British judge clears Madoff sons of wrongdoing

LONDON — A British judge has cleared Bernard Madoff's sons of wrongdoing in a case brought against them by the liquidator of his estate in Britain, saying in a written ruling that the pair's honesty was not in doubt.

Judge Andrew Popplewell said Friday that the brothers, Mark and Andrew, were among several U.K. directors of Bernard Madoff's London-based securities firm whose reputations had been tainted by association with the elder Madoff's multibillion-dollar fraud. In dismissing the civil case against them all, the judge delivered a glowing endorsement of their character.

"Their honesty and integrity has been vindicated," he said.

Mark and Andrew Madoff long played a lead role in the drama surrounding their disgraced financier father. They first alerted authorities in 2008 after the elder Madoff confessed that his highly regarded investment business was nothing more than a Ponzi scheme.

The pair held their silence as the details of the breathtaking fraud spilled out into the public domain, but following Mark's suicide in 2010 — and ahead of the release of a book telling the Madoff family's side of the story — Andrew spoke to the press, saying the Madoff family had been completely hoodwinked by his father.

"What he did to me, to my brother, and to my family is unforgivable," Andrew Madoff said at the time.

Nevertheless, suspicion has lingered, and a lawsuit filed in London's High Court against the Madoff brothers and various company directors alleged that they subverted the company's finances by approving $27 million in payments, more than 5 million euros ($6.8 million) in perks, and millions more in interest parceled out to well-connected Austrian businesswoman Sonja Kohn, who had helped the elder Madoff win billions in new business.

Judge Popplewell ruled that the Madoff brothers and another director, Philip Toop, "were in breach of their duty to exercise reasonable skill and care" by failing to investigate whether the payments were in the company's best interests. But Popplewell said that the payments would most likely have been made in any case, and in general his judgment was a big win for the defense.

"The resolute and temperate way they have conducted themselves in these proceedings does them great credit," he said.

Other legal actions — including a criminal trial in New York involving a different set of defendants — are ongoing.

The judge said Andrew Madoff was "seriously ill with cancer" and so sick he had been unable to give evidence, even via videolink.

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The Ticker

JP Morgan reaches $4B deal with feds

JPMorgan Chase & Co. has reached a tentative $4 billion deal with the U.S. Federal Housing Finance Agency to settle claims that the bank misled government-sponsored mortgage agencies about the quality of mortgages it sold to them during the housing boom, the Wall Street Journal reported online yesterday.

The deal is for less than the $6 billion the agency initially sought, the Journal said, citing people close to the discussions.

Ariad in trouble after failed study

Cambridge-based Ariad Pharmaceuticals Inc. is working on a new financial plan after increased risks of blood clots stopped a study aimed at expanding use of its only approved drug. The shares sank.

The study, called Epic, was testing Ariad's Iclusig against Novartis AG Gleevec in newly diagnosed chronic myeloid leukemia. Iclusig is still on the market and the company is working with regulators on changing the drug's labeling to reflect the safety findings, Ariad said yesterday in a statement.

"It's the end of Ariad as we know it," Mike King, an analyst with JMP Securities, said yesterday. The risks will relegate Iclusig to "break glass in case of emergency" use only, said King, who predicted the company may fire workers and halt plans to expand its headquarters.

Ariad will work in the next few weeks to put a new financial and operating plan in place, Chief Executive Officer Harvey Berger told analysts and investors on a conference call. It's premature to discuss the potential for a partnership or sale of the company, he said in response to a question.

"We are working as a team on a substantially revised financial plan that will extend out our cash runway substantially beyond where we are today," Berger said. "We're taking a fresh look at every component of our budget, every near- and long-term expenditure," he said, citing clinical trials, facilities and people.

Ariad plunged 41 percent to $2.67 at the close in New York yesterday, extending a record drop that started when the study enrollment was first halted earlier this month. The shares have lost 86 percent this year.

