WEEK IN REVIEW

Blame fixed, but not stock price

Cendant Inc. fired the former chief financial officer of CUC International Inc. — one of the two companies that merged in December to form it — after its stock lost $14 billion in market value in one of the greatest one-day revaluations in history.

The 46% drop came after the company reported that “accounting irregularities” in some CUC units could cut as much as $115 million from the $872 million Cendant reported earning last year.

CUC was the direct marketing company headed by Cendant chairman Walter Forbes, 55; Cendant CEO Henry Silverman, 57, headed HFS Inc., which franchises Ramada and Howard Johnson hotels and Avis rental cars, among other things. Mr. Forbes is expected to be eased out as chairman. Mr. Silverman lost a bundle himself: with 46.3 million shares and options, he was down $764 million or so before the stock bounced back better than a point on Friday.

None of this has any effect on Cendant’s deal to buy Miami credit insurer American Bankers Insurance Group Inc. for $3.1 billion, everybody insists. Bets, anyone?

Criminal probe into IPO spinning

The U.S. Attorney’s office in New York is investigating IPO spinning, where underwriters zip initial public offering shares into the personal accounts of corporate or venture capital execs before others get a chance to buy them. The Securities and Exchange Commission and the National Association of Securities Dealers have a hand in, too, but the U.S. Attorney’s interest makes it a criminal matter. The charges, if any, would be bribery.

Off the air

Nationally syndicated radio host Jerome Wenger and 17 others were indicted in federal court in New York on multimillion dollar fraud charges involving penny stocks that weren’t worth even that much.

Mr. Wenger, 52, told listeners to his show, called “The Next Super Stock,” to call a toll-free number to buy selected stocks, the U.S. Attorney’s office contends, and the registered and unregistered brokers who answered the phones manipulated the prices so they made a bundle. The feds allege one broker used the money to pay off two bookies, who also were indicted.

Way of future?

Last year’s blockbuster bank merger announcement, First Union Corp.’s proposed $17 billion purchase of CoreStates Financial Corp., is small potatoes these days, everywhere but the City of Brotherly Love. The Federal Reserve Board voted 7-0 to approve the acquisition, requiring First Union to get rid of 32 branches near there. (Even so, the Charlotte, N.C.-based bank will have a 38.1% market share in the Philadelphia area.) The U.S. and Pennsylvania attorneys general also signed off on the deal.

First Union reported first quarter earnings up 20%, by the way, thanks to fee income from underwriting and money management.

And Fed Governor Laurence Meyer told an audience at Widener College in the Philadelphia suburb of Chester that people shouldn’t worry about leviathan banks swallowing merely giant ones. “By most measures of performance, these small banks are more than a match for their larger brethren,” he said.

All aboard

Kansas City Southern Industries Inc., the railroad that runs the Janus and Berger mutual funds on its main line, is stretching its roadbed to Britain, picking up 80% of Nelson Money Managers PLC. Nelson has six offices throughout the sceptered isle and manages $1 billion or so for retired people.

What did K.C. Southern pay? The railroad says go whistle. It airily announced the price “was not disclosed and is not material to KCSI.” The deal is expected to be done by the end of the month.

Ach, du lieber

E*Trade Group Inc. is on its way to restoring the Holy Roman Empire in cyberspace. E*Trade Central Europe Inc. has licensed the company’s online trading technology in Germany, Hungary, Poland, the Czech Republic and Croatia. It’s a combine of two German outfits, the New York Broker Group, based (where else?) in Dusseldorf, and Berliner Freiverkehr AG Group, which at least knows where it’s from.

Good to have a pal

Mark Mobius, president of the $15 billion Templeton Emerging Markets Fund, has given his buddy Philip Tose, 52, a job. Mr. Tose, who built Hong Kong’s Peregrine Investments Holdings Ltd. into the top Asian stock underwriter, found himself out in the cold when his company collapsed in January. His new job is to scout for investments.

Bank marching through Georgia

Synovus Financial Corp., the Columbus, Ga., financial services company that sounds like a cold remedy, announced a deal to buy the $348 million-asset parent of the Bank of North Georgia.

Bloomberg News contributed to this report

Credit pinch

Marc Sheinbaum, chairman of General Electric Co.’s Montgomery Ward credit card unit, said his outfit will be hurtin’ in the next couple of years because the bankrupt retail chain has closed 92 money-losing stores. Monkey Ward’s cards make up 33% of GE Capital’s private-label credit card receivables, bringing in $200 million a year after taxes, according to court documents unsealed in the bankruptcy case in Wilmington, Del.

GE Capital owns 57% of Montgomery Ward Holding Co., too.

“When you close 25% of stores… you’re going to see a decline in the credit card base,” a deep thinker for GE Capital explained.