Fri Mar 15, 2013 7:32pm EDT

n">(Reuters) - BP launched its promised appeal against "fictitious" and "absurd" oil spill compensation payouts on Friday and asked a judge to temporarily halt to those made on a so-called business economic loss basis.

In a New Orleans court filing, BP gave examples of businesses in industries far from the spill and unconnected with the coastline that enjoyed strengthened earnings in the spill year of 2010 and yet had received millions in spill compensation.

The British oil and gas group, which has already sold a substantial part of its business to pay reparations and fines for the disaster, said it could be "irreparably harmed" by the payouts without relief from the court, because they could cost it "billions" more than it budgeted for when it agreed to a settlement in April 2012.

BP was appealing a March 5 ruling, which upheld the way the compensation was being paid to business claimants wanting recompense.

The ruling, by the same U.S. District Judge Carl Barbier who presides over BP's ongoing trial on separate civil charges, reopened a part of the saga that appeared to have been settled almost a year ago when BP agreed terms on economic, property and medical compensation for more than 100,000 individuals and businesses who had filed a class action suit.

At the time of the settlement, BP estimated the bill would be $7.8 billion - already making it one of the biggest settlements of its kind in U.S. history.

For a graphic of BP's oil spill costs: link.reuters.com/nen26t

The actual amount is uncapped, and dependent on decisions made by Patrick Juneau, a lawyer from Louisiana who administers the payments under a complex set of rules set out by the agreement.

As the payments started to flow out, BP realized that the funds it had set aside would be insufficient. At first, it added more, reaching $8.5 billion by the end of 2012, while complaining that the payments to businesses were too generous and the terms of the settlement were being misinterpreted.

On March 5, Judge Barbier upheld Juneau's methods.

Two days later, BP said it would appeal, and it reduced the sum earmarked for payments back to $7.7 billion to underline its disapproval.

"The BEL (Business Economic Losses) policy decisions rewrite the agreement's express terms, and contradict its purpose, plain text, and underlying principles by authorizing compensation awards for claimants seeking to recover for non-existent 'losses.'" BP's Friday filing said.

"BP did not agree to pay what is already hundreds of millions of dollars, and potentially billions, to claimants with 'losses' that do not exist in reality, but result solely from the claims administrator's rewriting of the agreement."

The April 2010 spill happened when the Macondo well ruptured and the Deepwater Horizon rig that was working on it exploded and sank. The accident killed 11 men and spouted 4 million barrels of oil into the Gulf of Mexico in the United States' worst offshore oil spill.

"ABSURD" CLAIMS

In its filing, among the examples BP offered of "absurd" claims, the British company referred to a $21 million payment made to a rice mill in Louisiana situated some 40 miles from the coast that earned more revenue than in spill year of 2010 than in 2007, 2008, or 2009.

It also cited a $9.7 million recompense for a highway, street and bridge construction company in northern Alabama, almost 200 miles from the Gulf, and which does no business in the region, and for which 2010 was its best year on record.

BP also referred to a digital printing business and a law firm that had been compensated despite strong profits.

All were unnamed.

Lawyers for the Plaintiff Steering Committee (PSC), with which BP agreed the settlement, and which is a plaintiff in the ongoing trial along with the Department of Justice, said BP had no case for appeal.

"This court has already affirmed Mr. Juneau's independent interpretation of the settlement agreement..., terms which were negotiated, co-authored and expressly agreed to by BP," said co-lead counsels Steve Herman and Jim Roy.

"Simply put, BP undervalued the settlement and underestimated the number of people and businesses that qualify under the objective formulas that BP agreed to."

Yet Internet advertisements from lawyers boast of the ease with which payments far in excess of actual losses can be obtained.

One describes the experience of a Florida bicycle retailer it represented. The shop enjoyed an increase in spill year revenue to $2.5 million from $1.9 million in 2009, and yet managed to win a payout of "almost one million dollars," the advertisement says.

Another explains how under one of the tests involved, claimants can demonstrate a loss by choosing to compare "any consecutive three months from 2010" with "a large combination of months going back to January 2007."

BP's appeal covers just one area of a raft of costs and potential costs it faces as the third anniversary of the spill approaches on April 20.

Its accounting provisions for the spill total around $42 billion - equivalent to about 30 percent of its stock market value. Almost matching that it has sold assets worth $38 billion to finance compensation, clean-ups and fines, and it has paid, or committed to pay, $37 billion. The actions have sliced $5 billion a year, or 14 percent, off its cash flow - a basic measure of its ability to make money.

