The total of cash losses by investors in Bernard L. Madoff’s giant Ponzi scheme has climbed to $21.2 billion, the court-appointed trustee overseeing victim claims said Wednesday. That is significantly higher than the tally of about $13 billion provided to the court by federal prosecutors when Mr. Madoff was sentenced for his crimes at the end of June, The New York Times’s Diana B. Henriques reports.

Both figures represent the total of the cash losses sustained by the roughly 2,300 accounts held by investors who put more into the scheme than they withdrew over time. Holders of another 2,660 accounts withdrew more than they had deposited.

These cash losses contrast with paper losses in the fraud of almost $65 billion, which includes the fictitious profits Mr. Madoff added to customer accounts over the years. That was the total of all the account statements that Mr. Madoff mailed to customers last November.

Read the full story here on the New York Times website.

Center City-based Pepper Hamilton L.L.P., accused of negligence in its representation of a failed student-loan company, may not collect from two of its malpractice insurers because the firm did not disclose that it might be the target of a lawsuit, New York state's highest court has ruled.

The loan company, Student Finance Corp., went bankrupt after disclosures that it had manipulated its books to hide student-loan defaults. Its former president and founder, Andrew Yao of Bryn Mawr, was sentenced to five years in federal prison in February after his conviction on charges that he had fraudulently obtained financing for his company.

Pepper Hamilton had ceased its representation of the company in 2002, based on concerns about its operations. But the firm was sued by the bankruptcy trustee, who alleged that Pepper Hamilton had failed to ferret out information about SFC's fraudulent finances and for allegedly furthering the deception.

In a 10-page opinion issued Oct. 20, the New York State Court of Appeals said the firm should have informed its insurance carriers, Executive Risk Indemnity Inc. and Twin City Fire Insurance Co., of the risk that it might be sued at the time it renewed its coverage.

"The law firm's knowledge of its client's fraudulent payments prior to its application for excess coverage coupled with the fact that a reasonable attorney would have concluded that the law firm defendants would likely be included in the litigation . . . create an obligation for the law firm to inform its insurers," the Court of Appeals said.

Read the full story here on the Philadelphia Inquirer website.

Treasury Department pay czar Kenneth Feinberg last week announced sharp cuts in total compensation at the finance and auto companies under his control.

But while he cut total compensation by half, he substantially increased one important element -- regular salaries, according to a Wall Street Journal analysis. The move reflects the complexity of regulating something that mixes politics and economics.

Mr. Feinberg oversees seven firms that accepted bailout packages: American International Group Inc., Citigroup Inc., Bank of America Corp., General Motors Corp., GMAC Financial Services, Chrysler Group and Chrysler Financial. The Treasury Department assigned him the job of tying more compensation at the companies to long-term performance and cutting pay deemed "excessive."

Government officials say Mr. Feinberg met that objective. All 136 employees and executives working at the seven companies under his review will earn much less this year than in 2008, even after accounting for the rise in regular salaries, also known as base salaries.

Read the full story here on the Wall Street Journal website.

After a quiet summer on the flu front, employment lawyer Rebecca Bernhard noticed a decided uptick in inquiries when it got cold earlier this month from business clients asking what they can and should do if the H1N1 virus visits their workplace.

Sitting in her St. Cloud office for the Minneapolis firm of Gray Plant Mooty, attorney Jackie Schuh experienced a similar increase in calls seeking advice from clients around Minnesota about what to do if the virus surfaces in the workplace.

The employers had a range of questions for the attorneys. Could they mandate employee vaccinations? Could they require families of workers to be vaccinated? Did they have to pay workers sent home who lacked sick leave? Could they ask people to work from home if they are sick? What about workers who had to stay home and tend to sick kids?

"This potential for an outbreak is probably over-hyped, but you'd hate not to be worried about it," said Bernhard, a member of the labor and employment practice group at the Minneapolis firm of Oppenheimer Wolff & Donnelly. "This is probably the first year that I've received calls about the flu."

Read the full story here on the StarTribune website.

The changes at these non-financial firms aren't a direct response to moves by Treasury pay czar Kenneth Feinberg and the Federal Reserve, which apply to banks and big recipients of government bailout funds. The recession, more than government regulation, is driving some of the moves.

