Regulators

Verizon Maryland Inc. violated state regulations by missing more than 20 percent of the service appointments it scheduled with phone customers in five of the first six months of the year, the phone giant acknowledged in a state hearing yesterday. The company provided the information while defending its service record during a sometimes-tense two-hour hearing in downtown Baltimore with the Maryland Public Service Commission, which regulates the utility. Commissioners on Friday ordered Verizon executives to turn over documents and attend the hearing, saying the agency received 300 complaints this year about the utility's service - or 50 percent more than a year ago. Some regulators grew frustrated yesterday when executives from Maryland's largest telephone provider could not explain how long it generally takes to fix a problem or why so many people say they had to wait days or weeks for their service to be restored after an outage.

WASHINGTON -- The Securities and Exchange Commission approved new regulations yesterday that will make it easier for foreign companies to delist from U.S. stock exchanges and withdraw from SEC oversight, including the requirements of the Sarbanes-Oxley law. Trading threshold The regulation will allow companies to delist their shares if U.S. trading is 5 percent or less of a firm's daily volume worldwide. The rules will take effect before a June deadline for complying with Sarbanes-Oxley's audit requirements, regulators said.

As a mutual fund shareholder, you wanted to believe there would be no more scandals, that the bad guys had been caught, would be punished, and that the worst was over. You'd have been better off believing in the Tooth Fairy. An agreement reached last week between former Putnam Investments top dog Lawrence Lasser and the Securities and Exchange Commission shows all too clearly why "minor" scandals will keep happening in the business for years to come. That's an ugly conclusion to draw about the business, but it's the logical supposition in light of the Lasser deal, which scarcely drew a headline when it was made public.

The Federal Reserve does not foresee a broader economic impact from the growing number of mortgage defaults and home foreclosures, its chairman said yesterday. And he cautioned that heavy-handed regulation of lenders could have the unintended effect of adding to the strain on the troubled housing market. With Congress preparing to take up legislation that would more closely monitor mortgage lending, Ben S. Bernanke contended that any new rules must be narrowly written. Speaking before the Federal Reserve Bank of Chicago in his most comprehensive remarks yet on the mortgage market's recent problems, Bernanke said regulation must "walk a fine line" between protecting consumers and making sure that people who deserve credit can get it. "Rules are useful if they can be drawn sharply, with bright lines," he said.

Baltimore County Savings Bank announced plans yesterday to reorganize as a fully public company in hopes of raising enough capital to put the bank on solid footing with regulators and depositors after it lost money in an alleged check kiting scheme last year. The bank, which operates as a mutual holding company, said the funds it expects to raise in a public offering would give management more flexibility as it implements a new business plan. The bank has been operating under new management since shortly after losing $10.7 million in the check kiting scheme, which according to court filings allegedly involved now-defunct A&B Check Cashing in Baltimore.

With gas prices hovering near $3 a gallon, that bottle in the auto parts store or gadget on a Web site that claims to "improve fuel economy by 20 percent" can sound awfully enticing, but federal regulators caution consumers not to act too quickly. A recent consumer warning from the Federal Trade Commission showed that gas gadgets such as air bleed devices, mixture enhancers and fuel additives rarely pay off. In fact, they're 0-for-93. The Environmental Protection Agency's Ann Arbor, Mich.

Habana Health Care Center, a 150-bed nursing home in Tampa, Fla., was struggling when a group of large private investment firms purchased it and 48 other nursing homes in 2002. The facility's managers quickly cut costs. Within months, the number of clinical registered nurses at the home was half what it had been a year earlier, records collected by the Centers for Medicare and Medicaid Services indicate. Budgets for nursing supplies, resident activities and other services also fell, according to Florida's Agency for Health Care Administration.

MINNEAPOLIS -- A group of state regulators and a top industry watchdog are backing a new rule that would provide uniform protection to people who buy annuities. The NASD, a self-regulating organization that oversees broker-dealers, along with insurance commissioners from Minnesota, North Dakota and Iowa issued a joint statement yesterday calling for states to make sure that insurance companies sell only suitable annuities to their customers. Under the current system, state insurance commissioners oversee insurance agents while the NASD supervises licensed broker-dealers.

One of the costs of globalization has become evident this year in the form of adulterated pet food, contaminated toothpaste, lead-tainted toy trains, suspect fish and tires that fall apart. All of these things, like so much else that Americans buy today, came from abroad. Specifically, they came from China. With a system in thrall to corruption and chiseling, the Chinese would be well advised to get their house in order before the rest of the world starts to give up on doing business with them.

