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Nader Run Makes Bush Supporters Delusional
Ralph Nader Announces Run for Presidency
By SAM HANANEL, Associated Press Writer
WASHINGTON - Consumer advocate Ralph Nader announced Sunday he will run again for the presidency, declaring that Washington has become "corporate occupied territory" and arguing there is too little difference between the Democratic and Republican parties.
"This country has more problems and injustices than it deserves," Nader said, bemoaning a "democracy gap." Nader, who turns 70 this week, said he wants to "challenge this two-party duopoly."
"There's too much power and wealth in too few hands," he said on NBC's "Meet the Press."
"Washington is now corporate occupied territory," Nader said. "There is now a for-sale sign on most agencies and departments. ... Basically, it's question of both parties flunking."
He decided against running under the banner of the Green Party. Nader's candidacy four years ago has been blamed by many Democrats for costing Al Gore (news - web sites) the election against Bush.
Democratic National Committee (news - web sites) chairman Terry McAuliffe, who has personally urged Nader not to run, said Nader would not have the same impact this time.
"I can tell you Green Party members are all coming into the (Democratic) party saying they want to help us because they know the stakes are so big this time," he said on CBS's "Face the Nation."
"It will be much more difficult for him," McAuliffe said.
Republicans largely have declined to comment on any benefits a Nader candidacy would have for Bush.
"If Ralph Nader runs, President Bush is going to be re-elected and if Ralph Nader doesn't run, President Bush is going to be re-elected," Republican National Committee chairman Ed Gillespie said on CBS"s "Face the Nation."
At a Sunday gathering of governors in Washington, former RNC chairman Haley Barbour, now governor of Mississippi said: "It will make less difference than the Democrats fear, but I know they're very nervous about it."
Asked if he was getting into the race to be a spoiler, Nader replied: "A spoiler is a contemptuous term, as if anybody who dares to challenge the two party system .. is a spoiler, and we've got to fight that.."
"Let me say, this is going to be difficult," said Nader, who planned a round of interviews after his announcement. But he also said, "This is not a democracy that can be controlled by two parties in the grip of corporate interests."
Third party candidacies have been a greater part of presidential politics in recent years; businessman Ross Perot (news - web sites) twice ran for president, winning 19 percent of the vote in 1992.
"It's his personal vanity because he has no movement. Nobody's backing him," New Mexico Democratic Gov. Bill Richardson said.
As the Green Party's nominee in 2000, Nader appeared on the ballot in 43 states and Washington, D.C., garnering only 2.7 percent of the vote. But in Florida and New Hampshire, Bush won such narrow victories that had Gore received the bulk of Nader's votes in those states, he would have won the general election.
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Associated Press writer Robert Tanner contributed to this report.
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On the Net:
Nader 2004 Presidential Exploratory Committee: http://www.naderexplore04.org
In some places they do well, in other places they do not, yet ultimately it will all evolve to higher ground. It seems always too little too late.
U.S. Pressing for High-Tech Spy Tools
By MICHAEL J. SNIFFEN, Associated Press Writer
WASHINGTON - Despite an outcry over privacy implications, the government is pressing ahead with research to create ultrapowerful tools to mine millions of public and private records for information about terrorists.
Related Links
• ARDA - official site
• High-Tech Spy Agency Has Low Profile (AP)
Congress eliminated a Pentagon (news - web sites) office that had been developing this terrorist-tracking technology because of fears it might ensnare innocent Americans.
Still, some projects from retired Adm. John Poindexter's Total Information Awareness effort were transferred to U.S. intelligence offices, congressional, federal and research officials told The Associated Press.
In addition, Congress left undisturbed a separate but similar $64 million research program run by a little-known office called the Advanced Research and Development Activity, or ARDA, that has used some of the same researchers as Poindexter's program.
"The whole congressional action looks like a shell game," said Steve Aftergood of the Federation of American Scientists, which tracks work by U.S. intelligence agencies. "There may be enough of a difference for them to claim TIA was terminated while for all practical purposes the identical work is continuing."
Poindexter aimed to predict terrorist attacks by identifying telltale patterns of activity in arrests, passport applications, visas, work permits, driver's licenses, car rentals and airline ticket buys as well as credit transactions and education, medical and housing records.
The research created a political uproar because such reviews of millions of transactions could put innocent Americans under suspicion. One of Poindexter's own researchers, David D. Jensen at the University of Massachusetts, acknowledged that "high numbers of false positives can result."
Disturbed by the privacy implications, Congress last fall closed Poindexter's office, part of the Defense Advanced Research Projects Agency, and barred the agency from continuing most of his research. Poindexter quit the government and complained that his work had been misunderstood.
The work, however, did not die.
In killing Poindexter's office, Congress quietly agreed to continue paying to develop highly specialized software to gather foreign intelligence on terrorists.
In a classified section summarized publicly, Congress added money for this software research to the "National Foreign Intelligence Program," without identifying openly which intelligence agency would do the work.
It said, for the time being, products of this research could only be used overseas or against non-U.S. citizens in this country, not against Americans on U.S. soil.
Congressional officials would not say which Poindexter programs were killed and which were transferred. People with direct knowledge of the contracts told the AP that the surviving programs included some of 18 data-mining projects known in Poindexter's research as Evidence Extraction and Link Discovery.
Poindexter's office described that research as "technology not only for `connecting the dots' that enable the U.S. to predict and pre-empt attacks but also for deciding which dots to connect." It was among the most contentious research programs.
Ted Senator, who managed that research for Poindexter, told government contractors that mining data to identify terrorists "is much harder than simply finding needles in a haystack."
"Our task is akin to finding dangerous groups of needles hidden in stacks of needle pieces," he said. "We must track all the needle pieces all of the time."
Among Senator's 18 projects, the work by researcher Jensen shows how flexible such powerful software can be. Jensen used two online databases, the Physics Preprint Archive and the Internet Movie Database, to develop tools that would identify authoritative physics authors and would predict whether a movie would gross more than $2 million its opening weekend.
Jensen said in an interview that Poindexter's staff liked his research because the data involved "people and organizations and events ... like the data in counterterrorism."
At the University of Southern California, professor Craig Knoblauch said he developed software that automatically extracted information from travel Web sites and telephone books and tracked changes over time.
Privacy advocates feared that if such powerful tools were developed without limits from Congress, government agents could use them on any database.
Sen. Ron Wyden, D-Ore., who fought to restrict Poindexter's office, is trying to force the executive branch to tell Congress about all its data-mining projects. He recently pleaded with a Pentagon advisory panel to propose rules on reviewing data that Congress could turn into laws.
ARDA, the research and development office, sponsors corporate and university research on information technology for U.S. intelligence agencies. It is developing computer software that can extract information from databases as well as text, voices, other audio, video, graphs, images, maps, equations and chemical formulas. It calls its effort "Novel Intelligence from Massive Data."
The office said it has given researchers no government or private data and obeys privacy laws.
The project is part of its effort "to help the nation avoid strategic surprise ... events critical to national security ... such as those of Sept. 11, 2001," the office said.
Poindexter had envisioned software that could quickly analyze "multiple petabytes" of data. The Library of Congress (news - web sites) has space for 18 million books, and one petabyte of data would fill it more than 50 times. One petabyte could hold 40 pages of text for each of the world's more than 6.2 billion people.
ARDA said its software would have to deal with "typically a petabyte or more" of data. It noted that some intelligence data sources "grow at the rate of four petabytes per month." Experts said those probably are files with satellite surveillance images and electronic eavesdropping results.
The Poindexter and ARDA projects are vastly more powerful than other data-mining projects such as the Homeland Security Department's CAPPS II program to classify air travelers or the six-state, Matrix anti-crime system financed by the Justice Department (news - web sites).
In September 2002, ARDA awarded $64 million in contracts covering 3 1/2 years. The contracts went to more than a dozen companies and university researchers, including at least six who also had worked on Poindexter's program.
Congress threw these researchers into turmoil. Doug Lenat, the president of Cycorp Corp. in Austin, Texas, will not discuss his work but said he had an "enormous seven-figure deficit in our budget" because Congress shut down Poindexter's office.
Like many critics, James Dempsey of the Center for Democracy and Technology sees a role for properly regulated data-mining in evaluating the vast, underanalyzed data the government already collects.
Expansions of data mining, however, increase "the risk of an innocent person being in the wrong place at the wrong time, of having rented the wrong apartment ... or having a name similar to the name of some bad guy," he said.
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On the Net:
DARPA: http://www.darpa.mil
ARDA: http://www.ic-arda.org
Gold Banc Completes Sale of 8 Rural Kansas Locations; Announces Agreement to Sell 3 Rural Oklahoma Locations Business Editors LEAWOOD, Kan.--(BUSINESS WIRE)--Feb. 17, 2004--Gold Banc (NASDAQ:GLDB) has completed the previously announced sale of seven rural banking locations in Northeast Kansas (Marysville, Seneca, Sabetha, Clay Center, Linn, Concordia and Washington) and a rural banking location in southwest Kansas (Elkhart.) United Bank & Trust based in Marysville, Kansas, is the purchaser of the seven Northeast Kansas locations and First National of Tribune based in Tribune, Kansas is the purchaser of the southwest Kansas location (Elkhart.) In addition, Gold Banc has entered into a contract to sell three of its locations in rural Oklahoma (Weatherford, Geary and Cordell) to Bank of Western Oklahoma of Elk City. This transaction is expected to be completed early in the second quarter of this year. The purchase price was not disclosed.
"The completion of the sale of the eight rural locations is another positive step toward the achievement of our long-term strategic goal of focusing on our high-growth metropolitan markets," explained Mick Aslin, President and Chief Executive Officer of Gold Banc. "The sale of these locations brings Gold Banc to a watershed in its plan to focus on our high-growth metropolitan markets. We will continue to own, operate and grow the 40 Gold Banks in metropolitan Kansas City; Pittsburg, Kansas; St. Joseph, Missouri; Oklahoma and Florida. The capital generated from these sales will be invested in our growth markets." "Maintaining a high level of customer service is important to Gold Banc. We believe that all of the purchasers, United Bank & Trust, the First National Bank of Tribune and Bank of Western Oklahoma each will continue to provide our former customers with the level of service they have experienced from Gold Bank. We believe that the purchasers are committed to our relationship-oriented style of banking and are deeply involved in the communities they each serve. We look forward to working with them to provide a seamless transition for our customers," Aslin concluded.
The combined deposits of the eight branches involved in the completed transactions are approximately $347.5 million, with total loans of approximately $197.8 million. The combined deposits of the 3 Oklahoma locations in the currently announced agreement are $65.3 million with combined loans of approximately $26.0 million.
In implementing its strategy of focusing on high-growth metropolitan markets and with the completion of the sales announced today, Gold Banc has sold 19 rural banks in Kansas and Oklahoma.
Gold Banc Corporation, Inc. is a bank holding company headquartered in Leawood, Kansas. Gold Banc provides banking and wealth management services through 40 locations in Kansas, Missouri, Oklahoma and Florida and is traded on the NASDAQ under the symbol GLDB.
This release contains information and "forward-looking statements" which relate to matters that are not historical facts and which are usually preceded by the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "target" and similar expressions.
These forward-looking statements are subject to significant risks, assumptions and uncertainties, including, but not limited to, the ability to complete the merger and those described in the periodic reports we file under the Securities Exchange Act of 1934 under the captions "Forward-Looking Statements" and "Factors That May Affect Future Results of Operations, Financial Condition or Business." Because of these and other uncertainties, our actual results may be materially different from that indicated by these forward-looking statements. You should not place undue reliance on any forward-looking statements. We will not update these forward-looking statements, even though our situation may change in the future, unless we are obligated to do so under the federal securities laws.
AXA Financial Will Not Increase Price for MONY Group Current Level Of Appraisal Demands Will Not Deter or Delay Closing NEW YORK, Feb. 17 /PRNewswire-FirstCall/ -- To put an end to speculation regarding various aspects of its pending acquisition of The MONY Group Inc.
(NYSE: MNY), AXA Financial's President and Chief Executive Officer, Christopher "Kip" Condron today stated: "As we have said from the time that we announced this transaction, we believe our offer to shareholders of $31 per share is full and fair. We will not increase it. Moreover, we remain optimistic that MONY shareholders will approve the acquisition.
"In addition, we are committed to closing this acquisition immediately following the receipt of all regulatory approvals and the satisfaction of other closing conditions and notwithstanding the current level of appraisal rights demands. In that regard, we believe that the speculation among a number of analysts - that if the deal is not approved, the price of MONY's shares could well fall below $31 - should underscore to MONY shareholders that they would not be well served by opposing the deal or by pursuing an appraisal proceeding in the hopes of receiving a higher valuation." About AXA Financial AXA Financial, Inc., with approximately $472.2 billion in assets under management as of September 30, 2003, is one of the world's premier financial services organizations through its strong brands: The Equitable Life Assurance Society of the U.S., AXA Advisors, LLC, Alliance Capital Management, L.P., Sanford C. Bernstein & Co., and its wholesale distribution company, AXA Distributors, LLC. AXA Financial is a member of the global AXA Group, a worldwide leader in financial protection and wealth management.
Important Legal Information The MONY Group Inc. ("MONY") filed a definitive proxy statement with the Securities and Exchange Commission (the "SEC") on January 8, 2004 regarding the proposed acquisition of MONY by AXA Financial. Before making any voting or investment decisions, investors and security holders of MONY are urged to read the proxy statement regarding the acquisition carefully in its entirety, because it contains important information about the proposed transaction.
MONY's proxy statement is being sent to the stockholders of MONY seeking their approval of the transaction. Investors and security holders may obtain a free copy of the proxy statement, and other documents filed with, or furnished to, the SEC at the SEC's web site at www.sec.gov. The proxy statement and other documents may also be obtained for free from MONY and AXA Financial by directing a written request to Shareholder Services, MONY, 1740 Broadway, New York, N.Y. 10019; Attn: John MacLane (jmaclane@mony.com.), or to AXA Financial, 1290 Avenue of the Americas, New York, N.Y. 10104, Attn. Robert Walsh (Robert.Walsh@axa-financial.com).
Forward Looking Statements Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties, including the risk that the proposed acquisition may not be consummated. The following factors, among others, could cause actual results or the status of the transaction to differ materially from those described herein or from past results: the failure of the MONY stockholders to approve the transaction; the risk that the AXA Financial and MONY businesses will not be integrated successfully; the costs related to the transaction; inability to obtain, or meet conditions imposed for, required governmental, regulatory and other third-party approvals and consents; other economic, business, competitive and/or regulatory factors affecting AXA Financial; and the risk of future catastrophic events including possible future terrorist related incidents.
Please refer to AXA Financial's Annual Report on Form 10-K for the year end December 31, 2002 for a description of certain important factors, risks and uncertainties that may affect AXA's business. AXA Financial does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or otherwise.
AXA Financial files reports and other information with the SEC. You may read and copy any reports and other information filed by the companies at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
SOURCE AXA Financial, Inc.
Mudanjiang DongXing Group Signs Agreement With U.S. Public Company; Mudanjiang DongXing Group Shareholders Will Own Majority Of U.S. Public Company Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 17, 2004--Global Access Ventures, an international consulting and venture capital firm, announced today that Mudanjiang DongXing Group, Ltd. has recently entered into an agreement with a U.S. public company, which will result in the DongXing Group, Inc. shareholders owning ninety percent of the shares of the U.S. public company. After the closing, which is subject to various conditions, DongXing Group, Inc. will be a wholly owned subsidiary of the U.S. public company. The management of DongXing Group, Inc. will remain in place with Mr. He Maoxing as its Chairman and General Manager. Mr. He will also assume the additional responsibility as Chairman of the Board of Directors and General Manager of the U.S. public company.
"Becoming a public company in the U.S. is a very prestigious and major step for DongXing", states Mr. He, chairman of DongXing Group.
"I believe this structure will provide opportunities in the U.S. as well as other countries around the world." Global Access Ventures is an international consulting and venture capital firm located in New York, New York. Consulting services include mergers and acquisitions, reverse mergers, and capital investments.
Capital Bank Corporation Announces the Sale of Three Branch Offices RALEIGH, N.C., Feb. 17 /PRNewswire-FirstCall/ -- Capital Bank Corporation (Nasdaq: CBKN), the parent company of Capital Bank, announced today that it has agreed to sell three of Capital Bank's branch offices. The Capital Bank branch located in Warrenton is being acquired by First-Citizens Bank & Trust Company and the branches in Woodland and Seaboard are being acquired by Southern Bank and Trust Company. Capital Bank will sell the related assets and liabilities of the three offices, including loans, deposits and facilities.
Associates working at these locations are expected to be transferred to the acquiring institutions.
"The sale of these branches will allow Capital Bank to better align its branch network with the strategic direction of the Bank. Our branching strategy focuses on expanding into higher-growth markets within and contiguous to our current footprint," stated Grant Yarber, President and Chief Operating Officer for Capital Bank. "This is a strategic decision that will allow us to redeploy our capital and increase the efficiency of the Bank. Our intent is to make the transition as smooth as possible for the customers and employees of these offices," said Bill Burkhardt, Chief Executive Officer.
The transaction is expected to be completed during 2004 and is subject to regulatory approval.