Some $4 billion in criminal claims - which are capped - have been settled, and are included in the above amounts, but civil claims under the Clean Water Act covered by the trial that began in February could add another $17.5 billion.

Billions more could be piled on in economic damage claims from Gulf Coast states. A third set of claims, for natural resource damage, have yet to be quantified.

(Reporting By Andrew Callus in London; Additional reporting by Jonathan Stempel in New York and Kristen Hays in Houston; Editing by Leslie Adler)

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A job seeker (R) meets with a prospective employer at a career fair in New York City, October 24, 2012.

WASHINGTON | Thu Feb 14, 2013 11:11am EST

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits fell more than expected last week, offering hope the sluggish labor market recovery may have picked up a step.

Initial claims for state jobless aid dropped 27,000 to a seasonally adjusted 341,000, the Labor Department said on Thursday. The prior week's claims figure was revised to show 2,000 more applications were received than previously reported.

Last week's drop in claims exceeded economists' expectations for only a 6,000 decline and pushed first-time filings down to the lower end of their range for this year.

"It does seem as if claims are trending down a bit. We think payroll growth will pick up this year and this sort of gradual downtrend in claims seems consistent with that," said Sam Coffin, an economist at UBS in New York.

But some economists said a blizzard that slammed the East Coast late last week and difficulties smoothing out the data for seasonal fluctuations could have artificially depressed claims.

While they were encouraged by the decline, they urged caution against reading too much into the data.

"Claims may not be giving a reliable signal about the labor market," said Daniel Silver, an economist at JPMorgan in New York.

A Labor Department analyst said claims for Illinois and Connecticut, one of the states hardest hit by the snowstorm, had been estimated. He said given that most claims are filed online, the blizzard appeared to have little effect on the broader data.

U.S. financial market were little moved by the data as investors focused on news the euro zone economy slipped deeper into recession in the fourth quarter. Stocks on Wall Street were little changed, while the dollar and U.S. Treasury debt prices rose.

LAYOFFS HAVE EBBED

The data offered more evidence that U.S. companies are no longer aggressively laying off workers. However, they still appear to be in no hurry to step-up hiring against the backdrop of still lackluster demand.

The economy has struggled to grow much more than 2 percent since the 2007-09 recession ended, and the jobless rate rose 0.1 percentage point to 7.9 percent in January.

High unemployment prompted the Federal Reserve last year to launch an open-ended bond buying program that it said it would keep up until it saw a substantial improvement in the outlook for the labor market.

It also has committed to hold interest rates near zero until unemployment reaches 6.5 percent, provided inflation does not threaten to push over 2.5 percent.

Job gains averaged 181,000 per month in 2012, far less than the at least 250,000 that economists say is needed to significantly reduce the ranks of unemployed.

"The rate of job losses has slowed in early 2013, which is consistent with a modest pickup in net job creation," said John Ryding, chief economist at RDQ Economics in New York.

"Our projection for 2013 is that the average pace of job growth will be around 175,000 per month and we judge this drop in claims to be broadly consistent with this forecast."

Last week, the four-week moving average for new claims, a better measure of labor market trends, rose 1,500 to 352,500. The average had approached a five-year low in the prior week.

The number of people still receiving benefits under regular state programs after an initial week of aid dropped 130,000 to 3.11 million in the week ended February 2.

That was the lowest level since July 2008 and could be a function of people either securing jobs or simply exhausting their benefits. So-called continuing claims had hovered around 3.2 million since late November.

(Editing by Andrea Ricci and Tim Ahmann)

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Job seekers stand in line to meet with prospective employers at a career fair in New York City, October 24, 2012.

WASHINGTON | Thu Jan 3, 2013 8:32am EST

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits rose last week, but the data continues to be too distorted by the holidays to offer a clear read of labor market conditions.

Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 372,000, the Labor Department said on Thursday. The prior week's figure was revised to show 12,000 more applications than previously reported.

Claims data reported for the week ended December 22 had been artificially depressed by the holidays, which resulted in data for 19 states being estimated.

A Labor Department official said claims data for nine states, including California and Virginia, had been estimated last week because of the Christmas and New Year holidays. This suggests the numbers are subject to revisions next week.

The four-week moving average for new claims, a better measure of labor market trends, rose 250 to 360,000. The claims data has no bearing on December's employment report, scheduled for release on Friday.

Employers are expected to have added 150,000 jobs to their payrolls last month, little changed from 146,000 in November, according to a Reuters survey of economists.

