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Bristol-Myers Squibb Co agreed to pay $2.1 million to settle a probe by the U.S. Federal Trade Commission into its negotiations in to delay the launch of a generic version of its blockbuster drug Plavix, the Wall Street Journal said.

The FTC was investigating whether the drugmaker made false statements to it regarding the deal it struck with Canada’s Apotex Inc to keep a copycat version of Plavix off the market, the paper said.

Plavix, also known as clopidogrel and made by Sanofi-Aventis SA and Bristol-Myers, is a top-selling blood-thinning drug cheap payday loans.

Reuters efforts to contact Bristol-Myers out of regular office hours were unsuccessful. In December, Bristol-Myers said it agreed to pay $1.1 million to settle charges connected with an anti-trust investigation by the New York State Attorney General’s Office.

(Reporting by S. John Tilak in Bangalore; Editing by Anshuman Daga)

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The S&K Men’s Warehouse at Rivercity Market Place is one of the 30 stores in the chain that will shut its doors as part of the parent company’s Chapter 11 reorganization bankruptcy.

Less than a month after the Feb. 9 filing, Richmond, Va.-based S&K Famous Brands Inc. and Hilco Merchant Resources LLC have started liquidating the merchandise at 22 percent of its 136 stores. The other two Florida closings are in Tallahassee and near Bradenton. Stores will also close in Alabama, Illinois, Indiana, Louisiana, Michigan, Mississippi, North Carolina, New York, Ohio, South Carolina, Tennessee and Virginia.

S&K, a menswear retailer operating in 23 states in the eastern U.S., offers tailored and non-tailored collections as well as tuxedo rentals. In the last year the company expanded to include sportswear, jeans and dress-casual shirts and introduced new designer collections paydayloans.

S&K has negotiated $13 million debtor-in-possession financing from Wells Fargo Retail Finance to fund its working capital requirements during the Chapter 11 process.

“Our first priority is to reduce debt and recapitalize the company as quickly as possible,” said company President and CEO Joseph Oliver.

In addition to the store closings, Oliver said the company is reducing operating costs and introducing new merchandise to attract a new generation of shoppers.

“Our goal is for this process to be the final step towards building a specialty retail chain that can prosper in the future,” Oliver said.

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Hundreds of people in the United States are under investigation for financial scams, many involving Ponzi schemes, a U.S. regulator said, calling the phenomenon "rampant Ponzimonium."

While none are as mammoth as disgraced financier Bernard Madoff’s $65 billion fraud, multimillion-dollar "mini Madoffs" are proliferating from New York to Hawaii, the head of the Commodity Futures Trading Commission said.

So far this year, the agency has uncovered 19 Ponzi schemes, which depend on an influx of new capital instead of investment profits to pay existing investors.

That compares with just 13 for all of 2008.

"Because of the economy, people are seeking redemptions more than they ever have and that’s making a lot of these scams go belly up," Bart Chilton, commissioner of the Washington-based Commodity Futures Trading Commission, said in a telephone interview.

In the last month, his agency has pursued investment fraud in Pennsylvania, New York, North Carolina, Iowa, Idaho, Texas and Hawaii.

Chilton called the problem "rampant Ponzimonium" and "Ponzipalooza" - a play on the word "Lollapalooza," an American music festival featuring a long list of acts.

Many of the financial scams are small but grew fast to support lavish lifestyles, like the suspected $40 million, five-year Ponzi scheme that came to light last month when a North Carolina man, Bruce Kramer, committed suicide no fax cash advance.

Claiming he was an expert mathematician, Kramer is accused of persuading 79 people to invest in what he said was a foreign currency trading operation, Barki LLC. He promised monthly returns of at least 3% to 4%, the CFTC said.

Instead, he funneled money into a Maserati sports car, a $1 million horse farm and artwork while holding "extravagant" parties, according to a CFTC complaint released on Wednesday.

As the economy soured, Kramer struggled to find new clients to keep the scheme going. In the days before his suicide, his investors demanded their money back and grew suspicious when they couldn’t access their own funds, said Chilton.

