FBI Raid
Federal agents last week raided JB Oxford & Co., a Beverly Hills-based discount brokerage firm associated with convicted stock swindler Irving Kott.
The Securities and Exchange Commission is working with the FBI in a probe of Kott, who was a consultant to Oxford.
Kott was previously convicted of stock fraud in Montreal in 1976. Federal agents are now looking into his recent dealings in the United States.
The FBI served search warrants on the brokerage firm and seized documents, but no arrests were made. Investigators would not comment on the Oxford investigation.
MTA Deficit
A study conducted by Mayor Richard Riordan’s office concluded that the Metropolitan Transportation Authority’s $2.8 billion budget is riddled with fiscal uncertainties.
The report issued last week found that the MTA’s spending plan includes “unrealistic financial assumptions and flawed funding plans.” In addition, the study found that the transit agency has a bigger deficit in this year’s budget than previously thought an amount that could hit $60 million.
Riordan, who assumed the chairmanship of the MTA’s board last month, said he wants to delay any action on the report until the agency has a new chief executive in place. The agency has offered the job to New York transit executive Michael C. Asher, who has yet to formally accept the position.
The study conducted by City Hall budget director Christopher O’Donnell found that the budget deficit is at least $29 million higher than the agency had reported. The report also went on to say that the agency’s accounting was often “sloppy,” with poor financial reporting and unrealistic revenue forecasting.
GlenFed Acquisition
The parent company of Glendale Federal Bank announced that it has agreed to buy Pasadena-based CenFed Bank in a stock swap valued at $210 million.
This will be the fifth deal in two years for GlenFed’s parent Golden State Bancorp Inc.
The acquisition of CenFed, which has $2.3 billion in assets, will require regulatory and shareholder approval.
The deal is expected to close in 1998 and might result in some branch closures and job cuts, according to Golden State officials.
CenFed has 400 full- and part-time employees and seven branches located within a mile of an existing Glendale Federal office. Glendale Federal is the state’s sixth largest savings and loan, with assets of $16.2 billion and 200 branches.
Sheik Deal
ITT Corp. announced that it has signed a one-year contract to manage four former Ritz-Carlton hotels owned by the Los Angeles-based company of billionaire Saudi businessman Sheik Abdul Aziz al Ibrahim.
Sheik Abdul’s investment company, Al Anwa, has agreed to transfer management duties to ITT for its hotels located in New York; Aspen, Colo.; Washington, D.C., and Houston.
ITT owner of the Sheraton hotel chain and Caesars World casinos is expected to sign a long-term agreement to manage the hotels, but not take ownership.
The deal came just two weeks after Ritz-Carlton Hotel Co. severed ties with the sheik, ordering him to remove the company’s name from the properties. Ritz-Carlton says the sheik owes $4 million in unpaid fees, and a judge ruled the hotels could not continue using the company’s name.
Terms of the contract between the sheik and ITT were not disclosed.
Burger Emissions
The South Coast Air Quality Management District is considering a measure to reduce smoke, odors and polluting emissions from fast food restaurants that use charbroilers.
Public hearings were held last week to determine if about 800 fast food restaurants using charbroilers should install a device to reduce emissions by more than 90 percent.
Among the chains using this cooking method are Burger King and Carl’s Jr., according to the AQMD. In addition, several local amusement parks would be impacted by the measure.
The AQMD would require these restaurants to install equipment that would convert emissions into less harmful carbon dioxide and water. A final report on the measure is expected to be completed some time next year.
Airline Fees
In a step that will save airlines millions of dollars, the Los Angeles Airport Commission decided last week to lower the landing fees at the Los Angeles International Airport for the first time in four years.
Airport landing fees charged per 1,000 pounds of weight arriving at LAX have been a subject of controversy since Mayor Richard Riordan took office. Saying L.A. had among the highest fees in the nation, airlines filed a lawsuit in 1994 to overturn increased fees.
Riordan, whose airport commission quadrupled the fees in one year, believes the airport should contribute more to the city’s general fund to offset costs for fire and police protection at LAX.
The fee which was at 51 cents and rose to $2.06 per 1,000 pounds was reduced to $1.83. In addition, the rate at Ontario International Airport was reduced to $1.07 per 1,000 pounds from $1.29.
To offset the loss, the city airport commission voted to impose a new $3 per passenger facility fee on each airline ticket. The fee, if approved by the Federal Aviation Administration, is expected to generate $75 million a year.
Corporate Move
Seiko Instruments USA has transferred its U.S. headquarters operations from Torrance to San Jose to be closer to the booming Silicon Valley.
President and CEO Akria Yamada and four other top executives at Seiko were transferred last month, according to Lynn Keyser, director of business administration.
“So many of our customers are in the Silicon Valley that it made sense to locate our headquarters at our facility there,” Keyser said.
Seiko’s four Torrance operations, which together employ about 120 people, remain intact, Keyser said. Chief among the components produced at the Torrance sites are liquid crystal displays for Seiko products.
Seiko’s San Jose operations employ about 100 people, Keyser said.
Compiled by Joe Bel Bruno and Howard Fine