But companies for a while have been seeking ways to reward executives' long-term performance and limit excessive risk-taking, according to compensation consultants.

"We are at the tipping point" for eliminating big annual bonuses, outsized severance agreements and other traditional pay practices, said James F. Reda, managing director of his pay consultancy in New York.

Among the changes: more stock-based compensation, with longer waiting periods before it can be sold; higher performance hurdles for bonuses; and limits on perks, severance and supplemental pensions.

Read the full story here on the Wall Street Journal website.

From the Wall Street Journal, here are President Barack Obama's comments on Exectuive Pay.

In a one-two punch at the pay culture of banks and Wall Street firms blamed for the financial crisis, the U.S. government announced plans to aggressively regulate compensation at thousands of lenders and impose steep pay cuts at seven companies that received billions in federal aid.

While the moves had been anticipated for weeks, Thursday's separate announcements by the Federal Reserve and Treasury Department represent unprecedented federal intervention in pay decisions traditionally left to boards and shareholders.

The crackdown is likely to influence how financial firms pay top executives, traders, loan officers and others whose actions could threaten the soundness of the institutions. Compensation experts said it would be hard for companies to escape the new oversight, though individuals could do so by jumping to hedge funds, private-equity funds and other financial firms beyond the reach of the new curbs.

Read the full story here on the Wall Street Journal website.

The federal pay czar is trying to force the American International Group to reduce $198 million in bonuses promised to employees of its trading unit, where problems posed a threat to the global financial system last year.

But the Treasury’s special master for compensation, Kenneth Feinberg, is running into legal hurdles because those bonuses fall outside new rules against bonus payments at companies receiving government assistance. The bonus agreements at issue were struck before last year’s emergency rescues by the Treasury and the Federal Reserve, and thus are not directly covered by the new rules.

The problem is a recurring one. A.I.G. payments early this year to the same employees elicited public outrage, though government officials said then that they had little legal authority to rescind pre-existing contracts.

Read the full story here on the New York Times website.

Republicans will seek amendments to parts of the Democrat's healthcare reform they oppose, rather than push for an alternative plan to overhaul the $2.5 trillion system, a key senator said Monday.

Conservatives are seeking changes that would limit medical malpractice liability and do away with any requirement for consumers to buy a health insurance policy, said Sen. Charles Grassley, speaking at the Reuters Washington Summit.

He would also like to enable consumers to purchase insurance policies across state lines. Insurance is currently regulated at the state level, with consumers unable to purchase from firms that do not sell plans in their state.

"I just hope that we're able to keep this bill from getting any worse,'' said Grassley, the ranking Republican on the Senate Finance Committee.

Read the full story here on the Insurance Journal website.

Reversing a downward trend, the frequency of medical malpractice claims against hospitals is rising, an insurance brokerage and risk management group has found.

The information, that claims are expected to continue increasing at a one percent annual rate, after a decade of decrease, was contained in a report released today by Aon Corporation and the American Society for Healthcare Risk Management (ASHRM).

Aon and ASHRM said more than 100 health care organizations representing over 1,500 facilities ranging from small community hospitals to large multi-state health care systems provided loss and exposure data for the study.

It found that one out of every four claims and 24 percent of hospital professional liability costs are associated with hospital acquired conditions such as infections and injuries, medication errors, objects left in surgery and pressure ulcers.

Medical malpractice insurance trade groups said they are gearing up to fight a proposal to cancel the antitrust exemption they are now afforded under the McCarran-Ferguson Act.

The Senate Democratic leader ship has said they will seek the change for medical practice insurers along with a repeal of the exemption for health insurers.

Lawrence E. Smarr, president of the Physician Insurers Association of America, based in Rockville, Md., said comments by President Obama supporting repeal in his weekly address this Saturday are confirmation of the industry’s view that the Senate plans to act on the measure.

“And they’re earning these profits and bonuses while enjoying a privileged exception from our antitrust laws—a matter that Congress is rightfully reviewing,” he added.

Mr. Smarr noted comments made in testimony last week before the Senate Judiciary Committee by Senate Majority Leader Harry Reid, D-Nev., concerning legislation that would repeal the exemption.

