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Daimler subsidiaries plead guilty to bribery

Friday, April 2, 2010; A12

LEGAL

Daimler subsidiaries plead guilty to bribery

Two units of Daimler pleaded guilty to violations of the U.S. Foreign Corrupt Practices Act, as part of an agreement with prosecutors to resolve allegations that the German carmaker paid bribes to foreign officials.

The units, DaimlerChrysler Automotive Russia and Germany-based Daimler Export and Trade Finance, pleaded guilty in U.S. District Court in Washington to conspiring to violate the FCPA and to violating its anti-bribery provisions.

The two subsidiaries were accused of paying bribes to Russian and Croatian government officials to secure contracts to sell cars and trucks.

Daimler, the Stuttgart-based maker of Mercedes-Benz cars and trucks, last month agreed to pay a $93.6 million fine to settle the criminal probe, which includes penalties imposed on the two subsidiaries.

-- Bloomberg News

CORPORATE GOVERNANCE

Treasury appoints two to AIG board

The Treasury Department announced Thursday that it was appointing two members to American International Group's board of directors. The agency had the right to make the appointments because the insurance giant has failed to pay dividends to the government over four quarters for its bailout loan.

The two appointees are Donald Layton, a former chief executive of E-Trade Financial, and Ronald A. Rittenmeyer, a former chief executive of Electronic Data Systems.

"These appointments underscore Treasury's commitment to effective stewardship of taxpayer dollars and interests," Herbert M. Allison Jr., assistant secretary for financial stability, said in a statement. "We are confident that these appointees will make significant contributions to AIG's strategy to de-lever, de-risk and pay back taxpayers."

-- David Cho

ECONOMY

Manufacturing gains point to expansion

Manufacturing grew in March at the fastest pace in more than five years, raising the odds that the United States has embarked on a prolonged economic expansion. The Institute for Supply Management's factory index rose to 59.6 points, the highest level since July 2004, exceeding the most optimistic forecast in a Bloomberg News survey of 77 economists. Readings greater than 50 signal growth.

Meanwhile, fewer Americans filed claims for jobless benefits last week, the Labor Department also reported. Applications for unemployment insurance payments dropped by 6,000, to 439,000. The average number of claims during the past four weeks fell to the lowest level since September 2008.

Construction spending fell 1.3 percent in February to the lowest level in more than seven years, figures from the Commerce Department showed, signaling that this part of the economy remains in a recession.

-- Bloomberg News

ALSO IN BUSINESS

-- EBay wins partial victory in Tiffany suit: EBay might be violating false-advertising laws if it does not warn consumers that some of the Tiffany products offered by sellers on its Web site are not authentic, a federal appeals court said Thursday.

Still, the U.S. Court of Appeals for the 2nd Circuit handed the online auctioneer significant victories in ruling that eBay did not engage in trademark infringement or trademark dilution in its use of the jeweler's trademarks. Those rulings upheld the findings of a lower-court judge.

Tiffany sued eBay in 2004, alleging eBay engaged in trademark infringement, trademark dilution and false advertising because most items listed for sale as genuine Tiffany products on eBay sites were fakes. The appeals court did not overturn a finding by the lower court that eBay did not violate false-advertising laws, but it did return the case to the judge to consider that issue again.

-- Verizon to take a charge related to health-care overhaul: Verizon Communications announced it will record a $970 million non-cash charge in the first quarter related to the health-care overhaul. Verizon and other companies receive a government subsidy to keep prescription drug benefits for retirees. They've been able to deduct all of their expenses, but that ends in 2013 under the recently enacted law.

-- From news services

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