LEGAL

Payment Freeze Allowed to Stand

The U.S. Supreme Court let stand a ruling against two former Gemstar-TV Guide International executives, bolstering the Securities and Exchange Commission's ability to freeze payments to executives under new accounting fraud laws.

The agency applied the provision in its investigation of a $250 million accounting scandal at Gemstar, which owns TV Guide, freezing $37 million in termination payments to former Gemstar chief executive Henry Yuen and top finance executive Elsie Leung. The SEC gained the ability to block payments to executives in the Sarbanes-Oxley Act of 2002, passed by Congress in response to several high-profile corporate accounting frauds.

INSURANCE

Ex-Marsh CEO Launches Firm

Jeffrey Greenberg, left, who resigned as chief executive of Marsh & McLennan a year ago after the world's largest insurance brokerage was accused of bid rigging, has founded a financial services buyout firm. Aquiline Capital Partners has eight investment professionals and will use equity and debt to buy stakes in banks, securities firms and insurance companies, managing director Matt Grayson said.

Greenberg founded Aquiline with executives from New York-based Venturion Capital, a seven-year-old financial services buyout firm. Venturion won't raise another fund, said Grayson, a Venturion co-founder. Its team will work with Greenberg and Chris Watson, formerly of American International Group and Citigroup.

Ex-General Re Executive Barred

John Houldsworth, a former executive of Berkshire Hathaway's General Re reinsurance unit, was barred from auditing public companies in the United States after pleading guilty in an accounting probe.

The sanction lasts until the Securities and Exchange Commission chooses to lift it, said SEC spokesman John Nester. Houldsworth, who lives in Ireland, admitted to helping American International Group use a sham reinsurance contract in 2000 to distort its finances.

AUTOMOTIVE

GM to Consolidate Engineering

General Motors plans to cut costs by $1 billion on revamped mid-size cars such as the Chevrolet Malibu by streamlining engineering and production, Vice Chairman Robert Lutz said. The reductions will be from investment, material and manufacturing expenses. Starting Jan. 1, the world's largest automaker will use a single engineering budget to develop all vehicles worldwide instead of four regional budgets that sometimes resulted in inferior designs, Lutz said.

FTC Clears Kerkorian's GM Bid

Billionaire investor Kirk Kerkorian won antitrust clearance from the Federal Trade Commission to raise his ownership stake in General Motors to as much as 9.9 percent and seek a board seat. Tracinda, Kerkorian's holding company, announced in September its intention to increase the GM stake from 9.5 percent.

Kerkorian has said he planned to be a "passive" investor and, based on that statement, the General Motors board took a neutral stance on his June tender offer of $31 per share.

T-bill rates rose to their highest levels since spring 2001. The discount rate on three-month Treasury bills auctioned yesterday rose to 3.63 percent from 3.525 percent last week. Rates on six-month bills rose to 3.95 percent from 3.87 percent. The annualized return to investors is 3.71 percent for three-month bills, with a $10,000 bill selling for $9,908.24, and 4.09 percent for a six-month bill selling for $9,800.31. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 4.08 percent last week from 3.97 percent the previous week.

Compiled from staff and news service reports.