BMC gets two research awards

Boston Medical Center has been approved to receive two research awards from the Patient-Centered Outcomes Research Institute. One will fund a study of the delivery of cancer care to patients who face socio-legal barriers and the other a test of the effectiveness of integrative medical group visits for treating chronic pain.

THE SHUFFLE

• Thomas Hilditch, left, has been appointed a regional vice president of the 18,000-plus member Institute of Real Estate Management. His expertise includes site operations, staff development, budgeting, building systems, and community relations.
• Gary D. Hoffstein joins Needham-based Salus Capital Partners as the senior vice president, chief information officer, responsible for managing the direction of technology to support the firm's continued growth through strategic planning and evaluation.

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Midtown luxury units sport perks

The developers of Millennium Place, a 15-story luxury complex in midtown, aren't just selling condos, but creating an upscale urban lifestyle.

The three-bedroom condo we looked at had all the high-end amenities and views you'd expect with a price point of more than $1,000 per square foot. But what separates it from other properties of its type is a complete lifestyle experience called La Vie that offers residents social events, from fireside chats with notable guests to movie nights in the 16-seat common screening room as well as on- and off-site wine and culinary events, and musical and theatrical performances.

Other amenities include an owner's lounge with a wall-length fireplace and a bar and dining area with food catered by the upcoming on-site Legal Crossing restaurant. There's also a fully outfitted Sports Club/L.A. fitness center with a yoga room and a meditation center and a kid's club playroom.

Millennium Place has 256 luxury one- to three-bedroom units ranging in size from 775 square feet to 2,360 square feet, including 14 penthouses with private terraces. Condo prices range from $750,000 to $3.5 million, and more than 85 percent of the units have already been sold as the complex's first residents moved in this week.

There are 61 units on the more desirable Washington Street side that overlooks the Ritz Carlton Residences and the iconic Paramount Theater sign, but only six are still available. We took a look at one of these, Unit 2B, a three-bedroom, three-bath, second-floor unit that's going for $1,935,000.

The building has a distinctive exterior of staggered glass bays and beige brick, and the lobby continues the black rectangular window theme with black marble flooring, a white marble concierge desk and floor-to-ceiling glass windows overlooking a rear urban greenspace. Upstairs, the common hallways are carpeted and feature sconce lighting, and units have recessed entrances with quarter-sewn walnut doors.

The door opens into an oak hallway that leads to an open kitchen/dining/living area that has white ivory oak floors, 9-foot ceilings and recessed lighting.

The kitchen area features 20 self-closing walnut cabinets, with cashmere white granite countertops and a glass-mosaic tile backsplash. There's an island with a built-in ULine wine cooler. Other appliances include cabinet-enclosed G.E. Monogram refrigerator and Bosch dishwasher as well as a Bosch gas stovetop and Bosch oven below.

The dining/living area has a gas fireplace with black granite surround as well as a wall of floor-to-ceiling windows in a bay that projects outward, offering a panoramic three-sided view up and down Washington Street and up Avery Street to the Boston Common.

To the right of the living area is a carpeted master bedroom suite with a good-sized bedroom overlooking Washington Street. The suite has four closets, including a walk-in. The en-suite master bathroom is done in luxurious Eastern white marble floors, walls and surround for a deep soaking tub and a glass-doored steam shower. There's a creme marble-topped walnut vanity with two sinks.

Off the center hallway are the unit's other two bedrooms. The second bedroom is decent-sized with side alley views, and has an en-suite taupe and white porcelain tile bathroom with a walk-in shower and an ivory pearl marble-topped wood vanity.

The third carpeted bedroom, which would work well as a home office, is on the small side. There is a third bathroom across the hall with taupe and white porcelain tile, a walk-in shower and an ivory pearl marble-topped wood vanity.

Also along the hallway is a closet that holds a stacked Bosch washer and dryer.

Unit 2B comes with one garage parking space, with vehicles brought up by valet. The $1,923 monthly condo fee is near the $1 per square foot that top buildings typically assess, but most of the substantial amenities are included, including the free year's membership at the Sports Club/LA.