The Commodity Futures Trading Commission shares oversight of financial markets with the Securities and Exchange Commission, which also faces a swelling casebook of Ponzi schemes, including charges against Texas billionaire Allen Stanford, who is accused of bilking investors of $8.8 billion.

Those accused of the scams used the money for cars, boats, clothing, jewelry, homes and ranches, said Chilton. One bought his own island in Belize in Central America, he added.

"Some are easier to catch now because people are more vigilant than they have been," he said. 

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Federal Reserve Chairman Ben S. Bernanke said the central bank is trying to counter “widening credit spreads” that are blunting efforts to pump cash into the economy after the Fed cut the main interest rate almost to zero.

This week’s Fed decision to buy $1.15 trillion of Treasuries and housing debt is “intended to improve conditions in private credit markets,” Bernanke said today in a speech in Phoenix, echoing a Fed statement this week. Officials are “encouraged” by market responses to Fed programs, he said.

Policy makers said on March 18 the central bank will try to end the worst financial crisis in seven decades by buying as much as $300 billion of long-term Treasuries and more than doubling mortgage-debt purchases to $1.45 trillion. The moves are intended to pare home loan and other interest rates.

Bernanke said regulators need to determine whether current capital rules and accounting standards magnify swings in financial markets. They also should ensure executive compensation practices don’t prompt undue risk-taking, he said.

Speaking to a group of executives at small U.S. banks, he reiterated that a $1 trillion Fed program to unfreeze markets for securities backed by loans may expand to include mortgage- backed debt.

Bernanke acknowledged “frustration” among audience members over the credit crisis precipitated by large financial companies, saying that addressing the issue of “too-big-to- fail” firms is “extremely serious.”

Audience Applause

He paused during audience applause at several points in his speech, including after saying the largest banks should be subject to “especially close supervisory oversight and be held to the highest prudential standards.”

Regulators must ensure that management compensation at such firms doesn’t “create perverse incentives that can ultimately jeopardize” a firm’s health, he said.

“Widening credit spreads, more-restrictive lending standards and credit market dysfunction are working against the monetary easing and leading to tighter financial conditions,” Bernanke told the Independent Community Bankers of America’s national convention fast payday loans.

The comments were Bernanke’s first since the Fed decision two days ago to increase debt purchases. He said that the Fed “continuously assesses the effectiveness of its credit-related tools” and so far officials “have generally been encouraged by the market responses,” including a drop in mortgage rates.

Yields Tumbled

Yields on Fannie Mae and Freddie Mac mortgage-backed securities tumbled yesterday to their lowest levels in two months, suggesting the Fed’s plan to expand its asset purchases may soon push rates on new loans to record lows. Still, the difference between the yields and those on 10-year Treasuries widened to the highest since March 9.

Spreads on credit-card-backed debt have narrowed since hitting record highs in December, widening in recent weeks. The spread on AAA credit-card-backed securities increased to about 320 basis points more than the one-month London interbank offered rate, or Libor, from 250 basis points in mid-February, according to JPMorgan Chase & Co. data on March 12.

“Policy makers should review existing rules and accounting standards to determine whether these rules and standards could be modified to reduce their potential to have unduly procyclical effects,” Bernanke said.

Answering questions after the speech, Bernanke said the Fed’s emergency-lending programs and asset purchases will wind down as the economy recovers. Some, such as the commercial paper funding program, are already shrinking, he said.

“We want to be sure that when the time comes we can move out,” Bernanke said.

Small banks will probably still face a “regulatory burden” after Congress passes new financial legislation. Still, “I do think you can look forward to a situation where your competitive disadvantage becomes smaller,” compared with large banks, he said.

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European Union leaders agreed to double a credit line for countries in financial distress, trying to shore up ex-communist economies hit by the worst slump in 60 years.

