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NATIONAL BRIEFING
Whistle-Blower Complaint at UBS
GM unveiled the Beat and two other ultra-small cars as concepts last year, including at the International Auto Show in New York.
(By Seth Wenig -- Associated Press)
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A former broker with UBS filed a whistle-blower complaint alleging that the firm forced him to resign after he cooperated with state regulators investigating sales of risky investments to Massachusetts cities and towns.
Timothy Flynn's complaint alleges that top UBS officials knew last winter that auction-rate securities could be on the verge of failing but continued to press brokers to portray them to customers as safe -- advice that proved costly when the more than $300 billion market for such investments collapsed in February.
UBS spokesman Kris Kagel said the firm took no improper actions against Flynn. "Mr. Flynn made the decision to resign of his own volition," Kagel said. "UBS therefore denies the allegations in his claim and plans to defend itself vigorously."
MERGERS & ACQUISITIONS
Penn National Takeover Canceled
Two investment firms pulled the plug on their $5.82 billion acquisition of Penn National Gaming after the racetrack and casino operator's stock price tumbled.
The firms, Fortress Investment Group and Centerbridge Partners, will pay for pulling out. Penn National will get $225 million in cash as a termination fee, plus $1.25 billion in what amounts to no-cost capital until 2015.
Penn National said its board was unwilling to negotiate a reduced buyout price and that the settlement was preferable to suing the buyers to force the acquisition.
HOUSING
Toll Brothers Rating Cut to Junk
Toll Brothers, the largest U.S. luxury home builder, had its credit rating lowered to junk by Moody's Investors Service as weak demand deepens the housing recession and cuts into earnings.
The rating on the company's senior unsecured notes was reduced to Ba1 from Baa3, Moody's said. The cut affects $1.1 billion of debt, Joseph Snider, a senior credit officer at Moody's, said.
"While the company is one of the only remaining homebuilders that is currently generating earnings before impairment charges, Moody's does not expect this to continue," Moody's said.
Toll Brothers, based in Horsham, Pa., reported its third consecutive quarterly loss on June 3 as tumbling demand forced the company to write down land values.
CONSUMER SAFETY
Salmonella Outbreak Widens
The number of people infected with a rare form of salmonella that authorities think is being spread by raw tomatoes increased to 887 people in 38 states and the District of Columbia.
Federal investigators hunting for the source said this week that while they still suspect raw tomatoes as the cause, they are also looking at other types of produce.
Compiled from reports by Washington Post staff writers, the Associated Press, Reuters and Bloomberg News.