Job gains in the first 11 months of last year averaged about 151,000 per month, not enough to significantly lower unemployment. Employers' hesitancy to ramp up hiring had been blamed on the so-called fiscal cliff, a combination of sharp government spending cuts and higher taxes.

Although Congress this week approved a deal to avoid the fiscal cliff, the budget problems are far from resolved. That could continue to cast a shadow of uncertainty and hurt job growth.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid increased 44,000 to 3.25 million in the week ended December 22.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

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SAN FRANCISCO | Fri Dec 28, 2012 2:14pm EST

SAN FRANCISCO (Reuters) - Apple Inc has agreed to withdraw patent claims against a new Samsung phone with a high-end display after Samsung said it was not offering to sell the product in the crucial U.S. market.

Apple disclosed the agreement in a filing on Friday in U.S. District Court in San Jose, California. Representatives for both Apple and Samsung declined to comment.

Last month Apple asked to add the Galaxy S III Mini and other Samsung products, including several tablet models, to its wide-ranging patent litigation against Samsung.

In response, Samsung said the Galaxy S III Mini was not available for sale in the United States and should not be included in the case.

Apple won a $1.05 billion verdict against Samsung earlier this year but has failed to secure a permanent sales ban against several, mostly older Samsung models. The patents Apple is asserting against the Galaxy S III Mini are separate from those that went to trial.

Samsung started selling the Mini in Europe in October to compete with Apple's iPhone 5. In its filing on Friday in U.S. District Court, for the Northern District of California, Apple said its lawyers were able to purchase "multiple units" of the Mini from Amazon.com Inc's U.S. retail site and have them delivered in the United States.

But Samsung represented that it is not "making, using, selling, offering to sell or importing the Galaxy S III Mini in the United States." Based on that, Apple said it agreed to withdraw its patent claims on the Mini, "so long as the current withdrawal will not prejudice Apple's ability later to accuse the Galaxy S III Mini if the factual circumstances change."

The case in U.S. District Court, Northern District of California is Apple Inc. vs. Samsung Electronics Co Ltd et al., 12-630.

(Reporting by Dan Levine; Editing by Leslie Adler and Dan Grebler)

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KADUNA, Nigeria | Sun Dec 23, 2012 6:15pm EST

KADUNA, Nigeria (Reuters) - Nigerian Islamist group Ansaru said on Sunday it was behind the kidnap of a French national last week, citing France's ban on full-face veils and its support for military action in Mali.

Ansaru sent a message to Nigerian reporters saying it was holding 63-year-old Francis Colump, who was taken on December 19 when around 30 gunmen attacked his residence in the remote northern town of Rimi, close to the Niger border.

The Nigerian police declined to comment on the claim but had already named Colump as the man abducted. He was working for French renewable energy firm Vergnet, which had been building Nigeria's first wind farm.

"The reason we kidnapped him is ... the law the government created which prohibits the wearing of niqab by French Muslim women. This is a denial of their religious rights," said the statement by the group, written in the local Hausa language.

"And again the participation of France in supporting the military attack on Muslims in northern Mali," the message signed by the group's purported leader Abu Usamata Ansari said.

In recent months France has led support for an African-led force to help defeat al Qaeda and other Islamist militants in northern Mali. Military deployment has the backing of the U.N. Security Council.

Last year, France banned full face veils.

Ansaru's full name is Jama'atu Ansarul Musilimina Fi Biladis Sudan, which roughly translates as "Vanguards for the Protection of Muslims in Black Africa".

The group, thought to be a breakaway from better known Islamist sect Boko Haram, has risen to greater prominence in recent weeks.

It claimed responsibility for a dawn raid on a major police station in the Nigerian capital last month, where it said hundreds of prisoners were released.

Britain last month put Ansaru on its official "terrorist group" list, saying it was aligned with al Qaeda and was behind the kidnap of a British and a Italian killed earlier this year during a failed rescue attempt.

Ansaru is thought to have loose ties to Boko Haram, which has killed hundreds this year in an insurgency focused mostly on Nigerian security forces, religious targets and politicians, rather than foreigners.

Western governments are increasingly concerned about Islamists in Nigeria linking up with groups outside the region, including al Qaeda's north African wing.

Colump's kidnap takes to nine the number of French citizens currently held hostage in Africa: seven others are in the arid Sahel belt and one in Somalia.

France's Intelligence agency said last week it believed "terrorist" links were behind the latest abduction.

