Two teenage sisters have been awarded $11 million in a malpractice lawsuit against a prominent Saranac Lake pediatrician who failed to take steps to prevent the girls from being repeatedly sexually assaulted by their half-brother when they were children in Lake Placid.
    
An eight-member jury in U.S. District Court ruled against Dr. Patricia Monroe and her workplace, Adirondack Internal Medicine and Pediatric, ending a federal case rooted in horrific abuse dating back more than nine years.

The older sister, now 18, will receive $6 million, the 16-year-old younger sister $5 million, according to a news release issued by Albany attorneys Pamela Nichols and Stephen Coffey, who represented the victims. He noted they were "never offered a dime" to the settle the case, which dates to 2002.

The news release said the jury of four men and four women found Monroe and her medical group were "negligent in their care and treatment of the children when they failed to take the proper measures to investigate a situation which would have prevented the girls from being sexually assaulted by their half brother."

Read the full story here on the TimesUnion website.

The new head of the antitrust division of America’s Department of Justice, Christine Varney, sees Thurman Arnold, a predecessor who took office in 1938, as a model. Arnold’s appointment created an uproar. His book, “The Folklore of Capitalism”, published a year earlier, was widely seen as a satire on the inadequacy of the country’s antitrust laws. He was, in his own words, “responsible for the first sustained programme of antitrust enforcement on a nationwide scale.” This vigorous approach, in Ms Varney’s view, was an important part of “that era’s legacy for modern economic policy”. In other words, Ms Varney means business.

In recent years “the pendulum swung too far from Thurman Arnold’s legacy of vigorous enforcement,” Ms Varney argued in May in one of her first speeches after Barack Obama appointed her. Companies are likely to find themselves scrutinised at least as intensively as they were under the administration of Bill Clinton, when many senior antitrust officials in the justice department and Federal Trade Commission (FTC) cut their teeth on a celebrated anti-monopoly lawsuit against Microsoft. (Ms Varney was an adviser to the software giant’s chief victim, Netscape.)

Read the full story here on the Economist website.

That could be about to change after it was revealed last week that PricewaterhouseCoopers (PwC), the world's biggest accountancy firm, faces a $2bn (£1.2bn) lawsuit linked to Bernard Madoff's record $65bn investment fraud.

PwC was not Madoff's auditor. That job famously went to a three-person outfit without the ability or inclination to ask the necessary questions of its powerful client. The case against PwC's Canadian arm, brought by investors who lost their savings via the Madoff "feeder fund" Fairfield Sentry, is that the firm was negligent in failing to spot that Fairfield Sentry's $7.2bn of assets invested with Madoff did not exist.

The firm, it is claimed, should have spotted the "red flag" that Madoff not only executed the fund's investment strategy, but was the custodian of the money. PwC Canada stresses that it was not Madoff's auditor, adding that its auditing of the fund's financial statements "fully complied with professional standards". The case against PwC follows a lawsuit filed against KPMG claiming that the big four firm should have spotted Madoff's scam when auditing the main fund of US fund manager Tremont, which lost $213m on Madoff.

Read the full story here on the Telegraph website.

Shares of American International Group Inc. surged Thursday as analysts speculated the company might be reconciling with former CEO Maurice "Hank" Greenberg, who could help bring private capital and other business benefits to the company.

Shares of AIG continued to climb in after-hours trading and last traded at $48.30. It finished the regular session at $47.84, up $10.15, or 27 percent. The shares have traded between $6.60 and $493.60 in the past year. AIG completed a 1-for-20 reverse stock split on July 1.

Investor interest was fueled by the news that the company may be working to mend the strained relationship with Greenberg, who was forced out of the company in 2005 after an accounting scandal surfaced.

"It's not just that they're shaking hands with Greenberg, there's a real financial value in doing that," said Bill Bergman, senior stock analyst for Morningstar Inc. "Given the fact that AIG would have access to capital and business opportunities could be had, the reconciliation is meaningful."

Read the full story here from Associated Press.