The EU will increase to 50 billion euros ($68 billion) a limit on emergency lending to 11 EU countries not using the euro, eight of which are in eastern Europe. Hungary has already drawn 6.5 billion euros and Latvia 3.1 billion euros. Leaders also agreed to boost funds to the International Monetary Fund by 75 billion euros

“We have matched our words with action,” European Commission President Jose Barroso told reporters after an EU summit in Brussels today. “Our message is one of confidence and solidarity.”

The offer by the richer western European countries calmed tensions triggered by a March 1 veto of a broad-based bailout for eastern Europe, which sent stock markets in the region to the lowest level in 5 1/2 years.

After spearheading opposition to an eastern rescue fund at the March 1 summit, German Chancellor Angela Merkel consented to lift the aid limit today as the deepening recession hammers eastern European finances.

The borrowing facility wouldn’t be available to countries using the euro such as Spain, which is reeling from a downgrade in its credit rating by Standard & Poor’s in January.

Romania last week became the third eastern country to request aid, with Prime Minister Emil Boc saying yesterday that the country may need 20 billion euros from the EU and IMF.

Credit Line

The credit line authorizes the European Commission to sell bonds to finance loans to EU countries outside the euro region that run into balance-of-payments difficulties. It was raised to 25 billion euros from 12 billion euros in December.

The leaders today left final decisions on implementing the increased aid ceiling to the bloc’s finance ministers.

The pledges came as EU leaders defended efforts to counter the economic crisis, rejecting criticism that they haven’t done enough. The economy of the 16-nation euro region will shrink 3.2 percent in 2009, the IMF said yesterday, worse than the 2 percent slump it forecast in January.

Goldman Sachs Group Inc us fast cash. yesterday urged bolder European action, saying governments should inject 1 trillion euros into the economy this year and next and accelerate their cleansing of banks’ toxic assets.

Along with the bloc’s increased in funding for the IMF, leaders announced spending of 5 billion euros on energy and telecommunications projects by the end of 2010 as part of a stimulus plan to combat the recession.

Eastern Loans

Strained by loans of $55 billion in the past six months to countries such as Hungary, Ukraine and Pakistan, the IMF had lobbied for a doubling of its pool of bailout funds to $500 billion.

The IMF contributions will come from individual EU governments and the size remains to be decided, possibly by the time Group of 20 leaders meet in London on April 2.

Merkel cleared the way for a separate deal on a 5 billion- euro package of energy and telecommunications projects, the final part of an EU stimulus plan to combat the recession.

Germany backed the EU-funded package as long as “substantial parts” of the projects get off the ground by the money is spent by the end of 2010, Merkel said.

The subsidies will go for energy and telecommunications networks, potentially including the Nabucco pipeline project to import natural gas from the Caspian Sea.

Deficit Balloons

The sum is part of the 30 billion euros from the EU’s central budgets that will be used to fight the recession. Steps by national governments will bring total EU spending to more than 400 billion euros.

The emergency spending will balloon the EU-wide deficit to 4.4 percent of GDP in 2009 from 2 percent last year, the EU forecasts. Under German and Dutch pressure, the leaders pledged to refocus on fiscal rectitude once the economy gets back on track.

Governments should return “to positions consistent with sustainable public finances as soon as possible,” according to a draft communiqué to be issued later today. The text set no deadline for erasing deficits.

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NEW YORK–IBM Corp. is in talks to buy Sun Microsystems Inc. for at least $6.5 billion in cash, a deal that would shake up Silicon Valley and the corporate computing market, The Associated Press has learned.

A person familiar with the situation told the AP of the negotiations, confirming an earlier report Wednesday in The Wall Street Journal. This person spoke on condition of anonymity because the talks are ongoing.

The Journal cited unnamed people familiar with the matter and said the deal could occur as early as this week.

The report sent Sun shares soaring $3.05, up 61 per cent, to $8.02 in morning trading. IBM shares were down $2.46, or 2.7 per cent, to $90.45.

Armonk, N.Y.-based IBM and Santa Clara, Calif.-based Sun both make computer systems for corporate customers. A purchase of Sun could help IBM in the finance and telecommunications markets as it tries to expand its role in digitizing key pieces of infrastructure, from electric utilities to water supplies.