Capital Bank Corporation, headquartered in Raleigh, N.C., with more than $857 million in total assets, offers a broad range of financial services.
Capital Bank operates 18 banking offices in Raleigh (4), Sanford (3), Burlington (3), Asheville (2), Cary (2), Oxford, Hickory, Siler City, and Graham and a mortgage lending office in Greensboro. The company's website is www.capitalbank-nc.com .
Information in this press release contains forward-looking statements.
These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation delays in obtaining or failure to receive required regulatory approvals, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates, and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in Capital Bank Corporation's filings with the Securities and Exchange Commission, including without limitation its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Capital Bank Corporation does not undertake a duty to update any forward looking statements in this press release.
SOURCE Capital Bank
United Companies Changing Structure of Trebor Industries Acquisition Business Editors SARASOTA, Fla.--(BUSINESS WIRE)--Feb. 17, 2004--United Companies Corporation, (OTCBB:UCPJ) rescinded today the press announcement stating that it has completed its merger with Trebor Industries.
United President, Dave Norris stated that as a result of the final review of the transaction the merger has not closed. Both parties have agreed to change the structure of the acquisition to a share exchange versus a merger. Mr. Norris further states that both Trebor and United are excited about the transaction and are working diligently to complete the documentation in the next few days.
For further information now on Trebor Industries, Inc., d/b/a Brownies Third Lung go to http://www.browniedive.com.
Forward Looking Statements: Statements about the company's future expectations, including revenues and earnings and all other statements in this press release other than historical facts are "forward looking statements" within the meaning of section 27A of the Capital Securities Act of 1933, section 21E of the Securities Exchange act of 1934, and as the term defined in the Private Litigation Reform Act of 1995. The Company's actual results could differ materially from expected results. The company undertakes no obligation to update forward looking statements to reflect subsequently occurring events or circumstances. Should events occur which materially affect any comments made within this press release; the company will appropriately inform the public.
For investor relations please contact United Companies Corporation.
SurgiCare Announces Execution of Definitive Agreement and Filing of Preliminary Proxy Materials Business Editors/Health/Medical Writers HOUSTON--(BUSINESS WIRE)--Feb. 17, 2004--SurgiCare Inc.
(AMEX:SRG), a Houston-based ambulatory surgery company, announced today that it has executed a definitive agreement to acquire Dennis Cain Physician Solutions, Ltd. ("DCPS") and Medical Billing Services Inc. ("MBS"). In addition, SurgiCare announced that it has filed preliminary proxy materials with the Securities and Exchange Commission (which may be reviewed at the Web site maintained by the SEC at http://www.sec.gov) relating to a meeting of stockholders to be held to approve various matters relating to the DCPS and MBS acquisitions, as well as the previously announced recapitalization, equity investment and acquisition of Integrated Physician Solutions Inc. ("IPS"). As part of the contemplated transactions, Brantley Partners IV, L.P. ("Brantley") will provide approximately $7.3 million in equity financing and negotiate an anticipated $8-10 million debt restructuring that will facilitate the formation of a consolidated healthcare services company, which will be renamed Orion HealthCorp Inc. ("Orion").
It is anticipated that Orion will continue to trade on the American Stock Exchange under a new symbol, ONH. Keith LeBlanc, the current CEO of SurgiCare, will continue to run the operations of SurgiCare and will be President of Orion. Terry Bauer, the current CEO of IPS, will continue to run IPS and will be the CEO of Orion. The meeting of stockholders has been set for May 4, 2004 at 5:30 p.m.
Central Time at the corporate headquarters of SurgiCare at 12727 Kimberley Lane, Suite 200, Houston, TX.
Closing of the transactions is conditioned upon several factors, including: approval of SurgiCare's stockholders; approval of continued listing of Orion's stock on the American Stock Exchange; satisfactory completion of due diligence by certain of the parties; satisfactory resolution of outstanding issues with creditors; exchange of our Series AA Preferred Stock for shares of our common stock; simultaneous closing of all transactions; and other conditions commonly found in similar transactions.
Stockholders are urged to read carefully the definitive proxy materials (including all exhibits thereto), which will be available after completion of audits of 2003 results. The definitive proxy materials will contain important information regarding SurgiCare, IPS, DCPS, MBS, the proposed transactions, the persons soliciting proxies relating to the proposed transactions, their interests in the proposed transactions and other related matters. Solicitation of proxies will be made only after definitive proxy materials have been provided to stockholders of SurgiCare. Free copies of the definitive proxy statement and any other relevant documents may also be obtained (when available) from SurgiCare by directing a request to SurgiCare Inc., 12727 Kimberly Lane, Suite 200, Houston, Texas 77024, attention: Tanya Jacobson, telephone 866-821-5200.
Summary of the DCPS and MBS Acquisitions Orion will acquire both DCPS and MBS for a combination of $500,000 in promissory notes, either $2.9 million or $3.5 million in cash (depending on the Orion stock price at closing), and either 1,406,061 or 1,212,122 shares (depending on the Orion stock price at closing) of Orion Class C Common Stock, a newly-created class of stock with certain liquidation and anti-dilution protections. This purchase price is subject to retroactive adjustment based on the financial results of these two companies in the two years following their acquisition.
Comments and Additional Information SurgiCare has made progress on other tasks necessary to complete the contemplated combinations and recapitalization, including the conversion of all shares of Series A Preferred Stock into common stock and the commencement of the re-syndication of its current surgery centers.
Keith LeBlanc, CEO of SurgiCare commented, "Completion of the preliminary proxy materials, along with the execution of the DCPS/MBS definitive agreement, is a significant milestone in the completion of this complex series of transactions. We are now entering the final phase of the SurgiCare restructuring process. Simultaneously we have begun the process of restructuring the partnerships at our existing centers, with new operating agreements, management contracts, and removal of the non-participating physicians. We remain confident that the Orion platform is the correct strategy for long-term stability and growth, and are anxious to start the growth phase." For the year ended Dec. 31, 2003, the combined entities had pro-forma revenues in excess of $45 million. The addition of Brantley as an investment partner will enable Orion to execute on its growth strategy and expand into new areas of outpatient healthcare delivery.
Orion's strategy is to develop a comprehensive, multi-dimensional, alternative site healthcare delivery system. This integrated healthcare services delivery model will be focused on serving the needs of our physician partners and clients and better enable them to meet the demands of the outpatient marketplace.
Paul Cascio, a general partner at Brantley, stated, "We remain very enthusiastic about this opportunity. The addition of the DCPS and MBS billing businesses to Orion is a very positive development.
Although there remain several debt and equity restructuring issues which need to be completed prior to the close of the contemplated transactions, we continue to be optimistic that all contingencies will be removed in a timely fashion. Although our short term objective is to get the contemplated transactions closed, we are equally focused on the long term growth prospects of Orion." About the Companies SurgiCare Inc., based in Houston, operates freestanding, licensed, certified and Medicare-approved outpatient ambulatory surgery centers that are staffed by board-certified surgeons. SurgiCare's mission is to deliver high-quality, affordable, community-based healthcare and provide access to local, specialized services in its centers through program affiliations. Additional information concerning SurgiCare is available at www.surgicareinc.com.
Integrated Physician Solutions Inc. is a Roswell, Georgia-based company, whose business units include Pediatric Physician Alliance, a national owner and operator of pediatric medical clinics, and IntegriMED, a provider of technology solutions for physicians that have been developed as a result of the Company's experience with managing small to medium-sized physician practices.
Dennis Cain Physician Solutions, Ltd. and Medical Billing Systems Inc. are affiliated companies headquartered in Houston, that provide billing and collections and practice management services to hospital based physicians, imaging centers and surgery centers.
Brantley Partners IV, L.P., located in Beachwood, Ohio, is one of a group of affiliated funds managed by Brantley Management Company.
Collectively, these funds have over $300 million of invested and committed capital, and have extensive investments in the healthcare area, as well as in other areas. Additional information concerning these funds and some of their portfolio companies is available at www.brantleypartners.com.
Information About Forward-Looking Statements Certain statements in this press release constitute "forward-looking statements" within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the "Acts"). Any statements contained herein that are not statements of historical fact are deemed to be forward-looking statements.
The forward-looking statements in this press release are based on current beliefs, estimates and assumptions concerning the operations, future results, and prospects of SurgiCare and the other companies described herein. As actual operations and results may materially differ from those assumed in forward-looking statements, there is no assurance that forward-looking statements will prove to be accurate.
Forward-looking statements are subject to the safe harbors created in the Acts.
Any number of factors could affect future operations and results and the consummation of the transactions described herein, including, without limitation, SurgiCare's ability to refinance its debt and other accounts payable; the results of various parties' due diligence investigations; the occurrence of any material adverse change affecting any of the parties prior to closing; a worsening of SurgiCare's business or financial condition; a decline in the price of SurgiCare's common stock, which could affect the percentages to be held by the parties following the closing; receipt of the necessary approval of stockholders and regulatory authorities; and those specific risks that are discussed in SurgiCare's previously filed Annual Report on Form 10-KSB for the fiscal year ended Dec. 31, 2002.
SurgiCare undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information or future events.
Garden Fresh Restaurant Corp. Announces Mailing of Proxy Materials In Connection With Pending $16.35 Per Share Merger SAN DIEGO, Feb. 17 /PRNewswire-FirstCall/ -- Garden Fresh Restaurant Corp.
(Nasdaq: LTUS), operator of the Souplantation and Sweet Tomatoes restaurants, today announced that on February 17, 2004, it commenced mailing proxy materials relating to a special meeting of stockholders scheduled to be held at 4:00 p.m. on March 9, 2004, at the Company's San Diego headquarters, in order to vote on the approval of the pending $16.35 per share merger with a subsidiary of GF Holdings, Inc. Completion of the merger is subject to approval of stockholders at this special meeting and other conditions which are set forth in the definitive proxy statement filed with the Securities and Exchange Commission on February 17, 2004.
About Garden Fresh Garden Fresh Restaurant Corp. currently operates 97 salad buffet restaurants in California, Florida, Arizona, Colorado, Georgia, Illinois, Kansas, Missouri, Nevada, New Mexico, North Carolina, Oregon, Texas, Utah and Washington under the names Souplantation and Sweet Tomatoes. Its restaurants offer an abundance of fresh, quality salad selections, soups, bakery items, pastas and desserts in a self-serve format. For more information about the company, see Garden Fresh's website located at www.gardenfreshcorp.com GARDEN FRESH AND CERTAIN OF ITS DIRECTORS AND OFFICERS MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FOR THE SPECIAL MEETING OF STOCKHOLDERS RELATING TO THE MERGER AGREEMENT. GARDEN FRESH HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND HAS MAILED TO ITS STOCKHOLDERS A DEFINITIVE PROXY STATEMENT FOR THE SPECIAL MEETING OF STOCKHOLDERS. THE DEFINITIVE PROXY STATEMENT CONTAINS IMPORTANT INFORMATION REGARDING THE PARTICIPANTS IN THE SOLICITATION AND OTHER IMPORTANT INFORMATION ABOUT THE MERGER AGREEMENT AND THE PROPOSED MERGER. GARDEN FRESH HAS ALSO FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AN AMENDED TRANSACTION STATEMENT ON SCHEDULE 13E-3 RELATING TO THE PROPOSED MERGER.
STOCKHOLDERS OF GARDEN FRESH ARE ADVISED TO READ GARDEN FRESH'S DEFINITIVE PROXY STATEMENT FOR THE SPECIAL MEETING OF STOCKHOLDERS BECAUSE IT CONTAINS IMPORTANT INFORMATION. STOCKHOLDERS OF GARDEN FRESH MAY OBTAIN, FREE OF CHARGE, COPIES OF GARDEN FRESH'S DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS FILED BY GARDEN FRESH WITH THE SECURITIES AND EXCHANGE COMMISSION AT THE INTERNET WEBSITE MAINTAINED BY THE SECURITIES AND EXCHANGE COMMISSION AT WWW.SEC.GOV. THESE DOCUMENTS MAY ALSO BE OBTAINED FREE OF CHARGE BY CALLING INVESTOR RELATIONS AT GARDEN FRESH AT 858-675-1600.
Forward-looking Information Certain statements in this news release for Garden Fresh Restaurant Corp., including statements regarding the proposed merger are forward-looking and may involve a number of risks and uncertainties. Certain factors that could cause actual events not to occur as expressed in the forward-looking statements include, but are not limited to, the failure to satisfy various conditions contained in the merger agreement. The company assumes no obligation to update the forward-looking information. Other risks and uncertainties concerning the company's performance are set forth in reports and documents filed by the company with the Securities and Exchange Commission from time to time. Please use caution in placing reliance on forward-looking statements.
FOR QUESTIONS RELATED TO THE MAILING OF PROXY MATERIALS, PLEASE CONTACT: Lawrence E. Dennedy MacKenzie Partners, Inc.
Tel: (212) 929-5500 SOURCE Garden Fresh Restaurant Corp.
Boston Private Completes Acquisition of First State Bancorp BOSTON, Feb. 17 /PRNewswire-FirstCall/ -- Boston Private Financial Holdings, Inc. (Nasdaq: BPFH) today announced that it has completed the acquisition of First State Bancorp (OTC Bulletin Board: FCAL.OB), the holding company of First State Bank of California (FSB), a $188 million asset commercial bank located in Los Angeles County. Founded in 1983, First State Bank of California is headquartered in Granada Hills with an office in Burbank and a loan production office in Rancho Cucamonga, California.
The transaction is valued at $27.5 million, or $18.93 per share, with 85% payable in shares of Boston Private common stock and the remaining 15% payable in cash. Each share of First State common stock will be converted into a combination of approximately $2.84 in cash and 0.6757 shares of Boston Private common stock based on an exchange ratio which values Boston Private Stock at $23.81 per share (based on the thirty day average closing price of Boston Private's stock which exceeds the $23.81 maximum pursuant to a 15% collar.) Boston Private will issue approximately 886,000 shares of common stock.
Boston Private expects the transaction to be immediately accretive to GAAP and cash earnings.
Timothy L. Vaill, Boston Private's Chairman and CEO, said, "We are pleased to be entering the Southern California marketplace this year through our acquisition of First State Bank of California, a very profitable banking platform. In line with our strategy, we plan to extend the breadth of our wealth management core capabilities in Southern California by adding financial planning and investment management expertise, as we have done in New England and Northern California. First State has a strong team, and I want to warmly welcome Rich Taylor, FSB's CEO, and his colleagues to the Boston Private family." About Boston Private Financial Holdings Established in 1987, Boston Private Financial Holdings offers a full range of wealth management services to successful people, their families, their businesses, and to selected institutions. Boston Private's assets include ten affiliate companies located in New England, Northern California, Southern California, the Pacific Northwest and New York, offering private banking, financial planning, and investment management services to its domestic and international clientele. These affiliates include: in New England, Boston Private Bank & Trust Company, Westfield Capital Management Company, RINET Company, and Boston Private Value Investors; in Northern California, Sand Hill Advisors, Borel Private Bank & Trust Company, and Bingham, Osborn and Scarborough; in Southern California, First State Bank of California, in the Pacific Northwest, Coldstream Capital Management, based in Bellevue, Washington, and in New York, Dalton, Greiner Hartman Maher & Co., LLC. Boston Private affiliates manage approximately $15.3 billion in client assets, and have balance sheet assets of approximately $2.4 billion. It is a member of the Standard & Poor's 600 Index and is included on the Nasdaq Financial-100 Index(R).
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements about the benefits of the transaction to Boston Private, including future financial and operating results, enhanced revenues that may be realized from the transaction, the accretive effect of the transaction on Boston Private's financial results, and Boston Private's performance goals for First State Bank of California; (ii) statements with respect to Boston Private's strategy, initiatives, plans, objectives, expectations, and intentions; (iii) statements regarding future operations, market position or prospects of either Boston Private or First State Bank of California; (iv) statements regarding potential product development; and (v) other statements identified by words such as "will," "continues," "increases," "expand," "grow," "opportunity," "believes," "expects," "anticipates," "estimates," "intends," "plan," "target," and similar expressions. These statements are based upon the current beliefs and expectations of Boston Private's management and are subject to significant risks and uncertainties.
Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in such forward-looking statements: (1) the expected benefits to Boston Private's wealth management initiatives may not be realized or may be realized more slowly than expected; (2) the risk that the business of First State Bank of California will not be integrated successfully with Boston Private's or such integration may be more difficult, time-consuming or costly than expected; (3) expected revenue and business synergies from the transaction may not be fully realized or realized within the expected time frame; (4) competitive pressures among investment management companies may increase significantly and have an effect on pricing, spending, product offerings, third-party relationships, revenues and Boston Private's and First State Bank of California's abilities to attract and retain clients; (5) the strength of the United States economy in general and specifically the strength of the New England, California, New York and other economies in which Boston Private and First State Bank of California will be operating may be different than expected resulting in, among other things, a deterioration in borrowers' ability to service and repay loans, or a reduced demand for credit, including the resultant effect on the combined company's loan portfolio, levels of charge-offs and non-performing loans and allowance for loan losses, and reduced demand for wealth management services; and (6) adverse conditions in the stock market, the public debt market and other capital markets and the impact of such conditions on the Boston Private's and First State Bank of California's asset management activities and fees from such activities.
