Three men pleaded guilty to criminal charges in the New York state probe of bid rigging and price fixing in the insurance industry. Joshua Bewlay, a former managing director at Marsh & McLennan; John Mohs, identified as a vice president in a unit of American International Group; and Carlos Coello, identified as an AIG underwriter, are expected to testify in the broadening case, said New York Attorney General Eliot L. Spitzer. Justice James A. Yates accepted the pleas but deferred sentencing, saying sentences will depend on cooperation with prosecutors.
Accord Near in Suit Over Insurer's Sale
Credit Lyonnais, the French government and California's insurance commissioner have reached a tentative agreement to settle a lawsuit over the purchase by Credit Lyonnais of a failed life insurer, pending approval of the accord by a rival bidder. Sierra National Insurance Holdings, a losing bidder for Executive Life Insurance's assets, must agree to accept a share of the $600 million settlement, said Gary Cohen, a lawyer for California's Insurance Department. The French government and Credit Lyonnais last year entered guilty pleas in a $770 million settlement of criminal charges related to the Executive Life purchase. California's civil suit sought about $3.5 billion on behalf of more than 300,000 policyholders.
Chile's tax agency is extending back to 1980 its investigation into charges of tax fraud by former dictator Augusto Pinochet, combing over more than 20 years of financial statements he submitted, according to a report in Santiago daily El Mercurio. Chile's International Tax Service has said it was investigating whether Pinochet secretly kept multimillion-dollar accounts at Riggs Bank from 1998 to 2002. The El Mercurio report said the broadening inquiry suggested investigators were looking into whether some of Pinochet's funds came from government coffers. Pinochet's spokesmen and associates have said the money is legal.
(Carlos Barria -- Reuters)
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MORE NEWS
U.S. retail sales fell 0.3 percent in January, the weakest showing in five months, led by a drop in demand for cars, the Commerce Department said. Car sales fell 3.3 percent; excluding cars, retail sales rose 0.6 percent.
Mall of America's management has proposed doubling the nation's largest shopping center's size at a cost of more than $1 billion. The plans, presented to city officials in Bloomington, Minn., where the 4.2 million-square-foot mall is located, include the addition of a casino, department stores, boutiques and restaurants, closely held Triple Five said in a statement. Construction on the expansion is expected to begin within a year and be completed in late 2007, the company said.
The Equal Employment Opportunity Commission collected $420 million in the past fiscal year for workers with discrimination complaints. The commission received 79,432 discrimination complaints against private employers and state and local governments in the year ended Sept. 30, compared with 81,293 complaints in 2003 and the seven-year high of 84,442 in 2002.
Continental Airlines cut board member pay 30 percent and eliminated an executive incentive program as it negotiates cheaper contracts with unions. The Houston airline has set a goal of cutting $500 million in labor costs by the end of this month.
Samuel Wyly, who sold a software company to Computer Associates International in 2000, has sued Ernst & Young, saying false information in financial reports prepared by the firm cost him millions. He is seeking more than $80 million in damages. Wyly sold his business for about $4 billion in Computer Associates stock, which plunged in value after Computer Associates warned that mid-2000 earnings would be disappointing, followed by a sharp decline in profit. A spokesman for Ernst & Young said the lawsuit was without merit.
RECALLS
Emmpak Foods voluntarily recalled about 123,000 pounds of ground beef because of concerns the meat was contaminated with hydraulic fluid at a plant. The Milwaukee packer shipped most of the meat to distributors in Wisconsin, Illinois and Indiana, but about 22,000 pounds went to Maryland and six other eastern states. The meat was packaged in one-pound containers with the code EST20654 inside the USDA mark of inspection, with Jan. 31, Feb. 1 and Feb. 2 sell-by dates, Emmpak said.
Toyota is recalling 22,228 Tacoma pickup trucks because the lock nut on the parking brake cable may not have been properly tightened and can loosen and come off, the National Highway Traffic Safety Administration and Toyota said. The recall affects 2005 model year Tacomas with automatic transmissions. Toyota will notify owners next month.
