Business Digest

BUSINESS DIGEST

March 08, 2007

Nation: Investigations

Time Warner settles with Ohio

Ohio has reached a $144 million settlement with Time Warner Inc. over claims that public employees lost millions after the media conglomerate agreed to be acquired by America Online, the state's attorney general said yesterday. The state sued in 2003 on behalf of five state pension funds and the Ohio Bureau of Workers' Compensation that said they lost $400 million when Time Warner's stock fell sharply after the 2001 deal. The settlement is the latest against Time Warner, which has reached other agreements to resolve claims from investors and regulators that AOL fraudulently inflated its online advertising revenue and subscriber counts.

Regulation: FBI

Mortgage fraud investigations up

The number of mortgage fraud cases investigated by the FBI almost doubled the past three years, reflecting a problem that is "pervasive and growing," the bureau said yesterday. The bureau said its mortgage fraud cases increased from 436 in 2003 to 818 in 2006.

SEC freezes Latvian account

An emergency court order froze $3 million in proceeds from a Latvian account allegedly used to defraud investors and manipulate trading by hacking into online brokerage accounts, federal officials said yesterday. Account intrusions hit seven U.S. brokerage firms, causing about $2 million in losses, and allowed the unknown scammers to pull in more than $700,000 in profits, the Securities and Exchange Commission said. The scam appears to have begun in December 2005 and continued for at least a year, investigators said. The Latvian assets were frozen at JSC Parex Bank, based in Riga, Latvia, and at Pinnacle Capital Markets, in Raleigh, N.C., which handled U.S. trading, the SEC said yesterday.

Economy

Growth modest, Fed concludes

Most parts of the country saw modest economic growth in the past month, although there were pockets of sluggishness as businesses continued to cope with fallout from the troubled housing and automotive industries. Information in the new snapshot, released yesterday by the Federal Reserve, was collected before last week's nosedive in worldwide financial markets, in part reflecting investors' worries about the health of the U.S. and Chinese economies. Information from the survey will figure into discussions at the central bank's meeting on March 20-21. Many economists expect the Fed will continue to hold interest rates steady.

Consumer borrowing rises

Consumer borrowing increased in January, reflecting an increase in auto loans. The Federal Reserve reported yesterday that consumer credit rose at a 3.2 percent annual rate in January, up from December's 2.5 percent increase. The gain was in line with expectations of analysts who believe faster wage growth would give consumers the confidence to take on more debt. The category that includes auto loans rose at an annual rate of 4.4 percent in January, up sharply from December's 2.9 percent increase.

Policy

Imports could cut drug prices, panel told

The prices Americans pay for prescription drugs would fall - though not to the levels of Canada or Europe - if the government let consumers buy medications abroad, a Senate subcommittee was told yesterday. Backers of the move say foreign prices can be half or a quarter what Americans pay for the same drugs. But permitting those drugs to be imported would cut U.S. prices by only 12 percent to 20 percent, said Stephen Schondelmeyer, a University of Minnesota pharmaceutical economist.

Technology

Hewlett-Packard, DreamWorks join

Hewlett-Packard Co., the world's largest maker of printers, is developing technologies with DreamWorks Animation SKG Inc. to improve the color consistency between print and digital images. DreamColor has been added to some printers and the companies are working to find ways to maintain tones when transferring images between cameras, computers, scanners and phones. The technology will be unveiled with a new printer, cameras and retail photo labs at a Photo Marketing Association conference in Las Vegas today, Hewlett-Packard said.

Kodak to offer in-store software

Eastman Kodak Co., seeking to bolster profit and keep competitors from encroaching on a market it dominates, will offer new software and printers to retailers that let consumers create albums and greeting cards in stores. The world's biggest photography company unveiled the new products at the Photo Marketing Association conference in Las Vegas yesterday. The new kiosks and related products should be available at retailers by year's end, Kodak said. Offering the products now is critical if Kodak is to keep from losing ground to Hewlett-Packard Co. and Xerox Corp., which have introduced in-store equipment capable of producing items such as books and calendars.

Courts

Racial bias suit filed against Walgreen

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