Tickers: July 16
Buccaneer Computer Systems & Services Inc. in West Des Moines received approval this morning for $200,000 in state funding from the Iowa Economic Development Board. The Virginia-based company launched a software development and informatics division in West Des Moines a year ago. The company, which currently has 65 employees, plans to add 53 additional technology jobs this year and expand its office space by nearly 17,000 square feet. The city of West Des Moines has already approved a five-year, no-interest loan of $40,000. Click here to see related story.
Seattle-based Keller Rohrback LLP announced in a release that it is investigating Principal Global Investors LLC and Principal Funds Inc. regarding losses in certain Principal mutual funds, including Principal’s LifeTimes funds. The investigation will focus on misrepresentations, mismanagement and excessive fees related to these funds. It is asking investors in Principal mutual funds who believe they have been negatively affected to contact the firm. Principal Financial Group Inc. said this is a common approach for some law firms to determine if there is any basis for a lawsuit and that no lawsuit has been filed against the two Principal subsidiaries at this time. “These notices do not mean that the lawyers have a case and we do not believe they do,” the company said in an e-mailed statement. “There has been no legal filing against us connected to this news release and there may never be one.”
JPMorgan Chase & Co.’s second-quarter net income rose 36 percent to $2.7 billion from a year ago, with record investment banking revenues of $1.5 billion, The New York Times reported. Total revenues rose 39 percent to $25.6 billion. Meanwhile losses in its consumer lending business reached $955 million from a net loss of $171 million a year ago, and card services posted a $672 million loss, compared with a profit of $250 million a year ago. CEO Jamie Dimon warned that the bank’s results “were negatively affected by the continued high levels of credit costs in consumer lending and card services, which we expect will remain elevated for the foreseeable future.” The company said it would set aside another $5.4 billion for credit losses, bringing the total set aside to $9.7 billion.
Iowa was among the 35 states and the District of Columbia that reached a settlement with Merck & Co. and Schering-Plough Corp. over the companies’ delayed release of negative results related to Vytorin, a cholesterol-lowering drug. The clinical study ended May 2006 concluded that Vytorin was no more effective in reducing formation of plaque in carotid arteries than a less-expensive generic cholesterol-lowering drug, simvastatin, but the companies did not release the results until 2008, the Iowa attorney general’s office said in a release. Meanwhile, the companies heavily advertised Vytorin. Iowa will receive $100,000 of the $5.4 million settlement, which will be used for consumer protection, enforcement and education.
The state and Microsoft Corp. have teamed up to offer 5,700 vouchers for free technology training and Microsoft certification. The “Microsoft Elevate America” program, presented by Iowa Workforce Development and Microsoft, is designed to help Iowans meet the demands of the 21st-century economy and is part of a nationwide initiative that will offer 1 million vouchers for Microsoft e-Learning courses and select Microsoft certification exams at little to no cost to recipients. Iowa’s vouchers will be handed out over the next 90 days. To request a voucher, go to www.iowaworkforce.org/elevateamerica.
Bank of America Corp. is working under a government memorandum of understanding (MOU), which requires that the bank overhaul its board and address perceived problems with risk and liquidity management, Reuters reported, citing The Wall Street Journal. An MOU is rarely publicized. Citing people familiar with the situation, The Wall Street Journal said that the MOU was imposed in early May, shortly after CEO Kenneth Lewis was ousted as chairman of the board. Six directors have resigned since the order was issued. Unless Bank of America meets a series of deadlines coming up at the end of July and in August, it could face tougher penalties, including a publicly announced cease-and-desist order.
MetLife Inc. announced this week that it will combine its institutional and individualized businesses, along with its Auto & Home unit, into a single U.S. business organization. The restructuring stems from a strategic review conducted two years ago. The transition is expected to enhance MetLife’s product design and distribution capabilities, streamline its decision-making processes and drive profitable growth. William Mullaney has been named president of the new organization; he has served as president of MetLife’s Institutional Business since January 2007. The changes will be effective Aug. 1 and will be completed by 2010.
U.S. Bancorp has paid $139 million to repurchase stock warrants from the U.S. Treasury Department, becoming the second major U.S. bank to completely exit the Troubled Asset Relief Program (TARP), Reuters reported. State Street Corp. announced Friday that it had paid $60 million to buy back its warrants. JPMorgan Chase & Co., which was approved to leave TARP, decided to allow the Treasury Department to auction its warrants on the public market rather than repurchase them at a price it claimed was inflated.