INTERNATIONAL
IBM plans to open more than a dozen software development centers in China, Brazil and Russia to promote work on Linux and other free programs. The centers will open in the next three months and employ about 200 people, IBM said. The Armonk, N.Y.-based company already operates 25 such centers worldwide.
LOCAL BUSINESS
Fidelity Investments bought 18.6 million shares in District-based XM Satellite Radio Holdings and is now XM's second-biggest holder. Fidelity bought the shares in the fourth quarter and now holds 25.9 million shares, 13 percent of XM's shares outstanding.
Washington Harbour, a 537,000-square-foot office building in Georgetown, was sold by New York-based Broadway Real Estate Partners, a national commercial real estate investment firm, for $220 million to Prudential Real Estate Investors. Jones Lang LaSalle Americas represented the seller.
EARNINGS
Reynolds American, the nation's second-biggest cigarette maker, said it had swung to a fourth-quarter profit of $76 million, compared with a loss of $136 million in the comparable quarter a year ago. Revenue rose 62.2 percent, to $2 billion. For 2004, profit was $688 million, compared with a 2003 loss of $3.45 billion. Sales rose 22.2 percent, to $6.44 billion. The company also unveiled a new strategy under which its Camel and Kool products will be its highest-priority brands.
Qwest Communications International narrowed its fourth-quarter loss to $139 million, compared with a loss of $407 million in the comparable period a year earlier, despite a 1.7 percent dip in revenue, to $3.43 billion, and a $36 million charge for a tax penalty adjustment. The fourth-quarter earnings report was released one day after Qwest learned its bid for Ashburn-based MCI had been rejected in favor of a lower offer from Verizon. For all of 2004, Qwest lost $1.79 billion, down from a 2003 profit of $1.51 billion. Annual revenue shrank 3.4 percent, to $13.81 billion.
Applied Materials said its fiscal first-quarter profit jumped sharply to $288.8 million from $82.4 million in the three months ended Jan. 30, 2004, when the semiconductor equipment manufacturer took $167.5 million in restructuring and other charges. Revenue climbed 14 percent, to $1.78 billion.
Deere, the nation's largest maker of construction and farm equipment, said fiscal first-quarter profit rose 30 percent, to $222.8 million. Revenue rose 18 percent, to $4.1 billion, for the three months ended Jan. 31.
Sears, Roebuck said it would restate its fourth-quarter results because of an error in the way it accounted for leasing transactions, a change it expects to reduce profit by 5 to 10 cents a share. The company also said it would file amended annual reports for fiscal 2003 and quarterly reports from 2004 to correct statements of cash flows related to its credit card business but said that change did not affect profit.
Navistar International said the Securities and Exchange Commission is informally investigating the company's restatement of results for the past three years. The Warrenville, Ill.-based heavy duty truck manufacturer disclosed the inquiry as it restated results for fiscal 2002 and 2003 and for the first three quarters of fiscal 2004 because of the way its Navistar Financial unit accounted for some transactions. Navistar also said its profit for the three months ended Oct. 31 more than quadrupled, to $159 million.
LOCAL EARNINGS
Choice Hotels International, a Silver Spring-based chain which franchises hotels and motels under the Comfort Inn and other brand names, said fourth-quarter profit fell slightly, to $20.3 million (60 cents a share), from $20.7 million (57 cents) in the comparable period a year earlier. The company had fewer shares outstanding than the previous year, accounting for the higher per-share figure. Revenue increased to $106.9 million from $95.2 million. Choice Hotels said the quarter's lower earnings resulted from higher interest expenses and a gain recorded in the fourth quarter of 2003 that made the 2004 comparison less favorable. For the year, the company earned $74.3 million ($2.15), up from $71.9 million ($1.96) in 2003. Revenue rose 11 percent, to $428 million.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.
