The Buzz on Business

INVESTMENT ADVISER GETS 12 YEARS FOR FRAUD: A federal judge Tuesday sentenced an investment adviser to 12 years in prison on fraud charges related to the loss of $216 million in a hedge fund at the state agency for injured workers. Mark Lay, chief executive and founder of the now defunct MDL Capital Management of Pittsburgh, also was ordered to pay $212.9 million in restitution and a $590,000 forfeiture. The forfeiture is the amount of money the jury determined he earned from his work on the hedge fund. U.S. District Judge David D. Dowd Jr., who sentenced Lay after the second day of a lengthy sentencing hearing, ordered Lay to be taken into custody immediately. He was led away in handcuffs. His mother shouted, "It's going to be OK, babe, we're here." Lay had faced a maximum of 27 years in prison. The Ohio Bureau of Workers Compensation was the sole investor in a high-risk hedge fund Lay set up in Bermuda. He was convicted in October of repeatedly failing to tell bureau officials when questioned, beginning in 2004, about the extent of the risk he was taking. Lay's defense attorneys argued that he was a scapegoat for a legitimate investment loss that wasn't a crime.

INSURER OFFERS 'GREEN' ADD-ON COVERAGE: Fireman's Fund Insurance Co. is targeting environmentally conscious homeowners with a new insurance product that would cover the cost of rebuilding a home to "green" building standards. "The green upgrade will actually replace a home that is not already green in the event of a loss," Erron Al-Amin, the company's senior director of Personal Insurance, said Monday. Fireman's Fund, which officially unveiled the plan Tuesday, is offering the green coverage option in several states, including Arizona, Georgia, Maine and Nevada. In California, it will be folded into the overall plan beginning Aug. 1. The company has received clearance to sell the optional coverage in 26 states, Al-Amin said, and expects to get clearance from all U.S. states by the end of the year. The green coverage, however, is only offered as an add-on to the company's top-tier homeowners insurance package. It would cost $25 a year to add the coverage for a home with a replacement cost valued at $500,000 or less, Al-Amin said. The green coverage feature kicks in only if the damage already is covered under the overall base homeowners insurance policy. Flood damage, for example, isn't covered unless the homeowner pays for that coverage add-on as well.

McCLATCHY SELLS OFF ONLINE AD SERVICE: The McClatchy Co., owner of The Modesto Bee and Merced Sun-Star, announced today that it has sold its stake in an online advertising and shopping service to another media company for $7.875 million. Gannett Co. Inc. bought McClatchy's 15 percent stake in ShopLocal LLC. McClatchy will use proceeds from the sale to pay down bank debt. The deal also will give the company a cash tax savings of about $5.6 million in the fourth quarter of this year, McClatchy officials said. It acquired a 33 percent stake in ShopLocal in June 2006 when it bought Knight Ridder Inc. Two months later it sold 18.3 percent of the business to ShopLocal partners Tribune Co. and Gannett.

SOUTHWEST PLANS TO FLY INTERNATIONAL: Southwest Airlines Co. said Tuesday it plans to offer international service -- a first for the low-fare carrier -- through a deal with Canada's WestJet. Southwest said it has taken the first step toward striking a so-called code-sharing agreement and planned to announce schedules and other features of the WestJet partnership by late next year. The agreement is subject to review by U.S. and Canadian regulators. Under most code-sharing deals, airlines sell tickets on each other's flights and share the resulting revenue. Southwest passengers could connect to a WestJet flight to Canada. Frequent-flier programs typically are reciprocal.

BEE NEWS SERVICES

Figuratively Speaking

82: Percentage of corporate responsibility, or CR, practitioners who rate their organizations favorably on their achievement of CR goals, according to a study by Sirota Survey Intelligence.

53: Percentage of providers of CR-related services (those who supply organizations and practitioners with strategic advice and counseling, management consulting, communications solutions, research and development, training/education, advertising and public relations and other services) who say those organizations' CR efforts have attained their objectives.

JOHN MacINTYRE, UNIVERSAL PRESS SYNDICATE

This story was originally published July 8, 2008 at 11:50 PM with the headline "The Buzz on Business."