Additional factors that could cause Boston Private's results to differ materially from those described in the forward-looking statements can be found in Boston Private's other press releases and Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the Securities and Exchange Commission. Boston Private does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
SOURCE Boston Private Financial Holdings, Inc.
The Peoples Holding Company Signs Definitive Agreement to Acquire Renasant Bancshares, Inc. of Germantown, Tennessee Business Editors TUPELO, Miss.--(BUSINESS WIRE)--Feb. 17, 2004--The Peoples Holding Company (AMEX:PHC) and Renasant Bancshares, Inc. announced today the signing of a definitive merger agreement pursuant to which The Peoples Holding Company will acquire Renasant Bancshares, Inc., a Tennessee-chartered bank holding company ("Renasant") headquartered in Germantown, TN. Renasant is the parent of Renasant Bank and at December 31, 2003, had total assets of $226 million, total deposits of $186 million and total stockholders' equity of $17 million.
According to the terms of the merger agreement, each Renasant common shareholder can elect to receive one of the three following options: (1) 1.117015 shares of PHC common stock for each share of Renasant common stock, (2) $36.37 in cash for each share of Renasant common stock, or (3) a combination of 45% cash and 55% common stock.
The merger consideration received by Renasant shareholders is subject to adjustment so that the merger will qualify as a tax-free reorganization, and the receipt of PHC common stock by Renasant shareholders will be tax free to Renasant shareholders. Based on PHC's market close of $31.85 on February 13, 2004, the aggregate transaction value, including the dilutive impact of Renasant's options and warrants, is approximately $56.7 million.
The acquisition expands PHC's franchise into the high growth Memphis region through Renasant's two banking offices in Germantown and Cordova. Renasant also operates a loan production office in Hernando, MS. The acquisition is expected to close in the third quarter of 2004 and is subject to regulatory and Renasant shareholder approval and other conditions set forth in the merger agreement.
"This acquisition represents an excellent fit with our franchise and gives us access to the fast growing markets of Memphis," stated E.
Robinson McGraw, President & Chief Executive Officer of PHC. "We are excited about this partnership with Renasant and believe we share similar values, cultures and operating philosophies. PHC considers Frank Cianciola as one of the premier bankers in the Memphis market, and we are proud to have him join the PHC management team. We feel the transaction will add to shareholder value in the years ahead." The transaction is expected to be approximately 4% dilutive to 2004 earnings per share determined in accordance with generally accepted accounting principles and to be accretive to earnings per share determined in accordance with generally accepted accounting principles in 2006. On a cash basis, the acquisition is expected to turn accretive in 2005.
"We look forward to this partnership and the enhanced products and services we will be able to offer our clients and prospects in the high growth markets of west Tennessee and north Mississippi," commented Frank J. Cianciola, President & Chief Executive Officer of Renasant.
"PHC's outstanding performance is a direct result of their commitment to the community banking concept of local leadership and teamwork," continued Cianciola. "That operating philosophy is helping build lasting relationships through excellent service and high value banking and non-traditional financial products." "In terms of client service and shareholder value, Renasant and PHC will clearly be stronger operating as one," stated Jack Johnson, Chairman of Renasant's Board of Directors. "Our combined companies will be better positioned to satisfy strong loan demand and our clients' need for insurance and wealth management services." Renasant Bank will maintain its name and charter. Renasant Bank will operate as an indirect subsidiary of PHC, and the management and board of Renasant Bank will remain in effect. Additionally, two board members of Renasant Bank will serve on the PHC board. "We look forward to the addition of Renasant's management to our team," concluded Mr.
McGraw. "They are experienced in the competitive Memphis marketplace and have done a superior job in building their bank." PHC and Renasant senior management will host an investor conference call on February 18, 2004 at 11:00 a.m. eastern standard time. The call may be accessed via a live Internet web cast at www.thepeoplesbankandtrust.com or through a dial-in telephone number at 1-800-901-5213, conference passcode ID 17616580. A replay of the web cast will be archived in the Investor Relations section of PHC's website. A telephone replay will be available two hours after the completion of the call through February 25, 2004 at 1-888-286-8010, conference passcode ID 25023942.
The Peoples Holding Company is the parent of Mississippi's fourth largest commercial bank headquartered in the state. Through its wholly owned subsidiary, The Peoples Bank & Trust Company, the company is also parent of The Peoples Insurance Agency, Inc. The Peoples Holding Company has assets of approximately $1.4 billion and operates 44 community bank, insurance and financial services offices in 27 cities throughout north and north central Mississippi and southwest Tennessee. Visit the company's website at www.thepeoplesbankandtrust.com for additional information.
Forward Looking Statement: Some of the statements in this press release, including, without limitation, statements regarding the proposed merger and projected growth in the counties in which we operate are "forward-looking statements" within the meaning of the federal securities laws. In addition, when we use words like "anticipate", "believe", "intend", "expect", "estimate", "could", "should", "will", and similar expressions, you should consider them as identifying forward-looking statements, although we may use other phrasing. These forward-looking statements involve risks and uncertainties and are based on our beliefs and assumptions, and on the information available to us at the time that these disclosures were prepared. Factors that may cause actual results to differ materially from those expressed or implied by such forward-looking statements include, among others, the following possibilities: (1) we may be unable to obtain required shareholder or regulatory approval; (2) competitive pressures among depository and other financial institutions may increase significantly; (3) changes in the interest rate environment may reduce margins; (4) general economic conditions may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduction in demand for credit; (5) economic, governmental or other factors may prevent the projected population and commercial growth in the counties in which we operate; (6) legislative or regulatory changes, including changes in accounting standards, may adversely affect the businesses in which we are engaged; (7) costs or difficulties related to the integration of our businesses may be greater than expected; (8) deposit attrition, customer loss or revenue loss following the acquisition may be greater than expected; (9) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than us; and (10) adverse changes may occur in the equity markets. Many of these factors are beyond our ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. We disclaim any obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.
Other Matters: This press release shall not constitute an offer of any securities for sale. The proposed transaction will be submitted to Renasant shareholders for their consideration. Peoples and Renasant will file a registration statement, including a proxy statement/prospectus and other relevant documents concerning the proposed transaction with the SEC. Shareholders of Renasant are urged to read the registration statement and the proxy statement/prospectus and other relevant documents filed with the SEC when they become available, as well as any amendments or supplements to those documents because they will contain important information.
Copies of the proxy statement/prospectus and the SEC filings that will be incorporated by reference in the proxy statement/prospectus can be obtained, without charge, by directing a request to Peoples Investor Relations Department at telephone number 662-680-1419. The annual, quarterly and other reports filed by Peoples with the SEC are also available free of charge at the SEC's website (http://www.sec.gov).
Renasant, its directors, executive officers and certain members of management and employees may be soliciting proxies from Renasant shareholders in favor of the transactions. A description of any interests, direct or indirect, that directors and executive officers of Renasant have in the transaction will be included in the proxy statement/prospectus when filed.
The First American Corporation Acquires Baker, Brinkley & Pierce - Premier Default Claims Management Provider Now Part of First American's Mortgage Information Services Group - SANTA ANA, Calif., Feb. 18 /PRNewswire-FirstCall/ -- The First American Corporation (NYSE: FAF), the nation's leading data provider, today announced that it has acquired privately held Baker, Brinkley & Pierce (BBP), a San Antonio-based default claims management company serving several of the mortgage industry's largest lenders and servicers. The acquisition, completed Jan. 6, 2004, establishes First American National Claims Outsourcing, a new company that will augment First American's ability to provide a complete menu of default management solutions to leading financial services companies.
"Mortgage lenders and servicers are increasingly moving toward outsourcing the important yet labor-intensive process of filing mortgage default claims," said James C. Frappier, president of First American Default Management Solutions. "BBP is the only company in the industry that has proven itself capable of handling large volumes of claims efficiently, cost-effectively and with the turn time that our customers require. Adding them to our team enhances our suite of default products and strengthens First American's position as the premier provider of default outsource-solutions for the mortgage servicing industry." Following a foreclosure, a mortgage servicer must file a claim with its mortgage insurer to be reimbursed for the defaulted loan as well as any uncollected interest and foreclosure costs. Although a vital function, the expense and complexity of the process often make outsourcing it a necessity.
Baker, Brinkley & Pierce, established in 1993, is the nation's largest processor of mortgage insurance claims, processing in excess of 6,000 claims per month. The company is headed by founders John Baker and Scott Brinkley, both of whom will continue to oversee operations as First American employees.
"Combining BBP's proprietary document tracking database with First American's claim filing technology will create a default claims management product of unparalleled strength," said Scott Brinkley, the new president of First American National Claims Outsourcing. "We have been one of the biggest customers of First American's Claims Management technology (CMAX) for years, and now as part of the First American family, we are able to add to the service selection lenders rely on to meet their specialized default needs." Michael Barrett, vice chairman of First American Real Estate Information Services, stated: "We have been working to provide a complete solution for field services, default outsourcing and claims management for nearly 20 years.
The addition of BBP to First American's field service capability and default management technology makes this dream a reality." The First American Corporation is a Fortune 500 company that traces its history to 1889. As the nation's largest data provider, the company supplies businesses and consumers with information resources in connection with the major economic events of people's lives, such as getting a job; renting an apartment; buying a car, house, boat or airplane; securing a mortgage; opening or buying a business; and planning for retirement. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within seven primary business segments including: Title Insurance and Services, Specialty Insurance, Trust and Other Services, Mortgage Information, Property Information, Credit Information and Screening Information. With revenues of $6.2 billion in 2003, First American has nearly 30,000 employees in approximately 1,400 offices throughout the United States and abroad. More information about the company and an archive of its press releases can be found at www.firstam.com.
Certain statements made in this press release, including those related to the default claims management product, are forward looking. Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include: interest rate fluctuations; changes in the performance of the real estate markets; access to public records and other data; general volatility in the capital markets; changes in applicable government regulations; consolidation among the company's significant customers and competitors; the company's continued ability to identify businesses to be acquired; changes in the company's ability to integrate businesses which it acquires; and other factors described in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2002, as filed with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made. The company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
For further information, please contact David Schulz, Corporate Communications of The First American Corporation, +1-714-800-3298, dschulz@firstam.com.
SOURCE The First American Corporation
Court Injunction Halts MONY-AXA Merger Until Shareholders Can Consider $90 Million Payout to Top Executives NEW YORK, Feb. 18 /PRNewswire/ -- In a victory for institutional and small shareholders, a Delaware court has issued an injunction temporarily stopping the merger between MONY and AXA Financial.
In a 37-page decision, Vice Chancellor Stephen Lamb of the state's Chancery Court ruled yesterday on a proxy circulated by MONY earlier this year for a special meeting of MONY's shareholders. That meeting is presently scheduled for February 24.
Attorney Lynda Grant, of Goodkind Labaton Rudoff & Sucharow, who represents shareholders in the case, alleged that the proxy is misleading because it fails to disclose that the over $90 million in "change-in-control" (CIC) payments set aside for MONY's executives are more than those paid in over 75% of deals similar to this one.
"This case is a paradigm of corporate greed," Grant said. "Goodkind Labaton got involved in this case because we need to ensure that shareholders voting on the transaction are aware that MONY's top executives are lining their pockets at shareholders' expense." In his ruling, Vice Chancellor Lamb held, "[t]he history of AXA's bidding shows that there is essentially a 1:1 ratio between the value of the CICs and the amount per share an acquiror offers ... a percentage of deal value, the money that will be paid to beneficiaries of the CICs is above the amount paid in CICs in more than 75% of comparable transactions." The Court held that such information should have been disclosed, particularly since MONY shareholders face the issue of whether to approve the deal or opt for appraisal, and recommended that MONY send out a supplemental disclosure.
The action, In re MONY Group Inc. Shareholder Litigation, C.A. No. 20554 (Del.Ch.), is being litigated by Grant and other co-counsel.
ABOUT GLRS: Since 1963, Goodkind Labaton Rudoff & Sucharow (GLRS) has built a national reputation for quality and integrity in its representation of investors. GLRS has recovered more than $1 billion from its clients and class members -- investors victimized by fraudulent schemes ranging from stock price manipulation to fraudulent offerings of mutual funds and limited partnerships.
GLRS' client base includes some of the nation's largest institutional investors.
SOURCE Goodkind Labaton Rudoff & Sucharow
Orkla to Sell its Stake in Carlsberg Breweries for NOK 17.5 Billion OSLO, Norway, Feb. 19 /PRNewswire/ -- Orkla is selling its 40 per cent interest in Carlsberg Breweries to Carlsberg AS (CAS) for NOK 17.5 billion.
CAS will also take over Orkla's share of the company's liabilities, bringing total enterprise value of Orkla's interest up to NOK 22.5 billion.
The agreement implies that Orkla will receive DKK 11 billion in cash and a debt certificate for DKK 3.8 billion from a first class bank which falls due in two years' time and runs at a market interest rate. Orkla will also receive a dividend of DKK 120 million from CB for 2003 and a sum to cover all transaction costs. The total proceeds from the CB shares will therefore be nearly DKK 15 billion (NOK 17.5 billion).
In addition to the proceeds, CAS will take over Orkla's share of CB's liabilities, which amounts to approximately DKK 4.5 billion. The enterprise value of Orkla's interest in CB will therefore be just over DKK 19 billion, or approximately NOK 22.5 billion. The sale will result in a book gain of NOK 12.5 billion. The effect of the sale on Orkla's accounts and relevant key figures for evaluating the sale price are shown in the enclosed appendices.
Implementation of the sale is conditional upon the approval of Orkla's Corporate Assembly, which will discuss the matter at its meeting on 3 March.
Provided that the Corporate Assembly approves, settlement will take place at the beginning of March.
When CB was established in 2000, Orkla's intention was to develop the values in CB in a long-term industrial perspective, with emphasis on profitable growth, efficient operations and commercial focus. This was to take place within a framework of good partnership between CAS and Orkla, where Orkla would contribute its industrial experience and brand expertise. This was also CAS's attitude, and the basis for the agreement concerning the growth and development of CB that was entered into between Orkla and CAS when CB was established in 2000.
In Orkla's view, cooperation between CAS and Orkla has been satisfactory until recently. However, in summer 2003 there was a change in the attitude of the Carlsberg Foundation and CAS towards the partnership that had been established. The Carlsberg Foundation, which is the controlling shareholder in CAS, has increasingly expressed ambitions and attitudes which, in Orkla's view, would not promote value creation in CB and would weaken important intentions inherent in the cooperation agreement signed in 2000. The parties have therefore held increasingly differing views concerning the future development of CB. The natural solution for Orkla would have been to buy CAS out of CB. This was impossible for several reasons. Orkla has therefore negotiated an agreement to sell its shares in CB to CAS for a good price, and believes that this will best serve the interests of the Orkla Group and its shareholders.
Orkla's shares in CB are owned by the Swedish company Orkla AB and the transaction will therefore be subject to Swedish tax regulations. According to the current Swedish tax regulations concerning the sale of shares in commercial enterprises, the payment received by Orkla AB will be tax-free.
Group President and CEO Finn Jebsen comments: "Orkla would have preferred to further develop its industrial position in Carlsberg Breweries. However, the changed attitude of the Carlsberg Foundation and the increasing distance between the parties has lead us to the conclusion that a sale at a good price is preferable. The Orkla Group has a solid foundation from which to pursue a long-term, profitable industrial growth on its own account, and the sale of the CB shares provides Orkla with substantial financial resources to realise such growth." The employee-elected members of Orkla's Board of Directors are of the opinion that a sale of CB shares is wrong for Orkla from an industrial point of view, and they have therefore been unable to support the resolution to sell the shares.
After the sale, Orkla will be in a very strong financial position. Taking this into account, and also taking into account the fact that Orkla is celebrating its 350th anniversary in 2004, the Board of Directors will recommend to the General Meeting on 29 April that an extraordinary dividend of NOK 25 per share be paid out (a total of more than NOK 5.1 billion) in addition to the proposed ordinary dividend of NOK 4.00 per share. The remainder of the proceeds from the sale of CB shares will be retained in the company as a basis for further industrial growth.
http://hugin.info/111/R/934981/129090.pdf Ref.: Ole Kristian Lunde, Sr. VP Corporate Communications, Tel.: +47 22 54 44 31 Rune Helland, VP Investor Relations, Tel: +47 22 54 40 00 SOURCE Orkla
H-NET.NET, Inc. Closes Acquisition of DONOBi, Inc.
BREMERTON, Wash., Feb. 19 /PRNewswire-FirstCall/ -- H-NET.NET, Inc.
(OTC Bulletin Board: HNNT) announced today that it has closed the acquisition of DONOBi, Inc., a Seattle-area based business service integrator with full-service Internet, video, and telecommunication services.
The Company also announced that Anton Stephens will be stepping down as President and CEO, and Christine Stephens will be resigning her CFO position.
New executive management will consist of the current management team of DONOBi, including President and CEO, Bill Wright, Vice President, Brett Green, and Interim CFO, Terry Stein. The Company anticipates officially changing its name to DONOBi, Inc., as well as its trading symbol in the coming weeks.
Commenting on the closing and the Company's new direction, CEO, Bill Wright said, "We are obviously very excited as we embark on this new chapter in DONOBi's history. We plan to make this brief transition period as simple as possible on all parties involved, including our new shareholders.
