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Former Morgan Stanley employee Darin DeMizio is escorted by FBI agents at Federal Plaza in New York. DeMizio is one of eight charged in connection with an investigation of stock-loan desks.
(By Jin Lee -- Bloomberg News)
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8 Charged in Stock-Loan Probe
Former employees of Morgan Stanley and Janney Montgomery Scott were among eight charged by U.S. prosecutors in a three-year probe of stock-loan desk workers who allegedly took millions in kickbacks. Four of the defendants pleaded not guilty to conspiracy to commit securities fraud and money laundering in federal court in Brooklyn. The rest were either expected to be arraigned or to surrender later.
The government has been investigating the loan desks and "finders" -- middlemen who track down stocks to lend to investors. "Stock-loan traders at several large brokerage firms funneled millions of dollars in fraudulent finder fees to their co-conspirators, often where no finders' services had been rendered, in exchange for cash bribes," said Robert Nardoza, a spokesman for the U.S. attorney's office in Brooklyn.
Morgan Stanley spokesman Mark Lake said his firm was cooperating with the investigation, adding that the allegations were in "direct violation of the firm's values and policies." Janney issued a statement saying its "involvement with this matter ended some time ago."
AIRLINES
Delays Sought on China Routes
United Airlines has sought and US Airways plans to ask for one-year delays in launching the new routes, representatives from the carriers said. The routes in question affect planned United service between San Francisco to Guangzhou, and US Airways flights between Philadelphia and Beijing.
United won final approval and US Airways received the tentative go-ahead from the Department of Transportation in September.
Cost of Late Flights: $41 Billion
Airline delays cost the U.S. economy as much as $41 billion last year, according to a report by the Joint Economic Committee of Congress. Delays cost airlines $19 billion last year, including $1.6 billion in fuel; passengers $12 billion in lost time; and other industries such as food service, lodging and retail $10 billion in "indirect" expenses.
Delays in the first quarter were the second-worst on record, behind the same period in 1996.
Military Airspace Opened Again
U.S. airlines can use military airspace off the East Coast this holiday weekend to cut delays that have added to industry fuel costs. The Defense Department also had opened its airspace during the Thanksgiving and Christmas holidays.
EARNINGS
Gap said its first-quarter profit jumped by 40 percent despite a persistent sales slump. The San Francisco retailer earned $249 million compared with $178 million during the corresponding period last year. However, sales fell 5 percent to $3.38 billion, as consumers scrimped on fashion to offset rising gasoline and food bills.
Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.