"We are informing the government of France that we would continue to attack ... its citizens anywhere in the world as long as the government does not retract on its policies," Ansaru's statement said. ($1 = 0.7590 euros)

(Additional reporting and writing by Joe Brock; editing by Jason Webb)

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1 of 2. People wait in line to enter a job fair in New York August 15, 2011.

WASHINGTON | Thu Oct 11, 2012 8:36pm EDT

WASHINGTON (Reuters) - The number of Americans filing new claims for jobless benefits slid last week to the lowest level in more than four and a half years, according to government data that may provide a boost to President Barack Obama a month before voters go to the polls.

The Labor Department report on Thursday was the latest data to suggest improvement in the jobs market, though the surprisingly large 30,000 drop in new claims may have reflected distortions due to seasonal adjustments that are likely to be smoothed out in coming weeks.

"The overall trend seems to be that the labor market is improving," said Brian Kim, a currency strategist at RBS Securities in Stamford, Connecticut.

A Labor Department analyst said seasonal factors had predicted a very large increase in claims last week, which he said would be typical for the first week of the quarter. Unadjusted claims did rise, but far less than expected, resulting in the sharp drop in the seasonally adjusted figure.

He noted that one state reported a decline in claims last week when a rise had been expected. No states had been estimated for the report, he said.

"We will likely see some payback in the claims data reported next week. But through this potential volatility, it does look like the trend in the claims is improving somewhat," said Daniel Silver, an economist at JPMorgan.

Silver said that California, given its large population and past "massive swings" in its claims data, was probably the state that caused the sharp drop in the seasonally adjusted figure.

But Pam Harris, director of the California Employment Development Department, said the state was not to blame.

Harris said California had reported all its unemployment insurance claims data on time. She said a published report stating it had not was "incorrect and inaccurate."

A second Labor Department official said "a processing issue" resulted in the state, which he did not identify, reporting fewer claims than expected.

"We cannot dictate to a state how they process their claims ... This is one of the years they happened to be behind everyone else," he said, adding the Columbus Day holiday this week may have been one factor.

"This individual state, whenever there are increases in claim, usually range from 15,000 to almost 20,000," he added.

The jobs data was tempered by a second report on Thursday that hinted at weaker U.S. and global demand.

The U.S. trade deficit widened in August to $44.2 billion, as U.S. goods exports fell for the fifth consecutive month and imports declined fractionally.

Initial claims for state unemployment benefits fell to a seasonally adjusted 339,000, the lowest number of new claims since February 2008, about a year before Obama took office in the midst of the global financial crisis.

Economists polled by Reuters had forecast claims edging up to 370,0000 last week.

Zach Pandl, strategist at Columbia Management in Minneapolis, said "you do have to be cautious about possible distortions. But with that caveat, the jobless claims numbers have been modestly encouraging over the last few weeks."

The four-week moving average for new claims, a better measure of labor market trends, fell 11,500 to 364,000, the lowest in six months.

U.S. stocks rose in response to the jobs data, while Treasury debt prices slipped and the dollar was lower against a basket of currencies.

A government report on Friday showed employers added a modest 114,000 jobs to payrolls in September but the unemployment rate dropped sharply to 7.8 percent, also the lowest level since Obama took office.

Former General Electric Chief Executive Jack Welch and others suggested last week the payrolls data was fixed to make Obama look better ahead of the election, a charge the Labor Department strongly denied.

Obama's opponent, Republican Mitt Romney, has accused the president of mishandling the economy.

Thursday's claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell to 3.27 million in the week ended September 29, the latest data available. It was the lowest since May.

DECLINING TRADE

A Reuters poll on Thursday showed economists were slightly less optimistic about U.S. growth, lowering their median growth forecasts to an annualized 1.6 percent for the first quarter of 2013, compared to 1.7 percent last month.

The group of more than 70 respondents also trimmed their second-quarter forecasts to 2.1 percent from 2.3 percent, suggesting the U.S. economy will continue its slow, steady plod despite a recession in Europe, a slowdown in China and more restrictive fiscal policy at home.

The monthly trade deficit increased to $44.2 billion in August, from an upwardly revised estimate of $42.5 billion in July, the Commerce Department said. Analysts were expecting an August trade gap of about $44.0 billion.

Overall U.S. exports dropped 1.0 percent as troubles in Europe continue to weigh on global growth, while imports fell 0.1 percent in a sign of faltering U.S. demand for consumer products, autos and capital goods.

"It looks like net exports will contribute negatively to GDP (gross domestic product) growth, subtracting as much as half a percentage point," said Michael Moran, chief economist at Daiwa Securities America in New York.