Since early this year, a basic assumption about Bernard L. Madoff’s enormous Ponzi scheme was that the trades shown in his clients’ account statements were fictional — created out of thin air by a key Madoff aide, Frank DiPascali Jr.

That is not quite true, according to the trustee liquidating Mr. Madoff’s assets for the benefit of his victims.

According to a court document filed late on Friday, other longtime Madoff employees were in charge of managing 245 accounts for Madoff friends and family, and for them at least a few of the reported trades actually occurred. The individuals were not named in the document.

These details, in a civil brief filed with the federal bankruptcy judge overseeing the Madoff case, expand what is known publicly about the inner workings of the fraud and raise new accusations about how many people were involved.

The trustee, Irving H. Picard, citing his own findings, asserted that 245 of the almost 5,000 active Madoff accounts were directly managed by other Madoff staff members, not by Mr. DiPascali.

Read the full story here on the New York Times website.

More than 1700 people have already registered to attend the 2009 PLUS International Conference.  Representing more than 12 countries (including China and Brazil) and 600 companies, our registrants are going to have three days of education, networking and fun.

Add to that keynote addresses from President Bill Clinton, Author Malcolm Gladwell and Economist Marvin Zonis, and you won't find a better three days in insurance.

Have you registered?  If not, you can get more information by clicking here.

For the second time this month, PayChoice Inc., a large online provider of payroll processing services, has had to shut down its online portal because of a security breach.

The company said its Online Employer site was "briefly taken offline" Thursday as the result of a security breach discovered a day earlier. The company did not identify what the problem was, but said that it had deployed additional security measures to protect client data after it identified a "key mechanism" used by online attackers.

PayChoice, based in Moorestown, N.J, provides payroll processing services and technology. The company bills itself as the "national leader" in the payroll services and software industry and claims over 125,000 business customers.

A story in the Washington Post quoted from a letter PayChoice sent to its customers saying the breach appeared to be linked to the password reset function on the portal. Those responsible for the breach appear to have stolen login IDs and passwords belonging to customers by exploiting a weakness in the function, the Post reported. The company has disabled the change password capability on the site and modified all login IDs as a result of the intrusion.

The valid login credentials of an employee at one of PayChoice's customers was used to add fictitious employees to that customer's payroll in an attempt to have payments made to fraudulent bank accounts, PayChoice confirmed today.

Read the full story here on The Industry Standard website.

The receiver overseeing R. Allen Stanford's businesses announced Thursday that he is suing two former employees of the Texas financier's capital management firm for more than $11 million.

In papers filed in federal court in Dallas, receiver Ralph Janvey said the money should be returned to investors the government alleges were defrauded in a $7 billion Ponzi scheme. Janvey said the payments were for three months work and came from revenue "not generated by legitimate business activities."

The payments were made in November 2008, three months before the government filed federal charges against Stanford and his top officers.

The announcement comes a day after Stanford was seen bleeding from his mouth during a criminal court hearing in Houston. Stanford has been jailed without bond following his June indictment.

The receiver's complaint names Christopher Aitken of Ponte Vedra, Fla., and Stephen Thacker of Baltimore. It says Aitken received nearly $8.7 million and Thacker nearly $2.6 million.

Read the full story here on the WTOP website.

William Lerach, a lawyer best known for winning settlements for Enron investors, has been moved to a California halfway house after serving most of a two-year prison sentence for a kickback scheme, according to U.S. Bureau of Prison records.

Lerach, 63, was transferred to the facility a couple of months ago and is expected to be released on March 8, prison records said.

He began his prison term in May 2008 at a Lompoc, California, facility and was moved to Stafford, Arizona, after offering a prison guard his San Diego Chargers season tickets.

Lerach has a job at the halfway house and is eligible for furloughs, a source familiar with the situation said.

Although the normally outspoken Lerach is not granting interviews, he weighed in on clawing back excessive executive pay on the political blog "The Daily Beast" and cooperated with a book about his long career as a corporate nemesis.