In the coming weeks we will be communicating more with the investment community, while announcing new customers and strategic partners that have come to fruition since we undertook this merger that will generate new revenues for the company.
Also, we will be developing an investor relations page on our corporate Web site (www.donobi.com) and will make a series of announcements to keep our existing and potential shareholders informed as to our progress and growth.
We are very pleased with the continued progress of the Company and now look forward to sharing our success. Since our inception in 1999, we have grown revenues steadily each year, including a 128% increase in 2003. We are able to maintain positive growth of revenues due in part to the reoccurring nature of our service revenues. We anticipate continued expansion of our customer base to include entry into additional states, and are expecting to release newly developed product lines to enhance services to existing customers and attract new customers.
About DONOBi, Inc.
Located in the tech-heavy Pacific Northwest, DONOBi is a regional provider of integrated Internet services, e-commerce solutions, business systems integration, network analysis and implementation, and business applications development and deployment. Since its inception, DONOBi has rapidly expanded through mergers and acquisitions of several small ISPs, consolidating talented personnel and technical infrastructure into a highly efficient and responsive service company. DONOBi specializes in helping clients with technical, state-of-the-art, high quality customer and B2B solutions. These products and services are matched to the customer's needs and goals by providing a full range of services and expertise within one company. For more information about DONOBi, please visit the company's Web site at www.donobi.com Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the expansion of the Company's operations are forward-looking statements. Words such as "expects," "intends," "anticipates," and "likely" also identify forward-looking statements. Actual results may differ from such forward-looking statements as a result of a number of factors.
SOURCE H-NET.NET, Inc.
First Albany Companies Inc. (Nasdaq:FACT) announced today that it has reached an agreement to acquire Descap Securities Inc., a New York-based broker- dealer and investment bank specializing in mortgage-backed securities.
The value of the transaction is approximately $32 million, plus future consideration based on financial performance.
"This deal builds on our strength in Taxable Fixed Income and provides immediate benefits for First Albany clients and shareholders," said Alan Goldberg, President and Chief Executive of First Albany. "Adding Descap to our existing capabilities will allow us to further accelerate growth by providing broader and deeper products, particularly in the mortgage-backed securities market.
Descap is a great fit for us and we are pleased to welcome Rob Fine, President, Robert Tirschwell, Head of Trading and their team to the First Albany family." The acquisition will be funded through a term loan of $20 million funded by Keybank, and other working capital. Management expects the impact on earnings to be accretive in 2004 and beyond, the Company said.
"We could not think of a better fit for our company, or a better platform for growing our business and client relationships," said Mr.
Fine. "First Albany's independence, its financial stability and the vision of its management team will allow us to continue to provide focused, high-quality, innovative service to our clients." In fiscal 2003, Descap, which will continue to operate under its current name, had revenues of approximately $32 million and a staff of 23 located in New York City. Fine and Tirschwell will continue to have operational responsibility for Descap, and will report to Robert F.
Campbell, Director of First Albany Capital's Taxable Fixed Income group.
"We have been seeking opportunities to expand our taxable fixed income business" said Bob Campbell, "And Descap's culture and business model fit remarkably well with what we do at First Albany. Descap is an integral part of our plans going forward and it will be a strong platform for further growth. The people at Descap have demonstrated expertise and an outstanding reputation in the mortgage-backed securities market, and we are delighted to have them aboard." About Descap Descap Securities specializes in the primary issuance and secondary trading of mortgage-backed securities, asset-backed securities, collateralized mortgage obligations and derivatives, and commercial mortgage backed securities. Its investment banking group provides advisory and capital raising services, and specializes in structured finance and asset-backed securities.
About First Albany Founded in 1953, First Albany Companies Inc. is a leading institutionally focused independent investment bank and asset management firm. Through its Taxable Fixed-Income, Municipal and Equity Capital Markets Divisions, the firm focuses on serving the institutional market, the growing corporate middle market and public institutions by providing its clients with strategic, research-based, innovative investment opportunities. First Albany offers a diverse range of products and advisory services in the areas of corporate and public finance as well as fixed income and equity sales and trading.
FA Asset Management is an investment management company with a growing client base and increasing assets under management. FA Technology Ventures is a leading early stage investor, providing venture capital, management and guidance for companies in the emerging growth sectors of information technology and energy technology.
First Albany is traded on NASDAQ under the symbol FACT and today has 19 offices in 12 states.
This news release contains forward-looking statements, which are subject to various risks and uncertainties, including the conditions of the securities markets, generally, and acceptance of the Company's services within those markets and other risks and factors identified from time to time in the Company's filings with the Securities and Exchange Commission. Actual results could differ materially from those currently anticipated.
The common shares of First Albany Companies Inc. are traded on NASDAQ under the symbol "FACT".
Cartesis today announces the completion of its acquisition by a group of four major investors.
The international investor consortium is led by Apax Partners, one of the world's leading private equity firms, alongside leading international technology investors Advent Venture Partners, CDP Capital Technology Ventures and Partech International.
Cartesis will now be able to leverage the vast experience and network of their new investors to accelerate growth on a global scale.
The new shareholders, who have strong track-records of helping build successful technology companies, will all be represented on Cartesis' Board.
Liberated from the regulatory constraints imposed by the Sarbanes-Oxley Act as a result of its former affiliation with the PricewaterhouseCoopers network, the company will now be able to address the entire BPM market and capitalize on the growth opportunities within it.
Cartesis has over 1,300 clients, including one in five of the Fortune Global 100 and more than 33% of the Financial Times European 100 companies. With revenues in the EUR 80 million range, Cartesis is one of the largest private software companies in Europe and has consistently delivered sales growth, averaging 30% over the last 6 years, and market share gains even in today's challenging economic environment.
"Our former affiliation with PricewaterhouseCoopers and Sarbanes-Oxley made it challenging for us to serve some large corporate accounts. Our new investors provide us with the financial and strategic backing to realize our ambitions free from regulatory restrictions. In a difficult market, we have been experiencing strong growth in recent years and with our new investors in place we are well positioned to become the BPM market leader," said Marie-Noelle Gauthier, Cartesis CEO.
Gilles Rigal, Apax Partners commented, "Cartesis is a successful company with a proven business model and a strong market position.
Cartesis will now be able to leverage the investor group's resources and experience to continue to provide market-leading BPM solutions and accelerate its growth in the years ahead." About Cartesis Cartesis provides CFOs with a unique business performance management solution to deliver the whole 'story behind the numbers' with unparalleled clarity and insight. Leading multinational companies around the globe rely on Cartesis' software applications to get the full picture and offer timely and relevant information to their stakeholders. The company maintains offices in Brussels, Frankfurt, London, Madrid, Norwalk, CT, Paris, Tokyo and Utrecht. Cartesis products give global companies the analytic capacity and the flexibility they need to assess the rapid changes in their market places. One in five of the Fortune Global 100 and more than 33% of the Financial Times European 100 companies use Cartesis solutions to obtain unprecedented command over their financial information and processes.
For more information about Cartesis, please visit www.cartesis.com.
IBSG International Confirms Closing of Acquisition; Company to Become Fully Reporting Business Editors CELEBRATION, Fla.--(BUSINESS WIRE)--Feb. 19, 2004--IBSG International, Inc. (OTCBB:IGII) announced today that the previously reported acquisition of Intelligent Business Systems Group, Inc.
(IBSG) has been formally completed. Intelligent Business Systems Group, Inc. is now a wholly owned subsidiary of IBSG International, Inc. As a previous condition to closing, the company's shares were requested to be listed on the Frankfurt exchange. This condition was waived, and on Friday, February 13, 2004 the company completed and finalized the transaction. An 8-K has been filed with the SEC to reflect this transaction closing.
"We are very pleased to have completed this transaction," stated Dr. Michael Rivers, CEO of IBSG. "We are now completing our year-end audits for fiscal year ending December 2003, and plan on becoming a fully reporting company under the U.S. Securities and Exchange (SEC) Act of 1934. We anticipate making this year end 10-K filing prior to the March 31st 2004 deadline." Furthermore, the closing now enables IBSG to pursue and finalize several acquisitions the company has been considering. The company has had several discussions with possible acquisition targets to increase market penetration and expand on IBSG's existing leading technology.
The company's expansion plans called for increased market share of its target markets, expansion of the business development division utilizing investment capital and contract revenues, and acquisitions that have market or technological synergy with IBSG. IBSG has been successfully pursuing new business and expects that strong trend to continue. The company has recently received substantial private placement capital allowing it to further fund its expansion. All of these avenues represent a cohesive plan to expand the company's business development and build on its continuing successes.
About IBSG: IBSG, a subsidiary of IBSG International, commenced business in 1997, and is now in its sixth straight year of profitable operations selling enterprise solutions that is designed to greatly enhance the operating efficiency and create revenue for State Small Business Development Centers, business associations (e.g. Chambers of Commerce) and Fortune 1000 corporations through the licensing of its proprietary turnkey digital service center software, which provides a broad range of digital budgetary, administrative and commercial services (B2B, e-commerce, government to business and enterprise business services) on a single platform known as the NetPool Data System (copyrighted).
As a software provider, system integrator and Application Service Provider, IBSG generates its revenue from license sales, system modifications, system support, and a percentage of monthly customer fees. IBSG clients, among others, include the Small Business Development Centers of California, National Black Chamber of Commerce, and North Dade Chamber of Commerce.
Forward-Looking Statements: Statements about the Company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as the term is defined in the Private Litigation Reform Act of 1995. The Company's actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances. Should events occur which materially affect any comments made within this press release, the Company will appropriately inform the public.
Arthur J. Gallagher & Co. Acquires The Romine Group, Inc.
ITASCA, Ill., Feb. 19 /PRNewswire-FirstCall/ -- Arthur J. Gallagher & Co.
(NYSE: AJG) today announced the acquisition of The Romine Group, Inc.
headquartered in Austin, Texas. Terms of the transaction were not disclosed.
Founded in 1988, The Romine Group, Inc. offers employee benefits brokerage and consulting services to both self-funded and fully insured markets. They also specialize in benefits and network design, cost containment and insurance market analysis. Bruce Romine, Don Munford and their associates will continue to operate in their current Austin and Dallas, Texas offices under the direction of J. Michael Brewer, Executive Vice President of Gallagher Benefit Services, Inc., a subsidiary of Arthur J. Gallagher & Co.
J. Patrick Gallagher, Jr., President and Chief Executive Officer said, "The Romine Group is an outstanding example of how a commitment to superior client service combined with a dedication to employees can result in success.
This combination fits well within our own client-focused culture. We are extremely pleased to welcome Bruce, Don and their experienced team to our growing Gallagher family of professionals." Arthur J. Gallagher & Co., an international insurance brokerage and risk management services firm, is headquartered in Itasca, Illinois, has operations in nine countries and does business in more than 100 countries around the world through a network of correspondent brokers and consultants. Gallagher is traded on the New York Stock Exchange under the symbol AJG.
SOURCE Arthur J. Gallagher & Co.
Australia-based Computershare Acquires Transcentive to Form
Global Share Plan Services Organization SHELTON, Conn., Feb. 19 /PRNewswire/ -- Transcentive, Inc., the leading provider of technology and services for stock plan management and financial reporting, announced today that it has been acquired by Computershare Limited (ASX: CPU), an Australian financial services and technology provider.
"Our vision has been to offer flexible, yet comprehensive global equity compensation plan services tailored to the unique needs of each customer," said Les Trachtman, President and CEO of Transcentive. "Given Computershare's reach and presence in markets around the world, this propels us further toward our vision, and opens up a huge new global market for our services," he said.
"This purchase is highly complementary to the Computershare group globally, our technology suite, and our employee share plan management business," said Computershare's Chief Executive Officer, Chris Morris. "As a global service provider with expertise in employee incentive compensation plan management, Transcentive fits well into Computershare's integrated service offering and global vision. Along with their mutually beneficial third party relationships, we are poised to cross-sell and up-sell technologies and services to existing Computershare and Transcentive clients, both in the US and internationally," he said.
With 25 years experience, Transcentive offers solutions delivered through "rightsourcing," an approach that combines innovative technology and services ranging from client self-administration to complete plan outsourcing.
Virtually every major financial institution, numerous leading law and venture capital firms, along with nearly 3,000 public and private companies rely on Transcentive solutions. In addition to partnerships with top brokerages, Transcentive has strong alliances with legal, tax, and consulting firms to offer expert guidance on financial reporting, communication, and compliance issues. Through the company's World Records group, Transcentive also supports the needs of corporate secretaries, tax officers, compliance officers, and human resources personnel.
"Since its founding over two decades ago, Transcentive has demonstrated product leadership and innovation, and amassed significant commercial experience," said Steven Rothbloom, President and CEO of Computershare North America. "Transcentive and Computershare are a near-perfect match, combining technology expertise with the capacity to provide solutions in equity compensation management globally." Founded in 1979 as Corporate Management Solutions (CMS), Transcentive has approximately 140 employees. The purchase of this highly-experienced provider enables Computershare to further solidify its position in the fast-growing market of employee share and option plan management services.
About Transcentive, Inc.
Transcentive is the leading provider of solutions for equity plan administration. With 25 years of experience, the company provides management solutions to nearly 3,000 public and private companies around the world specializing in equity compensation administration and world records subsidiary management. Clients include: Microsoft, Bausch & Lomb, Merrill Lynch, and Campbell Soup Company. Headquartered in Shelton, Connecticut, the company has a west coast office in San Francisco and a European office in London. For more information, visit the company's Web site at www.transcentive.com.
About Computershare Computershare is a leading financial services and technology provider for the global securities industry, providing services and solutions to listed companies, investors, employees, exchanges and other financial institutions.
It is the only global share registrar, managing more than 60 million shareholder accounts for over 7,000 corporations in 10 countries on five continents. It also provides sophisticated trading technology to financial markets in 25 countries across each major time zone. Founded in Australia, the company today employs nearly 5,000 people worldwide and is an Australia Stock Exchange Top 100 company. For further information, go to www.computershare.com Transcentive is a registered trademark of Transcentive Inc.
Computershare is a trademark of Computershare Limited and/or its affiliates.
All other company and product names may be trademarks of their respective owners.
SOURCE Transcentive, Inc.
NASD members must make an affirmative determination for all short sales prior to executing the sale (absent an exemption), including short positions not carried overnight.
--------------------------------------------------------------------------------
January 18, 2000
Michael T. Dorsey
Senior Vice President and General Counsel
Knight Securities, L.P.
525 Washington Boulevard
Jersey City, N.J. 07310
Re: Rule 3370(b)(2)(B)
Dear Mr. Dorsey:
This letter responds to your request for NASD Regulation, Inc. ("NASD Regulation") to reconsider its interpretive position under National Association of Securities Dealers, Inc. ("NASD") Rule 3370(b)(2)(B) with respect to the timing of the affirmative determinations members must make to effect proprietary short sales. The long-standing position of NASD Regulation on this issue is that firms must make an affirmative determination for all short sales prior to executing the sale (absent an exemption).1 You have asked NASD Regulation to consider altering this interpretation and require firms to make an affirmative determination only when they will carry short positions overnight.
NASD Regulation has carefully considered your request, but has determined to retain the current interpretation. I have enclosed a copy of a recently-issued Notice to Members wherein NASD Regulation reiterates, and states the rationale for, this position.2
I hope this letter is responsive to your inquiry. Please note that the opinions expressed in this letter are staff opinions only and have not been reviewed or endorsed by the Board of Directors of NASD Regulation. This letter responds only to the issues you have raised based on the facts as you have described them in your letter, and does not necessarily address any other rule or interpretation of the NASD or all the possible regulatory and legal issues involved.
Please do not hesitate to contact me should you have any further questions about this issue.
Sincerely yours,
Mary N. Revell
Associate General Counsel
Enclosure cc: Gary Liebowitz
District 9B
http://brokers.nasdr.com/2910/3370_03.asp
Short list
Securities and investment firms get shorted
Investors appear to be betting, in the short run at least, against broker/dealers that have business models tied either to technology and the individual investor or market-making. They have shorted the stocks of 14 broker/dealers and one asset manager so much that it would take at least a week of trading at their individual average daily volumes to cover the short interest positions.
The heftiest days-to-cover ratios among the 83 publicly traded securities and investments firms SNL Financial follows was 112.2 days for eChapman.com Inc., a Baltimore-based broker/dealer with a market value of $19M, and 42.6 days for Southwest Securities Group. The Dallas-based broker/dealer and clearing firm seems to have been on the short list for shorting for months: In April, its days-to-cover ratio stood at 37.
The figures come from www.ShortInterest.com, which also showed the following days-to-cover ratios for September, the latest month for which short interest information is available:
Ameritrade Holding Corp.: 22.1
Friedman, Billings, Ramsey Group Inc.: 19.6
LaBranche & Co.: 18.1
Knight Trading Group Inc.: 11.4
E*TRADE Group Inc.: 10.4
Bear Stearns Cos.: 9.1
A.B. Watley Group Inc.: 8.2
Neuberger Berman Inc.: 7.7
TradeStation Group Inc.: 7.2
Legg Mason Inc.: 6.8
JB Oxford Holdings Inc.: 6.2
Jefferies Group Inc.: 6
TD Waterhouse Group Inc.: 5.7
For stocks in general during the second half of 2001, particular-ly in the last quarter, "We've been seeing record short interest on the New York Stock Exchange and on the NASDAQ," said Luciano Siracusano, research director of Individual Investor Group, the par- ent company of ShortInterest.com, of which he is editor. "That has been increasing throughout the year."
