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BREACH OF CONTRACT Jury awards $125M to security systems maker New York (AP)-A federal jury in New York has awarded $125 million in damages to OSI Systems Inc., a California-based maker of X-ray inspection equipment, finding that a dispute with L-3 Communications Inc. caused it to lose substantial business after the Sept. 11, 2001, terrorist attacks. The jury awarded $33 million in compensatory damages and $92.6 million in punitive damages. It found that L-3 Communications had engaged in malice, oppression or intentional fraud as the two companies sought to acquire a third company, PerkinElmer Detection Systems, owned by PerkinElmer Inc. OSI had claimed that L-3 Communications did not deliver on its promise to buy the assets of PerkinElmer for both companies and give OSI all the rights as if OSI’s name was on the contract. CIVIL RIGHTS University, lab workers settle equal-pay dispute Los Alamos, N.M. (AP)-Hispanic and female employees who filed two class actions over alleged discrimination at Los Alamos National Laboratory reached a settlement with the laboratory’s manager. The University of California, which has run the New Mexico lab for the federal government for more than 60 years, has agreed to pay $12 million plus attorney fees and costs. The money is to be shared by female and Hispanic employees who worked at the lab between December 2000 and the present. REGULATORY ACTION Fannie Mae fined $400M over false accounting Washington (AP)-Fannie Mae has been fined $400 million, following publication by the Office of Federal Housing Enterprise Oversight of a report alleging accounting manipulation by the government-sponsored mortgage company. The report alleged that senior executives at Fannie Mae manipulated accounting to collect millions in “undeserved bonuses” and deceive investors, and that the board of directors failed to exercise its oversight responsibilities. The accounting manipulation occurred from 1998 to 2004. Insurance companies end rebate practice, pay fines Albany, N.Y. (AP)-Two major title insurance companies have agreed to end a practice of providing rebates to major commercial property customers at the expense of homeowners and small businesses, New York Attorney General Eliot Spitzer has announced. Fidelity National Title Group Inc. of Jacksonville, Fla., and First American Title Insurance Co. of Santa Ana, Calif., settled an investigation by agreeing to reduce their rates to New York homeowners and small businesses by 15% for properties sold for up to $1 million. Each company also agreed to pay New York $2 million in penalties. Spitzer said real estate developers typically received free or discounted title insurance in other states in exchange for giving their New York business to the two companies. New York’s higher rates subsidized the incentives and that violated state business law. TORTS $26M for woman left quadriplegic by car crash Chicago (AP)-An Illinois state jury awarded the children of a Chicago woman, Margaret Petraski, more than $26 million over a 2001 car crash with a Cook County sheriff’s patrol car that left her a quadriplegic and killed a passenger. The crash occurred on May 28, 2001. An officer was responding to a nonemergency call when she ran a red light and collided with Petraski’s vehicle. WAGES AND HOURS Citigroup unit, brokers settle overtime claims New York (AP)-Citigroup Inc.’s Smith Barney brokerage unit has agreed to pay $98 million to settle claims on behalf of thousands of current and former brokers that they are owed overtime pay and other reimbursements. Securities firms claimed that brokers are exempt from state and federal overtime laws because they are salaried, administrative employees. The number of people eligible for compensation from the settlements, and the amounts they can receive, depend on statutes of limitations in individual states and court approvals of the settlement formulas. WRONGFUL DEATH Gas explosion that killed woman costs utility $8M Seattle (AP)-Puget Sound Energy, a major investor-owned utility in the state of Washington, has agreed to pay $8 million to settle a lawsuit over the death of a woman after a natural gas explosion destroyed her home in Bellevue. Frances Schmitz, 68, was severely burned by the blast and fire on Sept. 2, 2004, and died three weeks later. The explosion was blamed on a leaky pipe. State regulators found that long-term corrosion caused the leak in a steel pipe leading to the house. The pipe was installed in 1963 and was essentially unprotected from rust for two decades before an electrical corrosion-protection system was added, according to expert testimony cited by the state Utilities and Transportation Commission.

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