PLUS Members can access the exclusive interview that was conducted with Bill Lerach just prior to his incarceration here on the PLUS Website:

https://plusweb.org/index.cfm/p/Media.Video

Two investors who lost more than $2.4 million investing with failed financier Bernard Madoff sued the U.S. Securities and Exchange Commission Wednesday, blaming the agency for failing to detect the epic multi-decade fraud that involved tens of billions of dollars.

Investors Phyllis Molchatsky, a disabled retiree, and Dr. Steven Schneider, filed the lawsuit in U.S. District Court in Manhattan.

The lawsuit said the SEC had ''countless opportunities to stop the Ponzi scheme Madoff operated over 16 years, and botched all of them.'' The lawsuit said the SEC directly caused the investors to lose their investment.

SEC spokesman John Heine said Wednesday that the SEC would contest the lawsuit.

''Based on our initial understanding of the matter, we believe there is no merit to the complaint,'' he said.

Attorney Howard R. Elisofon, representing Molchatsky and Schneider, said the lawsuit was the first lawsuit filed on behalf of Madoff investors against the SEC.

''Instead of watching the backs of Ms. Molchatsky and Dr. Schneider and the backs of the other investors, the SEC -- through its negligence -- was effectively watching Bernie Madoff's back,'' Elisofon said in a statement. ''Now it is time for the SEC to be held accountable and for the federal government to do what the law says it must do: compensate the victims for its negligence.''

The SEC has faced heavy criticism for not discovering the multibillion-dollar fraud since it was revealed last December, when Madoff was arrested after confessing the fraud to his sons. He is serving a 150-year prison sentence after pleading guilty to fraud charges.

Read the full story here on the New York Times website.

Excess and surplus lines insurance executives at a meeting here expressed worries that pending federal legislation for their sector could be a precursor to U.S. regulation for all insurance activity.

 The representatives of the nonadmitted (excess and surplus lines) industry voiced concerns over the Nonadmitted and Reinsurance Reform Act of 2009, which generally has broad support from industry trade groups.

A wholesale brokerage executive, Jim Keating, president of The Keating Group in Boston, said passage of the legislation aimed at streamlining multistate tax filing requirements and eliminating duplicative surplus lines broker licensing requirements might actually eliminate competitive advantages wholesalers currently have.

He expressed his views Friday during a panel discussion in Orlando, Fla., at the annual conference of the Kansas City, Mo.-based National Association of Professional Surplus Lines Offices, Ltd. Mr. Keating also voiced worries that the legislation moves in the direction of inviting federal regulation of the E&S insurance business.

“One of the tangible barriers to entry to our industry is the difficult nature of handling the [surplus lines] filings,” Mr. Keating said, responding to a question posed by panel moderator Glenn Hargrove, an industry consultant who once led wholesaler Crump Insurance Services.

Mr. Hargrove asked for panelists’ assessments of internal threats to the E&S industry—like E&S carriers increasingly placing business directly through retail agents.

Goldman Sachs has become the first bank to settle a legal investigation into the credit derivatives at the heart of the financial crisis, agreeing to paying $60m to the state of Massachusetts.

Martha Coakley, the state's attorney-general, had been examining if there was fraud or negligence when Wall Street traders packaged sub-prime loans into securities that could be sold on to other investors. Many sub-prime borrowers were never likely to be able to afford to pay back the loan, it has since become clear, and the insatiable demand for mortgages on Wall Street is blamed in part for the collapse in lending standards and the encouragement of fraudulent mortgage applications.

Read the full story here on the Indpendent website.

The U.S. pay czar is clashing with American International Group Inc. over $243 million in retention bonuses, potentially sparking a showdown over the insurer's compensation practices.

Kenneth Feinberg, the Treasury Department's special master for compensation, has told AIG it should reduce $198 million in promised payments for 2010 and recoup $45 million already paid in 2009. The demands were made public in a report from Neil Barofsky, the special inspector general overseeing the government's bailout.

AIG had agreed to both efforts earlier this year and has recouped about $19 million of the $45 million it paid in March. But some AIG employees are balking at returning 2009 bonuses until they know how much they will receive in 2010, according to people familiar with the matter.

As a result, Mr. Feinberg may slash some employees' 2009 salaries to compensate for the retention payments, these people said.