Investors' negative view on so many stocks reflects the economy as it heads into recession. They are particularly negative about telecommunications, judging from ShortInterest.com's list of com-panies with the largest short positions by number of shares.
Topping the list are Sprint Corp. (PCS GRP), Global Crossing Ltd., and Lucent Technologies, in that order. Immediately following are names most closely associated with technology: The NASDAQ 100 shares — QQQ — Cisco Systems Inc. and Intel Corp.
Six of the shorted securities firms stocks — A.B. Watley, Ameritrade, E*TRADE, JB Oxford, TD Waterhouse and TradeStation, — are online brokerages. mydiscountbroker.com is a subsidiary of Southwest Securities and eChapman offers Chapman Online.
The clientele on whom online brokerages count for their bread and butter — the retail investor — has been avoiding the market in droves. "People may be betting that the retail investor isn't likely to return to the market," said Putnam Lovell Securities Inc. analyst Rich Repetto, who covers Ameritrade and E*TRADE. He has a "hold" rating on Ameritrade and a "buy" rating on E*TRADE; he said he is not aware of any investment banking relationship between his firm and either company.
Investors may also be betting that "both the companies are around break-even and things can get worse, rather than better," he said. Technology alone does not explain the short interest positions. For instance, Charles Schwab Corp., the largest online broker by number of accounts, has a days-to-cover ratio of 3.5.
For eChapman, which had the highest days-to-cover ratio among the stocks followed by SNL, the significant short position was on a mere 84,012 shares. In addition to its online brokerage, the com-pany has other lines of business, such as insurance and capital man-agement. The company has an equity fund that focuses on what it calls domestic emerging markets, targeting companies owned or controlled by African Americans, Asian Americans, Hispanic Americans and women.
On Aug. 14, eChapman announced that it had bought NetNoir Inc., an African-American Internet company, for an undisclosed amount. On the same day, the company reported a second-quarter net loss of $544,000, or 4 cents per share, down from $913,000, or 7 cents per share, in the year-ago period. As of that earnings report, the company had yet to turn a profit, but Chairman Nathan A. Chapman Jr. received a 51% pay increase to $553,300 in annual salary and bonus for his performance in 2000. Efforts to contact Chapman were unsuccessful.
On Oct. 26, the company's shares closed at $1.51, down 49.1% for the year. On the same day, Southwest reported earnings that showed its fiscal first-quarter profits slipped quarter over quarter to $683,000, or 4 cents per share, from $5.3M, or 30 cents per share. The com-pany's clearing business was hit by the loss of four days of trading as a result of the events of Sept. 11; the firm processed 11.9 million shares during the quarter, vs. 13.5 million a year ago. On Oct. 26, Southwest shares closed at $18.30, down 22.2% in 2001.
"There's a committed group of investors who believe that, first, the conversion that the company is involved in from its old [clear-ing] system to the CSS system will result in the company failing, or at least losing most of its clearing business," said Raymond James Financial Inc. analyst Richard X. Bove. Although Bove has a "mar-ket perform" rating on the stock, he said he is not recommending it. Raymond James has done underwriting work for Southwest, but Bove said he does not own the stock.
"There's all sorts of wild statements out there," such as some that allege Southwest has inflated its book value, the value of one of its subsidiaries and the value of certain venture capital investments, as well as an allegation that it has understated loan losses at its thrift subsidiary. "Having tracked down, one by one, these stories, I think the SEC ought to look into the people making these stories up, because they're all untrue," Bove said. "If you ask yourself, ‘Why do they keep doing this? Why don't they just cover?' The answer may be that they can't," he said. With so much stock shorted, there may not be enough stock around to cover, he said. And if many did attempt to cover, it could double or triple Southwest's share price above current levels, he said. "They're in a box," he said.
Southwest's earnings may not be stellar at the moment, but the company is in no danger of failing, he said. Last year, Southwest hired Bear Stearns & Co. to explore strate-gic alternatives, including the possibility of selling part of the com- pany or seeking a merger partner. No deal was announced, and Southwest discontinued its relationship with Bear Stearns.
Bear Stearns, the only major Wall Street investment bank to make the short list, has itself been rumored periodically to be a ripe tar-get for takeover. Those who shorted Bear, however, might have got-ten squeezed: The company's stock closed Oct. 26 at $57.95, up 14.3% for the year.
The other discernable pattern among short positions on securities and investments firms involved stocks of companies whose business it is to make markets. Knight is the NASDAQ's largest market maker, while LaBranche is the NYSE's largest specialist by number of shares.
"For them," Putnam Lovell's Repetto said, "it's a bet [by investors] that the impact of decimalization will continue to nega-tively affect their business models." He covers both companies, and has "hold" ratings on their shares; he knows of no investment banking relationship between his firm and either company, he said. On Oct. 26, LaBranche's shares closed at $29.40, down 2.2% in 2001. Knight, meanwhile, closed at $10.95; its shares have fallen 21.4% during the year.
Generally speaking, asset managers have had a tough time of things during the second half of 2001, as they have witnessed the market's downturn reduce the values of the assets they manage, which in turn has reduced their income. Neuberger Berman is no exception. During the third quarter, the New York City-based firm that caters to wealthy clients saw its net income fall 5% from the year-ago period to $33.5M.
The company announced earnings on Oct. 23, the day after it said it would move into hedge funds by acquiring Oscar Capital Management LLC, which oversees approximately $800M, includ-ing $150M in hedge funds. Ironically, hedge fund managers can short stocks, something most mutual fund managers cannot do. At the Oct. 26 close, Neuberger Berman's shares were down 30.5% for the year at $37.58. But share prices have risen steadily since the Oct. 19 close at $34.60, which may indicate the market approved of the acquisition.
"Neuberger had a little bit of trouble on the mutual fund side that had relatively poor performance in the past, very little asset flow," said Friedman, Billings, Ramsey analyst Bijan Moazami. "But also because a lot of insiders a few months ago sold through a public offering. So maybe when people saw insiders selling, they just shorted the stock," he said. "I'm just totally speculating." He recently upgraded Neuberger Berman to a "buy"; his firm has no investment banking operation for asset managers.
He said he couldn't comment about Friedman, Billings, Ramsey's being shorted, other than to say, "I purchased a tremendous amount of shares, together with a lot of my other colleagues, a few months ago. … We're all big shareholders now."
http://www.snl.com/financial_svc/archive/20011029si.asp
OFFICE OF NEW YORK STATE ATTORNEY GENERAL ELIOT SPITZER
FROM WALL STREET TO WEB STREET: A REPORT ON THE PROBLEMS AND PROMISE OF THE ONLINE BROKERAGE INDUSTRY
PREPARED BY: INVESTOR PROTECTION INTERNET BUREAU AND SECURITIES BUREAU
NOVEMBER 22, 1999
D. Market Makers: Trade Execution Solutions for Online Investors
-- Knight Securities, L.P.
1. Complaints relating to poor executions.
A recurrent theme of the investor complaints reviewed by our office relate to delayed or questioned trade executions, particularly during the period from late October 1998 through February 1999. Knight Securities was the leading provider of automated trade executions ("auto-ex") for online brokers, and the curtailment of auto-ex services by Knight was a likely source of many of these complaints. Accordingly, our inquiry evaluated Knight's performance, as well as other market makers. For illustrative purposes, the following sections address the performance of Knight during the 1998-99 Market Storm and the issues that arise for online investors involving market makers.
The tremendous stress placed upon NASDAQ market making firms in the Market Storm are best illustrated by the volatility witnessed in Internet stocks:
On November 30, 1998, Onsale (ONSL) traded from 108 to 50 in 25 minutes.
On November 13, 1998, the shares of theglobe.com (TGLO) commenced trading after an IPO at $9 per share, traded as high as $97, closed at $63.50.
Also in mid-November, Avtel Communications (NASDAQ symbol "AVCO") went from $11 to $31 in the last 30 minutes of trading as a result of a mention on CNBC. At this trading peak AVCO had a market capitalization of $3 billion; today it is in violation of a loan covenant that it maintain a minimum net worth of $2 million.
On January 14, 1999, CMGI opened at $146, traded down to $88 and back up to $130 in 15 minutes.
Volatility of this magnitude can be simply lethal for novice investors -- and is even hazardous for market makers. These and similar events prompted SEC Chairman Arthur Levitt and the NASD Regulation in late January 1999 to call upon investors to employ limit orders, as opposed to market orders, in order to gain price protection against such volatile trading conditions.109 Online firms acted quickly to disseminate this information via their websites, monthly statement stuffers and advertisements. We have sought to weigh the performance of Knight Securities under these circumstances and conclude that the NASDAQ market place must facilitate, as Knight itself has urged, better tools by which market makers may effect executions against other market makers so that auto-ex providers will have an enhanced ability to offer uninterrupted liquidity to investors.
2. Who is Knight Securities?
Knight Securities is a wholly owned subsidiary of Knight/Trimark Group, Inc. a public company since July 1998. While Knight Securities concentrates upon NASDAQ market making from its Jersey City headquarters, sister corporation Trimark Securities provides off-exchange executions for NYSE listed securities. The origin of Knight/Trimark Group began in 1995. Until just prior to its initial public offering, the business was 60% owned by a consortium of 27 broker-dealers and their affiliates with management owning the remaining 40%.110 After the 30% of Knight now owned by executive officers and directors, online broker-dealers remain the largest shareholders in Knight.111 Waterhouse owns 8.53%, Ameritrade 7.13% and E*Trade and Discover collectively about 5%.112 Waterhouse, Ameritrade and E*Trade each contributed about 12% of Knight's order flow in the quarter ending June 30, 1999, totaling 36.5%.113 The total payments-for-order-flow earned by Waterhouse and Ameritrade from Knight in the June 30 quarter was $12.4 million. Knight employs sophisticated trading systems and proprietary methods to offer "best execution" services to broker-dealers and institutional customers emphasizing automated execution. The firm also utilizes proprietary risk management systems which provide Knight with real-time, online risk management and inventory control. Knight is also beginning to deploy innovative Internet based tools that permit customer broker-dealers to access information, such as pending order status, within Knight's system.114 Knight makes markets in more than 7,000 NASDAQ and OTC Bulletin Board stocks.115 Through its Trimark subsidiary, it also makes off-exchange markets in all NYSE and AMEX-listed equity securities. As of June 1999, Knight held the largest market share, at 17.5%, of total OTC dealer trading volume.116 In the course of accomplishing its market making business, Knight may either carry inventory (be long) or borrow shares (be short). As of June 30, 1999 Knight held $200 million in long positions and $220 million in short positions.117
3. Making payments for order flow.
As a market maker in NASDAQ securities, Knight engages in the widespread industry practice of "payments for order-flow." Under this practice, broker-dealers who originate market orders receive rebates of typically between 1 cents and 2 cents per share for orders directed by them to selected market makers for execution. This payment is not reflected in the trade confirmation seen by the investor but is paid by the dealer executing the trade from its market making profits. The customer agreements of the online brokers examined typically disclosed the firm's practice of accepting such payments. Further, the fact that the broker may receive other remuneration in connection with the order is typically a disclosure on the back of the trade confirmation documents issued to an investor.118 The absence of payment for order flow revenue from investor limit orders has typically resulted in online firms charging a higher price for limit orders as compared to market orders.119 Recently, one online firm has advertised its refusal to accept payment for order flow.120
Broker-dealers that do not make markets in individual securities, including online firms, direct order flow to firms such as Knight and Mayer & Schweitzer to achieve fast and advantageous executions for their customers. Market conduct rules obligate these originating firms to closely monitor the performance of firms providing such execution services for consistency with applicable market rules and practices. Periodic reports are compiled and furnished to the firms that sell their customer order flow which analyze the market maker's execution services and the frequency of achieving price improvement for customer's orders. However, this information does not reach customers or the public.121
Payments for order flow represent the second highest expense item of Knight's business, at 24% of net trading revenues in the three months ending September 30, 1999. A closer look at Knight's most recent 10Q reveals, however, that, as a percentage of net trading revenue, payments for order flow have declined 21.6% in the first nine months of this year. For the first nine months of this year, such payments constituted 18.85% of net trading revenues compared to 24% for the same period in 1998. This change potentially reflects heightened investor understanding of the risks of market orders and greater use of limit orders which are not eligible for order flow payments. Payments for order flow have been surrounded in controversy since well before online brokerage firms arrived.122 Critics have assailed them as outright bribery and a breach of the broker's agency obligations to the customer. At a minimum, a broker's opportunity to sell customer order flow presents a potential conflict with customers receiving "best executions" since market makers paying for order flow may be less vigilant in obtaining price improvement for customers where it might reduce their own profits. The SEC has not elected to bar the practice and the New York Court of Appeals has determined that application of our common law agency disclosure duties was impliedly preempted by the conflict that would arise with the "policy-based delicate balance Congress directed the SEC to achieve."123
Amid signs that the payment for order flow practice is now gaining a foothold in the options market,124 the SEC is again sounding alarms that the practice is not clear to investors and harmfully conflicts with the broker's "best execution" duty.125 A further assault on the practice may develop when equity pricing converts to decimals on June 30, 2000. The anticipated squeeze on market makers' quote spreads is expected to reduce, if not eliminate this practice. In fact, long-term revenue estimates of analysts for online brokers omit order flow payments.126
Investors should inform themselves about the payment for order plan practices of their brokers. "With today's low commissions, investors need to start focusing on other transaction costs," says John Markese, president of the American Association of Individual Investors.127 In placing orders, they should weigh the impact of the practice in light of their price and time objectives. In selecting their brokers, they should determine what percentage of its customers get price improvement, the average savings and the time it takes to obtain these savings.128
4. Automated executions.
The average online investor clicking the order entry box on their computer probably believes that their electronic buy/sell request for a particular security is directly connected to another party who has an inventory of the stock or seeks to buy the stock. This may occur if different customer limit orders are matched. In fact, such is the model upon which electronic communication networks (ECNs) such as Instinet, Island, REDIBook and Archipelago operate. Nonetheless, NASDAQ itself is not a marketplace of firm orders but a collection of market making dealers quoting bids/asks and profiting from the spread between the bid and ask. A quote is not the equivalent of an order. An order is firm. How firm is a quote if the market maker delays responding to another dealer's attempt to trade at the quote?129 How much size is in the quote? If the quote size is only for 200 shares, how liquid is the market? How long will it take for my order to be filled?
NASDAQ requires that dealers fill orders at the price and at the size represented in their quotes "at the time of receipt of any such offer."130 However, this has never been construed by the NASD to mean instantaneous, yet that is frequently the expectation of public customers. After its quote is hit, the market maker has an additional 10 seconds to change the quote's price and size during which period it is not required to honor its quote. The minimum size for a quote on NASDAQ National Market ("NNM") securities varies, depending on volume, between 1000, 500 or 200 shares.131 In addition, NASDAQ operates the Small Order Execution System (SOES) which does operate as an automatic execution system for small orders from the public.132 In sum, the image and the legal reality of NASDAQ are quite distinct. The basis for the investor's perception of NASDAQ lies in the fact that market makers, such as Knight, go beyond NASDAQ's minimum practices and guarantee to automatically execute transactions at NASDAQ's national best bid/best offer (the NBBO) substantially beyond NASDAQ's minimum practices and in amounts well in excess of NASDAQ legal requirements.
But Knight is not a charity. It is a NASDAQ market maker like all the rest. It has no better position than any other market maker in getting executions against other dealers. During periods of abnormal volatility and volume in a particular stock or group of stocks, Knight reserves the right to suspend its auto-ex guarantee. If the flow of customer orders to Knight exceeds the parameters it has set for auto-ex in an individual security, its traders decide order-by-order whether, to trade or pass the order along.133 Knight's calculation is ultimately dependent upon whether, if it adds to a long or short position by filling the order, it will be able to reverse that position by executing trades for itself against other NASDAQ market makers. Hence, the size of market makers' quotes is the barometer of NASDAQ's liquidity. The volatility of stock prices cited above illustrate what happens when NASDAQ's market makers see risk, step on the brakes (widen their spreads and reduce the size of their quotes), liquidity disappears and prices consequently gyrate.
Under these circumstances, market makers, such as Knight, that provide auto-ex can be expected to and do in fact curtail or suspend auto-ex. As a result all orders reaching these market makers queue up and take longer to manually execute. Separate, but related, delays may occur at the broker-dealers, online or offline, that originate customer orders. These delays may arise in the event of equipment failure or insufficient bandwidth to accommodate transmitting all of the information that must be dispatched to Knight or other market makers. The correspondent's bandwidth constraint may exist at an overall ceiling level, a destination level (the size of the pipe to Knight or other market makers) or an individual security level.