A separate Labor Department report showed that overall U.S. import prices rose 1.1 percent for the second consecutive month in September, while U.S. export prices rose 0.8 percent.

(Additional reporting by Gertrude Chavez-Dreyfus and Ellen Freilich in New York; Editing by Andrea Ricci, James Dalgleish and Lisa Shumaker)

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LONDON | Thu Oct 6, 2011 1:41pm EDT

LONDON Oct 6 (Reuters) - A former reporter on a tabloid owned by Trinity Mirror has claimed the newspaper hacked into the phones of celebrities, Sky News reported on Thursday, potentially broadening a scandal that has so far largely affected Rupert Murdoch's News Corp .

David Brown, who worked for The People before being sacked, was reported by Sky News as having claimed the mobile phones of celebrities were targeted by The People in the years up to 2006.

Trinity Mirror has said the allegation is incorrect.

Brown's comments came in a written witness statement prepared for an employment tribunal claim for unfair dismissal against Trinity Mirror, but the statement was never used.

Sky is part owned by Murdoch's News Corp media empire.

"A number of the methods used to pry into individuals' lives were illegal and I have little doubt that if these people knew they had been spied upon, they would take legal action for breach of their right to privacy," Brown was reported to have written.

The people whose phones were hacked by the Sunday newspaper, Sky said, included David Beckham's children's nanny and TV presenter Ulrika Jonsson.

Trinity Mirror, which also owns the Mirror newspaper, denied the accusations.

"All our journalists work within the criminal law and the PCC (Press Complaints Commission) Code of Conduct and we have seen no evidence to suggest otherwise," it said in a statement.

It added that the "unsubstantiated allegations" taken from a draft statement had never been tested under cross examination.

Brown declined to comment when contacted by Reuters.

He was reported to have written that information had been gleaned by others from Jonsson's mobile phone.

"This was done by 'screwing' or tapping Ms Jonsson's phone's message bank," he is said to have written.

He said in the statement that Trinity Mirror had quickly paid substantial damages to Beckham after running a front-page story wrongly alleging the soccer star had left angry messages on his nanny's mobile.

"It took the company less than a month to pay David Beckham substantial damages because it knew it could not produce the evidence of tapped mobile phones in any litigation," the statement reportedly said.

Brown was fired from the Sunday tabloid in April 2006 for gross misconduct, Sky said on its website.

The statement, written in 2007, was not used because the company settled out of court with Brown and he signed a confidential settlement agreement, Sky said.

When a News of the World reporter was arrested for hacking in August 2006, a senior human resources figure "contacted executives on Trinity's national titles to tell them that if they were asked by other newspapers or trade publications whether they had used information from 'screwed' mobile phones they should deny it," Brown was said to have written.

"(The) advice indicates that a major media plc was not only allowing its staff to carry out illegal activity by, at best, turning a blind eye to it, but also taking part in an organised cover-up of that activity."

Trinity launched a review of is editorial controls and procedures last August, and had obtained written confirmation from its current senior editorial executives that they had not engaged in phone-hacking since the introduction of an Act of law in 2000.

Allegations of hacking at its rival Sunday tabloid the News of the World led to the closure of the 168-year publication. Trinity Mirror soon afterwards said its circulation revenues had risen. (Reporting by Avril Ormsby; Editing by Jon Hemming)

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* Case involves contract dating back to 1998

* Oracle denied engaging in fraud, but agreed to settle (Adds details of case, Oracle comment)

WASHINGTON Oct 6 (Reuters) - Oracle Corp (ORCL.O) has agreed to pay $199.5 million plus interest to settle allegations that the software giant failed to give promised discounts to the federal government, the U.S. Justice Department said on Thursday.

The world's No. 3 software company was also accused of making false statements about its sales practices and discounts and failing to meet its contract obligations to provide complete information about its sales practices.

Additionally, Oracle did not disclose higher discounts given to other customers and as a result the federal government paid more for its products than it should have, according to the Justice Department.

The settlement over false claims allegations is the largest involving the General Services Administration, which handles procurement for the federal government.

"Resolutions like this one - the largest GSA false claims settlement in history - demonstrate our commitment to ensure taxpayers are not overpaying for the products and services they receive," Tony West, head of the Justice Department's Civil Division, said in a statement.

Oracle denied any wrongdoing or that it engaged in fraud as part of the contract, which dates back to 1998, and argued that many of the witnesses were no longer available or did not remember the events.