Read the full story here on the Wall Street Journal website.

The Supreme Court issued a poorly reasoned ruling in June that makes it much harder for older workers to prove illegal age discrimination. Fortunately, bills have been introduced in the Senate and House to undo the damage and put age discrimination cases on an equal footing with other employment-discrimination claims.

When employers discriminate, they generally do not admit it, so Congress and the courts have established calibrated rules of proof to give victims a fair chance. Generally, if workers can show that an illegal consideration, like race or national origin, was a factor in their being fired or demoted, the employer then has the burden of showing that it acted for nondiscriminatory reasons.

That should be the rule under the Age Discrimination in Employment Act of 1967, but the Supreme Court, by a 5-to-4 vote, decided that it is not. Older workers, Justice Clarence Thomas declared for the majority, have the full burden of proving that they were fired because of their age. That is an unfairly difficult standard, and it is an unreasonable interpretation of the law.

Read the full article here on the New York Times website.

Congressional budget analysts said Friday that lawmakers could save as much as $54 billion over the next decade by imposing an array of new limits on medical malpractice lawsuits -- 10 times more than previously estimated.

New research shows that legal reforms would not only lower malpractice insurance premiums for medical providers, but also would spur providers to save money by ordering fewer tests and procedures aimed primarily at defending their decisions in court, Douglas W. Elmendorf, director of the nonpartisan Congressional Budget Office, wrote in a letter to  Sen. Orrin G. Hatch (R-Utah).

The CBO report lends credence to Republican arguments that substantive limits on malpractice lawsuits will reduce health-care costs. However, President Obama opposes one of the chief proposed changes the CBO studied, caps on jury awards, and analysts give the measures little chance of passage.

Read the full story here on the Washington Post website.

JPMorgan Chase & Co. and two other investment banks have agreed to pay $100 million to settle a lawsuit over their contribution to investor losses in the collapse of American Business Financial Services Inc., the bankruptcy trustee's lawyer said Friday.

The banks, including then-independent Bear Stearns, Credit Suisse Group and Morgan Stanley, deny any wrongdoing in settlement documents to be filed in a Philadelphia court, said lawyer Steven Coren of the firm Kaufman, Coren & Ress.

JPMorgan, which took over Bear Stearns in March 2008, agreed to pay $55 million, Credit Suisse agreed to pay $37.5 million and Morgan Stanley agreed to pay $7.5 million, Coren said. The proceeds are to be distributed among the company's creditors.

The banks had allegedly taken part in "reporting fictitious gains and fictitious assets to create the illusion the company was profitable and solvent when it was losing hundreds of millions of dollars," Coren said.

Read the full story here on the Breitbart website.

Emergency room doctors make rapid-fire, life-or-death decisions in a chaotic environment, often without knowing the medical histories of their patients.

The Georgia Supreme Court’s justices were reminded of that Tuesday by lawyers defending a key provision of the state’s tort reform law. It requires a plaintiff to establish by “clear and convincing evidence” that an ER doctor committed “gross negligence” — an almost insurmountable legal threshold — to prove medical malpractice.

The case in question involves a woman who went to the ER in Columbus complaining of serious pain behind her eye; she says a doctor sent her away with a prescription and failed to diagnose her real, disabling illness.

The Legislature passed the tort reform law in 2005. With ER doctors facing an increased threat of malpractice suits, lawmakers sought to make sure Georgia could still attract the best physicians into the state’s emergency rooms, Wade Copeland, a lawyer representing a Muscogee County doctor, told the court.

But Atlanta lawyer Michael Terry said lawmakers improperly carved out a radical exception for hospitals and insurance companies that lobbied for it at the expense of those injured by medical negligence.

“It’s the practical elimination of any [medical malpractice] claims,” Terry told the justices. The provision gives hospitals and ER physicians “an unconscionable and inequitable advantage.”

MAG Mutual, which insures most of Georgia’s doctors, has seen a significant reduction in the number of malpractice lawsuits against emergency room physicians because of the law, the company’s president, Darrell Grimes, said Tuesday. Grimes noted that the cost of insurance premiums also has fallen.