During the past year's Market Storm, Knight constantly recaliberated the auto-ex parameters that it offered for securities. Changes in auto-ex parameters or suspension of auto-ex after a pre-set threshold is hit are electronically disseminated by Knight to its customer broker-dealers before the market opening and as they occur. Knight does not publicly post this information on its website and brokers who receive this data have varying practices as to what they disclose to individual investors. The prevailing practice appears to be a pop-up notice to the investor advising that a group of securities is trading in a "fast market." Since the events of January this year, online brokers have made informational efforts to educate investors of the meaning, resultant risks and behavioral adjustments arising from such conditions. Of course, there may be a general notice if such condition is endemic to the entire NASDAQ market place as has occurred this year on a number of occasions. The following is representative of the message that Ameritrade displayed during the Market Storm relating to Internet stocks:
Due to the extreme volatility in certain Internet related securities, the quotes carried by market data services may not be reflective of the actual price at which trades are occurring. In addition, most NASDAQ market makers have turned off "Auto-Execution" facilities for many of these stocks. Manual execution procedures can take much longer to complete and partial executions at various prices on market orders often occur during these types of markets. Thank you.
At the time of our July 16, 1999 on-site visit at Knight's facility, the predominant auto-ex circuit breaker on intra-day execution was a trade that created a long or short position ("inventory") aggregating thousands of shares above the minimum NASDAQ NNM quote sizes. For volatile issues, such as Internet stocks, the threshold was 60% lower, but still well above the NASDAQ quote sizes. If the trade flagged by the circuit breaker results in shares only marginally above the pre-set inventory benchmark, the Knight trader will frequently click and accept the orders. The purpose of the software is to allow Knight to tap the brakes on how much stock it will either be long or short after the trade. Knight's options, of course, always include curtailing on suspending auto-ex down to NASDAQ's minimum requirements. However, the growth in Knight's business 134 Efficient Networks, Inc., a supplier of high-speed digital subscriber lines, accounted for 65% of the parameter breaking trades. National Information Consortium, Inc. (EGOV), a builder of Internet portals to access information from and transact business with governments, was the other IPO.
For the day previous to our visit, only 31 stocks of the 4600 stocks where Knight offers an auto-ex guarantee saw trades that exceeded Knight's circuit breakers. Half of these stocks saw only five or fewer trades exceed the threshold. In contrast, 73.5% of trades exceeding the threshold were in just two securities that went public on July 15th. Both of these were Internet related issues.134 Finally, 18% of the circuit breaker trades occurred in big name NASDAQ stocks such as Amazon, Microsoft, Network Plus, Glenayre Technologies, Cisco and Viasoft.
Apart from intra-day operating parameters, Knight extends specially tailored execution services for NASDAQ's high-volume morning opening of trading. In June of this year, Knight announced a mid-point pricing plan that accommodates orders aggregating to 250,000 shares in 4800 NASDAQ issues.135 Knight guarantees that orders up to the ceiling will be executed at the mid-point of the first unlocked, uncrossed NBBO regardless of market imbalances. Knight maintains that mid-point pricing results in price improvement for all pre-opening market and marketable limit orders.
Knight is currently conducting an advertisement campaign that proclaims, "Who's the force behind the online trading revolution? We're Knight, the world's leading market maker . . . ."136 Certainly, it is true that today's market volume and speed of executions is inconceivable without auto-ex facilities by market makers at thresholds substantially greater than NASDAQ's firm quote rule.
It is our conclusion that the only way for the NASDAQ market to progress and dispense with the auto-ex curtailments witnessed during the Market Storm, not to mention preparedness for the storms of activity that may lie ahead, is for NASDAQ itself to create a tool that will permit market makers to auto-ex each other at size levels much above the current firm quote rule. Only when immediate access exists for auto-ex providers to other sources of liquidity, can we expect to stem NASDAQ execution delays.
5. Capacity and reliability.
The centrality of Knight in the online trading revolution raises significant questions.
Is Knight a potential single point of failure that would impact the entire market if it experienced either a hiccup or a more serious event?
How reliable are the systems that Knight has constructed?
How much capacity does Knight have and how much capacity will it need for the market to weather the next Market Storm?
In the following sections we present the information gathered on these topics during our inquiry. We do not suggest that we can answer these questions. We did find thoughtful, competent managers that are seeking to insure satisfactory answers in an environment where there are only general directives from either NASD or the SEC.137
(a) Single point of failure.
At its present Jersey City facility Knight has built in redundant systems, including emergency power generation, to insulate itself and investors from a system outage. However, the firm lacks a "hot" back-up data center and is in the process of establishing such a facility.138 Such a facility would substantially diminish Knight's exposure to a business interruption due to fire, weather, environmental or other emergency. Knight's Trimark affiliate, located in New York, is now available as a back-up site.
No online brokers are solely reliant upon Knight as they maintain relationships with other firms, together with the communications infrastructure to reach these alternate execution points.
(b) System reliability.
Knight's uptime availability for the eighteen months covered by our inquiry was 99.95%. This performance was superior to that of any of the online brokerage firms that we examined. A single 45-minute-outage was experienced by Knight on November 30, 1998 -- a Market Storm day when Ameritrade also experienced an outage.139 On November 30th, the Monday, following the Friday (November 27th) after Thanksgiving that also witnessed unprecedented volatility in Internet stocks, Knight saw order imbalances on the morning of the 30th and suspended auto-ex for 60 stocks before the opening. Knight's systems were overwhelmed as it explained in a subsequent letter to its customers:
The additional processing required to handle approximately 40,000 orders manually significantly impacted our trading system. This deluge of order flow also strained every part of our end-to-end service from our help desk response time to our P&S department reconciliation process. As a result, we have taken action to change our auto-ex procedures and to reconfigure our system to handle the type of trading situations encountered on November 30th.140 As indicated in the letter, Knight, as a consequence, made adjustments to its systems and improved its notification procedures to its broker customers.
(c) System capacity.
Knight/Trimark recorded a 600,000 trade day on November 7, 1999, representing cumulative share volume of 328 million shares of OTC and listed securities.141 Knight claims that its installed technology provides capacity of 1.2 million trades per day. This data indicates excess capacity of 50% over a peak day, but it does not capture the relationship that the day's order flow at 9:31 AM, one of the busiest times of the day, bears to total transaction capacity at that time.
It is impossible for a regulator to say that Knight's excess capacity is sufficient -- dependent as such a prognostication would be upon both general market activity and Knight's share (recently increasing) of overall activity. As we set forth below in our recommendations, periodic public visibility of all firm's performance metrics and capacity planning will serve to ensure that firms such as Knight continue to manage responsibly the growth of the electronic marketplace.
http://www.jimjacobson.com/NITE/nysag.shtml
Who is Knight Securities?
Knight Securities is a wholly owned subsidiary of Knight/Trimark Group, Inc. a public company since July 1998. While Knight Securities concentrates upon NASDAQ market making from its Jersey City headquarters, sister corporation Trimark Securities provides off-exchange executions for NYSE listed securities. The origin of Knight/Trimark Group began in 1995. Until just prior to its initial public offering, the business was 60% owned by a consortium of 27 broker-dealers and their affiliates with management owning the remaining 40%.110 After the 30% of Knight now owned by executive officers and directors, online broker-dealers remain the largest shareholders in Knight.111 Waterhouse owns 8.53%, Ameritrade 7.13% and E*Trade and Discover collectively about 5%.112 Waterhouse, Ameritrade and E*Trade each contributed about 12% of Knight's order flow in the quarter ending June 30, 1999, totaling 36.5%.113 The total payments-for-order-flow earned by Waterhouse and Ameritrade from Knight in the June 30 quarter was $12.4 million. Knight employs sophisticated trading systems and proprietary methods to offer "best execution" services to broker-dealers and institutional customers emphasizing automated execution. The firm also utilizes proprietary risk management systems which provide Knight with real-time, online risk management and inventory control. Knight is also beginning to deploy innovative Internet based tools that permit customer broker-dealers to access information, such as pending order status, within Knight's system.114 Knight makes markets in more than 7,000 NASDAQ and OTC Bulletin Board stocks.115 Through its Trimark subsidiary, it also makes off-exchange markets in all NYSE and AMEX-listed equity securities. As of June 1999, Knight held the largest market share, at 17.5%, of total OTC dealer trading volume.116 In the course of accomplishing its market making business, Knight may either carry inventory (be long) or borrow shares
http://www.jimjacobson.com/NITE/nysag.shtml
International Organization of Securities Commissions (IOSCO)
Framework for Supervisory Information About Derivatives and Trading Activities
International Organization of Securities Commissions and Basle Committee for Banking Supervision, Sept. 1998
Causes, Effects And Regulatory Implications Of Financial and Economic Turbulence in Emerging Markets
Sept 1998 The Emerging Markets Committee of the International Organisation of Securities Commissions
International Disclosure Standards for Cross-Border Offerings and Initial Listings by Foreign Issuers
September 1998, International Organization Of Securities Commissions
Objectives and Principles of Securities Regulation
September 1998, International Organization of Securities Commissions
Methodologies for Determining Capital Standards for Internationally Active Securities Firms
May 1998, A Report by the Technical Committee of the International Organization of Securities Commissions
Risk Management and Control Guidance for Securities Firms and their Supervisors
(CONSULTATIVE DOCUMENTS)
March 1998, International Organisation of Securities Commissions
Towards a Legal Framework for Clearing and Settlement in Emerging Markets
November1997, Emerging Markets of the International Organization of Securities Commissions
Principles for the Supervision of Operators of Collective Investment Schemes
September1997, Technical Committee of the International Organization of Securities Commissions
Disclosure of Risk A Discussion Paper
September 1996, Report of the Technical Committee of IOSCO
Reporting of Material Events in Emerging Markets
September 1996, Report of the Emerging Markets Committee of IOSCO
Final Report from the Co-Chairmen of the May 1995 Windsor Meeting to the Technical Committee of IOSCO
August 1996, SIB/CFTC
International Equity Offers: Changes in Regulation since April, 1994
September 1996, Annual Survey Report of IOSCO Working Party No.1
Client Asset Protection
August 1996, Report of the Technical Committee of IOSCO
Measures Available on A Cross Border Basis to Protect Interests and Assets Of Defrauded Investors
July 1996, Technical Committee of the International Organization of Securities Commissions
Discussion Paper on International Co-operation in Relation to Cross-Border Activity of Collective Investment Schemes
June 1996, Report of the Technical Committee of IOSCO No. 38
Legal and Regulatory Framework for Exchange-Traded Derivatives
June 1996, Report of the Emerging Markets Committee of IOSCO
Regulatory Cooperation in Emergencies (A Discussion Paper)
June 1996, Technical Committee of the International Organization of Securities Commissions
Report on Cooperation Between Market Authorities and Default Procedures
Report of the Technical Committee of IOSCO No. 35
Report on Margin
Report of the Technical Committee of IOSCO No. 36
The Implications for Securities Regulators of the Increased Use of Value at Risk Models by Securities Firms
July 1995
Report on Investment Management
October 1994, Report of the Technical Committee of IOSCO No. 27
Issues in the Regulation of Cross-Border Proprietary Screen-Based Trading Systems
October 1994, Report of the Technical Committee of IOSCO No. 28
Report On Issues Raised For Securities And Futures Regulators By Under-Regulated And Uncooperative Jurisdictions
October 1994, Technical Committee of the International Organization Of Securities Commissions
Operational and Financial Risk Management Control Mechanisms for Over-the-Counter Derivatives Activities of Regulated Securities Firms
July 1994
Regulation of Derivative Markets, Products and Financial Intermediaries
October 1993, Report of the Technical Committee of IOSCO
Mechanisms to Enhance Open and Timely Communication Between Market Authorities of Related Cash and Derivative Markets During Periods of Market Disruption
October 1993, Report of the Technical Committee of IOSCO
Coordination Between Cash and Derivative Markets
October 1992, Report of the Technical Committee of IOSCO
Principles For Memoranda Of Understanding
September 1991, Prepared by Working Party No. 4 of the Technical Committee International Organization
Capital Requirements for Multinational Securities Firms
1990, Report of the Technical Committee of IOSCO
International Conduct of Business Principles
July 9, 1990, The Technical Committee of the International Organization of Securities Commissions
Capital Adequacy Standards for Securities Firms
1989, Report of the Technical Committee of IOSCO No.
http://risk.ifci.ch/00007071.htm
Concentrated Positions
23. A significant risk occurs when a firm holds positions in equities (or bonds) which are concentrated in terms of the capital of the firm. This is because a substantial (unexpected) adverse move in the price of a single equity holding (for example because of a takeover) which is itself large relative to a firm's capital could leave the firm vulnerable A firm is of course also vulnerable, because of the possibility of default, if its exposure to a single issuer is large even though that exposure is spread over bonds and equities.
http://risk.ifci.ch/140310.htm
Old Affinity Scam
The U.S. Securities and Exchange Commission ("Commission") announced today that Monti L. Belot, U.S. District Court for the District of Kansas, Wichita Division, issued various emergency orders sought by the Commission to halt a $7.4 million affinity fraud which targeted, among others, members of Christian churches in rural Kansas, Nebraska and Missouri towns. According to the Commission's complaint, the defendants raised funds from at least 125 investors, supposedly to trade in high-yield foreign bank instruments in a secret "prime bank" trading market. The defendants represented to investors that they would receive a monthly return of 20% for 12 to 18 months, and that the return of the investors' principal was fully guaranteed. In reality, the prime bank trading program does not exist and investor funds have been transferred by the defendants to several offshore entities and used for unauthorized purposes. The Commission's complaint alleges that the defendants also conducted a "Ponzi" scheme by making principal and interest payments to early investors with funds raised from later investors to give the false illusion that the investment was successful.
The Commission alleges that the investment scheme is a classic "affinity fraud," in which the defendants preyed on various church communities. To establish credibility within the church communities, defendants gave the investments various names with Biblical connotations, such as Jubilee Trust Fund, Oracle Trust Fund and Elkosh Trust Fund (collectively, the "three funds"). They also proclaimed their status as so-called "born-again" Christians and suggested that the investment would fulfill a religious "duty" or "prophecy." Moreover, they informally enlisted members of various church communities to proselytize on behalf of the investment funds. Consequently, investors, most of whom are unsophisticated investors, invested in the trading programs on trust and faith, rather than adequate information.
According to the Commission's complaint, the scheme was devised, and/or participated in, by Jerome L. DeFries ("DeFries"), Kevin S. McQueen ("McQueen") and Roger Pearson ("Pearson").
DeFries, age 53, is a resident of Bonner Springs, Kansas. DeFries controls the Jubilee, Oracle and Elkosh Trusts, and is responsible for all their business activities.
McQueen, age 35, is a resident of Lee's Summit, Missouri. McQueen raised money from investors for the three funds.
Pearson is a resident of Nebraska, doing business as Biz Enterprises, a Nebraska company which he controls. From December 1998 through March 1999, Pearson received approximately $1.3 million from defendant DeFries through an account maintained by Biz Enterprises. Pearson was named in the lawsuit only as a defendant for the purpose of equitable relief.
The Commission further alleges that DeFries and McQueen have obstructed the Commission's investigation in a number of ways. They have attempted to persuade investors not to cooperate with the staff by requiring them to sign confidentiality agreements and falsely telling them that cooperation with the government will cause them to not receive a return on their investment. They are also reported to have destroyed records after learning of governmental investigations.
In its lawsuit, filed today, the Commission sought and the Court granted emergency orders: (1) freezing the assets of Oracle, Jubilee, Elkosh, DeFries and McQueen; (2) freezing the assets of Pearson, individually, and d/b/a Biz Enterprises, which he received, directly or indirectly, from the activities described in the Commission's Complaint; (3) requiring Oracle, Jubilee, Elkosh, DeFries, McQueen and Pearson to separately furnish an accounting, including an accounting of monies raised from investors; (4) prohibiting the destruction of documents; (5) authorizing expedited discovery; (6) requiring Oracle, Jubilee, Elkosh, DeFries, McQueen and Pearson to repatriate assets held offshore; (7) requiring DeFries and McQueen to surrender their passports and prohibiting them from leaving the Continental United States; and (8) appointing a receiver to recover assets for the benefit of investors.
In its complaint, the Commission alleges that Oracle, Jubilee, Elkosh, DeFries and McQueen violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition to the emergency relief described above, the Commission is seeking preliminary and permanent injunctions restraining future violations of the antifraud provisions of the federal securities laws against Oracle, Jubilee, Elkosh, DeFries and McQueen; an order requiring Oracle, Jubilee, Elkosh, DeFries, McQueen and Pearson to disgorge all wrongfully obtained profits plus prejudgement interest and civil penalties against Oracle, Jubilee, Elkosh, DeFries and McQueen.
The case was investigated jointly by the Commission and the Office of the Securities Commissioner for the State of Kansas. The Commission wishes to acknowledge the assistance of the State of Kansas in this matter.
*****************
The SEC today also issued an investor alert to provide investors tips on how to avoid being a victim in an affinity fraud. The "Affinity Fraud" alert tells investors how to spot an affinity investment scam and describes actions taken by the Commission to stop such scams. The investor alert can be found on the SEC's web site, at www.sec.gov.
http://www.sec.gov/litigation/litreleases/lr16355.htm
Other old scams:
http://www.investorshub.com/boards/read_msg.asp?message_id=2430405
http://www.investorshub.com/boards/read_msg.asp?message_id=2430390
Five Texas firms offering day-trading services settled allegations of violating various industry rules, the regulatory arm of the National Association Securities Dealers Inc. (NASD) said on Thursday.
