New York Attorney General Andrew Cuomo said Monday that 15 employees who received some of the largest bonuses from American International Group Inc. have agreed to return the money in full.
The commitments amount to more than $30 million of the $165 million in bonuses awarded earlier this month by the troubled insurer.
Cuomo said he still hopes that more AIG employees will return their bonuses.
He expects his office will be able to recoup about $80 million of the money the insurer paid out - roughly the amount of bonuses paid to American employees.
AIG Chief Executive Edward Liddy told Congress last week that some of the employees were willing to give the money back.
AIG has come under heavy criticism because the bonuses were given to employees after the company received $170 billion in government bailout money.
Cuomo had sought the names of the employees who received bonuses from Liddy through a subpoena.
"I applaud the employees who are returning the bonuses," Cuomo said during a conference call with reporters.
"I think they are being responsive to the American people."
Cuomo said 9 of the 10 people receiving the largest awards have agreed to return their bonus.
Additionally, 15 of the top 20 bonus recipients have consented to returning their money.
Cuomo said some have refused to return the money, while others are still considering it.
"We are deeply gratified that a vast majority of Financial Products' senior leadership have expressed a willingness to forsake their recent retention payments," wrote spokeswoman Christina Pretto in a statement e-mailed to The Associated Press.
She added that the company is continuing to review the responses of the other employees. Cuomo said he doesn't plan to release the names of the employees who have agreed to return the bonuses, and said there is no implied threat that if an employee doesn't consent to returning the bonus that their name will be released.
He said his office is continuing to assess the security of the employees.
About 400 employees and future employees in AIG's financial products division received bonuses.
Documents provided by AIG to the Treasury Department said the awards ranged from $1,000 to nearly $6.5 million.
Seven employees were to receive more than $3 million.
Last week Cuomo said AIG paid bonuses of $1 million or more to 73 employees, including 11 who no longer work there.
Separately, Connecticut's consumer protection division has subpoenaed AIG, demanding that the contracts and names of employees who received the bonuses be provided by March 27.
Gov. M. Jodi Rell has said she wants the division to determine whether the bonuses can be voided under the Connecticut Unfair Trade Practices Act.
AIG's financial products division is headquartered in Wilton, Connecticut.
Connecticut Attorney General Richard Blumenthal says his office also demanded the bonus recipients' names and the amounts.
Last week, the House passed a plan to slap a punitive, 90 percent tax on bonuses paid to AIG employees whose family income surpasses $250,000.
Not all of the AIG employees earned more than the income threshold specified by the House bill.
But President Obama has signaled opposition to the House's tax bill on constitutional grounds.
The Senate is soon expected to take up its own plan on the tax. - AP
Latest NYSE, NASDAQ and other business news, from AP-Wire
Wednesday, March 25, 2009
US stocks surge on bank plan, Dow up 500 points
Wall Street got the news it wanted on the economy's biggest problems - banks and housing - and celebrated by hurtling the Dow Jones industrials up nearly 500 points.
Investors added rocket fuel Monday to a two-week-old advance, cheering the government's plan to help banks remove bad assets from their books and also welcoming a report showing a surprising increase in home sales.
Major stock indicators surged more than 6 percent, including the Dow, which had its biggest percentage gain since October.
Analysts who have seen the market's recent false starts are still hesitant to say Wall Street is indeed recovering from the collapse that began last fall.
But the day's banking and housing news bolstered the growing belief that the economy is starting to heal, and that is what had investors buying.
"It's just hard to argue that there isn't an improvement in economic activity on the horizon," said Jim Dunigan, executive vice president at PNC Wealth Management.
The market began turning around two weeks ago on news that Citigroup Inc. was operating at a profit in January and February.
A spate of more upbeat economic reports helped the market build on its gains, although the rally stalled last Thursday and Friday.
Analysts said they saw more fundamental strength in Monday's buying than they saw at the start of the rally. Dave Rovelli managing director of trading at brokerage Canaccord Adams, said there appeared to be less short covering, which occurs when traders are forced to buy to cover misplaced bets that stocks would fall.
Short covering contributed to the market's surge after the Citigroup news.
"There is definitely new buying," he said. Rovelli also said the approaching end of the quarter can make money managers eager to buy into a market to make the statements they send to clients look stronger.
The market shot higher at the opening and kept going.
The Treasury Department said its bad asset cleanup program would tap money from the government's US$700 billion financial rescue fund and involve help from the Federal Reserve, the Federal Deposit Insurance Corp. and the participation of private investors.