A survey released today by Travelers reveals how the use of social media can expose businesses to risk. As the Travelers Global Technology business unit commemorates its 25-year anniversary, it conducted a national online survey of more than 2,000 adults to explore trends in social media and the potential risks to businesses.

A key finding in the survey shows that one out of eight respondents indicated that they post work-related information on social media Web sites. In fact, 30 percent feel it is acceptable to post information online about their employer as long as they believe it is true. Survey results also showed that more than 75 percent of those who post anything personal online said they were “not at all” or “not very concerned” about information posted online causing professional damage.

Read the full story here on the SmartBrief website.

Download the survey here from the Travelers website.

Proven systems already in use by the US Internal Revenue Service (IRS) should be adopted by the Securities and Exchange Commission (SEC) to deter and detect Ponzi schemes of the sort perpetrated by Bernard Madoff, according to a new white paper by NERA Senior Vice President Marcia Kramer Mayer.

"While the reforms proposed by the Obama administration are an excellent start, they don't go far enough in ensuring that we won't see another Madoff-type fraud in the future," said Dr. Mayer, a financial economist. "A common feature of Ponzi schemes is that investment advisers overstate the account assets that they report to clients. The IRS's simple, proven approach of routinely cross-checking reported data would be ideal for the SEC to adopt in its regulation of investment advisers, and such a system could be implemented at no cost to taxpayers."

Read the full story here on the Street Insider website.

From FoxBusiness News...

The deadline for early registration for the PLUS Conference is almost here. Visit the PLUS website to register on or before September 14, 2009 and take advantage of the discounted pricing. Both Conference Fees and Hotel Room Rates will increase after September 14, so book now and SAVE. Why pay more if you don't have to?

In addition to informative educational sessions and a host of networking opportunities, PLUS is pleased to present several insightful keynote addresses this year,

• Malcolm Gladwell, best selling author of Blink, The Tipping Point, Outliers, and Staff Writer for the New Yorker Magazine (view video clip here)
• Walter Bond, Former NBA player and "America's Accountability Leader"
• Corbette S. Doyle, Lecturer of Leadership and Organizations, Vanderbilt University (view video clip here)
• Dr. Robert Hartwig, President of the Insurance Information Institute
• Marvin Zonis, Professor Emeritus, Graduate School of Business, University of Chicago Business School (view video clip here)

We know that this year, more than ever, there is competition for your support. To that end, we've put together a program rich in information and networking opportunities that will deliver on your expectations. You won’t want to miss it!

Thanks to all the sponsors who have already committed to this event:

Their support makes events like this possible!

The finger-pointing in Merrill Lynch's bonus troubles shifted to a new target on Monday in two courts that essentially said: blame the lawyers, The New York Times’s Louise Story reported.

Responding to questions posed by a federal judge, Bank of America and the Securities and Exchange Commission said the bank had relied on its outside lawyers to fill in the fine print in that firm’s controversial marriage with Bank of America.

That meant that lawyers at two firms — Wachtell, Lipton, Rosen & Katz as well as Shearman & Sterling — handled a decision to keep Merrill’s $3.6 billion in bonus payouts a secret from Bank of America’s shareholders, according to the filings.

It is unclear if the responses will satisfy the judge who requested them, Judge Jed S. Rakoff of the Southern District of New York. He has the power to decide whether to approve a $33 million settlement reached between Bank of America and the S.E.C. over the bank’s failure to disclose the bonuses to its shareholders.

The judge could hold a second hearing on the settlement, which he lambasted two weeks ago, or he could approve or reject it.

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

Juries in the Longhorn State have a reputation for being generous with other people's money. But even by Texas standards, the verdict against Illinois drugmaker Abbott Laboratories this June was a whopper. After a four-day trial a jury in the tiny city of Marshall ordered Abbott to pay $1.7 billion.

It wasn't a case of sympathetic jurors socking it to an out-of-state corporation for injuring one of their own. The plaintiff was Johnson & Johnson, of New Brunswick, N.J. The dispute was a technical one over patents on the companies' competing arthritis drugs, J&J's Remicade and Abbott's Humira.