Without admitting or denying the allegations, the firms, located in Houston and Austin, were censured and ordered to pay fines of up to $75,000, said NASD Regulation Inc.
NASD Regulation said one of the firms, Landmark Securities Corp., was expelled from NASD. Its former president, James Gillock, was fined $50,000 and suspended for two years.
The Houston-based firm was accused of issuing misleading statements on customers' access to markets, misrepresenting the risks of day trading, allowing a person who was not properly registered to supervise day-trading activities, extending improper loans and violating short-sale and trade reporting rules, NASD Regulation said.
THE OTHER FOUR FIRMS
Allegations facing the other four firms include misleading advertisements, short sale and trade reporting violations, and operating without proper supervisory procedures.
Houston firm Momentum Securities LLC was fined $75,000. It, in addition, allegedly failed to disclose possible delays to system access and trade execution and allegedly paid compensation to unregistered entities.
Summit Trading Inc., also of Houston, and its President William Sunshine were fined a total of $20,000.
The NASD complaint also named Austin-based Cornerstone Securities Corp., which is now known as ProTrader Securities Corp., and its former president, Russell Grigsby. They were fined a total of $35,000 for the alleged violations, which also included questionable loans to customers.
CyBerBroker Inc., located in Austin, was only accused of allowing trade executions to be carried out by people not properly registered as equity traders. The firm and its former president, Mark Stryker, were ordered to pay $16,000 and give up $4,000 in commissions.
``The matter took place more than 2 years ago,' CyBerBroker spokesman Trey Robinson said. ``We cooperated with NASDR during the inquiry and we continue to try to be compliant with all the rules at all times.'
ProTrader said it cooperated fully with NASD and has gone through a management shake up. ``As part of the cooperative process, we have worked diligently with the NASD to correct internal polices and procedures, to ensure violations of this type will not occur at ProTrader in the future,' Michael Koch, chief compliance officer at ProTrader, said.
Attorneys for the other firms and individuals could not immediately be reached for comment.
This is not the first time industry regulators have cracked down on day-trading firms. In February 2000, NASD Regulation announced enforcement actions against five Texas firms and a former officer. Actions also were taken against a Chicago firm and individuals in New Orleans.
Currently, complaints are pending against Montvale, New Jersey-based All-Tech Direct Inc., one of the largest day trading companies, and three of its top officers, as well as Stock USA Inc. in San Diego, California.
Disciplinary Actions Reported For June
NASD Regulation, Inc. (NASD RegulationSM) has taken disciplinary actions
against the following firms and individuals for violations of National Association
of Securities Dealers, Inc. (NASD®) rules; federal securities laws, rules, and
regulations; and the rules of the Municipal Securities Rulemaking Board (MSRB).
The information relating to matters contained in this Notice is current as of the
end of May 2001.
Firms Expelled, Individual Sanctioned
Falcon Trading Group, Inc. (CRD #30361, Boca Raton, Florida), Sovereign
Equity Management Corp. (CRD #20016, Deerfield Beach, Florida), and Glen
Thomas Vittor (CRD #1565323, Registered Principal, Deerfield Beach, Florida)
were fined $1 million, jointly and severally. In addition, the firms were expelled
from NASD membership and Vittor was barred from association with any NASD
member in any capacity. The sanctions were based on findings that the
respondents effected short sales for the firms' own accounts and failed to make an
affirmative determination that the firms could borrow the securities or otherwise
provide for delivery of the securities by the settlement date. The findings also
stated that the respondents, in cooperation with others, attempted to obtain stock
at below-market prices through the use of threats and coercion, and that, through
naked short sales and extortion, the respondents participated in a manipulation of
the market for those securities. (NASD Case #CAF980002)
Firm Fined, Individual Sanctioned
http://www.nasdr.com/pdf-text/0106dis.txt
SOBI EM
Dow Jones to Acquire Alternative Investor Group for $85 Million, Bolstering Coverage of Venture Capital and Private Equity Markets; Sets Conference Call for 5 P.M. Today Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 19, 2004--Dow Jones & Company (NYSE: DJ) announced today that it has signed an agreement to acquire the stock and assets comprising the Alternative Investor Group of Wicks Business Information, LLC for a cash purchase price of $85 million, including net working capital (Dow Jones will assume no debt in the transaction). The purchase will be financed via operating cash flow and incremental borrowings under the Company's commercial paper program. The purchase price could potentially be increased by $5 million, payable in 2008, if performance in 2007 exceeds currently projected 2007 levels. The transaction, which is subject to regulatory approval and customary closing conditions, is expected to be completed by the end of the first quarter of 2004.
Alternative Investor is the leading provider of databases, newsletters and industry conferences for the venture-capital market and newsletters and events for the private-equity market. It had 2003 revenue of $23.1 million and pro-forma EBITDA1 of $9.5 million. The transaction is expected to be modestly accretive to Dow Jones earnings per share in 2004.
To maximize synergies, Alternative Investor will be integrated within the highly profitable Dow Jones Newsletters division, which also includes the recently acquired Technologic Partners business that also serves the venture-capital and private-equity markets with its VentureWire newswire and conferences. This newly formed operating unit providing newsletters, databases and conferences will be operated within the Dow Jones Newswires division, which in turn is part of the Dow Jones Electronic Publishing segment. Richard A. Shaffer, founder of Technologic Partners, will be editor and publisher of this unit, reporting to Paul Ingrassia, president of Dow Jones Newswires.
"For more than a century, Dow Jones has been the leader in coverage of public companies and public markets. Now we will also be the leader in news and information on private companies and private markets," said L. Gordon Crovitz, senior vice president of Dow Jones & Company and president, Electronic Publishing. "We are very pleased to make this acquisition and add this coverage at a time when venture-capital and private-equity firms are once again increasing their key role in global capital markets." "The core capability of Alternative Investor is gathering, interpreting and publishing financial-market information for the benefit of financial professionals and markets --a very similar mission to Dow Jones Newswires," said Mr. Ingrassia. "We will add Newswires content and expertise to benefit Alternative Investor customers. In turn, Newswires customers, especially brokers and wealth managers, will benefit from access to the Alternative Investment products to assist them in advising their high-net-worth clients. Mr.
Ingrassia concluded, "We are delighted to welcome the many talented employees of Alternative Investor to the Dow Jones family and look forward to working together to build these strong brands." "The quality and performance of the core products within Alternative Investor have been impressive over recent years despite a challenging business environment," said Doug Manoni, chief executive officer of Wicks Business Information. "The resilience of their performance stands as a testament to both the strength of the brands and the commitment of the employees." Alternative Investor Products--Databases, Newsletters and Conferences Alternative Investor produces five databases. These include Venture Source, which since 1987 has been the leading source of information on venture-capital deals, companies and people. This database, based in San Francisco, is built on proprietary information about which funds are investing in which companies and at what valuations. Venture capitalists then are able to use this information to analyze investing opportunities.
Alternative Investor publishes four newsletters and other publications, including Private Equity Analyst, which since 1988 has been the authoritative source of news and information covering the private-equity market and its investment specialities, including venture capital, leveraged buyouts, mezzanine investing and turnarounds.
Private Equity Analyst, based in Wellesley, Mass., also conducts the Private Equity Analyst range of eight annual conferences, the leading gatherings of the private-capital industry.
Alternative Investor Expands Dow Jones Capabilities Alternative Investor will expand Dow Jones Newswires capability to provide news and information in different channels of distribution.
"We want to broaden ways of distributing our financial news.
Electronic newsletters, databases and related conferences provide another channel of distribution for our products--complementing our strong distribution base on market-data terminals," Mr. Ingrassia noted. "This acquisition is a rare combination of market-leading content and products that fit perfectly with that strategy." Dow Jones Newswires currently publishes 20 newsletters for specialized markets in both public and private-capital markets. These newsletters include Daily Bankruptcy Review, Daily Bankruptcy Review-Small Cap, Dow Jones Corporate Governance and High Yield Weekly. (A full list of Alternative Investor Properties and Dow Jones Newsletters can be found on page 7 of this release). In addition, Technologic Partners has eight newsletters, including VentureWire Professional, which is the leading news service for the venture-capital community, VentureWire Wireless, VentureWire Lifescience and ComputerLetter. This group of high-priced newsletters has several thousand subscribers.
Complementary Services Venture Source, Private Equity Analyst and the other Alternative Investor products will draw on content from all Dow Jones publications and its network of more than 1,500 news staff around the world.
Likewise, content from the Alternative Investor products will be made available to other Dow Jones publications and services.
Alternative Investor has major offices in Wellesley, Mass., and San Francisco, with news bureaus and sales offices in New York and London.
Dow Jones will host a conference call for analysts and investors at 5 p.m. EST today. The call can be accessed via a live Web cast through the Investor Relations section of the Company's Web site, www.dowjones.com, or through a dial-in conference line, by dialing 201-689-8054. A replay of the conference call and the full text of the prepared remarks will be available on the Company's Web site in the Investor Relations section shortly after the call concludes.
About Dow Jones & Company In addition to The Wall Street Journal and its international and online editions, Dow Jones & Company (NYSE: DJ; www.dowjones.com) publishes Barron's and the Far Eastern Economic Review, Dow Jones Newswires, Dow Jones Indexes and the Ottaway group of community newspapers. Dow Jones is co-owner with Reuters Group of Factiva, with Hearst of SmartMoney and with NBC of the CNBC television operations in Asia and Europe. Dow Jones also provides news content to CNBC and radio stations in the U.S.
About Wicks Business Information Based in Fairfield, CT, Wicks Business Information (www.wicksbusinessinfo.com) concentrates on growth by acquisition and development of business publications, databases, conferences and specialized information products serving the financial industry and the general business sector. The WBI portfolio also includes Investment Advisor and Treasury & Risk Management franchises, as well as the Briefings Publishing Group of professional development media.
Wicks Business Information is an affiliate of The Wicks Group of Companies, L.L.C., (www.wicksgroup.com), a private equity firm focused on selected segments of the communications, information and media industries.
Information Relating To Forward-Looking Statements and Non-GAAP Reconciliation: This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated, including the volatility of the venture capital and private equity markets and the extent to which these markets begin to grow, following their contraction in recent years; the Company's ability to successfully integrate this acquired business, which includes the distinct newsletters, database and events businesses, into the company's Newswires business unit, and to achieve production and operational efficiencies in doing so; the competition from other news and information companies for products aimed at the venture capital or private equity markets; the volatility of the events business which is impacted by growth and contraction in the venture capital and private equity markets and by external factors that impact willingness to travel, such as war and other geopolitical events; and such other risk factors as may be included from time to time in the Company's reports filed with the Securities and Exchange Commission. This press release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, we have attached to this press release a reconciliation of those measures to the most directly comparable GAAP measures. This reconciliation is also available on the Investor Relations page of our web site at www.dowjones.com.
1 EBITDA - Use of Non-GAAP Measures: EBITDA is widely used in the industry as a measure in evaluating the market value. EBITDA is not a measure of performance under generally accepted accounting principles and should not be construed as a substitute for net income as a measure of performance, nor as a substitute of cash flow as a measure of liquidity. Pro forma EBITDA was calculated for Alternative Investor as follows: -0- *T (in millions) 2003 ----- Net loss, as reported $ (5.5) Adjusted for: Income tax benefit (1.8) Interest expense 2.6 Depreciation and amortization expense(*) 12.3 Pro forma adjustments(**) 1.9 Pro forma EBITDA $9.5 *T (*) 2003 depreciation was $0.8 million and amortization of intangibles was $11.5 million. The amortization of intangibles for Dow Jones will be determined by a third party valuation. Dow Jones expects significantly lower annual amortization costs based on a preliminary assessment of amortizable intangibles.
(**)Pro forma adjustments include corporate overhead allocations and other costs that will not be included in its continuing operations.
Editors Note: a complete list of Dow Jones Newsletters and Alternative Investor publications follow on the next page.
-0- *T ALTERNATIVE INVESTOR PROPERTIES Newsletters--4 Total 1. The Private Equity Analyst 2. The Venture Capital Analyst (Healthcare Edition) 3. The Venture Capital Analyst (Technology Edition) 4. The GP Management Report Directories--4 Total 1. Galante's Venture Capital & Private Equity Directory 2. The Directory of Alternative Investment Programs 3. The Directory of Corporate Acquirers 4. The Directory of Leveraged Lenders Reports--8 Total 1. PEA Private Equity Fund of Funds Report 2. PEA-Holt Private Equity Compensation Study 3. PEA Private Equity Partnership Terms & Conditions Study 4. VentureOne Deal Terms Report 5. VentureOne Valuations & Liquidity Report 6. VentureOne Venture Capital Industry Report 7. VCA Report: Drug-Coated Stents & Beyond 8. VCA Report: Healthcare Investor Sourcebook Guides--2 Total 1. The PEA Guide to the PE Secondary Market 2. The PEA Guide to VC and PE Attorneys Conferences--8 Total 1. PEA Outlook 2. PEA Conference 3. VentureOne Summit 4. LP Summit Europe 5. LP Summit East 6. LP Summit West 7. Innovation & Growth East 8. Venture Journey Europe Databases--5 Total 1. VentureSource 2. Private Equity Interactive 3. CompensationPro 4. VentureReporter 5. MergerReporter DOW JONES NEWSLETTERS Newsletters--20 Total 1. Daily Bankruptcy Review 2. Daily Bankruptcy Review Small Cap 3. Dow Jones Airline Industry Daily 4. High Yield Weekly 5. Dow Jones Corporate Governance 6. Mutual Fund Advance 7. The REIT Investor 8. International Insolvency 9. Dow Jones China Energy 10. Energy Legal Beat 11. Telecom Intelligence 12. VentureWire Professional 13. VentureWire Lifescience 14. VentureWire Wireless 15. Semiconductor Innovation Letter 16. VentureWire Monthly 17. Computer Letter 18. VentureWire People 19. VentureWire Alert 20. Tomorrow's News Today *T
Omni Medical Announces Closing Date for Acquisition Business Editors/Health/Medical Writers RAPID CITY, S.D.--(BUSINESS WIRE)--Feb. 19, 2004--Omni Medical Holdings, Inc.'s (OTCBB:ONMH) letter of intent to acquire an Iowa based medical transcription company has been extended to March 31, with closing set for that date. This extension was needed to facilitate a more orderly integration of systems and client accounts.
The operation in Iowa has a ten year history in providing transcription services.
Omni will merge the company with its Kentucky based transcription division, McCoy Business Services, resulting in greater efficiencies for the transcription operations. Omni will continue to maintain the regional sales office that will service the Iowa and Illinois area.
The acquisition will increase Omni's presence to five states and is anticipated to increase revenue to nearly $3 million annually.
"This pending acquisition is a very exciting one for Omni Medical.
Upon completing this acquisition, we will have over 35 employees, 50 independent contractors and clients located in seven states. Cash flow is expected to be positive, along with expanding operating margins through efficiencies. We continue to grow primarily through acquisition and have many candidates we are currently negotiating with. Omni remains confident it will reach its targeted revenue goals for the year ahead," said CEO Arthur Lyons.
Based in Rapid City, SD, Omni Medical Holdings is a medical services company providing transcription, billing and collection services to healthcare providers throughout the United States.
This Press Release may contain forward-looking statements including the Company's beliefs about its business prospects and future results of operations. These statements involve risks and uncertainties. Among the important additional factors that could cause actual results to differ materially from those forward-looking statements are risks associated with the overall economic environment, changes in anticipated earnings of the Company, lack of expected performance of acquired entities and other factors detailed tin the Company's filing with the Securities and Exchange Commission that are contained in the Edgar Archives. In addition, the factors underlying Company forecasts are dynamic and subject to change and therefore those forecasts speak only as of the date they are given. The Company does not undertake to update them; however, it may choose from time to time to update them and if it should do so, it will disseminate the updates to the investing public.
South Shore Savings Bank Completes Acquisition of Horizon Bank & Trust Company Business Editors SOUTH WEYMOUTH, Mass.--(BUSINESS WIRE)--Feb. 19, 2004--South Shore Savings Bank today announced that it has completed its acquisition of Horizon Bank & Trust Company ("HZBT") in a $20 million cash transaction. The Bank also announced that it has formed a mutual holding company, South Shore Bancorp, MHC, in accordance with Massachusetts banking laws and regulations requiring the Bank to reorganize into the mutual holding company structure to facilitate the acquisition.
"This acquisition has made South Shore Savings Bank a stronger and more diverse financial institution that will continue to be dedicated to fulfilling its mission as a community bank serving the residents and businesses of the South Shore," said Arthur R. Connelly, Chairman and Chief Executive Officer of South Shore Savings Bank. "We are looking forward to welcoming Horizon Bank & Trust's customers into the South Shore Savings Bank family." Originally chartered in 1833, South Shore Savings Bank is a full-service community bank with approximately $865 million in assets, 12 branches and 11 ATMs. All deposits are insured in full. The first $100,000 is insured by the Federal Deposit Insurance Corporation (FDIC); all accounts above this limit are insured by the Depositors Insurance Fund (DIF).