While some of their technologies and customers overlap, IBM and Sun have been heading in different directions for most of the past decade payday loan.

Sun, a darling of the dot-com era, has been struggling since the tech bust of 2001 to find its place. The company has cut thousands of jobs and tried to refocus on open-source software besides the proprietary systems it built much of its wealth on.

IBM, after an enormous restructuring in the 1990s, has proven one of the technology industry's most reliable earners. It has gobbled up dozens of companies in recent years. But a $6.5 billion deal would be its biggest to date.

It would represent a big premium for Sun, which closed trading Tuesday with a market capitalization of less than $4 billion. However, Sun's last quarterly report shows it with more than $2.6 billion in cash and securities that could be readily converted to cash.

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German investor confidence unexpectedly rose to the highest level in almost two years in March after the European Central Bank reduced borrowing costs to a record low.

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations increased to minus 3.5 from minus 5.8 in February. That’s the highest reading since July 2007. Economists expected a drop to minus 8, according to the median of 39 forecasts in a Bloomberg News survey.

The ECB on March 5 lowered its key rate by 50 basis points to 1.5 percent to stem the worst economic slump in 60 years. In Germany, Chancellor Angela Merkel’s coalition has agreed to spend about 80 billion euros ($104 billion) to stimulate economic growth. Germany’s benchmark DAX share index has gained 8 percent this month, paring its decline this year to 17 percent. The euro rose almost half a cent to $1.3021 on ZEW’s report.

“Expectations are getting ahead of themselves,” said Kenneth Broux, an economist at Lloyds Banking Group Plc in London. “Investors are looking at equity markets to provide a slightly more confident outlook, but in the economy there’s no sign that we’re near the bottom.”

ZEW’s gauge of current conditions fell to minus 89.4 from minus 86.2 in February. That’s the lowest since September 2003.

Deeper Recession

There are signs Germany’s recession is deepening. Industrial output dropped 7.5 percent in January from December, the biggest decline since data for a reunified Germany began in 1991, and factory orders plunged 38 percent from a year earlier as export demand slumped. Unemployment rose in February for a fourth straight month, pushing the jobless rate to 7.9 percent, while business confidence dropped to a 26-year low.

German gross domestic product may drop 3.7 percent this year instead of the 2.7 percent projected in December, the Kiel-based IfW institute said on March 12. The ECB expects the economy of the 16 euro nations to shrink about 2.7 percent this year and to stagnate in 2010 freecreditreport.

Volkswagen AG, Europe’s largest carmaker, on March 12 predicted a first-quarter loss and lower profit and revenue this year. Chief Executive Officer Martin Winterkorn said it will be “one of the most difficult years” in the company’s history.

BASF SE, the world’s largest chemical company based in Ludwigshafen, said last month it will accelerate plant closures and eliminate at least 1,500 jobs.

No Pickup Yet

“Demand for chemical products has not picked up since the start of 2009,” BASF CEO Juergen Hambrecht said. “A reversal of the trend is not yet in sight.”

“Things will get worse before they get better,” said Carsten Brzeski, an economist at ING Group in Brussels. Still, “the pace of contraction should slow down significantly in the summer months, when most measures of the fiscal package and the aggressive monetary easing find their way into the economy.”

Merkel’s government has crafted two economic packages since late last year, including a 100 billion-euro fund to boost company liquidity and 82 billion euros in stimulus measures, such as investment in infrastructure and an incentive to scrap old cars to buy new, energy-efficient vehicles.

The ECB has cut its key rate by 2.75 percentage points since early October, the most aggressive easing since the bank took control of monetary policy a decade ago. ECB President Jean- Claude Trichet indicated earlier this month that policy makers may lower borrowing costs further.

A drop in energy costs is also boosting purchasing power and may bolster company and consumer spending.

“The bottom of the recession is likely to be reached this summer,” ZEW President Wolfgang Franz said in a statement today. “The economic situation is extremely bad, but we see the first rays of light.”

