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Business news in brief

In the Region

MF Global, accused of lax oversight, to pay up

Futures and options broker MF Global Ltd. agreed yesterday to pay more than $77 million to settle federal charges that it failed to watch over a King of Prussia hedge fund charged with fraud more than two years ago. The Commodity Futures Trading Commission settled the charges with MF Global, formerly known as Man Financial Inc. The government said the company did not adequately supervise accounts used by Philadelphia Alternative Asset Management Co., a hedge fund that regulators charged with fraud in the summer of 2005. The CFTC, which pursued the case with the receiver in charge of the hedge fund's assets, said it settled the charges with both MF Global and a former account executive, Thomas Gilmartin, who also had an ownership stake in the hedge fund and failed to tell his employer. The hedge fund, the CFTC said, lost about $133 million in MF Global accounts, but hid large losses by restricting Internet access to accounts and backdating execution dates of some trades executed through MF Global.

- AP

Fort Washington gets a Vantage Point Bank

Vantage Point Bank opened for business yesterday in Fort Washington. Walter L. Tillman, chief executive officer of the state-chartered commercial bank, said it took longer than originally planned to raise $10 million in start-up capital. "It was a more difficult environment," largely because institutional investors were less interested in start-up banks than they had been in previous years, said Tillman, a veteran of Prime Bank and Independence Bancorp who also helped found Earthstar Bank in 2001.

- Harold Brubaker

Most holiday travels costing more this year

Travelers' costs in the Philadelphia area for the New Year's holiday are up this year except for car rentals, AAA Mid-Atlantic said. Its study found that the average rental car will cost $38 a day, a 34 percent drop from $58 a day a year earlier. But airfares (using a composite of fares to popular destinations from Philadelphia) are up 16 percent to an average $192 from $165 a year ago, and hotel rates will average $184 per night, up 3 percent from last year's $179, AAA said. Gasoline is up to $3.06 a gallon in the five-county Philadelphia area from $2.45 last New Year's Day.

- Paul Schweizer

Nasdaq clears a hurdle in bid for Phila. exchange

The Nasdaq Stock Market Inc. was cleared by federal antitrust enforcers to acquire the Philadelphia Stock Exchange for $652 million to enter the options business. The approval was announced by the Federal Trade Commission, which publishes a list of merger reviews. The takeover would make Nasdaq the third-biggest exchange in the $1 trillion U.S. options industry. The buyout is also subject to approval by the Securities and Exchange Commission.

- Bloomberg News

Bryn Mawr water firm buys Indiana utility

Aqua America Inc., Bryn Mawr, said it bought Western Hancock Utilities L.L.C. in Indiana for $5 million. Western, a wastewater utility serving an area east of Indianapolis, has 50 business customers and also serves housing developments with 2,500 residents. Aqua, a water utility, said it would invest $500,000 in new sewer lines to promote growth of the 10-year-old Western system.

- Paul Schweizer


Pump prices fall; gasoline demand rises

U.S. gasoline demand rose as pump prices fell a second consecutive week, a report from MasterCard Inc. showed. Consumers bought an average 9.7 million barrels of gasoline a day in the week ended Dec. 21, up 1.2 percent from the same week last year, MasterCard, the credit card company, said in its weekly SpendingPulse report. Demand rose 0.9 percent from the previous week. The national average pump price for regular gasoline fell 1 cent to $2.98 a gallon, the report showed. The price was 28 percent higher than a year earlier. The report from MasterCard, assembled by MasterCard Advisors L.L.C., the company's consulting arm, was based on credit card swipes and cash and check payments at about 140,000 U.S. gasoline stations.

- Bloomberg News

Rates for freight trucking rise at FedEx

FedEx Corp. announced a general rate increase of 5.5 percent for its FedEx Freight trucking division. The demand for freight shipping is "severely restrained" by the weak national economy, the company said, noting the 6 percent drop in less-than-truckload shipments with FedEx Freight from a second-quarter earnings report last week. The rate increase for freight trucking, to take effect Jan. 14, follows increases at the shipper's other divisions, FedEx Express and FedEx Ground.

- AP

Weather forces United to cancel 5% of flights

United Airlines said it canceled about 5 percent of its flights yesterday after bad weather kept crews from scheduled routes. "We had issues with aircraft and crews not being in place," spokeswoman Megan McCarthy said. She said the Chicago-based airline "proactively canceled" flights on Christmas, a lighter travel day, to get crews back on schedule after winter storms began Dec. 22. United's pilots blamed the cancellations on poor management. Their union said an internal memo showed winter-weather delays had caused workers' hours to exceed monthly legal limits. American Airlines canceled less than 1 percent of scheduled service since Dec. 22 because of weather, said Tim Wagner, a spokesman for the Dallas-based company.

- Bloomberg News

Fitch puts watch on bond insurers' securities

Fitch Ratings Inc. said it placed credit ratings on residential mortgage-backed securities backed by bond insurers MBIA, Ambac, Financial Guaranty and Security Capital on watch for possible downgrade. Among those affected are 87 RMBSs insured by MBIA Inc., 64 by Ambac Financial Group Inc., 35 RMBSs insured by Financial Guaranty Insurance Co. and 19 backed by Security Capital Assurance Ltd. Last week, Fitch put the nation's two largest bond insurers, Ambac and MBIA, on warning that the insurers must raise fresh capital or face downgrades. The warning implies the firms' capital cushions are not deep enough to support the companies if the credit markets continue to deteriorate.

- AP

German minister: Not so fast on growth outlook

Germany's economy minister said the government must lower its 2008 economic growth forecast, according to an interview. The forecast for Europe's biggest economy, which dates to October, is for gross domestic product to expand 2 percent in 2008, after growth of 2.4 percent this year. "We will have to go back somewhat on our growth estimate," Economy Minister Michael Glos was quoted as saying by the weekly Die Zeit. He did not give a new figure.

- AP

Yields on money market funds are mixed

The average seven-day yield on taxable money market funds fell to 3.99 percent from 4.08 percent last week, according to iMoneyNet Inc. A seven-day yield is an annual yield that is based on the preceding seven days' level of income by the fund. The average yield on

tax-free funds rose to 2.70 percent from 2.69 percent last week.

- Rhonda Dickey