CSC Acquires Mortgage Industry Utility From Freddie Mac Company Plans to Expand Default Management Services EL SEGUNDO, Calif., Feb. 19 /PRNewswire-FirstCall/ -- Computer Sciences Corporation (NYSE: CSC) today announced that it has purchased EarlyResolution, a default management utility, from Freddie Mac. The purchase agreement includes acquisition of the utility assets, customer contracts and intellectual property in EarlyResolution for the U.S. mortgage servicing market segment. Terms of the agreement were not disclosed.
EarlyResolution was created in 2000 by Freddie Mac in collaboration with Revolent Technologies and a consortium of banks to help mortgage servicers find effective solutions when borrowers are in default, lower collection costs associated with defaults and enable more borrowers to keep their homes when facing potential foreclosure. Users include six major servicers: Wells Fargo, Chase Home Mortgage, Indy Mac, National City Mortgage, Bank of America Mortgage and Greenpoint.
"CSC has been a technology and operations provider to Freddie Mac since the founding of EarlyResolution," said Philip E. Comeau, vice president of non-performing loans for Freddie Mac. "CSC participated in the collaborative effort to build EarlyResolution and has continuously hosted and operated this business process hub since its inception. The ownership change will be virtually transparent to current users and, since EarlyResolution does not require major changes to legacy systems, servicers will find its business process services easy to use." "EarlyResolution users have achieved substantial business results, particularly in reducing foreclosure and bankruptcy rates, and call processing time," said Jamie Jackson, managing director, mortgage lending, with CSC's Consulting Group. "We are pleased to assume ownership of this service and see great potential for its broader adoption within the industry." CSC will collaborate with its clients and other vendors to expand the functionality of EarlyResolution, allowing clients to layer complementary customer-related services onto the hub. These additional services will help lenders more effectively manage the default process and support other types of consumer loan and business processes.
EarlyResolution can be used for most mortgages in a servicer's portfolio.
The Web-based utility guides loan counselors to the best possible resolution plan for delinquent loans using a linear progression of options. A rules engine factors the borrower's willingness and ability to reinstate the mortgage against the servicer's loss mitigation philosophy and applicable investor and guarantor requirements. The servicer defines these rules through a set of flexible and robust management controls that help enforce consistent application and construct a lasting solution to the delinquency.
The financial services mortgage segment is one of the largest consumer lending industry segments with more than $5 trillion in loans outstanding.
CSC has approximately 10,000 employees dedicated to serving its financial services client base of more than 1,200 major banks, healthcare organizations, insurers and investment management and securities firms.
About CSC Founded in 1959, Computer Sciences Corporation is a leading global information technology (IT) services company. CSC's mission is to provide customers in industry and government with solutions crafted to meet their specific challenges and enable them to profit from the advanced use of technology.
With approximately 90,000 employees, CSC provides innovative solutions for customers around the world by applying leading technologies and CSC's own advanced capabilities. These include systems design and integration; IT and business process outsourcing; applications software development; Web and application hosting; and management consulting. Headquartered in El Segundo, Calif., CSC reported revenue of $13.8 billion for the 12 months ended Jan. 2, 2004. For more information, visit the company's Web site at www.csc.com.
SOURCE Computer Sciences Corporation
BVR Technologies Ltd. Announces the Closing of a Share Purchase Agreement for Technoprises BVR to Issue 90% of the Share Capital of the Company TEL AVIV, Israel, Feb. 19 /PRNewswire-FirstCall/ -- Technoprises Ltd.
(OTC Bulletin Board: BVRTF.OB), a global provider of end-to-end cross-media integration for "seamless computing", today announced that following the announcement of December 23, 2003 it has completed its merger with BVR Technologies Ltd. For the time being, Technoprises will use the current ticker symbol.
At a special shareholder meeting held on January 18 2004, BVRT Technologies shareholders voted to approve the issuance of 90% of its issued shares to the Shareholders of Technoprises Apros & Chay Ltd. and other parties. Following the completion of the merger, Technoprises and its shareholders received 88,539,309 shares of newly issued ordinary shares.
Yaron Sheinman, Chairman and Chief Executive Officer of the Company, and Joshua Agassi, director, resigned from their positions.
Prosper Abitbol, Chairman and CEO of Technoprises, said, "As a public company, we will be able to go to the capital markets in order to continue to fund our subsidiaries. Our mission is to enhance the experience of business, leisure and entertainment content consumers by leveraging and commercializing leading-edge technologies. We will do so by capturing content from any source, enrich it by matching it with complementary content from other sources, and package and deliver it in a personalized manner to any digital device." About Technoprises Ltd.
Technoprises is a strategic roll-up of companies who have come together to optimize synergies of their respective businesses. Since 1995, R&D investments in the technologies owned by the company totals approximately $40 million. In addition to having the technologies needed to provided end-to-end cross-media integration for "seamless computing", Technoprises has seven patent applications -- six are pending and one was approved in 2003, as well as exclusive license rights to a patent for InfoStyle -- a technology to distribute targeted media to customers based on a profile of up to 28 unique ways of processing information. The Company's subsidiaries are TCM -- including the TVgate Division purchased from Comverse Ltd., (Nasdaq: CMVT), and Coresma.
Safe Harbor This press release may contain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current expectations of the management of BVR Technologies only, and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in technology and market requirements; decline in demand for BVR's affiliates' products; inability to timely develop and introduce new technologies, products and applications; loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of BVR to differ materially from those contemplated in such forward-looking statements.
BVR Technologies undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risk and uncertainties affecting BVR, reference is made to BVR's reports filed from time to time with the Securities and Exchange Commission.).
SOURCE Technoprises Apros and Chay Ltd.
Collectors Universe Sells Majority of Auction Businesses To Unit of Greg Manning Auctions NEWPORT BEACH, Calif., Feb. 19 /PRNewswire-FirstCall/ -- Collectors Universe, Inc. (Nasdaq: CLCT), the leading provider of value-added grading and authentication services and products to dealers and collectors of high-end collectibles, today reported that in accordance with the plans to reposition the corporate strategy to focus on its grading and authentication business, the Company has sold its Bowers & Merena, Kingswood Coin Auctions and Superior Sports Auction Divisions to Spectrum Numismatics International, Inc.
("Spectrum Numismatics"), a unit of Greg Manning Auctions, Inc.
(Nasdaq: GMAI).
Commenting on the decision, Chief Executive Officer Michael Haynes stated, "We have been analyzing the results from our two segments, and we decided to reposition the company and return our focus to our core competency as the leading grader and authenticator of high-end collectibles. We believe that our opportunities for profitable growth in the grading and authentication business are significant and to achieve the maximum value for our shareholders, it is necessary to devote all of our resources to that single objective." In the sale to Spectrum Numismatics, Collectors Universe has sold businesses and operations comprised of the Bowers & Merena, Kingswood and Superior Sports Auctions names. Under the terms of the agreement, the Company will receive $2.5 million in cash for the assets of these businesses, exclusive of their accounts receivable and inventory, which the Company will retain. The Company plans to collect the receivables and sell the inventory in the ordinary course, which is expected to generate approximately $8 million of additional cash for the Company. The businesses sold to Spectrum Numismatics had net revenues of $13.9 million in the fiscal year 2003, and represented 44% of the revenue from the commerce segment of the Company's business, and 27% of total net revenues, in fiscal 2003.
Collectors Universe also plans to sell its remaining assets in Odyssey Auctions, which represented 6% of collectible sales segment revenue in fiscal year 2003. Earlier in fiscal 2004, the Company sold its currency auction business, operated by its wholly owned subsidiary, Lyn Knight Currency Auctions, Inc. This business accounted for 10% of the commerce segment's revenue in fiscal year 2003.
For the fiscal year ended June 30, 2003, the Company's collectibles auction and sale businesses generated 61% of Collectors Universe's total revenues. At September 30, 2003, this segment accounted for $6.4 million, or 93% of the Company's total net accounts receivable and $7.2 million, or all of the Company's net inventories. The Company plans to reinvest the cash provided by the sale of the assets and inventory and the collection of accounts receivable into the continuing operations of the grading and authentication businesses.
Leveraging Dominant Brands Key to Growth David Hall, President and Founder of Collectors Universe, said, "We have successfully developed our brand names in the grading and authentication businesses, beginning with the original brand, PCGS. By focusing our attention on these brands and the possible future expansion of our authentication business into vertical and horizontal markets, we believe that we can best leverage our successful experience in managing and creating these brands and direct our capital for a maximum return on investment." About Collectors Universe Collectors Universe, Inc. is the leading provider of products and essential services to the high-end collectibles market. The Collectors Universe brands are among the strongest and best known in their respective markets. The Company grades and authenticates collectible coins, sportscards, stamps, and autographs. This information is accessible to collectors and dealers at the Company's web site, www.collectors.com , and is also published in print.
Forward-Looking Statements This news release contains statements regarding our expectations about our future financial performance that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Our actual results in the future may differ, possibly materially, from our current expectations as set forth in the forward looking statements contained in this release due to a number of risks and uncertainties. Those risks and uncertainties include, but are not limited to: changes in general economic conditions, and changes in conditions in the collectibles markets in which we operate, such as a possible decline in the popularity of some high-end collectibles, either of which could reduce the volume of grading submissions and, therefore, the grading fees we generate potential losses on owned collectible merchandise or the need to adjust these inventories to fair market value through inventory write downs; our dependence on a limited number of key management personnel the loss of any of which could adversely affect future financial performance; and seasonality and potential fluctuations in quarterly operating results and quarterly cash flows. Certain of these risks and uncertainties, in addition to other risks, are more fully described in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2003, as filed with the Securities and Exchange Commission.
These forward-looking statements are made only as of the date of this news release, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. In addition, although we believe that our strategy to exit the commerce segment of our business and focus substantially all of our resources on our grading and services segment will better enable us to achieve improvements in the profitability, there is no assurance that our strategy will prove to be successful. Among other things, one consequence of our strategy is that there will be a significant decline in our revenues. As a result, our profitability will suffer if we are unable to reduce our general and administrative expenses to bring them in line with our lower revenue base.
Also, there is a practical limit on the amount by which expenses can be reduced as a means of improving profitability. As a result, our success in the future will depend as well on our ability to achieve internal growth in our grading businesses and to find and take advantage of opportunities to acquire other businesses that provide value added services to the collectibles markets. There is no assurance that we will be able to achieve such growth and growth by acquisition presents a number of risks including an inability to integrate newly acquired businesses into existing operations successfully.
SOURCE Collectors Universe, Inc.
Trover Solutions Announces Agreement to be Acquired for $60 Million LOUISVILLE, Ky., Feb. 20 /PRNewswire-FirstCall/ -- Trover Solutions, Inc.
(Nasdaq: TROV) today announced that it has entered into a definitive agreement to be acquired for approximately $60 million (subject to adjustment for option exercises) in an all-cash transaction. The acquirer, a private equity fund managed by Tailwind Capital Partners, will pay $7.00 per share in cash for all outstanding shares of Trover Solutions' common stock. CapitalSource Finance LLC has signed a commitment letter to provide senior debt financing as part of the transaction.
The payment to shareholders represents a premium of approximately 21% over the Company's stock price of approximately $5.80 prior to the announcement that the Board of Directors had formed a Special Committee to review strategic alternatives. The investment banking firm of Houlihan Lokey Howard & Zukin advised the Special Committee in connection with both the consideration of these alternatives and the consummation of the Tailwind Capital Partners transaction.
Jill L. Force, Chair of the Special Committee, said, "Since last August, the Special Committee, comprised of the Company's independent directors, has conducted an exhaustive review of the strategic alternatives available to Trover Solutions, and we are confident that this transaction serves the best interests of our shareholders." Douglas M. Karp and Lawrence B. Sorrel, Managing Partners of Tailwind Capital Partners, said, "We look forward to working with the highly capable management team and employees of Trover Solutions to build and grow the company under private ownership. Trover Solutions' market position at the intersection of technology, healthcare and business services meshes perfectly with our expertise." Patrick B. McGinnis, Chairman and Chief Executive Officer of Trover Solutions, said, "The entire senior management team and I look forward to working closely with the highly experienced professionals at Tailwind Capital Partners in leading Trover Solutions as we continue to pursue market leadership in healthcare subrogation, property and casualty subrogation, and related software solutions." The Company anticipates filing its preliminary proxy material regarding the transaction in March 2004. The transaction is subject to customary closing conditions, including approval by the Company's stockholders, and is expected to be completed in the first half of 2004.
About Trover Solutions Trover Solutions, Inc. is a leading independent provider of outsourced insurance subrogation and other claims recovery and cost containment services to the private healthcare payor and property and casualty industries. The Company's other claims recovery services include clinical bill auditing and overpayments recovery.
About Tailwind Capital Partners Tailwind Capital Partners is the merchant banking affiliate of investment firm Thomas Weisel Partners LLC. Tailwind manages Thomas Weisel Capital Partners, L.P., a $1.3 billion private equity fund with backing from leading institutional investors and a current portfolio of over 30 companies primarily focused in the growth sectors of the economy, including healthcare, technology and business services, and media and communications. Tailwind's team of 20 dedicated investment professionals brings to bear an exceptional combination of private equity and operating experience, and is headquartered in New York and San Francisco.
About CapitalSource Finance LLC CapitalSource (NYSE: CSE) is a specialized commercial finance company offering asset-based, senior, cash flow and mezzanine financing to small and mid-sized borrowers through three focused lending groups: Corporate Finance, Healthcare Finance, and Structured Finance.
Forward-Looking Statements This press release includes forward-looking statements, which are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically indicated by the presence of words such as "expect," "anticipate," "believe," "intend," "may," "predict," "will be" and other similar expressions. These forward-looking statements cover, among other items, statements regarding the consummation of any transaction. Any forward-looking statements are not guarantees of future performance and actual results could differ materially from those anticipated as a result of certain risks and uncertainties, some of which are beyond the control of the Company. A description of the risk factors affecting the Company's business can be found in Trover Solutions, Inc.'s Safe Harbor Compliance Statement included as Exhibit 99.1 to its Annual Report on Form 10- K for the fiscal year ended December 31, 2002.
Additional Information About the Transaction In connection with the proposed acquisition transaction, the Company intends to file a proxy statement with the U.S. Securities and Exchange Commission (the "SEC"). All security holders of Trover Solutions are advised to read the proxy statement when it becomes available because it will contain important information about Trover Solutions and the proposed transaction.
Security holders may obtain a free copy of the proxy statement, when available, and other documents filed by Trover Solutions with the SEC at the SEC's website at http://www.sec.gov/ . Free copies of the Company's SEC filings also may be obtained by directing a request to Trover Solutions Investor Relations, Trover Solutions, Inc., 1600 Watterson Tower, Louisville, Kentucky 40218. In addition, investors and security holders may access copies of documents filed with the SEC by Trover Solutions on the Company's website at www.troversolutions.com .
Trover Solutions, its directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company's stockholders in favor of the proposed transaction. A description of the security holdings and other interests of the directors and executive officers of Trover Solutions will be set forth in the proxy statement referred to above.
SOURCE Trover Solutions, Inc.
Center Financial Corporation (Nasdaq:CLFC) and Liberty Bank of New York (Liberty Bank) today announced the signing of a Memorandum of Understanding whereby Center Financial Corporation will acquire Liberty Bank in a cash transaction. The Memorandum indicates Liberty Bank will be merged into Center Financial Corporation's wholly owned subsidiary, Center Bank, headquartered in Los Angeles. Financial terms were not disclosed. Upon successful completion of due diligence, Center Financial and Liberty Bank will move forward to execute a definitive agreement.
Liberty Bank of New York, with total assets of $73.5 million as of December 31, 2003, focuses on serving the Korean-American business community in the New York metropolitan area. Liberty Bank operates two full-service branch offices located in Manhattan and Flushing. It is a commercial bank chartered under the New York State Banking Laws and insured by the Federal Deposit Insurance Corporation (FDIC).
Center Financial Corporation, the financial holding company of Center Bank, had total assets of $1.0 billion at year-end 2003.
Founded in 1986, Center Bank is a community bank offering a full range of financial services and is one of the nation's largest financial institutions focusing on the Korean-American community. It specializes in commercial and SBA loans and trade finance products for multi-ethnic and small business customers. Center Bank operates 13 full-service branches throughout Southern California and five loan production offices located in Phoenix, Seattle, Denver, Las Vegas and Washington, D.C. Center Bank is a California state-chartered and FDIC-insured financial institution.
The transaction is subject to the completion of due diligence, the execution of a definitive agreement, appropriate regulatory approvals and the approval of the Board of Directors and the stockholders of Liberty Bank.
This release may contain forward-looking statements, which are included in accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The cautionary statements contained in Center Financial Corporation's filings made from time to time with the Securities and Exchange Commission are incorporated herein by reference. These factors include, but are not limited to: the ability of Center Financial and Liberty Bank of New York to execute definitive agreements following on and pursuant to the Memorandum of Understanding. Actual results and performance in future periods may be materially different from any future results or performance suggested by the forward-looking statements in this release. Such forward-looking statements speak only as of the date of this release. Center Financial and Liberty Bank of New York expressly disclaim any obligation to update or revise any forward-looking statements found herein to reflect any changes in the either of the company's expectations of results or any change in events.