FINANCIAL SERVICES

BOSTON STOCK EXCHANGE TO CHALLENGE NEW YORK EXCHANGES

BOSTON – In the latest challenge to the New York-based stock exchanges, four financial services companies and the Boston Stock Exchange said yesterday they are partnering to launch an electronic stock exchange, the Boston Equities Exchange, or BeX. The investors are four brokerage firms: Citigroup; Fidelity Brokerage, a unit of Fidelity Investments; Credit Suisse Group’s Credit Suisse First Boston unit, and Lehman Brothers Holdings. The new exchange’s services will be phased in over the next year to 15 months with the first phase expected to be completed in early 2006.

– Dow Jones Newswires

EIGHT FORMER PARTNERS AT KPMG MAY FACE CRIMINAL CHARGES

Eight former partners at accounting firm KPMG face individual criminal charges for their roles in the sale of abusive tax shelters, an attorney for one of the defendants said.

Robert Fink said he expects his client, a former partner at KPMG whom he wouldn’t identify, to be formally notified of the indictments in New York yesterday or today. He wouldn’t disclose his source of information about the charges or identify the other seven defendants. Mr. Fink said he believes the federal charges will likely include conspiracy to defraud the Internal Revenue Service, tax evasion, and possibly obstruction of justice.

– Bloomberg News

PUBLISHING

CONDE NAST HIRES WALL STREET JOURNAL EDITOR FOR NEW MAGAZINE

Conde Nast Publications will form a new business group that includes a monthly magazine and Web site, and Joanne Lipman, previously deputy managing editor of the Wall Street Journal, will become editor in chief of the new group.

Conde Nast also tapped the publisher of the New Yorker, David Carey, to head the group as its president. Mr. Carey was also the founding publisher of Smart-Money, a joint venture between the Wall Street Journal and the Hearst Corporation. The title and launch date of the new group have yet to be determined, said Conde Nast, which publishes Vanity Fair, the New Yorker, and 16 other magazines.

Ms. Lipman, 44, has been a deputy managing editor of the Wall Street Journal, the flagship paper of Dow Jones, since 2000. She was the founder of the Weekend Journal and Personal Journal sections, and editor in chief of Weekend Journal. Most recently, she has been working on the development of Weekend Edition, a sixth day of the Wall Street Journal that will appear each Saturday beginning on September 17.

– Dow Jones Newswires

CHERNIN EARNED MORE THAN MURDOCH, ACCORDING TO SEC FILINGS

News Corporation, the publishing and broadcast company run by Rupert Murdoch, paid its chief operating officer, Peter Chernin, $31.6 million, or about 34% more than his boss, in the year ended June 30. Mr. Murdoch’s compensation was $23.6 million, News Corporation said yesterday in a filing with the Securities and Exchange Commission.

– Bloomberg News

ENERGY

HAWAII SETS CAP ON WHOLESALE GAS PRICES

HONOLULU – In an effort to gain some control over what motorists pay at the pump, Hawaii became the first state in America yesterday to set caps on the wholesale price of gasoline. Industry officials and analysts said Hawaii, whose average retail gasoline prices are the highest in the country, now runs the risk of becoming less attractive to suppliers, raising the possibility of future supply problems. Beginning September 1, wholesalers in Honolulu may not charge more than $2.1578 a gallon for regular unleaded, or about $2.74 a gallon when taxes are included.

– Associated Press

RETAIL

DENIM GLUT WORRIES RETAILERS

Retailers from Federated Department Stores to American Eagle Outfitters may have a hard time selling all the jeans and denim jackets they stocked for back-to-school shoppers.

The looming denim glut has prompted Gap and Limited Brands to discount jeans. Responding to a surge in popularity for torn, embroidered, and paint-splattered styles last year, retailers bought on average 10% more denim apparel this season, a Legg Mason analyst, Richard Jaffe, said.

“The back-to-school season so far has been pretty sluggish,” the chief economist of the New York-based International Council of Shopping Centers, Mike Niemira, said. “Is it weather, is it the economy, is it the energy price story? Probably all of it.”

– Bloomberg News

IN BRIEF

The Federal Reserve Bank of New York invited 14 of the “major participants” in the credit-derivatives market to a meeting next month amid concern the $8.4 trillion industry is rife with unconfirmed trades … China widened a program to make $270 billion of mostly state-held stock publicly traded, the biggest shakeup of ownership since the nation’s exchanges opened in 1990 … Moody’s Investors Service slashed the ratings of the two largest American automakers, sending both General Motors and Ford to speculative grade and indicating that despite recent incentive-driven strides in sales, the old-line manufacturers face significant hurdles to a financial recovery … The Justice Department said yesterday that tobacco companies should pay more than $140 million to cover the government’s cost of bringing a racketeering lawsuit alleging the industry misled the public about the dangers of smoking … The venture capital firm Mayfield Fund said it raised $375 million to invest in startup companies, less than half the amount raised for its last fund five years ago … General Electric, which has been shedding insurance businesses since 2003, may sell much of the rest within three years, its top insurance executive said … SBC said it will offer Yahoo’s music service to bolster content provided to its nearly 6 million high-speed Web subscribers … Fannie Mae said Ann Kappler plans to step down as its general counsel by year end and will join the Washington, D.C., law firm of Collier Shannon Scott … A former executive of the company that owns the Chicago Sun-Times, 58-year-old Mark Kipnis, pleaded not guilty yesterday to charges that he participated in a scheme to wrongfully divert $32 million in company funds … Abu Dhabi citizens, among the world’s wealthiest people, can buy homes without royal approval for the first time in 34 years.

– Bloomberg News, Dow Jones Newswires, and Associated Press