Companies love to complain about liability lawyers who shop around for plaintiff-friendly jurisdictions. But when they have a patent case to prosecute, they do the same thing. Often they go to Marshall or two other federal courts in the Eastern District of Texas. With lightning-fast deadlines and a preference for putting matters before a jury, the judges there have created a patent plaintiff's paradise.

Read the full story here on the Forbes website.

A unanimous ruling issued by the state high court on Monday says lawsuit plaintiffs cannot routinely appeal trial judge's denial of class-action status for cases. That could make it uneconomical for some plaintiffs to proceed with their cases on an individual basis.

The ruling overturns a 1972 decision by the current justices' predecessors and says the new ruling is based partly on a subsequent holding by the U.S. Supreme Court.

Please click here to see the article on the AZCentral.Com website.

When 18-month-old Kaelyn Sosa suffered a bump on the head in a fall at home, her mother took her to the emergency room to make sure it wasn't serious. While Kaelyn was under sedation in an MRI machine, her breathing tube was dislodged, cutting off her oxygen and causing a crippling brain injury.

As often happens after medical accidents, the facility, Baptist Children's Hospital in Miami, settled with the Sosa family for an undisclosed sum. But the hospital went further. Administrators analyzed the chain of events that led to the tragedy. They put in place new measures aimed at preventing the mistakes that injured Kaelyn from recurring and to better respond when something does go wrong. The hospital then engaged the child's parents in educational efforts to underline to medical staff the critical importance of patient safety.

Now Sandy Sosa, Kaelyn's mother, serves as a community liaison on the hospital's quality-and-patient-safety committee. "We wanted something good to come out of what happened to our daughter," she says.

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

A lawsuit filed on Wednesday against some of the most shadowy Internet criminals — gangs based in Eastern Europe that electronically break into business computers, steal banking passwords and transfer themselves money — is being used to pry information from a group that is nearly as reclusive as the hackers: banks whose computers have been compromised.

The suit by Unspam Technologies, which organizes volunteers to track down information about spammers and other online rogues, was filed in United States District Court for the Eastern District of Virginia.

Click here to read the full story from the CNBC website.

This article, from Jay Westermeier of the Finnegan law firm details strategies for defending against trade-misappropriation claims.

Read the strategies here on the Finnegan website.

A federal judge in Manhattan has rejected an argument by Countrywide Financial seeking certain protections from investor lawsuits under new legislation intended to encourage modifications of home loans.

Countrywide, the big mortgage company, had argued that the legislation automatically voided its pledges to buy back loans from investors if those loans were modified for troubled borrowers.

The ruling is a win for holders of mortgage-backed securities who sued Countrywide in December after the company, now a unit of Bank of America, agreed to modify thousands of loans in a settlement with state attorneys general. The opinion, by Judge Richard J. Holwell of Federal District Court in New York, was made public on Tuesday.

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

Increased energy costs and growing awareness about climate change have pushed "green issues" into corporate boardrooms.

Regulatory, shareholder, employee and customer concerns about corporate environmental accountability, in addition to emerging climate change and energy regulations, have made "green" policies a common element of business strategic planning.  The recently released Global Green 100 list includes the many Fortune 500 companies that have adopted and implemented board-level green corporate policies and governance commitments for sustainable and energy-efficient practices.[i]  Indeed, organizations across the economic spectrum (including this law firm) have adopted or are adopting green policies (also called sustainability policies).  These provide standards for environmental responsibility and sustainability initiatives.

Read the full article from the Perkins Coie law firm here on there website.

A primary goal of PLUS Foundation’s mission is Diversity and Outreach. Toward that mission, one of our 2009 objectives is to begin offering opportunities to women for career development, education and networking in the Professional Liability industry. These Foundation opportunities will help prepare women for leadership roles by building relationships and expanding networks of professional contacts. Through ongoing participation, this initiative will also provide a means for women leaders to share their roadmap to success and to support and mentor other women.

We are pleased to announce the Inaugural Event taking place on Thursday, November 12 during the PLUS International Conference. The Foundation would especially like to reach out to female PLUS members who would greatly benefit from attending the Women’s Leadership event by hearing  a highly successful business woman speak about her experiences and leadership qualities.