WASHINGTON -- Congress and government regulators are planning an array of moves to strengthen oversight of 401(k) accounts, which have become the linchpin of retirement savings for millions of Americans but are often burdened by hidden fees that chip away at their value. Rep. George Miller of California, a member of the Democratic leadership and the new chairman of a committee that has authority on retirement matters, said he planned to hold hearings on 401(k) fees this year as part of a broader effort to examine issues that undermine the financial security of older Americans.

If EDF Group and Constellation Energy wanted to use Maryland regulators as an excuse to scrap their $4.5 billion deal, the regulators let them down. The Public Service Commission's requirements for approving the deal are relatively minor. They amount to shuffling around money the companies already have or were planning to spend - plus new regulations Constellation has already agreed to in principle. They come nowhere close to the "unreasonable conditions" the Baltimore-based energy company warned that regulators might impose.

Cal Dooley, president and chief executive officer of the American Chemistry Council, representing manufacturers, said the industry also wants the law "modernized" to boost public confidence in their products and to head off a growing patchwork of state laws and regulations. He said the principles outlined by Jackson were "in most respects very closely aligned" with proposals made last month by his industry group. "We are convinced through testing in our own industry that our products are safe," Dooley said.

Months before the Bradford Bank's failure, the signs were there. Since early this year, the Towson-based bank had been operating under greater federal supervision, and - more tellingly - regulators in July gave the bank 30 days to find a buyer or merge with another institution. Regulators seized the bank Friday and sold it to M&T Bank. But banks often don't send up such red flares before failing. So what can you do to avoid being caught up in a failure? There are sources to check up on the health of an institution.

Federal regulators seized Bradford Bank of Towson late Friday after the financial institution failed to find a buyer, making it the second bank in Maryland to fall victim to bad loans amid the collapse of the real estate market. M&T Bank, which recently acquired Baltimore's Provident Bank and is one of Maryland's largest lending institutions, will assume all of Bradford's deposits and most of its assets in a purchase agreement with the Federal Deposit Insurance Corp. That means Bradford's nine branches, mostly in Baltimore County, will reopen today as M&T offices and business will go on as usual.

This is a column about how Constellation Energy Group and Electricite de France are going to scrap the $4.5 billion deal that has filled headlines, politics and regulators' files for eight months. My apologies for not writing it sooner - like the day they announced it. We should know by now that, any time Constellation contemplates matrimony, the courtship is probably doomed to political resistance and heartache. Shame about that third nuclear reactor the companies were going to build at Calvert Cliffs on the Chesapeake.

Baltimore-based Bradford Bank, which had been placed under federal supervision in February, must merge with or be acquired by another financial institution or sell itself by Aug. 24, according to a federal regulatory document. The Office of Thrift Supervision, in an order dated July 24, issued a "prompt corrective action directive" against the bank, requiring it to complete a merger, acquisition or sale of its assets and liabilities to another financial institution within 30 days. The OTS had issued a "cease and desist" order against the bank in February, when regulators said Bradford pursued "an aggressive growth strategy that was poorly planned and executed, unsupported by adequate and appropriate levels of capital."

Stocks edge mostly higher; Microsoft drags Nasdaq NEW YORK - Major stock indicators climbed 11 percent in the past two weeks to their best levels since last fall as hopes for an economic recovery take hold. A series of strong earnings reports has many traders more optimistic about business conditions, while some are simply afraid to miss another rally. Over the past 10 days the Dow Jones industrial average jumped 947 points and broke through the 9,000 barrier for the first time since January.

It would be nice if Bernie Madoff's 150-year prison sentence would scare straight any financial adviser who ever thought of duping a client. But that's not likely. While most advisers are honest, there will always be some who will betray clients' trust for a quick buck - or billion. Last year's stock market crash devastated portfolios, causing many investors to realize they could use the help of a professional. Unfortunately, it coincides with the Madoff scandal and other high-profile cases of suspected fraud.

WASHINGTON - -The end is nearing for an accounting trick destined to be remembered as a hallmark of the housing boom, because it allowed financial firms to conceal a vast expansion in their lending from regulators and investors. Under this strategy, firms placed trillions of dollars in loans in the financial equivalent of self-storage facilities. They were not required to disclose the contents or maintain capital buffers against potential losses. By allowing firms to expand lending without increasing capital, the practice increased profits.

Maryland hospitals must use new standards to determine who is eligible for free and reduced-price care, and provide information about financial assistance to all patients under two bills signed into law Thursday by Gov. Martin O'Malley. The measures require state regulators to monitor whether hospitals comply with the new consumer protections, which also prohibit charging interest on bills incurred by uninsured patients before a court judgment is approved. The new rules, which take effect June 1, require hospitals to give free care to all Maryland residents with incomes less than 1.5 times the federal poverty guideline - equivalent to $33,075 for a family of four - and provide reduced-price care to low-income patients above that level.