Read the full story here on the Atlanta Journal Constitution Website.

The Genetic Information Anti-Discrimination Act of 2008 ("GINA" or "the Act") will take effect on November 21, 2009. Covered employers should start learning about this new anti-discrimination law now, to ensure compliance come November.

Title II of GINA prohibits discrimination in employment based on a person's genetic information, or the genetic information of a person's family members, and requires covered entities to protect the confidentiality of individuals' genetic information. GINA applies to all entities covered under Title VII of the Civil Rights Act of 1964 ("Title VII"); i.e., employers with 15 or more employees, employment agencies, labor unions, and joint labor-management training programs. It also applies to federal employers covered by Section 717(a) of the Civil Rights Act of 1964, such as military departments, executive agencies, and the United States Postal Service.

The term "genetic information" is generally defined as information about (1) genetic tests that an individual has undergone, (2) the genetic tests of an individual's family members, and (3) the manifestation of a disease or disorder in a family member. More specifically, the term "genetic information" encompasses use of genetic services (such as counseling) or participation in clinical research involving such services. The Equal Employment Opportunity Commission ("EEOC"), which is tasked with enforcing GINA, has issued proposed regulations which state that "genetic information" also includes genetic information of a fetus or an embryo. Final regulations were expected in May, but have not yet been released.

Read this full article, authored by Emily Miller of Cozen O'Connor, here on the Mondaq website.

Justin Feffer, a senior investigator at the Los Angeles County district attorney's office, drove to a suspect's house last December for a search relating to an identity-theft case. First, he did what cops normally do: took down the license number on the truck in the driveway, noted that surveillance cameras hung from the eaves and the windows were covered in paper.

Then, he did something unusual for a local cop: He pulled out his iPhone and checked for any unencrypted wireless access points nearby. The iPhone check, says Mr. Feffer, helped avoid the predicament that befell two other law-enforcement agencies that raided the wrong house on successive days, because the real suspect in a child pornography case had been using an innocent person's unprotected wireless Internet connection. Mr. Feffer didn't find any wireless loopholes that could be exploited.

As a member of the Los Angeles district attorney's high-technology crimes unit, Mr. Feffer is part of a cadre of 21st century crime fighters who sift through digital evidence on computers, cellphones and other electronic devices. While the Internet has vastly expanded the reach of criminals, the digital fingerprints that these activities leave can be a powerful investigative tool -- for those with the knowledge and equipment to use it.

Read the full story here on the Wall Street Journal website.

Lloyd’s Underwriters do not have to pay Safeco Insurance Company more than $1 million in defense costs in connection with a professional liability policy, because plaintiff Safeco did not have the defendant Lloyd’s Underwriters’ permission to settle the underlying claim.

In the case, Judge Charles F. Palmer of the Superior Court of California, County of Los Angeles, granted summary judgment to the Lloyd’s Underwriters on Sept. 30 because a no-voluntary-payment clause, contained in the directors and officers policy in question, required Safeco to obtain written consent from  Lloyd’s Underwriters before entering into a settlement in an underlying case.

The underlying case—according to Robert Firriolo, a partner in the New York office of Duane Morris LLP who represented the defendants—involved a personal injury action brought against Safeco. In connection with that case, a bad faith lawsuit was brought against Safeco.

Safeco intended to settle the action, but, Mr. Firriolo said, the company did not notify Lloyd’s Underwriters about the action until just before mediation. Furthermore, they provided very little detail. Lloyd’s Underwriters replied that Safeco had to obtain written consent before settling the claim, Mr. Firriolo asserted, but never provided a written agreement to settle.

Three Democratic Congressional committee chairmen said Tuesday that they would move to overturn a four-month-old Supreme Court ruling that made it significantly harder for workers to win many age discrimination cases.

The three chairmen criticized the court’s decision in a case involving a 54-year-old man who was demoted, saying the ruling flouted Congress’s intent and created unfair obstacles to the victims of age discrimination.

In a 5-to-4 ruling last June, the Supreme Court created a tougher burden of proof for plaintiffs in age bias cases. Previously, if an employee could prove that age was a factor in an adverse employment decision, like a demotion or a layoff, the employer then had to show that it had acted for a valid reason other than age discrimination. But as a result of the June ruling, employees now face the full burden of demonstrating that age was the deciding factor.