The speaker will be Christa Davies, Chief Financial Officer of Aon Corporation. She is a graduate in Aerospace Engineering from the University of Queensland in Australia, and as a Fulbright Scholar, she earned a masters degree in business administration from the Harvard Business School.

For more information, please contact Dan Jenney, Executive Director, PLUS Foundation.

Before Bernie Madoff, there was the Antar family. In the seventies and eighties, the family ran a popular electronics chain, Crazy Eddie, which was known for its frenetic commercials and low prices. The business was crooked from the start, but the fraud got more serious when the family took the company public in the 1984. Going public earned the Antar family millions of dollars, but infighting and jealousy later led them to turn against each other.

In 1987, the Securities and Exchange Commission investigated the family and discovered years of inflated profits and overstated income.

You can listen to this entire interview here on the NPR Website.

How many legs would a calf have if we called its tail a leg?

Four, of course. Calling a tail a leg wouldn’t make it a leg, as Abraham Lincoln famously said.

Nor does calling an expense an asset make it an asset. This brings us to the odd accounting rules for the insurance industry, including Lincoln National Corp., which uses Honest Abe as its corporate mascot.

Look at the asset side of Lincoln National’s balance sheet, and you’ll see a $10.5 billion item called "deferred acquisition costs," without which the company’s shareholder equity of $9.1 billion would disappear. The figure also is larger than the company’s stock-market value, now at $7 billion.

These costs are just that -- costs. They include sales commissions and other expenses related to acquiring and renewing customers’ insurance-policy contracts. At most companies, such costs would have to be recorded as expenses when they are incurred, hitting earnings immediately.

Read the full story here on the Bloomberg website.

Five Facebook users are suing the social network for doing what made it an online superstar -- letting members share aspects of their lives on the Web.

A lawsuit filed Monday in a southern California court accuses Facebook of being a data-mining operation that does not deliver on promises to give users strict control of data uploaded to profile pages.

Facebook has dismissed the lawsuit as being without merit and promised a legal battle. The suit asks for unspecified cash damages.

One of the parties to the suit is a woman who joined Facebook in an early phase when membership was limited to the college crowd.

Then-Harvard University student Mark Zuckerberg founded Facebook in 2004 as a way for college friends to remain connected as their lives grew apart.

Read the full article here on the Yahoo! News website.

Judge Posner is a conservative with libertarian leanings, and he is a leader of the law and economics movement associated with the University of Chicago.  He often relies on economic analysis in his judicial decisions, and he believes that many questions are best sorted out by the marketplace.

But corporate America has insulated pay decisions from market discipline, Judge Posner wrote. “Executive compensation in large publicly traded firms often is excessive,” he added, “because of the feeble incentives of boards of directors to police compensation.”

The Supreme Court will hear the case this fall, as anger over huge bonuses paid to the executives of failing companies continues to grow. The case, Jones v. Harris Associates, may turn out to be the court’s first significant statement on the corporate culture that helped lead to the Great Recession.

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

This PowerPoint report, presented by Steven Weisbart, at Westfield Insurance’s Defense Days Business Meeting, offers insight into what constitutes the “new normal” for the U.S. economy, the property/casualty (P/C) insurance industry, the liability insurance marketplace and litigation and tort system cost trends.  For the economy the new normal entails high levels of unemployment and  underemployment, low levels of investment return and of new borrowing, affecting housing, autos and other consumer durables.  For the P/C insurance industry the new normal means flat premiums and investments along with pressure on expenses.  The report notes that costs in the liability insurance marketplace have generally declined in recent years for all sizes of business.

Download the report here from the Insurance Information Institute website.

Two former attorneys have been sentenced to decades in federal prison and ordered to pay $127 million in restitution for defrauding hundreds of clients in a diet-drug settlement.

U.S. District Judge Danny Reeves also on Monday ordered 58-year-old William Gallion and 54-year-old Shirley Cunningham Jr. each to pay a $30 million forfeiture.

