Mattel: Must Pay for Stealing Bratz Secrets
A federal judge ordered Mattel (MAT) to pay $225 million in punitive damages and legal fees for stealing trade secrets from MGA Entertainment, maker of the popular Bratz dolls. The award is in addition to the $85 million in liabilities from an April jury verdict that found Mattel misappropriated trade secrets when its employees got into MGA’s showrooms at toy fairs using phony business cards. MGA CEO Isaac Larian says he will now pursue an antitrust case against Mattel. The two companies have been embroiled in legal disputes since 2004 over the design of the pouty dolls, which MGA began selling in 2001. Mattel did not respond to requests for comment.
AOL: Ad Growth Isn’t Keeping Up
AOL (AOL) increased advertising sales for the first time in three years in the second quarter, yet the new revenue was not enough to offset losses from continued erosion of subscribers to its Web-access subscription services. The loss, announced alongside a reduced annual earnings forecast, helped send AOL’s stock to down to $10.06, its lowest level since it was spun off from Time Warner (TWX) in 2009. AOL recently purchased the Huffington Post website and is expanding its Patch hyperlocal news sites as it tries to lure advertisers with expanded online content.
Education Management: Sued by the Justice Dept.
Federal prosecutors are suing the second-largest for-profit college chain, Education Management (EDMC), for using improper recruitment practices to secure more than $11 billion in student aid. The Justice Dept.’s complaint says the chain, 41 percent owned by Goldman Sachs (GS), paid recruiters based on the number of students they signed up, which the government bars because it may encourage companies to register unqualified students. Education Management denies violating government rules.
Atlanta Hawks: Sold to Hispanic Entrepreneur
Los Angeles entrepreneur Alex Meruelo will become the first Hispanic to be the lead owner of an NBA franchise if the professional basketball league approves his purchase of the Atlanta Hawks. Meruelo agreed to buy the team for an undisclosed sum from Atlanta Spirit, a local partnership that bought it in 2004. For the past four years the Hawks have reached the postseason. Meruelo founded the Los Angeles chain La Pizza Loca in 1986 and has expanded his holdings into real estate, construction, and Spanish-language television
HSBC: Backing Away from U.S. Consumers
HSBC (HBC) agreed to sell its U.S. credit-card unit as it tries to focus on emerging markets. Capital One (COF), which recently agreed to buy ING (ING)’s U.S. online bank, will pay a $2.6 billion premium for the acquisition above the value of the unit’s existing consumer-loan balances. The sale continues the pullback from U.S. consumer banking by HSBC, which on July 31 agreed to sell almost half its U.S. retail branches, primarily in upstate New York. HSBC acquired the credit-card unit in 2003 when it bought subprime lender Household International.