Altogether, $227 million has been recovered, including the $23 million.

This is one of the largest settlements in Kentucky history. Claims are reportedly still pending against four Kentucky Life officers and directors.

Deloitte did not admit any wrongdoing as part of the settlement.

"The settlement was fair and reasonable for all of the parties," said state insurance commissioner Janie A. Miller in a statement.

Biotech Settles with SEC
Here's one for the scrapbook.

It seems that late last week, International BioChemical Industries Inc. (IBCL) and its president and chief executive officer Timothy C. Moses settled a lawsuit filed by the Securities and Exchange Commission.

So what? The SEC settles hundreds of lawsuits every year, right?

Yes, but read the details of this case. Apparently the SEC alleged that IBCL issued a series of false and misleading press releases. Those press releases indicated that the federal government had contacted the company to discuss the effectiveness of its products in the war on bioterrorism. In doing so, the commission claims the biotech created the impression that the federal government was interested in purchasing IBCL's products.

In truth, the FBI had contacted IBCL—but only as part of the bureau's inquiry into the post—September 11, 2001, anthrax mailings, said the commission. "The FBI never expressed any interest in purchasing IBCL's products," the SEC added.

The complaint alleges that, as a result of the false press releases, IBCL's share price and trading volume increased dramatically.

As part of the settlement, the U.S. District Court for the Northern District of Georgia permanently enjoined IBCL and Moses from violating the antifraud provisions of the federal securities laws.

Moses was ordered to pay a fine of more than $11,6000, representing the profits he gained as a result of his alleged conduct.

SEC Probing eFunds
On Thursday eFunds Corp. said the SEC has launched a formal investigation in connection with its ongoing inquiry.

Management at eFunds said it will continue to cooperate fully with the SEC.

The commission began an informal inquiry last March after eFunds restated 2001 results stemming from the way the company accounted for its acquisition of Access Cash International in 2000.

The company, which provides electronic transaction processing, ATM services, business consulting, and other services, was spun off from Deluxe Corp. in 2000.

After the company announced the informal SEC probe last March, several key executives left the company, including former chief financial officer Paul Bristow and former chief executive officer J.A. "Gus" Blanchard.

Last Monday the company named Thomas S. Liston as chief financial officer. He joined eFunds in July 2002 as interim CFO, focusing on the company's accounting and finance operations.

The company said Liston will continue to have responsibility for dealing with the investment community, as well as overseeing all of the company's financial functions.

Before joining eFunds, Liston served as interim CFO for PetSmart Inc.

Short Takes

• FleetBoston Financial Corp. indicated it would not pay 2002 bonuses to chairman and chief executive officer Charles Gifford, president and chief operating officer Eugene McQuade, and vice chairman and chief administrative officer Jay Sarles. The reason? The bank's "disappointing financial performance" last year, spokesman James Mahoney told Bloomberg.
  
  

Citigroup Inc. CEO Sandy Weill earlier this month also agreed not to take his 2002 bonus.

• Moody's Investors Service downgraded McDonald's long-term senior unsecured debt rating to A2 from Aa3, confirmed its Prime-1 short-term rating, and assigned a stable rating outlook.
  
  

"The downgrade of McDonald's ratings reflects the second consecutive year of negative same store sales at Brand McDonald's on a worldwide basis, combined with continued declines in company-operated and overall company margins, and a lower return on assets," the rating agency said in a statement.

• Prescription-drug sales in the United States grew 12 percent to $192.2 billion in 2002, according to IMS Health, a pharmaceutical information and consulting company. In 2001, sales grew 17 percent. Drug prices rose an average of 4 percent, nearly double the inflation rate.
  
  

• Bristol-Myers said it would now elect all members of its board of directors at one time rather than at various times during the year. The change would allow shareholders to replace a majority of the board in one meeting, making it tougher for management to entrench itself in the face of investor unhappiness.
  
  

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