A sudden downpour could not dampen the spirits of those attending the opening reception at the 24th annual Vermont Captive Insurance Association's conference at beautiful Shelburne Farms on the shores of Lake Champlain in Shelburne, Vt. As attendees sought refuge under a tent or a nearby building, sampling Vermont's famous cheddar cheese and summer sausage, the rain subsided, the skies cleared and not one, but two rainbows appeared.
ome may wonder if Vermont's captives could be the pot of gold at the end of the rainbow.

While Molly Lambert, president of the VCIA, jokingly took credit for planning the colorful display of nature, John Lochner, principal of Towers Perrin, closed a well-attended session on the financial crisis and captives by saying, "Captives have been a ray of sunshine in this otherwise financial storm."

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

Colonial BancGroup Inc. has become the largest bank failure this year as the 2009 toll of financial institutions approaches 80.

The Federal Deposit Insurance Corporation seized the struggling Alabama-based lender Friday and sold it to BB&T Corp.

Late Friday, the FDIC announced four other banks had been closed: Community Bank of Nevada and its Arizona subsidiary, Community Bank of Arizona; Union Bank, Gilbert, Ariz; and Dwelling House Savings and Loan Association, Pittsburgh.

The Colonial BancGroup deal will knock roughly $2.8 billion off a pool of money, known as the Deposit Insurance Fund, which the FDIC maintains to guarantee bank customer deposits.

Read the full story here on the Marketwatch website.

With an asthmatic 4-year-old boy at home and a sick father a world away in Australia, she had no room in her life for osteoporosis or early menopause. It was 20 years ago, and when her gynecologist suggested hormone replacement therapy to stave off the effects of aging, she agreed.

"I was having these awful hot flashes," the 62-year-old recalls. "I found it really hard to deal with. There was a lot of stress in my life."

It's a moment she is revisiting now, with news that the company behind her treatment used ghostwriters to promote HRT in academic journals and play down any health threats, including breast cancer and stroke.

Last month, Smith, who was on HRT for 13 years, was told she has breast cancer.

"The hardest part was telling my son," she says, adding that her boy, now living in British Columbia, flew home immediately.

Read the full article here on the HealthZone.CA website.

t's hard to picture the crystal-clear Illinois River that Oklahoma Attorney General Drew Edmondson remembers from his youth, how he could look to the bottom and spot a dime, no matter how deep the water.

That was almost 45 years ago, and time has not been a friend. Pristine water has turned to green soup in some places. Algae coats the rocks and pebbles that once seemed to sparkle when the light was just so.

The river's watershed — where Edmondson saw his first daddy longlegs, floated away endless summer days and still comes to recharge — is the centerpiece of his federal lawsuit against the Arkansas poultry industry, which he says polluted the area with tons of bird waste from hundreds of poultry farms.

Read the full story here on the NPR website.

From the Miami Herald website:

About a third of Lou Pearlman's victims won't face controversial "clawback" lawsuits that would have tried to recover cash they had tied to the former boy band promoter's investment scheme.

Earlier this year, the trustee sued nearly 700 investors in so-called "clawback" litigation aimed at recovering cash tied to Pearlman's investment fraud.

Victims protested because the suits targeted many people who didn't profit at all, but lost some, if not all, of their principal investment.

Corbette Doyle, Lecturer in Leadership, Policy & Organizations at Vanderbilt University, will be leading The Secret Sauce: Using Diversity for a Sustainable Competitive Advantage on Thursday of the 2009 PLUS International Conference. In this clip, she talks about what makes an effective diversity strategy for an organization.

Registration information for the 2009 PLUS International Conference can be found here on the PLUS Website

2009 PLUS Conference Speaker Corbette Doyle from Scott Billey on Vimeo.

Marvin Zonis, Author of The Kimchi Matters and Professor Emeritus, Graduate School of Business, University of Chicago, will be discussing the US and Global Economy as well as leading the Industry Leaders Panel on Friday during the 2009 PLUS International Conference. In this clip, he talks about economic stresses in China and the potential for them leading to political instability.

Registration information for the 2009 PLUS International Conference can be found here on the PLUS Website.

