Business Desk
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

IN THE COURTS
COURT: SEPTEMBER 11 ‘SILVER DOLLAR’ ADS DECEPTIVE
A court has ruled that a company engaged in deceptive advertising in its heavy marketing of “Freedom Tower” commemorative coins, New York Attorney General Eliot Spitzer said yesterday. A state Supreme Court judge ruled the National Collector’s Mint Inc., based in Port Chester, N.Y., engaged in civil offenses of fraud, false advertising, and deceptive business practices in selling its “2004 Freedom Tower Silver Dollar.” The company claimed each coin was a “legally authorized government issue silver dollar … struck to commemorate the World Trade Center and the new Freedom Tower being erected in its place … Most importantly, each coin has been created using .999 pure silver recovered from ground zero!” “This company capitalized on the emotional and historical significance of the events of September 11 through the use of false and misleading claims,” Mr. Spitzer said. “I am gratified that Justice [Joseph] Cannizzaro acted quickly to put a permanent halt to this.” A company spokeswoman wouldn’t say if an appeal is planned. “National Collector’s Mint has complied, and will continue to comply, with all orders of the court,” the company said in a statement released yesterday. “The company notes that the attorney general’s petition did not challenge the origin of the silver, and the Court has made no finding in this respect.”
– Associated Press
CITY
NEWSDAY REPLACES TOP EDITOR AHEAD OF JOB CUTS
Tribune Co.’s Newsday yesterday replaced its top editor ahead of planned job cuts and other cost-saving initiatives at the New York daily newspaper, which has been hurt by a circulation scandal. Howard Schneider, who was the paper’s editor for nearly 16 months, resigned and was replaced by John Mancini, who has overseen the newspaper’s New York City edition for the past three years. In a letter to employees, Newsday Publisher Tim Knight said he and Mr. Schneider “have basic differences in how best to position Newsday for the future. “In recognition of that, he has made the decision to step down as editor of Newsday,” said Mr. Knight, who was named publisher in July in the wake of revelations that the newspaper overstated its circulation. Mr. Schneider’s resignation comes as Newsday faces mounting pressure to reduce costs. Tribune has set aside $90 million to compensate advertisers at Newsday and its Spanish-language newspaper Hoy, which also inflated its circulation figures. Mr. Knight told staff last week that job cuts would be announced within a week.
– Dow Jones Newswires
NATIONAL
CALIFORNIA OKAYS ANTHEM-WELLPOINT MERGER
California’s insurance commissioner gave his blessing yesterday to a $16.4 billion merger that would create the nation’s largest health insurance company after wringing hundreds of millions of dollars out of the companies.
Federal regulators gave approval to the proposed merger of Anthem Inc. and WellPoint Health Networks Inc. in February, but Insurance Commissioner John Garamendi had blocked it for months by rejecting Anthem’s acquisition of a Well-Point subsidiary, Blue Cross Life & Health Insurance Co.
Mr. Garamendi had said the deal would reduce the quality of health care for policyholders, pull $400 million a year out of California in the form of dividends that would go to Indiana-based Anthem, and give an excessive buyout package to WellPoint’s chief executive.
Mr. Garamendi said Anthem agreed to concessions and $250 million in contributions “that will assure that California health care consumers will realize benefits from this transaction.”
The combined company’s name will be WellPoint Inc., with the corporate headquarters in Indianapolis and 26 million members from Maine to California. The companies are the nation’s two largest Blue Cross Blue Shield providers.
– Associated Press
LUCENT AND UNIONS REACH CONTRACT DEAL
Working past a deadline for the expiration of a contract that already had been extended twice, Lucent Technologies Inc. and two unions said they reached a tentative agreement early Tuesday. The deal calls for workers to shoulder more health care costs, a major issue through a month of bargaining.
The seven-year, seven-month deal would remain in effect through May 2012,and includes a raise of more than 16 percent over the term of the contract, a cost-of-living adjustment starting in 2008 and a $1,000 ratification bonus, the Communications Workers of America said.
The contract also covers members of the International Brotherhood of Electrical Workers.
The company wanted union retirees to help cover their health insurance. With about 3,250 union members, Lucent has some 70,000 union retirees, with 50,000 dependents, for whom it was given responsibility when the company was spun off from AT&T Corp. in 1996.
For retirees, the tentative settlement calls for increases in medical co-payments and deductibles, and requires them to share the cost of premiums beginning in 2005, the CWA said.
Those younger than 65 would contribute 3 percent of their monthly pension rate for health care, or about $28.50 on average. Family coverage for those retirees will be 5 percent of the monthly pension rate, about $47.50 on average. Retirees over 65 will pay 2 percent of their monthly pension for single coverage and 4 percent of their monthly pension for family coverage.
Contributions for both groups will increase by one half of one percent per year over the contract term. Workers who retired before March 1, 1990, will continue to have employer-paid premiums, the CWA said.
– Associated Press
CISCO 1ST-QUARTER NET RISES 29% AMID WEB-PHONE SALES GAIN
Cisco Systems Inc., the world’s largest maker of computer-networking equipment, said first-quarter profit rose 29% amid demand for Internet phones. Sales fell short of analysts’ estimates.
Net income increased to $1.4 billion, or 21 cents a share, compared with $1.09 billion, or 15 cents, a year earlier, Cisco said in a statement. Sales rose 17% to $5.97 billion.
Cisco’s stockpile of unsold goods was unchanged and sales this quarter won’t meet analysts’ estimates, signaling demand isn’t as robust as investors expected. Cisco is expanding new businesses, including Internet calling and home networking, which are growing faster than the routers and switches that generate two-thirds of sales.
– Bloomberg News
ENRON, MERRILL BARGE JURY FINDS FRAUD COST INVESTORS $14 MILLION
A jury that convicted five former executives from Enron Corp. and Merrill Lynch & Co. of fraud conspiracy found that the crime cost investors $13.7 million. The five convictions, handed up November 3, followed a six-week criminal trial in Houston federal court, the first arising from the fraud that led to Enron’s collapse. The jury of six men and six women acquitted one former Enron official. Today’s verdict, coming after seven hours of deliberations, may be used by U.S. District Judge Ewing Werlein to increase or decrease the defendants’ prison terms at sentencing, currently scheduled for March.
– Bloomberg News
REGULATORY
SEC PROPOSES STANDARD GOVERNANCE RULES FOR EXCHANGES
The New York Stock Exchange and nine other American markets would be required to make public disclosures, including executives’ salaries, for the first time and file private quarterly reports under a federal regulator’s plan. The five-member Securities and Exchange Commission voted unanimously yesterday to collect public comment on the plan to standardize governance rules, which includes reporting the salaries of the five highest-paid executives, codes of ethics, and charitable contributions. The exchanges would also have to file nonpublic reports with SEC inspectors about trends or potential problems they identified while monitoring trading. The plan may be approved by early 2005, Mr. Donaldson said.
– Bloomberg News