Morgan Keegan settles civil fraud charges
WASHINGTON (AP) -- Investment firm Morgan Keegan & Co. is paying $200 million to settle civil fraud charges that it overstated the value of mortgage investments just as the housing market was collapsing in 2007 and lured buyers of its funds with false sales materials.
Morgan Keegan's parent company, Regions Financial Corp., also announced Wednesday that it hired investment bank Goldman Sachs & Co. to explore a sale of the investment firm.
Federal and state regulators said the actions of Morgan Keegan, based in Memphis, Tenn., caused investors in five funds to lose an estimated $1.5 billion. Morgan Keegan failed to use "reasonable" procedures to calculate the value of securities in the funds backed by high-risk mortgages, the regulators said. The firm misrepresented the value of the funds and the risk involved to entice people to invest, they said.
Half of the money will go toward compensating investors.
Kinex raises $5 million
Kinex Pharmaceuticals has raised $5 million by selling stock in the Buffalo drug development company to wealthy investors.
Kinex, which is located in the New York State Center of Excellence in Bioinformatics and Life Sciences on the Buffalo Niagara Medical Campus, is developing drugs that could be used to treat various types of cancer.
One of the company's drugs has completed a Phase 1 dosing study to assess its safety and effectiveness and is being evaluated in a Phase 2 study with patients suffering from prostate cancer.
The company is developing another drug targeted toward patients with brain cancer, with hopes of beginning a Phase 1 clinical study early next year.
Right to appeal claim denial
WASHINGTON (AP) -- The Obama administration says most Americans will soon have the right to appeal to a third party referee when their health insurer denies a claim for a medical service.
The rules released Wednesday carry out provisions of President Obama's health care law. Insurers generally give customers a couple of chances to appeal internally, but access to outside review varies.
Consumer groups say it's a move in the right direction, just not far enough. For example, advocates wanted 24-hour turnaround in cases involving urgent care, and the rules allow up to 72 hours.
The rules take effect in January, except for "grandfathered" plans. Only a small percentage of denials are ever challenged.
Sweetening the deal
TORONTO (AP) -- TMX Group, owner of the Toronto exchange, said Wednesday that it will pay a special cash dividend of CA$4 (US$4.11) per share when it closes its merger with the London Stock Exchange Group, sweetening the deal for shareholders of the Canadian stock market operator.
TMX also said the combined company will also pay a regular dividend after the merger that is at least equivalent to the current quarterly rate of 40 Canadian cents per TMX share.
The moves are aimed at enticing shareholders to back the friendly merger, which has come under fire by some critics who argue it would put Canadian stock exchanges under the control of a foreign company.
Hotel opening delayed
The opening date for a hotel in Cheektowaga across from the Buffalo Niagara International Airport has been pushed back.
The five-story Courtyard by Marriott Buffalo-Airport is now scheduled to open in September, instead of late June as initially planned. A water main break at the property in late May forced construction workers to redo a number of the rooms. "Otherwise we would have been right on schedule," said Krista Glenn, marketing manager for Buffalo Lodging Associates, which will own and operate the hotel.
A dollar estimate of the damage was not available. Buffalo Lodging Associates is a Massachusetts-based subsidiary of Benderson Development.