Wednesday, February 02, 2005|
Corporations and securities brief ~ Putnam faces $100 million payout
Amit Patel at 2:22 PM ET
[JURIST] Leading Wednesday's corporations and securities law news, Putnam Investments [corporate website], the eighth-largest US mutual fund company, may have to increase the restitution it had agreed to pay investors as part of the massive securities fraud at the company. As part of an agreement with the SEC [official website] and Massachusetts Secretary of the Commonwealth William Galvin [official website], the firm had agreed to pay more than $10 million in restitution and also allowed an independent consultant to determine the extent of the improper trades. The consultant is now reporting that Putnam may have cost clients more than $100 million, or 10 times as initially believed. Putnam will not comment until the consultant has finished his work. Read the SEC press release about the settlement. Secretary Galvin has more on the Putnam settlement. Reuters has more.
In other news...
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- Connecticut's Resources Recovery Authority [official website] has recovered more than $111 million, half of what it lost in a failed energy deal with Enron in 2001. State Attorney General Richard Blumenthal [official website] said he is working on recovering the rest of the losses. Read the Blumenthal press release. AP has more.
- As previously reported on JURIST's Paper Chase, the New York Stock Exchange [market website] released a previously confidential report Wednesday that provides details of former Chairman Richard Grasso's [wikipedia profile] compensation package. Last week, New York Supreme Court Justice Charles Ramos ruled [opinion, PDF] that the so-called Webb report was not subject to attorney-client privilege, and the NYSE released the report to avoid "almost endless litigation with regard to its confidentiality." New York Attorney General Eliot Spitzer [official website] is suing Grasso and the former chairman of the NYSE's compensation committee [complaint, PDF] over the compensation. AP has more.
- Bradford Bleidt, a businessman accused of stealing millions of dollars from over 140 investors, was found competent to stand trial on mail fraud charges. Bleidt also faces an SEC civil complaint [SEC litigation release]. AP has more.
- Pension Benefit Guaranty Corp. [official website], the US government's pension insurer, announced it has taken over the pensions of US Airways' [corporate website] machinists and flight attendants at a cost of $2.3 billion. Read the Pension Benefit Guaranty press release. The Street.com has more.
- Tower Automotive [corporate website], a Michigan-based vehicle parts maker, has filed for Chapter 11 protection citing the squeeze on parts suppliers caused by high costs and a stagnant car market. Read the Tower press release. The Financial Times has more.
- Fiat SpA [corporate website] announced it has failed to settle with General Motors Corp. [corporate website] over an option to force GM to buy its auto unit. The failure to reach a settlement raises the possibility of a legal battle. AP has more.
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