“This extremely high burden really undermines workers’ ability to hold employers accountable,” said Senator Tom Harkin, Democrat of Iowa and chairman of the Senate Health, Education, Labor and Pensions Committee.

Read the full article here on the New York Times website.

The Supreme Court has refused to hear former Qwest CEO Joseph Nacchio's appeal of his insider trading conviction.

The court said Monday that it would not entertain Nacchio's request that he either be acquitted of the charge or granted a new trial.

Prosecutors said Nacchio sold $52 million worth of stock in 2001 while knowing that Denver-based Qwest Communications International Inc. would have trouble meeting its sales goals. Nacchio, 60, began serving a six-year sentence on April 14. He contended the jury was given improper instructions about what internal information had to be disclosed publicly. He also argued that the trial judge improperly barred testimony from an expert who could have explained Nacchio's trading patterns.

"I am deeply disappointed by the court's decision because I am convinced that he is innocent and did not receive a fair trial," Nacchio's lead appeals attorney, Maureen Mahoney, said in an e-mail.

Nacchio did win one legal fight this summer when a federal appeals court ordered that his sentence be shortened.

Read the full story here on the TwinCities.Com website.

In November 2008, the major pharmacy benefit management firm said it received an anonymous letter that included the names, Social Security numbers, birth dates and, in some cases, prescription information of 75 members. The writer or writers threatened to release millions of more records if the business failed to pay an unspecified sum of money.

In the last two months, based on new information from the extortionists, Express Scripts began notifying more than 700,000 victims of their personal information may have been compromised.

After initially notifying only the 75 victims from last year, the company in August was told by the FBI that “…the perpetrator of the earlier action had recently forwarded a letter and data file to a law firm,” according to the company's website.

Maria Palumbo, spokeswoman for Express Scripts, would not elaborate on the contents of the letter.

“The FBI is conducting the investigation that was opened last fall,” she told SCMagazineUS.com Thursday. “It is still ongoing.”

The website points out, however, that FBI special agents contacted Express Scripts immediately, and the news was not good.

Read the full story here on the SC Magazine website.

With federal agents threatening to put his bank out of business, Allen Stanford turned to the powerhouse Miami law firm of Greenberg Traurig.

Stanford International Bank and other banks in Antigua were suspected of laundering money and were close to being cut off from the global banking community.

Not only did the firm save his bank, it helped Stanford eliminate his competition and become a top Antiguan regulator -- just years before prosecutors say he began stealing millions in one of the largest frauds in U.S. history.

Now a decade later, with Stanford charged in the massive criminal case, the law firm is being pulled into a widening inquiry of the $7 billion Ponzi scheme that wiped out thousands of investors.

Though not under criminal investigation, Greenberg Traurig is facing a legal review of its actions on this tiny island that was the center of his banking kingdom.

The court-appointed receiver trying to recover money for victims is demanding records of the legal work provided to the disgraced banker -- including that of Greenberg. The effort is the latest by the receiver to untangle the complex deals spun by Stanford as well as the conduct of his lawyers.

Read the full story here on the Miami Herald website.

Katie Allison Granju, who writes a blog on parenting and current events, was worried a barbed post could get her sued. So she bought media liability insurance to protect her home and savings.

"You wouldn't publish a newspaper without liability insurance, so you should take the same precautions with blogging, if you have any kind of audience or readership," said Granju, 41, of Knoxville, Tenn.

U.S. lawsuits over Web postings jumped 70 percent in 2008 from 2006, when the social networking site Facebook Inc. was opened to anyone with a valid e-mail address and Twitter Inc. was first started. The data come from the Citizen Media Project, which is affiliated with Harvard Law School's Berkman Center for Internet & Society in Cambridge, Mass.

The cost of defending against legal action can range from $5,000 to at least $100,000 if the case goes to trial, said Ron Coleman, a trademark lawyer at Goetz Fitzpatrick in New York. Of the 256 lawsuits dating as early as 1994 through April tracked by the New York-based Media Law Resource Center, damages were awarded in 17 cases, totaling $43.9 million.

