SEC INVESTIGATES GRASSO: The Securities and Exchange Commission is examining whether former New York Stock Exchange chairman Dick Grasso engaged in "influence trading" during his eight years leading the exchange, the Wall Street Journal reported Friday, citing unidentified people close to the situation. The SEC is trying to determine whether Grasso urged the NYSE's specialists to buy additional shares of American International Group Inc. in an attempt to shore up the company's stock price, AIG chairman Maurice "Hank" Greenberg was a member of the NYSE board from 1996 to 2002 and was part of its compensation committee.
HALL KINION STOCK TUMBLES: A day after Tampa staffing company Kforce Inc. said its $65-million acquisition of Hall Kinion & Associates was in doubt, Hall Kinion's stock fell 40 percent, or $1.92 per share, to close Friday at $2.92. Kforce said in a news release Thursday evening that unspecified conditions might have a "material adverse effect" on Hall Kinion of Novato, Calif. Hall Kinion denied late Thursday "that any conditions exist that would permit Kforce to terminate the merger." An analyst with Robert W. Baird & Co. said a failed merger could cost Kforce $3.5-million, not including a possible $2-million termination fee. Kforce's stock fell 32 cents Friday to close at $9.75 a share.
MORGAN STANLEY BUILDS WALLS: Morgan Stanley announced Friday it will use glass walls to separate traders and sales personnel from analysts in its fixed-income division globally to avoid conflicts of interest. The company also will eliminate the link between the profit or loss generated by fixed-income traders and the salaries of debt analysts, said Anna Lenaghan, a spokeswoman in London for Morgan Stanley. Morgan Stanley and Citigroup Inc. said last July they would prohibit research analysts from helping to woo investment-banking clients, becoming the first Wall Street firms to apply new conflict of interest rules.
NOVARTIS MAY BE WHITE KNIGHT: Novartis AG weighed into the takeover struggle between France's two main drug companies on Friday, saying it was considering a white knight bid to thwart Sanofi-Synthelabo's hostile offer of $58.5-billion in stock and cash for Aventis. After weeks of rumors about a possible bid by Novartis, the Swiss pharmaceutical company confirmed it was "exploring the feasibility of a combination with Aventis." The statement made no direct reference to the hostile bid Sanofi launched Jan. 26 for its larger rival.
SPEARS DEVELOPING FRAGRANCE: Pop star Britney Spears has signed a deal with Elizabeth Arden Inc. to develop and market her own line of perfumes and cosmetics, the company said Friday. Spears' first product will be a fragrance, which will be launched in the fall at department stores, the company said, adding that Spears is "personally involved" with all aspects of developing the product. Thursday, Elizabeth Arden posted a loss of $11.1-million for the fourth quarter due to restructuring and debt-reduction costs. But sales for the quarter surged 26 percent, helped by new products and a weak dollar.