Nevertheless, company spokeswoman Deborah Hellinger said "Oracle has therefore decided to avoid the distraction and high cost of litigating this case by settling."

The settlement represents about 11 percent of the $1.84 billion in net income Oracle had in the quarter that ended Aug. 31.

The case involved a former Oracle employee who became a whistleblower, Paul Frascella, and he will receive $40 million as his share, according to the Justice Department.

Oracle shares closed up 56 cents, or 1.9 percent, at $30.07 in regular trading on the New York Stock Exchange. (Reporting by Jeremy Pelofsky in Washington and Jim Finkle in Boston, editing by Carol Bishopric, Gary Hill)

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Fri Sep 28, 2012 6:05pm EDT

n">(Reuters) - Bank of America Corp agreed on Friday to pay $2.43 billion to settle claims it hid crucial information from shareholders when it bought investment bank Merrill Lynch & Co at the height of the financial crisis.

The settlement, among the biggest of its kind to stem from the 2008 meltdown, underscores how Bank of America is still suffering from decisions it made during the crisis, even as competitors are moving on.

The second largest U.S. bank likely lost money in the third quarter in large part because of the agreement, while other major banks, including JPMorgan Chase & Co and Wells Fargo & Co are expected to earn billions of dollars each.

As Lehman Brothers failed in September 2008, Bank of America agreed to buy Merrill Lynch. But in the weeks after that agreement, the bank tried unsuccessfully to scrap the deal. Merrill Lynch generated more than $15 billion of losses and its executives agreed to award employees up to $5.8 billion of bonuses.

Bank of America's shareholders voted to approve the deal in December 2008. After the merger closed, Bank of America shares fell sharply, and investors sued, saying Merrill's losses and bonuses should have been disclosed before the vote.

Bank of America denied the lawsuit's allegations, but CEO Brian Moynihan said the bank agreed to settle to remove uncertainty and put the case behind it.

The Merrill Lynch deal, as well as the bank's 2008 purchase of subprime lender Countrywide Financial, have ended up costing Bank of America billions, with the bank's mortgage business alone losing more than $35 billion since the Countrywide deal.

But the Merrill Lynch acquisition has also given much needed revenue to Bank of America. While the bank does not break out its results from Merrill Lynch, its wealth management and investment banking units, which owe much of their business to Merrill, generated nearly $160 billion of revenue from 2009 through June, or 43 percent of the bank's overall revenue.

Friday's settlement, which requires court approval, would resolve a case set for an October 22 trial in U.S. District Court in Manhattan. Investors sued the company and executives including former Chief Executive Ken Lewis, but Bank of America said it was footing the bill for the settlement.

At a brief hearing before Judge Kevin Castel on Friday afternoon, the judge told lawyers, "This is, needless to say, a good development," referring to the settlement. Few expect the settlement to face the obstacles that Bank of America experienced in 2009 when settling with the Securities and Exchange Commission over this same acquisition. A judge rejected the bank's initial settlement and forced both parties to renegotiate it.

LONG-SOUGHT DEAL

In September 2008, Bank of America's Lewis told his shareholders that buying Merrill Lynch was a real opportunity. The investment bank had the biggest retail brokerage on the Street, which gave Bank of America a new channel for selling products like credit cards.

As the deal started to look bad toward the end of 2008, Lewis tried to back out of it. But then-Treasury Secretary Henry Paulson pressured him to go through with the transaction. In January 2009, when Bank of America closed on its Merrill Lynch purchase, it received a $20 billion government bailout to shore up its balance sheet.

Bank of America has since repaid the money. Lewis retired at the end of 2009.

The deal helped the financial system but hurt Bank of America's shareholders, said Gary Townsend, chief executive of Hill-Townsend Capital in Chevy Chase, Maryland. Bank of America shares have slid more than two-thirds since the Merrill deal was announced in September 2008.

"It's good to get a bad tooth removed. But the question is, 'How expensive was Ken's mistake back in 2008?,'" Townsend said.

Lewis, when contacted by Reuters, declined to comment on the settlement.

The Merrill deal was valued at $50 billion when announced, but the final price was around $29.1 billion as Bank of America's shares fell.

Bank of America's acquisitions have continued to bring it pain. Since the financial crisis, the bank has agreed to pay more than $16 billion in 12 settlements with mortgage investors and other accords linked to takeovers, counting an $8.5 billion pact that still needs court approval.

On top of that $16 billion, Bank of America is on the hook for $11.8 billion in payments, mortgage modifications and loan refinancings as part of a $25 billion settlement this year over allegedly faulty handling of foreclosures.