The government's announcement was what the market had waited weeks to hear.
Treasury Secretary Timothy Geithner had announced an outline of the program last month but provided few details then about how it would work, leading to a stock plunge that sliced 380 points from the Dow.
But while analysts were pleased with the market's performance Monday, they were also still cautious; Wall Street more than gave back its big yearend rally and continued falling during January and February.
Subodh Kumar, an independent investment strategist in Toronto, said the Fed's announcement that it would buy government debt and the details on plans to help banks are giving traders hope for recovery.
"The market is shedding some of its excess pessimism. That doesn't mean the market goes straight up," he said.
The National Association of Realtors' existing home sales report was overwhelmingly positive for investors although it showed a decline in home prices in February.
Investors are embracing any sign that a glut in homes for sale may be easing.
Monday's data followed a dose of good housing news last week as housing starts for February came in much better than expected.
The Dow rose 497.48, or 6.8 percent, to 7,775.86, its highest finish since Feb. 13.
It was the biggest point gain for the blue chips since Nov. 13 when they rose 552 points and the biggest percentage gain since Oct. 28. when they rose 10.9 percent.
It was the fifth biggest point gain in the Dow's history.
Broader stock indicators also surged.
The Standard & Poor's 500 index rose 54.38, or 7.1 percent, to 822.92, crossing the psychological milepost of 800.
The Nasdaq composite index rose 98.50, or 6.8 percent, to 1,555.77.
The Russell 2000 index of smaller companies rose 33.61, or 8.4 percent, to 433.72.
The Dow Jones Wilshire 5000 index, which reflects nearly all stocks traded in America, jumped 7 percent.
That's a paper gain of about $700 billion.
More than 10 stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.9 billion shares.
The Dow is now up 1,228 points, or 18.8 percent, from March 9, when it finished at its lowest point in nearly 12 years, although it's still down 1,000 points in 2009.
The S&P 500 is up 21.6 percent in that time. The Dow and the S&P 500 index remain more than 45 percent below their peak in October 2007.
Collapsing home prices and the damage they have caused banks are at the center of the economy's current problems and are a major focus for the stock market.
Banks have sharply curbed lending after becoming weighed down with loans that have gone bad, especially mortgages.
Investors had been largely disappointed in the government's efforts to date to restore the banks to health, but finally seemed encouraged by the long-awaited announcement of details for the bad loan cleanup plan.
"The actions that we're getting from a policy standpoint are very helpful in removing the sand from the gears," said Alan Gayle, senior investment strategist at RidgeWorth Investments.
"That is going to be good for the financials."
Shares of the country's largest banks, which have been pounded in recent weeks over concerns about their ability to weather the crisis, soared on Monday.
Citigroup Inc. jumped 19.5 percent, and Bank of America Corp. added 26 percent. Even banks seen as being on better footing posted big advances.
JPMorgan Chase & Co. rose 25 percent, while Wells Fargo & Co. rose 24 percent.
Investors welcomed the rise in home sales Monday although the biggest jump in nearly six years came as first-time buyers pounced on deep discounts of foreclosures and other distressed properties.
Analysts say it could be a nascent sign of recovery.
But only weeks ago traders might have dwelled on the 15.5 percent drop in median prices.
"It's like putting on a different pair of glasses and you think you saw something different today than you saw yesterday," Dunigan said.
Bond prices were mixed as stocks rose.
The moves were moderate as investors remained mindful of the Federal Reserve's plan announced last week to buy government debt to help drive down borrowing costs by reducing interest rates.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.68 percent from 2.64 percent late Friday.
The yield on the three-month T-bill was flat at 0.19 percent.
Oil rose $1.73 to settle at $53.80 a barrel and the dollar was mixed against other major currencies.
Gold fell.
The price of gold has risen in recent weeks as investors have worried about the faltering economy and a weaker dollar.
Overseas, Britain's FTSE 100 rose 2.9 percent.
Germany's DAX index rose 2.7 percent, and France's CAC-40 rose 2.8 percent. Japan's Nikkei stock average rose 3.4 percent. - AP
Investors added rocket fuel Monday to a two-week-old advance, cheering the government's plan to help banks remove bad assets from their books and also welcoming a report showing a surprising increase in home sales.
Major stock indicators surged more than 6 percent, including the Dow, which had its biggest percentage gain since October.
