IN BRIEF
Judge fines former PurchasePro chief
A federal judge fined Charles "Junior" Johnson, the former chief executive of failed PurchasePro.com, $3 million for an accounting scheme that violated securities laws, the Securities and Exchange Commission announced Friday.
U.S. District Judge Gladys Kessler of Washington, D.C., permanently enjoined Johnson against violating securities law and barred him from being an officer or director of a publicly traded company.
Johnson is serving a nine-year prison sentence and was ordered to pay $9.7 million in restitution.
PurchasePro, which provided software that enabled businesses to conduct auctions for supplies online, filed for bankruptcy in September 2002.
Irwin Union shut down; banking operation sold
State and federal regulators shut down Irwin Union Bank on Friday and sold the banking operations to First Financial Bank of Cincinnati. The bank operated a branch at 401 N. Buffalo Drive.
First Financial will assume all of the deposits and there will be no losses by any depositors.
Irwin Union clients will be able to continue banking over the weekend, First Financial said.
WASHINGTON
Guarantee program for money markets ended
Treasury Secretary Timothy Geithner said an emergency program that had guaranteed as much as $3 trillion in assets in money market mutual funds was being allowed to expire Friday.
"As the risk of catastrophic failure of the financial system has receded, the need for some of the emergency programs put in place during the most acute phase of the crisis has receded as well," Geithner said in a brief statement.
Geithner had said last week that the financial system was healthy enough to begin unwinding some of the programs put in place a year ago after the collapse of Lehman Bros. triggered the worst financial crisis in seven decades.
WASHINGTON
FDIC chief may borrow money from Treasury
The chairwoman of the Federal Deposit Insurance Corp. says she is "considering all options, including borrowing from Treasury," to replenish the dwindling fund that insures bank deposits.
Sheila Bair's remarks go beyond what she said just three weeks ago when asked about tapping the Treasury after the fund that insures regular deposit accounts up to $250,000 hit its lowest point since 1992, at the height of the savings-and-loan crisis.
The FDIC estimates bank failures will cost the fund around $70 billion through 2013.
Ninety-two banks have failed so far this year. Hundreds more are expected to fall in coming years largely because of souring loans for commercial real estate.
Officials investigate bank deal, paper says
The FBI and Department of Justice are conducting a criminal probe into Bank of America Corp.'s purchase of Merrill Lynch last year, the Charlotte Observer reported Friday.
The investigation has been under way for six months, the newspaper reported on its Web site.
A BofA spokesman declined to confirm whether the FBI or Justice Department was investigating. Spokesmen for the FBI and DoJ neither confirmed nor denied that a probe was under way.
The bank is also being investigated by other authorities, including the New York Attorney General's office, which has been drafting charges against BofA officials over accusations that they misled shareholders about losses and bonus payments at the investment bank.
"We have provided thousands of documents and had numerous meetings with various government agencies regarding the Merrill Lynch transaction," Bank of America spokesman Scott Silvestri said.
WASHINGTON
Home loan agency faces money squeeze
The Federal Housing Administration is tightening rules for lenders after reporting that its financial cushion will sink below mandatory levels for the first time in its 75-year history.
Officials, however, insisted Friday that the agency won't need a rescue. The agency doesn't expect to raise fees for borrowers or curtail the number of loans it insures, they said.
Amid the collapse of the subprime lending market, the government has taken up the slack.
The FHA has insured nearly a quarter of all new loans made this year, and about 80 percent of that business is from first-time homebuyers.
NEW YORK
Lawsuits aim to halt flow of malicious ads
Microsoft Corp. has filed five lawsuits aimed at halting the flow of malicious online advertising.
The Redmond, Wash., software maker filed the claims Thursday in Washington state court against five unknown individuals under the business names Soft Solutions, DirectAd, qiweroqw.com, ITmeter INC. and ote2008.info.
Microsoft's associate general counsel, Tim Cranton, announced the move in a blog post.
The company is accusing the defendants of spreading so-called "malvertisements," ads that can end up infecting computers with damaging software.
MINNEAPOLIS
American Airlines sees capacity, traffic falling
American Airlines said on Friday that it expects its September traffic to fall 16.4 percent from August, as capacity drops 9.7 percent.
Airlines typically reduce flying after Labor Day, and other carriers have been making cuts, too. This year's fall schedules have been especially lean as airlines try to match their flying with reduced demand.
American said it expects third-quarter unit revenue, or revenue divided by capacity, to fall 14.5 percent to 15.5 percent from the same period last year. Counting regional flying, unit revenue is expected to fall 14.3 percent to 15.3 percent.
Chemical company taps new chief exec
American Pacific Corp., a Las Vegas-based chemical manufacturer, said Joseph Carleone will succeed John Gibson as chief executive officer.
Gibson is retiring after 12 years as CEO but will continue as board chairman. Carleone, president and chief operating officer at American Pacific, was also a senior vice president at Irvine Sensors Corp.