2009 PLUS Conference Speaker Marvin Zonis from Scott Billey on Vimeo.

Malcolm Gladwell, Best Selling Author of Blink, The Tipping Point, Outliers, and Staff Writer for the New Yorker Magazine, will be the Thursday Luncheon Keynote during the 2009 PLUS International Conference.   In this clip, he talks about the strange nature of decision making, and how having all of the facts and information sometimes will cloud judgment.

Registration information for the 2009 PLUS International Conference can be found here on the PLUS Website.

2009 PLUS Conference Speaker Malcolm Gladwell from Scott Billey on Vimeo.

In a recent opinion, Hernandez v. Hillsides, Inc., the California Supreme Court held that an employer acted lawfully when it surreptitiously installed a video camera in a shared office even though both employees had a reasonable expectation of privacy there. While binding only in California, the court's decision is instructive for employers throughout the United States because the court's analysis is based upon legal principles applicable to invasion-of-privacy claims in virtually every jurisdiction.

Read this full article, written by Philip Gordon and Gregory Iskander of the Littler law firm here on the Littler website.

On July 22, the Securities and Exchange Commission (SEC) commenced an enforcement action against Maynard L. Jenkins, former chief executive officer of CSK Auto Corporation, under Section 304 of the Sarbanes-Oxley Act of 2002 (SOX) to recover more than $4 million that he had received in bonuses and stock sales profits while CSK was allegedly committing accounting fraud. This is the first action brought by the SEC seeking reimbursement under the “clawback” provision of Section 304 from an individual who is not alleged to have otherwise violated the U.S. securities laws. This action by the SEC may be a harbinger of the agency’s renewed commitment to conducting a vigorous enforcement program.

Read the full article here in PDF format from the TORYS LLP website.

A key lieutenant of convicted Ponzi-scheme operator Bernard Madoff pleaded guilty to multiple counts of fraud, becoming only the second person after Mr. Madoff to admit to complicity in the multibillion-dollar fraud.

Frank DiPascali Jr., 52 years old, pleaded guilty to 10 criminal charges at a hearing in federal court in lower Manhattan in New York and was immediately sent to jail.

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

A design firm and a construction contractor shouldn't have to reimburse the state for $37 million paid to victims of the Minneapolis bridge collapse, attorneys for the companies told a Minnesota judge on Monday.

The state wants Jacobs Engineering Group and Progressive Contractors Inc. (PCI) to pay, saying they helped contribute to the collapse. It also has sued URS Corp., an engineering firm that studied the bridge before it failed.

An investigation identified a design problem and the weight of construction materials piled on the bridge as key factors in the Aug. 1, 2007, collapse. Jacobs is the successor to the original bridge designer; PCI was doing repaving work when it fell.

Read the full story here on the StarTribune website.

Gov. David Paterson has signed legislation to freeze medical malpractice insurance rates in New York for another year, but the state's largest insurer said it leaves the company financially weaker while efforts to resolve malpractice issues are stalled.

Dr. Robert Menotti, president of Medical Liability Mutual Insurance Co., said the measure positions it to lose $55 million from a $275 million surplus, already diminished by past rate freezes.

Paterson signed the freeze for the second straight year. He said last year that the freeze enabled doctors to keep providing care "without getting suffocated by more back-breaking fiscal burdens," while work continued on long-term solutions. Legislative negotiations are continuing.

Read the full story here on the San Francisco Examiner website.

A federal judge delayed a decision Monday on whether to approve a $33 million settlement of allegations that Bank of America Corp. (BAC) failed to disclose to investors that Merrill Lynch & Co. agreed to pay billions of dollars in bonuses on the eve of their merger.

At a hearing Monday, U.S. District Judge Jed S. Rakoff in Manhattan grilled lawyers from the U.S. Securities and Exchange Commission and Bank of America for more than 90 minutes about the pact, in which the Charlotte, N.C., bank wouldn't admit or deny wrongdoing.

The judge said he had "continued misgivings" about the settlement and wants more information about who was responsible for the alleged wrongdoing, the basis for the settlement itself and whether a evidentiary hearing should be held to weigh the facts of the case.

