Marketplace: News Archives

Friday, October 20, 2000
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It's Friday, October 20, 2000. I'm David Brancaccio.

A big industrial merger may be in the works. But just who might buy aerospace parts and industrial controls maker Honeywell isn't clear. Yes, we know that when you went in this morning everyone was talking about United Technologies buying Honeywell, but those talks came to naught this afternoon. The company, which used to be called AlliedSignal until it bought Honeywell last year, confirms that those talks are off and that it has other suitors, but it's not identifying anyone in particular. Analysts say plausible buyers include The General Electric Company. From New York Marketplace's Jessica Smith has more on the company that used to be called Allied Signal until it was bought last year.

Smith: Honeywell's products aren't that visible to the eye.

Collins: When we fly we don't realize that its Honeywell brakes and Honeywell navigation systems. We don't realize what products are under the wings and in the cockpit.

Smith: But Matt Collins, an analyst at investment bank Edward Jones, says Honeywell's depressed stock and slower-than-promised earnings are an eyesore to the company's investors on Wall Street. Thus the drive to find another merger partner, barely a year after a fourteen billion dollar merger with Allied Signal.

Collins: Management really had to do something to pacify investors and this is one quick way they can make investors happy rather than investors waiting for a slow prolonged turnaround. They can reduce employee head count, they can close certain corporate offices, they can merger facilities and save a lot of money that way.

Smith: Analysts say consolidation in aerospace isn't new. But when a company the size of Honeywell does a deal, it's always eye catching. In New York, I'm Jessica Smith for Marketplace.

Honeywell shares rose 29 percent today. General Electric was down 6 percent on a day the Dow went up 83 points or eight tenths percent. The Nasdaq Composite rose one point 9 percent. More details with the Texas broker in a few minutes.

The commission set up by Congress to recommend ways to keep kids away from online pornography today endorsed a path that's different from the one Congress is considering. Emily Harris has details on the Child Online Protection Act Commission's report.

Harris: The COPA commission looked at a variety of ways to limit kids' access to online porn, including filtering technology, content rating, and better law enforcement. Mandatory filtering was NOT recommended. COPA commission chair Don Telgate.

Telgate: We just stayed away from mandatory requirements because I think it was felt by the commission that there is a substantial amount of low fruit that would yield very strong results today.

Harris: Like a big public campaign to tell parents what's available to help them filter, if they choose. But the commission could be on a collision course with Congress. Next week, both Houses are expected to consider a bill that would mandate filtering software be used when kids access the web from schools and libraries with federal internet subsidies. Although the Commission didn't mandate filtering, it does recommend evaluating the pros and cons of such software programs. Some block information on sexually transmitted diseases. According to the commission chair, others may carry a political agenda. The commission also gave a big push for more money for online law enforcement. From Washington, I'm Emily Harris for Marketplace.

A month ago, the Securities and Exchange Commission got a lot of attention when it publicized a big stock-fraud settlement with a New Jersey kid too young to even have a driver's license. Now the kid is about to show up on "60 Minutes," and our reporter Bob Moon joins us with an interesting twist to the story:

Moon: Well you know it didn't take much for this high school junior to get a rise out of the stock market. The SEC says he'd buy stock and then get on the internet to hype it up before unloading it for a big profits. And the government says his postings always caused the price and volume of those stocks to rise dramatically. Now what the regulators told us a month ago is that the boy had agreed to pay back $285,000. But 60 Minutes says that's just a fraction of the $800,000 bucks he made on trades the SEC didn't file charges over. So he keeps a cool half-million; in fact, bought a Mercedes SUV for the family already. Was he manipulating stocks? Jonathan Lebid tells 60 Minutes yes, but he wasn't doing anything wrong, he says he didn't make up any facts, in fact he included disclaimers, be sure to take the time to do your own research. Even so, federal prosecutors are still considering possible criminal charges against him.

Bob, how old is this fellow?

Moon: He's the youngest ever accused of securities fraud, 14 when he started trading, 15 when he settled this case, he just turned 16.

Reporter, Bob Moon. The SEC says you can legally express your opinion about stocks in online chat rooms...unless your intention is to manipulate the price.