BUSINESS BRIEFS
Lawmakers say Madoff scandal shows SEC's flaws
Associated Press
WASHINGTON — Republican and Democratic House members said yesterday the alleged $50 billion fraud involving Wall Street figure Bernard Madoff reflects deep, systemic problems at the Securities and Exchange Commission.
Inspector General H. David Kotz said he is so concerned about the SEC's failure to uncover Madoff's alleged Ponzi scheme that the IG is expanding the inquiry called for last month by SEC Chairman Christopher Cox. Cox had pushed the blame squarely onto the SEC's career staff for the failure to detect what Madoff was doing.
At the first congressional hearing on the scandal, Rep. Spencer Bachus, R-Ala., called for Congress to create a modern regulatory structure.
The House Financial Services Committee is trying to determine how, despite warnings back to at least 1999 to SEC staff members, Madoff continued to operate his alleged scheme.
AILING BORDERS NAMES NEW CEO
NEW YORK — Borders Group Inc. named Ron Marshall as its new chief executive yesterday as part of a management shakeup aimed at turning around the struggling bookseller's balance sheet.
The Ann Arbor, Mich.-based company also warned that its stock is in danger of being delisted from the New York Stock Exchange. Borders shares fell 3 cents to 42 cents in morning trading. The stock, which traded at $11.60 a year ago and in the $20 range in 2007, has plunged in recent months amid larger-than-expected losses.
Borders appointed Marshall, 54, to replace George Jones as CEO as well as serve as president and a director. Marshall recently served as principal of private equity firm Wildridge Capital Management, which he founded.
Marshall is known for his ability to turn around businesses, having served as CEO of food distributor and retailer Nash Finch Co. during its financial difficulties.
EX-CEO OF TYSON FOODS BACK ON JOB
MILWAUKEE — Tyson Foods Inc. said yesterday its president and chief executive, Dick Bond, will step down immediately and be replaced by a former CEO as the world's largest meat processor continues to weather a downturn in the industry.
Bond, who had been CEO since 2006, will be replaced on an interim basis by former chairman and Chief Executive Leland Tollett, the Springdale, Ark.-based company said in a news release. Tollett was CEO from 1995 until he retired in 1998 after nearly 40 years with the company.
The appointment shows that as the beleaguered meat company navigates an industry plagued by volatile commodity costs and an oversupply of meat that is exacerbating already-weak chicken prices, Tyson doesn't plan to experiment, said analyst Chris Bledsoe of Barclay's Capital.
"I think it was a prudent thing to bring in someone with this kind of operating experience," Bledsoe said of Tollett, 71.
The company's stock yesterday fell 6 percent, or 56 cents, to close at $8.79.
AIRLINES FILE SUIT TO BLOCK NEW RULES
DALLAS — Several of the nation's largest airlines have joined in a lawsuit to block stronger federal rules on crew rest during the longest international flights.
The airlines say the Federal Aviation Administration bypassed rule-making procedures and denied them the right to comment before it notified American Airlines and Continental Airlines Inc. of the new rules in October.
The petition was filed Dec. 24 in the federal appellate court in Washington by American, Continental, UAL Corp.'s United Airlines, US Airways, JetBlue and two smaller carriers.
The airlines said the new requirements would saddle them with "substantial burdens and costs." They said FAA did not show how the rules would improve safety.
The FAA rules would require that pilots on the longest international flights get more rest before flying again.
The extra rest would be required even when only 10 percent of flights on a particular route exceed 16 hours.
