subpoena as part of a Security and Exchange Commission investigation of Global Crossing Ltd. and will cooperate fully with authorities.

Qwest battled Global Crossing in 2000 for U S West, the regional Bell based in Denver. Qwest launched a successful hostile bidding war to break up Global Crossing's merger agreement with U S West.

The SEC is investigating allegations that Global Crossing misstated revenue and expenses. Global Crossing, which filed for bankruptcy last month, has said the accusations by Roy Olofson, its former vice president of finance, are without merit and that it is cooperating with the investigation.

DuPont to create division for textiles, interiors

DuPont Co. is creating a separate textiles and interiors subsidiary, and plans to separate it from the rest of the huge chemical company by the end of 2003, the company said yesterday.

The new subsidiary, DuPont Textiles & Interiors, will include the Stainmaster carpet, Antron nylon carpet, and Lycra fiber businesses.

DuPont Textiles & Interiors will be the world's largest integrated fibers company with annual sales estimated at $6.5 billion, or about 23 percent of total DuPont sales last year.

Stockbroker's $13 million alleged to be only $6.55

A stockbroker suspected of defrauding clients kept false accounts for about 110 customers and inflated their values by $277 million, according to an FBI affidavit unsealed yesterday in Cleveland.

Frank Gruttadauria, 44, is suspected of conducting a 15-year fraud while working as a broker for various firms, including SG Cowen Corp. and Lehman Brothers Inc. He disappeared Jan. 11 but surrendered to the FBI in Cleveland Saturday and was being held without bail on a charge of making false statements to a financial institution.

The charge stems from a $6 million line of credit Gruttadauria received in December from National City Bank. According to the affidavit, he told the bank he had $13 million in assets in a Lehman Brothers account, but the account actually had a value of $6.55.

Bank of America alleges fraud in Brazil bank deal

Bank of America Corp., which paid $254 million for Banco Liberal SA, says in a lawsuit that the sellers inflated the purchase price and then stole $38 million from the Brazilian bank after transferring ownership.

In court papers filed yesterday in New York, the No. 3 U.S. bank also claims that it's now exposed to "significant penalties" because the sellers, who were officers of Banco Liberal, violated Brazilian foreign exchange law.

Bank of America, then known as NationsBank, bought a majority stake in Banco Liberal in 1998 as part of its effort to expand into the Brazilian market. When Bank of America first invested in Banco Liberal, the Brazilian bank was the country's fourth-largest manager of foreign money.

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