EXPECTED LOSS

The bank expects to incur total litigation expenses of about $1.6 billion in the third quarter. It said that expense, a U.K. tax charge and a charge related to improvements in the company's credit spreads would hit quarterly results by about 28 cents per share. That would likely trigger a loss for the period. Analysts had expected profit of 14 cents per share when the bank releases results on October 17, according to Thomson Reuters I/B/E/S.

Lead plaintiffs in the lawsuit included the State Teachers Retirement System of Ohio, the Ohio Public Employees Retirement System and the Teacher Retirement System of Texas. The case was originally filed in 2009 by former Ohio Attorney General Richard Cordray, now director of the U.S. Consumer Financial Protection Bureau.

Four to five million shareholders could be eligible to share in the settlement, said Dan Tierney, spokesman for Ohio Attorney General Mike DeWine. Payouts will depend on the number of shares owned, he said.

Bank of America shares slipped 9 cents to $8.88 on the New York Stock Exchange in afternoon trading.

Prior to this accord, the largest crisis-era investor class action settlement involved allegations Wachovia, now part of Wells Fargo & Co, misled investors about the quality of loans sold before the financial downturn, according to NERA Economic Consulting.

Wells Fargo agreed last year to pay $590 million to resolve that lawsuit, on top of $37 million that auditor KPMG LLP agreed to pay.

Overall, the largest securities fraud settlements in U.S. history include the $7.2 billion agreement with investors stemming from the collapse of Enron; the $6.2 billion WorldCom settlement; and the $3.2 billion agreement over the accounting scandal at Tyco International, according to Stanford Law School's Securities Class Action Clearinghouse.

Under the Bank of America settlement, the bank will also make changes to its corporate governance through January 1, 2015. Some of the changes already were part of a February 2010 settlement with the U.S. Securities and Exchange Commission, including provisions on independence of the board compensation committee and an annual shareholder vote on executive pay.

The plaintiffs' law firms leading the case are expected to apply for $150 million in fees, said Tierney, the Ohio attorney general's spokesman. The law firms include Bernstein Litowitz Berger & Grossmann; Kaplan Fox and Kessler Topaz Meltzer & Check. The fee, which would be subject to court approval, works out to 6 percent of the settlement fund.

(Additional reporting by Grant McCool and Nate Raymond in New York, Tom Hals in Wilmington, Delaware and Tanya Agrawal in Bangalore; Editing by Supriya Kurane, Jeffrey Benkoe and David Gregorio)

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Sat Sep 29, 2012 12:52am EDT

n">(Reuters) - General Motors Co (GM.N) on Friday dismissed claims made in a $3 billion lawsuit filed by Saab's parent that the U.S. automaker deliberately bankrupted the Swedish company by blocking a deal with a Chinese investor.

GM, in a response filed in the U.S. District Court for the Eastern District of Michigan, said the automaker had the legal right to approve Saab's transaction with China's Zhejiang Youngman Lotus Automobile Co.

"The nub of plaintiffs' complaint is that GM declined to approve the transaction plaintiffs proposed to enter into with Youngman," GM said in the filings. "But the relevant contracts did not permit Saab to consummate the proposed transaction without GM's approval."

GM had previously said the lawsuit -- filed last month by Saab parent Spyker(SPYKR.AS) -- was without merit.

Saab, one of Sweden's best-known brands, stopped production in May 2011 when it could no longer pay suppliers and employees. It went bust in December, less than two years after GM sold it to Dutch sportscar maker Spyker.

GM's efforts to kill any sale were made to eliminate a potential rival in China, Spyker had said in the lawsuit.

Spyker Chief Executive Victor Muller said at the time that GM "had it coming" with regard to the lawsuit. Spyker is seeking at least $3 billion in compensatory damages, as well as interest and punitive damages, and legal fees.

For months, Muller tried to pull off a rescue deal with various Russian, Middle Eastern and Chinese investors, Youngman and Pang Da Automobile Trade Co Ltd (601258.SS).

The lawsuit is being funded by an anonymous third party, who will share in any settlement, Muller has said.

Youngman previously declined to comment about whether it was involved with the lawsuit, while Pang Da said it was not.

GM, which operates in China in a partnership with state-run automaker SAIC Motor Corp Ltd (600104.SS), late last year effectively blocked deals with Pang Da and Youngman, Spyker said.

GM said it would stop supplying vehicles and technology to Saab's new owners because it would run counter to the interests of its own shareholders.