Read the full story here on the NSADAQ website.

A blog posting discussing how liability reform might be a better target in the overall cost of health insurance.

Click here to read the entry from the Heritage Foundation website.

Regardless of the economic cycle, corporate transactions are always taking place, whether through mergers, acquisitions, going private, or, in a recent trend, marriages between financial institutions arranged by the Treasury and the Federal Reserve. These transactions often have at least one common complication: insurance.

For a long time, scant attention was paid to insurance assets in even some of the larger M&A deals. Over the past decade or so that has changed with insurance taking up a more prominent piece of the due diligence checklist. The insurance review, however, usually does little more than scratch the surface. There are a number of reasons for this, including the fact that insurance is typically not a major driving force to consummating a deal and often the attorneys and investment bankers spearheading the deal have little real-world appreciation for the nuances and land mines that inhabit the insurance claims world. Given that, there are some important steps to take to help avoid insurance problems in the M&A process.

Read the full story here on the AllBusiness website.

Maurice R. "Hank" Greenberg, who headed giant insurer American International Group Inc. for decades before leaving the firm amid an accounting scandal, will pay $15 million to settle fraud allegations by the U.S. Securities and Exchange Commission.

Howard Smith, AIG's former chief financial officer who currently works with Mr. Greenberg at closely held C.V. Starr & Co., an insurance firm, will settle SEC allegations against him for $1.5 million. The settlement will bar the men from serving as officers of public companies for several years. C.V. Starr underwrote some of AIG's business in the past.

"Corporate leaders cannot avoid the truth and consequences of their companies' performance by using improper accounting gimmicks and signing off on distorted financial reports," said Robert Khuzami, the director of the SEC's Division of Enforcement. "Greenberg and Smith oversaw various improper transactions that presented a false financial picture and allowed AIG to claim success in meeting its performance goals."

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

This briefing note reviews the House of Lords decision in Wasa v Lexington, in which the the reinsurers' appeal was allowed. In a decision likely to be welcomed by London market reinsurers, the Lords held that although the the normal commercial purpose of proportional facultative reinsurance policies is to provide "back to back" cover with the direct policy, where the contracts are governed by different laws, it remains a question of construction of both contracts as to what risk is assumed.

Authored by Joanne Jolly and Tracey Anderson of the London office of Barlow Lyde & Gilbert, the full article can be downloaded by clicking this link.

The National Association of Insurance Commissioners and American International Group Inc. are disputing a report that the state-regulated companies at the AIG's core are in a dangerously weakened and interdependent state

The NAIC issued a statement saying "the claims-paying abilities of these companies remains appropriate" and referred to information in a July 31 New York Times story as "incomplete and misleading."

According to the Times report, the financial health of the dozens of individual AIG companies is difficult to gauge from the parent company's U.S. Securities and Exchange Commission filings. However, it quoted sources as saying many of the companies are essentially keeping each other afloat with reinsurance and liabilities to other AIG units.

NAIC Chief Executive Officer Therese M. Vaughan said such concerns are misplaced. "Consumer protection is our first and foremost concern. The 71 state-regulated insurance entities within AIG are financially sound and are fully able to pay claims," she said in a statement

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

Sen. Arlen Specter, the Pennsylvania Democrat who recently switched parties, introduced a bill on July 30 that if enacted would reverse a 2007 Supreme Court decision and expand the number of entities shareholders can sue in corporate fraud cases.

The legislation is already attracting strong reaction from the trial bar and big business. The U.S. Chamber of Commerce, the nation’s largest business lobby, opposes the bill.

Lisa A. Rickard, president of the Chamber’s Institute for Legal Reform, said, ”Greatly expanding private securities class action lawsuits will only slow our economic recovery, drag down investors’ portfolios and retirement accounts, and delay the creation of much needed new jobs.”

Dan Newman, a spokesman for the large plaintiffs firm Coughlin Stoia Geller Rudman & Robbins countered: “Recent corporate scandals have made it more clear than ever that we can’t give selected corporations a free pass to commit fraud and leave innocent investors holding the bag,” he said, “For our economy and our financial markets to thrive, corporations must be held accountable when they commit fraud.”