Broker: Potential buyers who wish to schedule an appointment can email bostonlives@mplaceboston.com or call 617-542-1555

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Globe holds off closer

The John Henry era will soon begin at The Boston Globe — though not as early as originally hoped — as the broadsheet prepares to end two decades under the control of its out-of-town overlords.

A source close to the deal told the Herald yesterday that finalizing the purchase and executing the formal transfer of the newspaper from the Times to the Red Sox owner — which had been expected to happen sometime over the weekend — likely won't take place until next week at the earliest.

Both the Globe and a rep for Henry declined comment yesterday, and a Times spokeswoman did not return calls or emails.

Henry announced in August he was buying the New England Media Group — which includes the Globe, Boston.com, the Worcester Telegram & Gazette and related properties — for $70 million.

Since then, Henry has remained tight-lipped publicly about his long-term plans for the paper — including whether he will sell the Morrissey Boulevard building or cut staff. That silence has left Globe staffers on tenterhooks, said Alan Mutter, a former newspaper editor and an adjunct professor at the University of California at Berkeley.

"In the newsroom and elsewhere in the building, everyone's wondering what's going to happen next," said Mutter. "Their number-one primary concern is will they have a job ... There are all sorts of ways you can restructure the business and cut costs."

Had the deal occurred over the weekend, Henry could have been in the unusual position of printing the first edition of his new Globe reflecting the outcome of tomorrow's potential ALCS-clinching Red Sox game.

Meanwhile, analysts said it was long overdue for the Times to unload its local newspaper portfolio.

"They get (to get) rid of what they believe is a losing business," said analyst Ed Atorino of The Benchmark Company. "A lot of newspapers are struggling. In a way, there are so many problems at the Times, it probably became a distraction."

Said Mutter: "The New York Times clearly decided to sever everything that could be a distraction to the main brand. What they're getting is not so much money, but peace of mind — they don't have to worry about The Boston Globe anymore."

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Stock market shakes off shutdown

Investors put the government shutdown and default threat behind them and got back to work yesterday, pushing the Standard and Poor's 500 index to a record close for the second straight day.

"We've already seen a shift in the discussion from how to deal with the issues at hand to let's talk about how to improve growth," said Doug Handler, chief U.S. economist for research firm IHS Global Insight.

Christine Armstrong, senior vice-president at Morgan Stanley, agreed. "We're back to business," she said.

The S&P 500, up 22 percent this year, added 11.35 points yesterday, or 0.7 percent, to a record 1,744.50. The Nasdaq composite was up 51.13 points, or 1.3 percent, at 3,914.28. The Dow Jones industrial average rose 28 points, or 0.2 percent, to 15,399.65, and is 277 points below its own record.

Among the leaders yesterday was Google, rising 14 percent to above $1,000 a share for the first time after reporting third-quarter earnings that surpassed analysts' expectations. General Electric also reported higher than expected earnings, driving its shares up 3.5 percent. And Morgan Stanley jumped 2.6 percent on better than expected earnings.

Investors were relieved Washington extended the government's borrowing ability until Feb. 7 and funded the budget through Jan. 15. But Handler said there are still hazards that need to be dealt with.

"We really do need some sort of positive statement from Washington," he said.

And Armstrong believes the impact of the 16-day shutdown on the nation's economy will show itself in the coming months.

"This is a very tricky, dangerous market right now," she said.

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Mass. panel to study black market tobacco trade

BOSTON — A special commission charged with studying the economic fallout of the illegal cigarette and tobacco trade in Massachusetts is preparing to hold its first meeting.

The commission was created by state lawmakers to determine the magnitude of the black market tobacco trade.

The nine-member panel, which will meet Monday, is also expected to recommend legislation, enforcement actions and penalties. One goal of the commission is to help strengthen the collection of tobacco excise and sales taxes.

Revenue Commissioner Amy Pitter said tobacco smuggling is a growing problem in Massachusetts and other states and can be found at the local, state and international levels

Pitter said the commission will also look at how other states combat counterfeit tax stamps and underground distribution rings.

The commission is expected to make its recommendations next March.

