Google settlement to benefit Yahoo

Online search engine leader Google Inc. will surrender more than $300 million of its stock to Yahoo Inc. in a settlement that removes a legal threat hanging over its public stock offering while enriching a nettlesome rival.

The agreement announced Monday gives Yahoo an additional 2.7 million shares of Google stock in exchange for dropping a patent lawsuit involving a crucial piece of online advertising technology. The payment also resolves a dispute about how much Yahoo is owed under an old partnership between the two companies.

The settlement is worth about $328 million, based on the midpoint in the $108- to $135-per-share range that Google has established for its highly anticipated initial public offering.

Study

Most 401(k) accounts endure bear market

Most Americans who invest in 401(k) retirement savings accounts weathered the 2000-2002 bear market downturn pretty well, according to a research report issued Monday.

The average account balance at the end of 2003 was $76,809, up nearly 30 percent from $59,510 a year earlier thanks to the stock market recovery, the study found. And it also was up more than 17 percent from the average $65,572 in accounts at the end of 1999.

The study was prepared by the ICI, a mutual fund trade group, and the Employee Benefit Research Institute, a nonprofit research organization that also is based in Washington.

Still, not everyone came through unscathed. The balances of savers in their 60s dropped to an average of $127,130 at the end of 2003 from $139,317 five years earlier. Some long-time savers in their 50s saw account balances drop to $146,509 at the end of last year from $161,537 five years earlier, the study said.

Investigation

Insurance companies settle trading cases

Two insurance companies will pay $20 million in a settlement that ends an investigation into charges that the companies allowed improper trading of annuities, law enforcement officials announced Monday.

Conseco Inc. and its successor in the variable annuities business, Inviva Inc., agreed to the settlement with New York Atty. Gen. Eliot Spitzer and the Securities and Exchange Commission. Regulators accused the companies of allowing some favored investors to engage in rapid trading of mutual funds linked to variable annuity products, Spitzer said.

The SEC called the settlement the first enforcement action charging insurance companies with securities fraud for allowing market timing of mutual funds.

The insurance companies misled investors by claiming the annuities were “not designed for professional market timing organizations,” according to the firms’ prospectuses. But the companies marketed and sold the annuities to professional market timers anyway, according to the SEC.