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Letter to the editor

Fed expected to drop interest rates today

By Times Wires
Published January 30, 2008

WASHINGTON

Individuals and businesses are likely to see their borrowing costs drop further as the Federal Reserve weighs another interest-rate reduction to bolster a sagging economy. Many economists believe the Fed will lower its key rate, now at 3.5 percent, by as much as one-half percentage point to 3 percent when policymakers wrap up their meeting today.

FBI launches subprime inquiry

The Federal Bureau of Investigation has opened criminal inquiries into 14 companies as part of a wide-ranging investigation of the subprime mortgage crisis, focusing on accounting fraud, securitization of loans and insider trading, among other areas, the online version of the Wall Street Journal reported late Tuesday. The FBI did not identify companies under investigation but said the bureau is looking into allegations of fraud in various stages of mortgage securitization, from those who bundled the loans to the banks that ended up holding them. Neil Power, chief of the FBI's economic crimes unit in Washington, said the bureau also was going over books of financial firms that have been forced into bankruptcy as a result of the mortgage crisis to look for instances of insider trading or other wrongdoing.

TALLAHASSEE

Florida to get $3M in bid-rigging case

Florida reached a settlement Tuesday with an insurance carrier involved in a "pay-to-play" tactic used by Marsh & McLennan and other insurance brokers. American International Group Inc. will pay $12.5-million to Florida, eight other states and the District of Columbia to resolve allegations that some of its insurance subsidiaries engaged in bid-rigging and price-fixing in the commercial insurance market. Florida's share is about $3-million. AIG and several of its subsidiaries allegedly conspired with Marsh and other brokers by submitting fake bids to create the illusion of competitive bidding in the excess casualty commercial insurance market. Investigators determined that despite the appearance of a fair bidding process, the broker had already decided which insurer would receive a particular policyholder's business. As part of the scheme, AIG paid the brokers "contingent commissions" that were not disclosed to policyholders and in return received other lucrative business. Florida's portion of the settlement will fund a reimbursement pool for affected policyholders and repay the state's investigative costs.

TAMPA

Wrestling exec on switch firm's board

Tampa-based Switch and Data, which offers expertise and space for telecommunications and Internet service providers to house their switching equipment, said it has appointed Michael Sileck to its board of directors. Sileck is the chief operating officer of World Wrestling Entertainment Inc.

[Last modified January 29, 2008, 23:50:26]