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WASHINGTON – Leaders of the White House economic team bellowed about bonuses at bailedout insurance giant AIG Inc. and pledged to stop such payments in the future.

From one Sunday talk show to the next, they tore into the contracts that American International Group asserted had to be honoured, to the tune of about $165 million (U.S.) and payable to executives by yesterday – part of a larger total payout reportedly valued at $450 million – even as the company has benefited from more than $170 billion in a federal rescue.

AIG has agreed to requests from the administration of President Barack Obama to restrain future payments. Treasury Secretary Timothy Geithner pressed the president’s case with AIG’s chair, Edward Liddy, last week.

"He stepped in and berated them, got them to reduce the bonuses following every legal means he has to do this," said Austan Goolsbee, staff director of the president’s Economic Recovery Advisory Board.

"I don’t know why they would follow a policy that’s really not sensible, is obviously going to ignite the ire of millions of people, and we’ve done exactly what we can do to prevent this kind of thing from happening again," Goolsbee said.

Added Lawrence Summers, Obama’s top economic adviser: "The easy thing would be to just say off with their heads, violate the contracts. But you have to think about the consequences of breaking contracts for the overall system of law, for the overall financial system payday loans."

AIG reported this month that it had lost $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.

In a letter to Geithner dated Saturday, Liddy said outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

Liddy said in his letter that "quite frankly, AIG’s hands are tied," although he said that in light of the company’s current situation he found it "distasteful and difficult" to recommend the payments.

Liddy said the company had entered into the bonus agreements in early 2008 before AIG got into severe financial straits and was forced to obtain a government bailout last fall. The bulk of the payments cover AIG Financial Products, the unit that sold credit default swaps, the risky contracts that caused massive losses for the insurer.

Financial company bonuses have come under harsh scrutiny after the U.S. began loaning them billions of dollars to keep the institutions afloat. AIG is the largest recipient of aid in the current financial crisis.

Goolsbee acknowledged the AIG example could make it harder to sell the administration’s financial plan to Congress. "Yes, you worry about that backlash. But you’re also angry that this would happen at an institution that has been so troubled and you’re trying to save.”

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The Canadian Auto Workers union would likely prefer to deal next with Ford instead of Chrysler as it attempts to negotiate a deal for concessions that matches cuts at General Motors.

Ford and Chrysler have already said the concessions in the GM-CAW deal are inadequate.

CAW negotiators yesterday held high-level talks with both companies in an attempt to break the impasse between the ailing automakers, which are demanding more concessions, and the union, which insists Ford and Chrysler must follow the GM "pattern" contract.

CAW president Ken Lewenza said talks recessed for the weekend and the union will likely select one of the companies on Monday in efforts to reach a deal.

Agreement on significant cuts in labour costs is critical for the three money-losing companies if they want to qualify for billions of dollars in financial assistance from the federal and Ontario governments, and stay alive.

Lewenza said there is more pressure for a deal at Ford Motor Co. of Canada Ltd. now because the company’s U.S. workers have ratified a deal with cost savings that puts their Canadian counterparts at a disadvantage.

"We held exploratory talks with Ford that were constructive and we have been also meeting with Chrysler," he said yesterday.

"The deal with the UAW (United Auto Workers) and Ford in the U.S. is putting a little more pressure on getting the job done. The disadvantage of not doing so is obvious."

Lewenza doesn’t think Ford and Chrysler could achieve any significant savings through workplace changes in local plant deals that would be beyond the so-called "master agreement" with GM.

The union, which represents about 9,000 workers at operations in Oakville, Windsor and St. Thomas, has said it will retain its competitive edge over labour costs at Ford in the U.S. so they don’t jeopardize company investments here.

Ford is seeking a standby line of credit of about $2 billion from Ottawa and Queen’s Park. Chrysler is requesting nearly $3 billion.

CAW leaders have historically looked at Ford as more co-operative in reaching contracts under difficult circumstances easy payday loans. But one CAW insider said yesterday the union was running into problems with both companies.

