WEEK IN REVIEW

Catch a rising Morningstar?

After passing out enough stars for the Almighty to re-illuminate the firmament, Chicago’s Morningstar Inc. is thinking about lighting up its own IPO. It’s seen investment bankers about going public, created a board of directors and hired a grownup as chief operating officer.

Still, says Don Phillips, 35, president and chief executive, “We have not set in our mind the goal of going public.” Then again, he’s not closing the door.

The new chief operating officer is Timothy Armour, 49, who had headed Stein Roe Mutual Funds. Founder Joe Mansueto, 41, remains as chairman.

Stein Roe picked Thomas W. Butch, 41, to succeed Mr. Armour. He had been senior vice president of marketing, a post he earlier held at Colonial Group Inc. Both belong to Liberty Financial Cos.

S&P in AOL package

As if financial advisers don’t have enough competition, now they’re getting it from America Online and McGraw-Hill’s Standard & Poor’s division. They’ve signed a deal to put S&P’s Financial Advisor on AOL’s Personal Financial Channel. AOL spokesmen say that the channel is the service’s busiest, with 5 million regular users. S&P officials note that its site operates under registered investment adviser status and so is authorized to give individualized financial planning advice as well as to offer other investment management services. The cost? After a free 30-day trial it’s $9.50 a month, but AOL subscribers get 20% off. If they can log on.

This deal speaks for itself, John

Fortis Inc. of New York is paying $600 million in cash for John Alden Financial Corp. of Miami, which provides group health insurance and managed care. Alden will become part of Fortis Health in Milwaukee. Fortis is jointly owned by Dutch and Belgian companies of the same name and, in addition to Fortis insurance companies, owns American Security Group, a credit insurer, and United Family Life, which, as the company delicately puts it, provides “pre-need funeral insurance.”

Big bang or big bust?

The Japanese financial mess just gets worse and worse. Yasuo Matsushita, governor of the Bank of Japan — that’s their answer to the Fed — submitted his resignation after cops marched into his building for the first time ever and hauled away an underling named Yasuyuki Yoshizawa, 42, and charged him with leaking market-sensitive information to two big banks.

The banks, Industrial Bank of Japan Ltd. and Sanwa Bank Co. Ltd., issued statements saying they regretted the development. Prosecutors say officials of the two banks and four others wined and dined Mr. Yoshizawa to the tune of $55,000 or so and he told them about future money market movements — sort of like having a microphone hooked on Alan Greenspan’s eyeglasses. Mr. Yoshizawa was in charge of monitoring and carrying out liquidity operations and says nothing he did exceeded the normal bounds of hospitality.

Meanwhile, another central bank official is expected to be arrested and a bank inspector at the Ministry of Finance killed himself, apparently because he too believed in free lunch.

At the same time, the government decided to inject almost $10 billion into 17 banks to keep them afloat.

All this turmoil comes as the land of rising mistrust is about to deregulate its financial system on April 1, what everyone there is calling Big Bang day — but we know what it is here. Without confidence, says Shigenori Okazai, political analyst at SBC Warburg Japan Ltd. in Tokyo, “the new law will be like building a statue of Buddha but forgetting to include the spirit.”

First Union Bowles

Good old First Union Corp. You remember the friendly neighborhood North Carolina bank that’s about to be in all 50 states, once it merges with the Money Store Inc.? It’s still gobbling up smaller companies like peanuts at a turkey shoot. Last week’s acquisition was Bowles Hallowell Connor & Co., an investment banking firm that’s a Charlotte neighbor. It was founded by Erskine Bowles, the White House chief of staff who’s busy enough these days in Washington, tha
nk you, and has left the firm. Bowles Hallowell specializes in companies between $10 million and $150 million and has closed 140 deals since 1994. It will operate as a separate division, much as Wheat First Butcher Singer Inc. is doing, bank spokesmen say. The price was not disclosed.

Credit unions find a friend

The Treasury Department is on the side of the credit unions. Assistant Secretary Richard S. Carnell told a House Banking subcommittee that the law should allow “reasonable flexibility for credit unions to include additional groups in their membership.” You recall that the Supreme Court on Feb. 25 narrowed the range of credit union membership, gladdening the hearts of bankers everywhere.

The Big Five

The Department of Justice approved the merger of Coopers & Lybrand LLP and Price Waterhouse. The European Union is expected to OK the accounting merger today, but nobody there is talking until it happens. Or doesn’t.

My, what a big umbrella

If you were thinking that American Express Co. CEO Harvey Golub was doing pretty well with his $9.7 million 1997 pay package, think again. That’s just shoelace money for the hand-tooled clodhoppers of Travelers Group chairman Sanford I. Weill.

Mr. Weill, 65 today and with no intention of retiring, thank you, hauled down $49.9 million in salary and bonuses, almost twice as much as in 1996. So there.

Oh, yeah. And there was that $222.2 million worth of stock options he exercised. Isn’t that more than the total payroll of the Florida Marlins? And they had a better year. The Fish won the World Series; Mr. Weill’s company, in addition to angering residents of lower Manhattan with a big red umbrella lit all night atop his headquarters, is only the No. 2 U.S. financial company in market value, even after its stock climbed 78% last year.

Coffee it up

Morgan Stanley Dean Witter & Co. is hoping it does better in Brazil, where it’s talking with Banco de Investimentos Garantia SA about buying its corporate finance, asset management and underwriting busine
ss. Goldman Sachs & Co. is in the race, too, and Credit Suisse wants the whole $1.5 billion thing.

Low risk, high loss?

Morgan Stanley & Co. International Ltd. is being sued in New York Supreme Court by 14 corporate and private investors for $120 million on grounds of fraud and negligent misrepresentation. They say Morgan promised them a low-risk capital preservation hedge fund called the Global Opportunities Fund and what they got instead was something that swallowed their money like a fat man at a hot dog-eating contest. They contend that “massive breakdown of internal controls led to collapse.” Morgan promises to defend itself vigorously.

French leave?

Jean-Yves Haberer, CEO of Credit Lyonnais until the end of 1993, was taken into custody in Toulouse in connection with a fraudulent bankruptcy case.

Bloomberg News contributed to this report