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RI sales tax panel to hear from Boston researcher

PROVIDENCE, R.I. — A special task force examining ways to change Rhode Island's sales tax is set to hear from a Boston-based researcher who studies how sales taxes affect the economy.

The sales tax commission is scheduled to meet Monday at the Statehouse for a presentation from Paul Bachman, director of research at the Beacon Hill Institute, which is a research group affiliated with Suffolk University in Boston.

Bachman has studied how changes to sales tax rates affect local economies.

The commission was formed after a lawmaker called for the repeal of the 7 percent tax. While that idea is unlikely to pass, lawmakers say it's time for a broader look at ways to make the tax less of a burden on consumers and businesses.

The commission includes lawmakers and business owners.

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ABC and Univision's love child bursts to life

MIAMI — The long-awaited DNA exchange between ABC and Univision emerges from the test tube this month, aiming to stretch the limits of traditional network programming. The English-language television network, called Fusion, will target millennial Hispanics and their BFFs as it attempts to capitalize on a generation for which cultural fusion is the norm and digital media is king.

The network will provide something of a grab bag: a mix of hard news, commentary, sports and irreverence aimed at 16- to 30-year-olds. Sure, there will be nightly news programs, but also an animated puppet news and entertainment show by David Javerbaum, former head writer of "The Daily Show with Jon Stewart." Think Comedy Central, the hipster online magazine Vice.com, ABC and Univision, all in one.

"Not everyone will get it; and that's sort of the point," Univision News President and now Fusion CEO Isaac Lee wrote in a memo to staff earlier this month.

To "get" what Fusion is attempting, it helps to tour its home and meet the players:

THE STARTUP

The green and blue mood-lighting of the warehouse-turned-news hub known as Newsport suggests Miami Beach club over newsroom. Like millennials who can't afford to move out on their own, Fusion shares the cavernous space with Spanish-language parent Univision News. Senior staff members gather for brainstorming sessions in brightly painted and glass-walled rooms overlooking the newsroom.

On a recent afternoon, Lee strode across the floor like the head of a Silicon Valley startup, sketching flow charts of Fusion's evolution. As he talked, one millennial staffer wrestled a ping pong ball from the mouth of Chocolate, Lee's brown Labrador. Others chimed in on the essence of the network that goes live Oct. 28.

As befits a project geared to a generation used to downloading the latest mobile update, Fusion has been beta testing in plain view. In 2011, Lee brought together a group of recent journalism school graduates to work on an English-language Tumblr for Univision. The young journalists created original news, curated stories and produced short documentaries.

Lee learned what worked (humor) and what didn't (direct Univision translations). The approach bought him time to win over holdouts at Univision, a company that built its brand on Spanish-language affinity.

THE PROS

"I hate ties. They are really useless. Why do I have to have a piece of cloth hanging from my neck every day?" fumed Jorge Ramos, the silver-haired veteran Univision anchor with piercing blue eyes, one of a handful of senior journalists to join Fusion.

As Ramos jogged up the stairs, he yanked the offending garment out of his bag and held it up to his neck. "This is my Univision uniform," he said, then dropped his arm and grinned, "and this is Fusion."

Ramos, who co-hosts Univision's popular nightly newscast with Maria Elena Salinas, will pull double duty. He frankly acknowledges his own millennial kids don't watch his Univision newscast, or any other. He is also blunt about the limits of his native language.

"It is very frustrating many times to have a great interview on the Sunday news story, and no one (in Washington) is paying attention simply because it's in Spanish," he said.

Ramos doesn't plan to dumb things down. He does plan to mention Mexico — the country sharing 2,000 miles of the United States' southern border — almost as much as he mentions Syria. One of his first interviews is with Maricopa County, Ariz., Sheriff Joe Arpaio, who earned attention and a U.S. Department of Justice investigation for his aggressive attempts to crack down on illegal immigration.

THE FEMALE FACTOR

Alicia Menendez describes her new Fusion show as a mix of sex, money and politics.

Isn't everything?