Bill Clinton, Founder of The Clinton Foundation and 42nd President of the United States, made a trip to North Korea today, to talk about the incarceration of two US Journalists.

Clinton will present the Opening Keynote Address "Embracing Our Common Humanity" at the 2009 PLUS International Conference taking place November 11-13 in Chicago.  Please click here for more information about the PLUS International Conference.

Merck & Co. anticipates paying $80 million to settle litigation in which drug-benefit plans sought to recover their costs in paying for the former pain drug Vioxx, Merck disclosed Monday.

Also, Merck disclosed the U.S. Securities and Exchange Commission has terminated its investigation related to Vioxx, which Merck withdrew from the market in 2004 for safety reasons.

About 190 claims by private, third-party payers are pending in New Jersey and  federal courts. Merck said in a regulatory filing Monday it has reached an agreement in principle with the plaintiffs to settle the claims for $80 million. Merck booked a charge in this amount for the second quarter.

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

The lawyers were paid millions of dollars. Ford Motor Co. put behind it a costly lawsuit connected to the Explorer rollover scandal of the 1990s. And the judge closed out a complex case that clogged the Sacramento County Superior Court's overburdened calendar for more than seven years.

Everyone seemingly got some tangible benefit - except for nearly all of the 1 million consumers covered by the class action lawsuit filed in their name. None of the consumers got money, only discount coupons toward new Ford purchases. Few used them.

The practice of settling class action lawsuits by doling out discount coupons rather than cash has come under fire from tort reform activists and others who complain that such lawsuits mainly benefit the lawyers - and even the companies being sued - at the expense of their clients.

Read the full story here on the WTOP website.

An New Delhi court issued a warrant today for the arrest of the former head of the American chemical company responsible for a gas leak that killed at least 10,000 people in Bhopal 25 years ago.

Warren Anderson was the head of Union Carbide when its factory in the central Indian city leaked 40 tonnes of poisonous gas on 3 December 1984 – the world's worst industrial disaster.

More than 555,000 people who survived the initial disaster are thought to have suffered aftereffects, though the exact number of victims has never been determined. Many have died over the years from gas-related illnesses, including lung cancer, kidney failure and liver disease.

In response to a recent appeal by a victims' group, Prakash Mohan Tiwari ordered the arrest of Anderson, who is reportedly living in the US. Tiwari, who is the chief judicial magistrate of Bhopal, also ordered the federal government to press Washington for the American's extradition.

Read the full story here on the Guardian website.

Illinois Attorney General Lisa Madigan filed a lawsuit Friday accusing Wells Fargo & Co. of discriminating against black and Latino homeowners by employing racially biased lending practices.

"As a result of its discriminatory and illegal mortgage-lending practices, Wells Fargo transformed our cities' predominantly African-American and Latino neighborhoods into ground zero for subprime lending," Madigan said Friday at a Chicago news conference announcing the lawsuit.

The suit filed in Cook County Circuit Court accuses Wells Fargo & Co., based in San Francisco, of selling high-cost subprime mortgage loans to minorities while white borrowers with similar incomes received lower-cost loans.

Read the full story here on the Chicago Sun-Times website.

Jeffry M. Picower, the secretive philanthropist accused of helping Bernard L. Madoff perpetuate his vast Ponzi scheme, outlined his defense in an extensive court filing on Friday, calling the claims against him specious misrepresentations of the facts.

The court-appointed trustee overseeing the Madoff bankruptcy sued Mr. P{icower and his wife, Barbara, in May, seeking the return of $5.1 billion withdrawn from their numerous accounts from the mid-1990s to 2008. The trustee, Irving H. Picard, also accused Mr. Picower of cooperating with Mr. Madoff to orchestrate a string of fake profits that helped to keep the fraud going.

Mr. Picower’s lawyer called the “villainous portrayal” of his client “groundless” and merely an attempt by the trustee to scoop up a large amount of money for other victims of the scheme.

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