Spyker charged GM with interfering in a prospective deal with the Chinese companies by claiming it would no longer license its technology to or build cars for Saab even though the last agreement was structured to exclude the U.S. automaker's intellectual property, according to the lawsuit.

Saab had created its own vehicle platform that did not use any GM technology, so GM's statements that it would not support a deal were "intentionally false" because such support was not needed, Spyker said in the lawsuit.

In its response on Friday, GM dismissed the idea that its technology would not be shared with the other investors under the proposed Spyker deal.

"Putting aside whether this argument is factually wrong, it misses the point," GM said, adding that it had the right to terminate its technology license and supply agreements with Saab if there was a change in control of Saab with GM's prior consent.

"This right was clear and absolute, and did not depend on how GM's technology purportedly was being handled," GM said.

GM bought half of Saab -- which had been making cars since 1947 and built a small, loyal following -- in 1990 and the rest 10 years later. It decided to sell the brand in 2009 after the financial crisis and came close to closing it before Swedish Automobile, then called Spyker Cars, bought Saab in January 2010.

Despite its well-known name, Saab was a niche player whose future had been questioned by analysts. Saab was profitable in only one of the 19 years GM owned it, executives with the Detroit automaker have said.

A consortium called National Electric Vehicle Sweden AB (NEVS) earlier this month closed a deal to buy most of Saab's assets for an undisclosed sum. NEVS plans to build electric cars for the Chinese market based on the Saab vehicle platforms, starting in about 18 months.

(Reporting By Ben Klayman in Detroit; editing by Carol Bishopric)

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Conference attendees cross a street in San Francisco, California March 15, 2012.

WASHINGTON | Thu Aug 2, 2012 10:42am EDT

WASHINGTON (Reuters) - The number of Americans filing new claims for jobless benefits rose less than expected last week, but the data continues to be influenced by distortions from seasonal auto shutdowns.

Initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 365,000, the Labor Department said on Thursday. The prior week's figure was revised up to 357,000 from the previously reported 353,000.

"The claims number is not that bad. There does seem to be some difficulty dealing with the seasonals this time of year whether it's auto plant closures or lack thereof," said Cary Leahey, a senior economist at Decision Economics in New York.

Economists polled by Reuters had forecast claims rising to 370,000 last week. The four-week moving average for new claims, a better measure of labor market trends, fell 2,750 to 365,500, the lowest in four months.

Temporary plant shutdowns by automakers for annual retooling cause wide swings in claims data in July, which makes it difficult to get a clear picture of the labor market's health.

The model used by the government to smooth the numbers for typical seasonal patterns has trouble anticipating the timing of the temporary closures and in addition, some automakers kept production lines running in July.

A Labor Department official said last week was the last where the seasonal expectation was shaped by seasonal layoffs in the auto manufacturing sector.

U.S. financial markets were little moved by the data, with traders focusing attention on a press conference by European Central Bank President Mario Draghi.

The claims data has no bearing on the July employment report as it falls outside the survey period.

The government is expected to report on Friday that employers added 100,000 new workers to their payrolls last month, according to a Reuters survey, up from 80,000 in June.

Job growth averaged 75,000 per month in the second quarter, a sharp deceleration from the average monthly increase of 226,000 in the first three months of the year.

An uncertain fiscal policy path and ongoing debt problems in Europe have hurt demand and left businesses cautious about hiring new workers.

On Wednesday, the Federal Reserve signaled it was willing to ease monetary policy further, noting that economic activity had slowed in the first half of the year. Many economists expect the U.S. central bank to launch a third round of bond buying, also known as quantitative easing, in September.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 19,000 to 3.3 million in the week ended July 21.

A second report showed planned layoffs at U.S. companies dropped for a second straight month in July, even as job cuts in the financial sector persisted.

Employers announced 36,855 planned job cuts last month, down 1.9 percent from June, consultants Challenger, Gray & Christmas said. So far this year, announced layoffs are up 2.5 percent from the same period in 2011.

The financial sector cut 6,156 jobs in July, the largest number since January.

"The situation in Europe is far from being resolved and ongoing weakness here could continue to take a toll on the financial sector," John Challenger, chief executive of the company, said in a statement.

Challenger also cautioned that layoffs typically slow during the summer months, while the heaviest job cuts historically happen in the fourth quarter.

"This may simply be the lull before the storm," he said.

(Reporting By Lucia Mutikani, additional reporting by Leah Schnurr and Ellen Freilich in New York; Editing by Andrea Ricci)

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