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FRAUD Drug maker settles SEC charges for $15 million Washington (AP)-Irish drug maker Elan Corp. has agreed to pay $15 million to settle Securities and Exchange Commission (SEC) charges that it misled investors about revenue from a joint venture program. The $15 million penalty is intended to be distributed to investors harmed by the company’s alleged wrongdoing. The final judgment is subject to court approval. Elan booked nearly $500 million of license fees from the joint venture in 2000 and 2001 but failed to tell investors it was being paid with money that Elan had provided to its venture partners, the SEC said. Elan also failed to tell investors that a “substantial portion” of the product revenue it reported was generated by selling partial royalty rights to some of its most important products and by selling off other drug lines entirely. As a result, investors were misled about how Elan’s business was faring. HEALTH LAW Medicare fraud suit leads to $8.1M award for man Reading, Pa (AP)-An 83-year-old Reading man who filed a lawsuit claiming that HealthSouth Corp. was cheating the government’s Medicare program has been awarded $8.1 million out of a $325 million lawsuit settlement. James DeVage began his battle in 1996 when he noticed that HealthSouth continued charging Medicare for treatments for a bad back that he was no longer receiving. He sued under the federal False Claims Act-a law allowing private citizens to act as agents of the government in order to stop the government from being cheated. The Justice Department joined his lawsuit and reached a settlement last month with HealthSouth. MALICIOUS PROSECUTION Gibson Dunn, heir, told to pay art expert $21.4M Great Falls, Mont. (AP)-An art expert was unfairly sued after he concluded that his own grandfather had created a Western-theme painting bearing the name of a better-known artist, a jury has ruled. Jurors have awarded Steve Seltzer nearly $21.4 million in damages in the dispute over the watercolor Lassoing a Longhorn, supposedly signed by the painter C.M. Russell in 1913. It is owned by Steve Morton, an heir to the Morton Salt fortune. Seltzer, who had been hired as an expert to examine the painting, said the watercolor was really the work of his grandfather, O.C. Seltzer, with a forged Russell signature. As a Russell, the painting is worth $800,000; as a work by O.C. Seltzer, only about $80,000. Morton sued Seltzer in federal court in 2001, alleging that Seltzer knew that his opinion about the painting was wrong, refused to admit the error and had damaged the painting’s value to the point it could not be sold. But when no expert could be found to testify that the painting was indeed a Russell, Morton dropped his lawsuit. Seltzer then filed a malicious prosecution and abuse of process suit in state court against Morton and law firm Gibson, Dunn & Crutcher. He alleged that the suit had damaged his reputation as an expert on his grandfather’s work. Jurors awarded Seltzer $20 million in punitive damages and $1.4 million in compensatory damages. REGULATORY ACTION Bank of America settles improper trading charges Washington (AP)-Bank of America Corp.’s mutual fund adviser company, brokerage and clearing firm have agreed to pay a total of $375 million to settle regulators’ charges of improper trading that hurt ordinary shareholders. The $375 million payment, which includes $125 million in civil fines and $250 million in restitution, is part of an agreement between the three Bank of America companies and the Securities and Exchange Commission, the office of New York Attorney General Eliot Spitzer, the Federal Reserve and the U.S. Office of the Comptroller of the Currency. It is the latest enforcement action over alleged mutual fund trading abuses in an industrywide crackdown that began in September 2003. It comes in addition to a March 2004 settlement in which Bank of America and FleetBoston Financial, which Bank of America has since acquired, agreed to pay a total $515 million and cut fees investors pay by $160 million. The $375 million will go to the affected mutual funds and to shareholders. The companies are Banc of America Capital Management, BACAP Distributors and Banc of America Securities. SHAREHOLDER SUIT $168M Enron settlement has preliminary approval Houston (AP)-A proposed $168 million shareholder suit settlement by 18 former Enron Corp. directors who oversaw the company before its 2001 collapse has received preliminary approval from a Texas judge, along with two other settlements previously reached with banks. The agreement with plaintiffs in the conglomerate of lawsuits in Houston-led by the University of California-involves $155 million in insurance proceeds and $13 million from the pockets of 10 of the former directors who sold stock inflated by hidden debt and accounting tricks. The other settlements given preliminary approval by U.S. District Judge Melinda Harmon were $69 million with the Bank of America Corp. and $222.5 million with Lehman Brothers Inc.

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