A judge ordered State Farm insurance company to pay an additional $730 million in penalties in a repair-parts fraud case, bringing to $1.18 billion the judgment now confronting the largest U.S. automobile insurer. The case involved allegations that State Farm required repair shops to use inferior and unsafe generic parts. Yesterday's penalties were $130 million for violating state consumer fraud laws and $600 million in punitive damages. On Monday a jury awarded $456 million to policyholders for alleged breach of contract.
IBM said it will cut 5 percent to 10 percent of its personal computer work force, or up to 1,000 workers, in an effort to turn around the division, which lost nearly $1 billion last year. The cuts will mostly affect marketing employees.
Asarco backed away from its $2.12 billion sale to copper rival Phelps Dodge and said it will consider a higher offer from Grupo Mexico. New York-based Asarco advised its shareholders not to tender their shares to Phelps Dodge in light of Grupo Mexico's $2.24 billion offer.
Goldman Sachs Group said it has been sued for allegedly using inside bid information to improperly obtain, along with bidding partners, about $4.7 billion in U.S. government housing notes. The suit, filed by an unnamed whistleblower, contends the financial adviser to the Department of Housing and Urban Development provided Goldman Sachs and its bidding partners with confidential information about note auctions.
The New York Stock Exchange and Nasdaq Stock Market should include a one-hour trading break if they extend hours next year, a committee appointed to study extended hours said in a draft report. An hour-long halt starting at 4 p.m. "would allow time for news to be released and absorbed by the public," the draft said.
Baker & McKenzie, a large Chicago-based law firm, has elected Christine Lagarde as chairman of its executive committee. The election was hailed as a milestone for women in management. It represents "the breaking of a glass ceiling," said Susan Getzendanner, a former federal judge who is now a senior partner in the Chicago office of Skadden, Arps, Slate, Meagher & Flom.
Clayton Dubilier & Rice, a New York-based investment firm, will buy a majority stake in Fairchild Aerospace, one of the world's top three makers of regional jets, from Carl Albert, Fairchild's controlling shareholder, for about $250 million, according to a person familiar with the situation. The firm also will spend at least $250 million, and possibly as much as $350 million, to enable Fairchild to develop a new family of jets.
Gateway is recalling about 1 million foam rubber toy cows it used as giveaways with its computer products after receiving complaints the devices could pose a choking hazard to children. The cows are about 4 1/2-by-3 inches long and have "Gateway" on the back. Consumers should discard them or exchange them at a Gateway store for another item. For more information, call 877-206-4889 or go to the recall Web site, www.gateway.com/stresscow.
Landmark Systems of Reston said its president and chief operating officer, Ralph Alexander, has resigned, following disappointing preliminary results for its third quarter. Those results, blamed in part on the failure of the software company to make several large anticipated sales, will be released Oct. 19. Kathy Clark, Landmark's chief executive, has taken over Alexander's duties.
Anthony G. Tuffo was named president of Lockheed Martin Missiles & Space in Sunnyvale, Calif. He has been serving since early September as the company's acting executive vice president during the management transitions within the space systems business area of the Bethesda-based aerospace giant. He replaces Thomas A. Corcoran, who resigned in September.