Analysts who have seen the market's recent false starts are still hesitant to say Wall Street is indeed recovering from the collapse that began last fall.
But the day's banking and housing news bolstered the growing belief that the economy is starting to heal, and that is what had investors buying.
"It's just hard to argue that there isn't an improvement in economic activity on the horizon," said Jim Dunigan, executive vice president at PNC Wealth Management.
The market began turning around two weeks ago on news that Citigroup Inc. was operating at a profit in January and February.
A spate of more upbeat economic reports helped the market build on its gains, although the rally stalled last Thursday and Friday.
Analysts said they saw more fundamental strength in Monday's buying than they saw at the start of the rally. Dave Rovelli managing director of trading at brokerage Canaccord Adams, said there appeared to be less short covering, which occurs when traders are forced to buy to cover misplaced bets that stocks would fall.
Short covering contributed to the market's surge after the Citigroup news.
"There is definitely new buying," he said. Rovelli also said the approaching end of the quarter can make money managers eager to buy into a market to make the statements they send to clients look stronger.
The market shot higher at the opening and kept going.
The Treasury Department said its bad asset cleanup program would tap money from the government's US$700 billion financial rescue fund and involve help from the Federal Reserve, the Federal Deposit Insurance Corp. and the participation of private investors.
The government's announcement was what the market had waited weeks to hear.
Treasury Secretary Timothy Geithner had announced an outline of the program last month but provided few details then about how it would work, leading to a stock plunge that sliced 380 points from the Dow.
But while analysts were pleased with the market's performance Monday, they were also still cautious; Wall Street more than gave back its big yearend rally and continued falling during January and February.
Subodh Kumar, an independent investment strategist in Toronto, said the Fed's announcement that it would buy government debt and the details on plans to help banks are giving traders hope for recovery.
"The market is shedding some of its excess pessimism. That doesn't mean the market goes straight up," he said.
The National Association of Realtors' existing home sales report was overwhelmingly positive for investors although it showed a decline in home prices in February.
Investors are embracing any sign that a glut in homes for sale may be easing.
Monday's data followed a dose of good housing news last week as housing starts for February came in much better than expected.
The Dow rose 497.48, or 6.8 percent, to 7,775.86, its highest finish since Feb. 13.
It was the biggest point gain for the blue chips since Nov. 13 when they rose 552 points and the biggest percentage gain since Oct. 28. when they rose 10.9 percent.
It was the fifth biggest point gain in the Dow's history.
Broader stock indicators also surged.
The Standard & Poor's 500 index rose 54.38, or 7.1 percent, to 822.92, crossing the psychological milepost of 800.
The Nasdaq composite index rose 98.50, or 6.8 percent, to 1,555.77.
The Russell 2000 index of smaller companies rose 33.61, or 8.4 percent, to 433.72.
The Dow Jones Wilshire 5000 index, which reflects nearly all stocks traded in America, jumped 7 percent.
That's a paper gain of about $700 billion.
More than 10 stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.9 billion shares.
The Dow is now up 1,228 points, or 18.8 percent, from March 9, when it finished at its lowest point in nearly 12 years, although it's still down 1,000 points in 2009.
The S&P 500 is up 21.6 percent in that time. The Dow and the S&P 500 index remain more than 45 percent below their peak in October 2007.
Collapsing home prices and the damage they have caused banks are at the center of the economy's current problems and are a major focus for the stock market.
Banks have sharply curbed lending after becoming weighed down with loans that have gone bad, especially mortgages.
Investors had been largely disappointed in the government's efforts to date to restore the banks to health, but finally seemed encouraged by the long-awaited announcement of details for the bad loan cleanup plan.
"The actions that we're getting from a policy standpoint are very helpful in removing the sand from the gears," said Alan Gayle, senior investment strategist at RidgeWorth Investments.
"That is going to be good for the financials."
Shares of the country's largest banks, which have been pounded in recent weeks over concerns about their ability to weather the crisis, soared on Monday.
Citigroup Inc. jumped 19.5 percent, and Bank of America Corp. added 26 percent. Even banks seen as being on better footing posted big advances.
JPMorgan Chase & Co. rose 25 percent, while Wells Fargo & Co. rose 24 percent.
Investors welcomed the rise in home sales Monday although the biggest jump in nearly six years came as first-time buyers pounced on deep discounts of foreclosures and other distressed properties.
Analysts say it could be a nascent sign of recovery.