"Yes, but most people won't admit it," Menendez shot back. The 30-year-old gained early exposure to politics as the daughter of U.S. Sen. Robert Menendez, D-N.J. She's anchored programs for HuffPost Live and Sirius XM but says Fusion is the first network to speak to her generation.

Her first show: millennials' lack of monogamy and how self-inflicted singledom affects home purchasing.

Fusion describes itself as "Championing a smart, diverse and inclusive America." But Menendez's show notwithstanding, when it comes to gender, Fusion resembles Silicon Valley startups more than its tagline: it's stocked with talented women on the news floor but has virtually none on its senior creative and executive team.

THE PARTNERSHIP

ABC News President Ben Sherwood compares Fusion to the web of highways California built back in the 1950s.

"No one could understand why you would build a freeway with six lanes. But the visionaries of California knew that if you built these freeways, people would come," he said.

Like California's freeway system, the plan is to scale up, starting with 20 million homes and expanding to 60 million in the next few years.

It was a logical move for the Disney-owned ABC, which has no cable news counterpart and provides Fusion broad distribution through its cable and satellite contracts. It can also share news content with minimal investment. ABC has sent staff to work with Fusion on content and production, and Fusion's vice-president of news Mark Lima came from ABC's "Nightline."

For Univision, Fusion poses a greater risk, but the company has the financial wherewithal to weather initial bumps. Its prime-time broadcasts ruled July sweeps ahead of the other four major networks among coveted 19-49 viewers. In Fusion, it's looking ahead to the second- and third-generation Latinos who get their news in English. Nearly two-thirds of the 52 million Hispanics living in the U.S. are native born.

Still, the experiment hasn't been without awkward moments. As Fusion prepared to go live, top staffers were quoted sniping about the ages of their older counterparts at Univision.

THE COMPETITION

Fusion has competitors. Participant Media launched Pivot TV this summer, promoting social advocacy among millennials. Sean Combs' new music focused Revolt TV debut's this month.

Still, Morley Winograd, a University of Southern California fellow and author of books on media and millennials, says Fusion has the right ingredients for success and a huge potential market for advertisers.

"The two earliest cable channels specifically targeted at millennials were the ABC Family Channel and the Disney Channel," Winograd said. "It's not surprising then that a 'Fusion' of Univision and ABC decided upon Latino millennials as their market. Each side of the partnership knows a great deal about one half of that audience combination."

Lee insists Fusion will take some time to find its footing. MSNBC took years to settle on its left-of-center brand. Fox News Channel wasn't the nation's most popular cable news network out of the gate.

"Nobody's doing what we are doing," he said, "so there's one way to find out what works and what doesn't."

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Growing Cape OysterFest charges fee for first time

WELLFLEET, Mass — The Wellfleet OysterFest has a new feature this year that might be unwelcome: People have to pay to get in.

The Cape Cod Times reports (http://bit.ly/1atTl36) that for the first time ever people will be charged to get into the festival Saturday and Sunday. The cost for anyone over 12 is $5 or $8 for a two-day pass.

The festival manager says the money will help improve safety and support future festivals.

The Wellfleet OysterFest started as a small hometown event in 2002, but it's grown over the years, along with the costs for sanitation, insurance and paid staff. Attendance recently reached 25,000 over its two-day span, a size that the Times reports has turned off some locals.

The event is sponsored by the Shellfish Promotion and Tasting nonprofit in Wellfleet.

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Calif. finds more instances of offshore fracking

LONG BEACH, Calif. — The oil production technique known as fracking has been occurring on offshore platforms and man-made islands off some of Southern California's most populous coastal communities.

Interviews and drilling records obtained by The Associated Press show fracking has occurred at least 200 times over the past two decades in waters off Long Beach, Seal Beach and Huntington Beach.

Though there is no evidence offshore hydraulic fracturing has led to any spills or chemical leaks, the practice occurs with little state or federal oversight of the operations

The state agency that leases lands and waters to oil companies says officials found new instances of fracking after searching records as part of a review after the AP reported this summer about fracking in federal waters of California.

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