The comment came a day after Joe Hinrichs, group vice-president for global manufacturing at parent Ford Motor Co., said the GM deal would not provide sufficient savings to compete against U.S. rivals.

A day earlier, Chrysler president Tom LaSorda described the GM concessions as "unacceptable" for his company. Chrysler would need more cuts, plus the resolution of a long tax dispute worth hundreds of millions of dollars, otherwise plants here would be at risk, he said.

The GM worker concessions, which are conditional on the company getting loans from the governments, call for wage and pension freezes until 2012, plus higher personal costs for benefits.

The union says the GM concessions will reduce labour costs, including pension obligations, by "several dollars" an hour from the current level of almost $70.

CAW economist Jim Stanford said the latest GM cuts will mean "even more substantial savings" than a deal last year, in which workers accepted changes that would cut labour costs by about $400 million until 2011. Lewenza said the current talks are unusual because there is no strike deadline and workers have a contract for more than two years.

As well, it is unusual for talks to be linked to negotiations between the automakers and the government.

Industry watcher Dennis DesRosiers expressed concern this week that GM did not gain more concessions from production workers who earn about $34 an hour and receive significant benefits.

He said the deal could "blow up" in GM’s face because of public sentiment against taxpayers’ aid. At the same time, he said lack of aid for the automakers would cause thousands of other job losses and "untold damage" to the economy.

Federal Industry Minister Tony Clement said he didn’t want to pass judgment on the GM concessions, but added it was one of many issues that needed resolution before Ottawa invested taxpayers’ money.

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AIG’s recent claims that its collapse could threaten not just banking counterparties but also decimate the broader U.S. life insurance industry are alarming but also largely unproven.

The contention was made in a presentation to U.S. regulators in late February on the eve of the third iteration of the U.S. government’s rescue of American International Group Inc — the globe insurer whose collapse has cost taxpayers up to $180 billion.

But while the report may have strengthened AIG’s plea for the government to put another $30 billion at the insurer’s disposal, it may have been based more on alarmist guesswork than a realistic risk scenario.

“Will AIG take down the industry? Categorically no, and to suggest that is irresponsible and inaccurate,” said Citigroup analyst Colin Devine. “The (life insurance) industry is facing some tough times but that is regardless of what happens at AIG.”

AIG, until recently the world’s largest insurer, was rescued by the U.S. government last September as losses on toxic mortgage bets taken by a financial products unit nearly drove the holding company into bankruptcy.

At the time, the U.S. Treasury and Federal Reserve deemed it necessary to save AIG to protect millions of banks and others that had bought guarantees on debt from AIG Financial Products, fearing losses that would send shocks through already sick financial markets.

The U.S. government has continued to fund the insurer since, mindful of the turmoil created by Lehman Brothers’ collapse two days before the initial AIG rescue.

AIG warned in the presentation to regulators that an AIG collapse could have a “cascading impact on a number of U.S. life insurers already weakened by credit losses paydayloans.”

To make matters worse, state insurance guarantee associations, set up about 40 years ago to ensure policyholder obligations are met, would “be quickly dissipated, leading to even greater runs on the insurance industry,” AIG told officials, as it was seeking greater federal funding.

But AIG’s troubles did not stem from any of its insurance units — which operate in about 140 countries around the world — and even a bankruptcy would not necessarily lead to the closures of any subsidiaries.

Joe Belth, professor emeritus of Indiana University and editor of Insurance Forum newsletter, said it was misleading for AIG to draw any parallels between troubles at the parent company and insurance businesses.

“I don’t like to even think of AIG the holding company as an insurance company because that blurs an important distinction,” he said. Belth said there were numerous examples of insurance holding companies collapsing while insurance units continued to operate, pointing to Conseco’s failure in 2002 as an example.

To be sure, the failure of a company of AIG’s size would be unprecedented, and likely made much worse by the fact that its business included investment and financial products arms, raising the prospect of broader ramifications than in previous insurance company failures.

AIG, in the presentation, said its assessment of “potential consequences (from its own failure) are inherently judgmental and, to an extent, speculative.”

The company had no further comment. 

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