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Chinese Baby Formula Scandal Company Sanlu Goes Bankrupt

A few months ago, the source that made more than 60,000 people sick and killed at least six infants was found to be from Hong Kong dairy producer Sanlu Group Corp (among other producers) as it was adding a harmful chemical called autumn into its milk products. Now, Sanlu Corp has just been declared bankrupt by a Chinese court. The company now has a full six months to dissolve by paying creditors and selling all assets. A second company involved in the scandal, China Mengniu Corp. Said today it was expecting to post $130 million loss this fiscal year because of its use of the dangerous chemical.

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AIG Sells $39.9B in Mortgage Backed Securities, SEC Charges Siemens AG for Bribery

AIG has announced it will sell $39.9 billion worth of residential mortgage backed securities to Maiden Lane II LLC, which is operated by the NY Fed Reserve, in hopes of helping AIG discard the bad securities. Part of the deal, the NY Federal Reserve will get $19.8 billion according to the SEC.

In other news, the SEC has charged Siemens AG for “engaging in a systematic practice of paying bribes to foreign government officials to obtain business.”

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Former Nasdaq Chair Bernard Madoff Arrested in Ponzi Scheme

madoff Former Nasdaq Chair Bernard Madoff Arrested in Ponzi SchemeBernard Madoff, who served as the Nasdaq chairman for 3 years in the early 90s, has just been arrested by the FBI for allegedly running a huge Ponzi scheme. He reported his firm that he founded in 1960, Bernard L. Madoff Investment Securities LLC NY, had $17 billion in assets available in 2008 while the company in fact had almost nothing. According to the SEC, Bernard planned to distribute $100 million to friends and family. He was arrested yesterday at his penthouse after being turned in by his sons. He told authorities that he had no explanation and that he expected to go to jail. He faces a maximum of 20 years in jail. He is now free on a $10 million bond.

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Wal-Mart Settles $54.25 million Labor Action

Wal-Mart has just settled a lengthy 10 year class action for $54.25 million that alleged the company cut employee break and worker times in Minnesota. Last July, a Dakota County Judge ruled in favor of a suit concluding Wal-Mart broke labor laws 2 million times for the same reasons, though the company later appealed. This isn’t the first time Wal-Mart has faced similar actions. In 2005 in California, it was slapped with a $172 million suit that alleged the company denied lunch breaks. Later in 2006, Wal-Mart was slapped with yet another suit, a $78.5 million class action alleging workers were forced to work during their breaks.

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Facebook wins $873 million Spam Case

Judge Jeremy Fogel in San Jose, California, has just awarded Facebook the largest remedy ever under the CAN-SPAM act, a total of $873 million, against Adam Guerbeuz and Atlantis Blue Capital for spamming people on Facebook. No one will likely face any jail time. However, they have been banned from accessing or using Facebook at any time for any reason whatsoever. You can review the judgment filing here.

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Google ends Yahoo ad deal

As we previously reported, Google changed its terms for the US Justice Department in hopes of satisfying requirements and settling concerns over an ad deal with Yahoo. Details of the revisions can be found here from our previous post. The Justice Department was not satisfied with the new deal, and now Google is reporting that it has given up on the deal altogether. Google cites the process was too long and costly and that it wouldn’t be in the best interest of its stakeholders to continue pressing for a deal with Yahoo. Yahoo stock surged 5% after the news broke.

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