Visit the Honolulu Advertiser website for the rest of the article.

The Equal Employment Opportunity Commission last week sued Zachry Industrial Inc. for allegedly firing a female worker who complained about unequal access to bathrooms for women employees.

The case comes amid a surge in complaints of retaliation to the EEOC. Claims including a retaliation charge rose 23% in the year ended Sept. 30, 2008, to 32,690 -- more than a third of all claims filed with the agency. Claims that didn't involve retaliation rose 12% in the same period.

Carolyn Wheeler, an EEOC assistant general counsel, says stamping out retaliation is the commission's top priority. Enforcement of antidiscrimination laws "depends totally on people coming to file complaints," she says. "If people don't feel free to do that, these laws don't get enforced."

Please visit the Wall Street Journal website for the rest of the article.

A federal appeals court today reversed a judge's decision to exclude evidence from the upcoming trial of former Broadcom Corp. executive William Ruehle over an alleged $2.2 billion stock options backdating scheme, ruling that Ruehle's statements to company lawyers were not made in confidence.

The 9th U.S. Circuit Court of Appeals panel – consisting of U.S. Circuit Judges Raymond C. Fisher, Ronald M. Gould and Richard C. Tallman – found that the company's former chief financial officer "failed to meet his burden of establishing the existence of an individual attorney-client privilege" regarding June 2006 conversations he had with Broadcom lawyers.

The ruling overturns the opinion of U.S. District Judge Cormac Carney, who in April disallowed prosecutors from using the conversations in their case. Carney said Broadcom's attorneys – from the firm Irell & Manella – committed ethical misconduct and violated the attorney-client relationship by giving federal investigators notes from interviews with Ruehle.

We don’t live in the world for which conventional risk-management textbooks prepare us. No forecasting model predicted the impact of the current economic crisis, and its consequences continue to take establishment economists and business academics by surprise. Moreover, as we all know, the crisis has been compounded by the banks’ so-called risk-management models, which increased their exposure to risk instead of limiting it and rendered the global economic system more fragile than ever.

Low-probability, high-impact events that are almost impossible to forecast—we call them Black Swan events—are increasingly dominating the environment. Because of the internet and globalization, the world has become a complex system, made up of a tangled web of relationships and other interdependent factors. Complexity not only increases the incidence of Black Swan events but also makes forecasting even ordinary events impossible. All we can predict is that companies that ignore Black Swan events will go under.

Instead of trying to anticipate low-probability, high-impact events, we should reduce our vulnerability to them. Risk management, we believe, should be about lessening the impact of what we don’t understand—not a futile attempt to develop sophisticated techniques and stories that perpetuate our illusions of being able to understand and predict the social and economic environment.

Eliminating defensive medicine could save upwards of $200 billion in health-care costs annually, according to estimates by the American Medical Association and others. The cure is a reliable medical malpractice system that patients, doctors and the general public can trust.

But this is the one reform Washington will not seriously consider. That's because the trial lawyers, among the largest contributors to the Democratic Party, thrive on the unreliable justice system we have now.

Almost all the other groups with a stake in health reform—including patient safety experts, physicians, the AARP, the Chamber of Commerce, schools of public health—support pilot projects such as special health courts that would move beyond today's hyper-adversarial malpractice lawsuit system to a court that would quickly and reliably distinguish between good and bad care. The support for some kind of reform reflects a growing awareness among these groups that managing health care sensibly, including containing costs, is almost impossible when doctors go through the day thinking about how to protect themselves from lawsuits.

Read the full editorial, written by Philip K. Howard, here on the Wall Street Journal website.

House Republicans accused the U.S. Securities and Exchange Commission of being slow to respond to an ex-Moody's Investors Service analyst who complained in September that the ratings agency might be inflating complex securities ratings.

Eric Kolchinsky, the former Moody's employee, testified at a U.S. House committee hearing that he was contacted by the SEC last week after he went public with new allegations against the rating service.

Kolchinsky has complained to the SEC twice this year - first in March and again shortly after he was suspended in early September. SEC officials said they were in touch with Kolchinsky after his March complaint.

Read the full story here on the SmartMoney website.