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TOP STORIES -- Nov. 2-7 | Week in Review

November 09, 2003|From Times Staff and Wire Services

Unemployment Rate Drops Again in October

The nation's unemployment rate dropped to 6% in October as companies added thousands of jobs for the third straight month, new evidence of an improving labor market.

The Labor Department reported that payrolls grew by 126,000 last month, significantly more than the 50,000 net new jobs that economists had predicted. That followed a revised 125,000 net new jobs in September, which initially was reported at 57,000.

U.S. companies also added to payrolls in August, marking three months of hiring gains after a six-month slump. October hiring occurred across a broad swath of the business landscape, including technical services, temporary employment firms, health care, social work, education and retail.

The hard-hit manufacturing sector continued to shed jobs in October, but the pace of job loss has slowed considerably.

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NYSE Chief Reveals Proposed Reforms

John S. Reed, brought in to shake up the New York Stock Exchange, unveiled his reform plan but drew fire from critics who said it would not go far enough to make the stock market answerable to investors.

The highlight of Reed's proposal is a slimmed-down board of directors that for the first time would be free of business or regulatory ties to the exchange.

"I do not believe today's reforms are powerful enough medicine to restore the health of the NYSE," California Treasurer Phil Angelides said.

Reed, the interim chairman, defended his proposals as "robust." Under his plan, the board would consist of six to 12 members who would hire the NYSE chairman and chief executive, oversee regulatory functions and set some salaries. Reed nominated eight people; only two would be holdovers from the existing 27-member panel.

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Recording Giants Sony, BMG Announce Merger

Sony Corp. and Bertelsmann formally announced plans to merge their recorded-music operations, and rivals Time Warner Inc. and EMI Group moved closer to announcing a similar hook-up -- deals that would put the overwhelming majority of the world's music catalogs into the hands of three players.

The once vibrant, cash-rich music business is drowning in red ink amid widespread piracy and plummeting sales. Joining the industry's No. 2, Sony, with the No. 5, BMG, would generate an estimated $5 billion in annual sales.

Executives have said they believe that the rise of piracy and other shifts in the marketplace make it easier to make the case for a merger before the European Commission, which must approve such consolidations and has cast a harsh eye on music industry tie-ups in recent years.

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Prosecutors Plan Second Trial for Quattrone

Prosecutors in New York said they would retry Frank Quattrone, the former Silicon Valley investment banking luminary whose first trial on obstruction-of-justice and witness-tampering charges ended last month with a Manhattan federal jury deadlocked 8 to 3 for conviction.

In a letter to U.S. District Judge Richard Owen, U.S. Atty. James B. Comey said prosecutors had talked with Quattrone's defense about the second trial, "and we will contact the court shortly regarding scheduling."

Comey did not indicate whether the government would bring the same charges against the 48-year-old Quattrone.

The prosecution contended that an e-mail Quattrone sent in December 2000 was proof that he knowingly interfered with investigations into alleged misconduct at his employer at the time, Credit Suisse First Boston.

Quattrone's attorney, John W. Keker, said he and his client "remain confident that the government's evidence is insufficient to prove their case."

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State to Broaden Probe to 40 Tenet Hospitals

State officials said they would audit Medi-Cal billing practices at Tenet Healthcare Corp.'s 40 California hospitals after finding the company's Redding Medical Center was overpaid nearly $12 million in taxpayer money.

Diana Ducay, deputy director of audits and investigations at the California Department of Health Services, said the decision to widen the probe was spurred by "the number and severity of discrepancies found at Redding Medical Center."

A Tenet spokesman said the company planned to challenge the state's audit.

The review concluded that Redding received $11.9 million in excess reimbursements for Medi-Cal patients, and for the rural poor treated under the County Medical Services Program, for the two years that ended May 31, 2001.

The Redding hospital has repaid not quite $8.9 million of the money, the state said, and has 60 days to appeal the audit and to repay the $3 million that remains -- due even if an appeal is filed.

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Lawmakers Lash Out as Fund Debacle Broadens

Members of Congress and law enforcement officials blasted the $7-trillion mutual fund industry for betraying the public, amid new evidence that many financial firms had engaged in improper trading that siphoned profits from small investors.

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