But only weeks ago traders might have dwelled on the 15.5 percent drop in median prices.
"It's like putting on a different pair of glasses and you think you saw something different today than you saw yesterday," Dunigan said.
Bond prices were mixed as stocks rose.
The moves were moderate as investors remained mindful of the Federal Reserve's plan announced last week to buy government debt to help drive down borrowing costs by reducing interest rates.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.68 percent from 2.64 percent late Friday.
The yield on the three-month T-bill was flat at 0.19 percent.
Oil rose $1.73 to settle at $53.80 a barrel and the dollar was mixed against other major currencies.
Gold fell.
The price of gold has risen in recent weeks as investors have worried about the faltering economy and a weaker dollar.
Overseas, Britain's FTSE 100 rose 2.9 percent.
Germany's DAX index rose 2.7 percent, and France's CAC-40 rose 2.8 percent. Japan's Nikkei stock average rose 3.4 percent. - AP
Tuesday, March 24, 2009
Home » Features » Data centers and infrastructure » IBM said to be poring over Sun's contracts IBM said to be poring over Sun's contracts
Lawyers for IBM are examining Sun Microsystems' contracts and other documents in a due diligence process that could precede an acquisition, the Wall Street Journal reported Friday, citing unnamed sources.
Such work is common before a merger and suggests that acquisition talks between Sun and IBM, which were reported earlier this week but have not been confirmed by the companies, are still under way. Examining the documents could take a number of days, the Journal said.
The work being done includes an examination of Sun's software license terms to see if any of them conflict with IBM's business practices, the newspaper reported. Sun offers most of its software, including its Solaris OS, MySQL database and Java programming language, under a variety of open-source licenses.
News of the supposed merger talks was broken by the Journal overnight on Tuesday, though Sun and IBM have not confirmed nor denied any discussions. IBM would pay between US$6.5 billion and $8 billion to buy the company, the Journal said Friday.
Observers have been puzzling over whether IBM is interested in Sun for its hardware or its software assets. IBM would gain some of Sun's large corporate customers and widen its lead in the enterprise server market, where it was just ahead of Hewlett-Packard last year, according to IDC.
There would also be significant overlap between the companies' product lines, however. Both have Unix server OS, a RISC chip architecture, at least one enterprise database and a whole line of middleware. Any deal would create uncertainty for customers as to which products IBM would continue to develop and support.
Sun has been struggling to grow its business, particularly lately with the recession. Some of its biggest customers were Wall Street banks that either no longer exist or are in dire straits themselves.
Despite the uncertainty it would create, an acquisition by IBM might be a better outcome for Sun's customers than some of the alternatives, said Dan Olds, principal analyst at Gabriel Consulting Group.
"The economic climate plays against Sun's recovery strategy. I think they have probably made as many cuts as they can without really changing what they do and having to drop something big," he said.
If the reports are accurate and Sun has decided to sell, the decision was probably driven by outside investors, notably Southeastern Asset Management, which increased its stake in Sun to more than 20 percent last year and has been pushing hard for a bigger return on its investment.
"I think those guys are driving the bus at Sun," Olds said. "This isn't a strategic thing or a Jonathan Schwartz thing; it's purely business."
Talk of an acquisition has pushed Sun's share price higher. It closed at $8.63 on Friday, up from $4.97 before the discussions were reported. IBM's share price initially slipped on the reports but recovered slightly on Friday, closing at $92.66.
Such work is common before a merger and suggests that acquisition talks between Sun and IBM, which were reported earlier this week but have not been confirmed by the companies, are still under way. Examining the documents could take a number of days, the Journal said.
The work being done includes an examination of Sun's software license terms to see if any of them conflict with IBM's business practices, the newspaper reported. Sun offers most of its software, including its Solaris OS, MySQL database and Java programming language, under a variety of open-source licenses.
News of the supposed merger talks was broken by the Journal overnight on Tuesday, though Sun and IBM have not confirmed nor denied any discussions. IBM would pay between US$6.5 billion and $8 billion to buy the company, the Journal said Friday.
Observers have been puzzling over whether IBM is interested in Sun for its hardware or its software assets. IBM would gain some of Sun's large corporate customers and widen its lead in the enterprise server market, where it was just ahead of Hewlett-Packard last year, according to IDC.
There would also be significant overlap between the companies' product lines, however. Both have Unix server OS, a RISC chip architecture, at least one enterprise database and a whole line of middleware. Any deal would create uncertainty for customers as to which products IBM would continue to develop and support.
