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With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Intel Dealt $1.45 Billion Fine; WSJ: Gov't Wants Financial Sector Pay Overhaul; Verizon Divests Access Lines for Stock; AIG Says 5 Years to Pay Back Gov't; Foreclosures Jump to Record High; Geithner: Small Banks to Get TARP Funds; Auto Dealers Get The Axe; Ford Raises $1.4 Billion From Stock Sale
- European Union legislators smacked Intel Corp. (NASDAQ: INTC) with a record 1.06 billion euro ($1.45 billion) fine for using illegal rebates to push competition out of the market. The verdict and fine is the culmination of an eight-year investigation on the tech titan, Bloomberg reported.
- The Obama administration is talking about changing compensation practices in the financial-services industry, including banks that did not receive bailout money, The Wall Street Journal reported. The talks are in early stages, and there are several ideas floating – including having the Federal Reserve and Securities and Exchange Commission in supervisory positions.
- Frontier Communication Inc. (NYSE: FTR) said it has agreed to buy 4.8 million access lines from Verizon Communications Inc. (NYSE: VZ) for $5.25 billion in stock. The deal triples its size and makes it the largest U.S. communications provider to rural areas, Reuters reported.
- American International Group Inc. (NYSE: AIG) Chief Executive Edward Liddy told a Congressional panel that he expects his firm to repay the government in three to five years. Liddy said that time frame is contingent upon the financial markets remaining stable or improving, Bloomberg reported.
- Foreclosures on U.S. homes jumped 32% in April from a year ago to a record high, RealtyTrac said yesterday (Wednesday). One in every 374 households with mortgages received a foreclosure filing in April, the highest monthly rate since RealtyTrac began tracking it in January 2005. Filings were reported on 342,038 properties last month, a number expected to climb because temporary freezes on foreclosures by banks ended in March, Reutersreported.
- U.S. Treasury Secretary Timothy Geithner said yesterday (Wednesday) that the government planned to reopen the $700 billion bailout fund to small banks once the larger firms repay some of the government money they received. Speaking to a group of community bankers, Geithner also said the U.S. financial system has completed a big part of the painful adjustment away from its excessively leveraged state, and lending is starting to improve, Reuters reported. He said there was still more restructuring ahead for the financial industry as a whole, "but a substantial part of the adjustment process is now behind us."
- General Motors Corp. (NYSE: GM) and Chrysler LLC dealers in urban areas probably will suffer the most when the companies reveal which stores will close this week, Bloomberg reported. Chrysler will today (Thursday) disclose which dealers it intends to retain, according to court documents. GM will notify 1,000 to 1,200 dealers whose franchises won't be renewed on Friday, the company said.
- Ford Motor Co (NYSE: F) said it raised $1.4 billion through a 300 million share offering on Tuesday, Reuters reported. Ford said the proceeds would be used for general corporate purposes, including to fund a portion of its obligation to a union-run fund set up for retiree healthcare expenses. Chief Executive Alan Mulally said in a statement that issuing equity now and possibly funding a larger portion of its retiree obligations with cash would help Ford improve its balance sheet and reduce the potential impact of those obligations on its shareholders.