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News at a glance

Facebook: New privacy controls debut; Health care: McNeil could face charges; Hedge funds: Insider-trading charges for Pequot; Deals: Sale of AIG’s Asian unit falls through; Scams: Plot to leak Disney’s data goes awry

Facebook: New privacy controls debut
Facing a backlash against Facebook’s privacy policy, CEO Mark Zuckerberg has unveiled new settings that he said would increase the control users have over their personal information, said Benny Evangelista in the San Francisco Chronicle. Users can now indicate with a single mouse click whether to share their information with “everyone,” “friends of friends,” or “just friends.” They can also opt out of “instant personalization” features that, in essence, follow users around the Internet and let third parties know what they’re doing online. Previously, users were forced to navigate through a bewildering set of commands in order to opt out of instant personalization. Users threatened to quit the site en masse, and four U.S. senators promised to investigate.

Privacy advocates weren’t satisfied with the changes, said Scott Duke Harris in the San Jose Mercury News. They were particularly upset that Facebook “did not retreat from defaults that automatically provide” some user information to several of Facebook’s partner sites. Groups such as the Electronic Privacy Information Center want nearly all information to be kept private unless the user actively chooses to share.

Health care: McNeil could face charges
The Food and Drug Administration is considering criminal charges against McNeil Consumer Healthcare, the Johnson & Johnson subsidiary that makes Tylenol and other over-the-counter medicines, said Tom Giusto in ABCnews.com. McNeil last month issued a massive recall of pediatric medicines, including liquid Tylenol for children, because they contained too much of the active ingredient, were tainted with metal shavings, or contained unapproved ingredients. Citing a history of “sloppy” manufacturing processes, the FDA said it might ask the Justice Department to file criminal charges. The company has denied that it ever knowingly sold any contaminated products.

Hedge funds: Insider-trading charges for Pequot
Pequot Capital, once one of Wall Street’s largest hedge funds, said it would shut down after settling an insider-trading complaint brought by the Securities and Exchange Commission, said Liz Moyer in Forbes.com. The case dates back to 2001, when Pequot bought Microsoft stock shortly after hiring a former Microsoft employee, who allegedly tipped off Pequot about the company’s earnings. Pequot founder Arthur Samberg paid $28 million out of his own pocket to settle the charges. He is permanently barred from running another hedge fund.

Deals: Sale of AIG’s Asian unit falls through
Bailed-out insurer AIG’s quest to repay the U.S. government hit a setback this week when its $35 billion deal to sell its main Asian subsidiary fell through, said Mary Williams Walsh in The New York Times. The prospective buyer, Britain’s Prudential (which is unaffiliated with the similarly named U.S. insurer), had asked AIG to lower its sale price to $30 billion after world stock prices tumbled in May, but AIG refused. AIG “may have to revert to its previous Plan B, selling the Asian subsidiary in an initial public offering.”

Scams: Plot to leak Disney’s data goes awry
A Disney secretary and her boyfriend were arrested after they allegedly tried to sell inside information about Disney to hedge funds, said Walter Hamilton in the Los Angeles Times. Authorities said Bonnie Jean Hoxie and Yonni Sebbag sent an e-mail to three dozen hedge funds, offering them “early peeks at earnings reports” from Disney. The funds alerted federal authorities, which arrested the pair.

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