Sun has been struggling to grow its business, particularly lately with the recession. Some of its biggest customers were Wall Street banks that either no longer exist or are in dire straits themselves.
Despite the uncertainty it would create, an acquisition by IBM might be a better outcome for Sun's customers than some of the alternatives, said Dan Olds, principal analyst at Gabriel Consulting Group.
"The economic climate plays against Sun's recovery strategy. I think they have probably made as many cuts as they can without really changing what they do and having to drop something big," he said.
If the reports are accurate and Sun has decided to sell, the decision was probably driven by outside investors, notably Southeastern Asset Management, which increased its stake in Sun to more than 20 percent last year and has been pushing hard for a bigger return on its investment.
"I think those guys are driving the bus at Sun," Olds said. "This isn't a strategic thing or a Jonathan Schwartz thing; it's purely business."
Talk of an acquisition has pushed Sun's share price higher. It closed at $8.63 on Friday, up from $4.97 before the discussions were reported. IBM's share price initially slipped on the reports but recovered slightly on Friday, closing at $92.66.
S.Africa denies Dalai Lama visa over World Cup clash
South Africa said Monday the Dalai Lama has been denied a visa to meet here with other Nobel laureates, arguing his visit would overshadow the country's preparations to host the 2010 World Cup.
His exclusion has prompted the Oslo-based Nobel peace prize committee to announce that it would not participate in the peace conference organised in Johannesburg, unless the 1989 peace prize laureate is granted an entry visa.
"Unless the South African decision is rapidly changed we will not go," Lundestad said.
The Tibetan spiritual leader was billed to attend a Peace Conference this week, backed by the Nobel Peace Committee and hosted by South Africa's three surviving laureates, former presidents Nelson Mandela and FW de Klerk, and Archbishop Desmond Tutu.
Both Tutu and De Klerk confirmed they would no longer be attending the conference, casting doubt on the conference.
"He has confirmed he is not attending," Tutu's spokeswoman Tamu Matose told AFP.
Addressing local media Tutu said: "We are shamelessly succumbing to Chinese pressure. I feel deeply distressed and ashamed."
Former president De Klerk released a statement saying he would "reluctantly not participate in the peace conference... if a visa is not granted to enable the Dalai Lama to attend the conference as well."
The laureates were meant to discuss how soccer can help fight racism and xenophobia, as South Africa gears up for the 2010 World Cup.
But Thabo Masebe, spokesman for President Kgalema Motlanthe, told AFP that "there is no visa" for the Dalai Lama because his visit would draw attention away from the tournament.
Organisers of the conference had not consulted with the government before extending the invitation to the Dalai Lama, Masebe said.
"We in the South African government have not invited the Dalai Lama to visit South Africa, because it would not be in the interests of South Africa," he said.
"The attention of the world is on South Africa because of it being the host country for the 2010 World Cup, and we wouldn't want anything to distract from that," he added.
A spokesman for the spiritual leader said he was "very disappointed" by the decision.
"It is true that South Africa, under intense pressure from the Chinese authorities, have denied a visa to the Dalai Lama," spokesman Thubten Samphel told AFP in Dharamshala, India, home of the Tibetan government-in-exile.
"The Chinese government does not like any government to host the Dalai Lama because they feel his presence attracts media attention to the deplorable human rights conditions in Tibet," he said.
"African states are vulnerable to Chinese pressure because of huge Chinese investments there and so this is a case of business winning over human rights and good behaviour."
South African foreign ministry spokesman Ronnie Mamoepa denied pressure from China had played a role in the visa being denied.
"What is critical to know is we are an independent sovereign country which makes independent sovereign decisions," he said.
During a 1999 visit to South Africa, then-president Thabo Mbeki refused to meet with the Dalai Lama, citing scheduling difficulties, but local media blamed Chinese pressure for the brush-off.
China's minister counsellor at the embassy in Pretoria, Dai Bing, was quoted as saying in local media that his government had urged South Africa to deny the visit or risk damaging bilateral relations.
Dai told the paper that it was an "inopportune time" for the Dalai Lama to visit, coming just after the 50th anniversary of a failed uprising against China's rule of Tibet, which led to the exile of the region's most revered spiritual figure.
South Africa is China's key trading partner in Africa, accounting for 20.8 percent of the total volume of China-Africa trade in 2008 with total trade at some 100 billion rand (10 billion dollars).
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