The news at a glance

Scandal: Olympus in $1 billion cover-up

Corporate Japan was rocked by scandal last week when executives at Olympus, the 92-year-old Japanese camera manufacturer, admitted to using $1.3 billion in questionable payments to cover up investment losses dating back to the 1990s, said The Economist. The scandal first broke last month, when the company’s British CEO, Michael Woodford, was ousted after questioning the spending, which included a $687 million payment in 2008 for financial advice to now-defunct firms in the Cayman Islands and New York. Tsuyoshi Kikukawa, who resigned as the company’s chairman but remains on its board, said Woodford was fired because he couldn’t grasp Japanese corporate culture, even though the Englishman had spent three decades at Olympus. “Plenty of questions remain,” but investors are already fleeing; the stock’s value has plunged 80 percent since mid-October.

The scandal “threatens to shatter the reputation” of Japan’s leading auditing firms, said Michiyo Nakamoto in the Financial Times. Major financial reforms launched in 2000 were supposed to break up too-cozy relationships between Japanese firms and their outside accountants. “Why didn’t the auditors function as a check on the cover-up?” asked parliamentarian Tsutomu Okubo. “It is like the robbers had hired the police.”

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France: Outrage over mistaken S&P downgrade

The French are irate after ratings agency Standard & Poor’s sent out a false message last week that the country’s prized AAA credit rating was being downgraded, said Sarah DiLorenzo in the Associated Press. An hour and a half later, S&P retracted the message, calling it an inadvertent error. Still, it spooked investors enough to send the interest rate on French government bonds to its highest level since July. Market analyst Gary Jenkins said many people believed the mistake could not have happened “unless S&P were preparing the ground for a downgrade.”

Tech: Buffett’s Berkshire invests $10.7 billion in IBM

Warren Buffett’s Berkshire Hathaway has purchased $10.7 billion in IBM stock over the past eight months, “a major shift for a billionaire investor who has famously avoided technology stocks,” said Erik Holm and Shara Tibken in The Wall Street Journal. The investment, which comes as IBM’s stock “has repeatedly set all-time highs,” makes Berkshire one of the tech giant’s two largest shareholders, with a roughly 5.4 percent stake. Buffett said he was “hit between the eyes” with the company’s competitive advantages after reviewing its regulatory filings. “It was something I should have spotted years earlier.”

Banks: New charges launched under the radar

U.S. banks may have backtracked on proposed debit card fees, but many are “quietly imposing other new fees” to recoup lowered profits from recent regulations, said Eric Dash in The New York Times. Major banks need to earn $15 to $20 more per depositor each month to make up for lost income, and that means more fees on cash withdrawals, paper statements, lost debit cards, and wire transfers. “Most people don’t realize” the fees have been added or increased, said Alex Matjanec, co-founder of MyBankTracker.com.

Bankruptcy: Alabama county files for debt relief

Jefferson County, Ala., filed the largest municipal bankruptcy in U.S. history last week, said William Selway in Bloomberg.com. The county, which contains Birmingham, had reached a tentative deal with creditors in September to restructure most of its total $4 billion debt, which grew out of poor accounting and corruption on a sewer project. But the rescue plan unraveled over the final details. “We could continue and keep kicking this can down the road, but I think the people of Jefferson County have had enough,” said Commissioner Joe Knight.