Galvin seeks testimony from Merrill Lynch employees

A spokesman for Massachusetts Secretary of State William F. Galvin said he has subpoenaed testimony from two employees of Merrill Lynch & Co. in connection with a probe of investment advice the New York financial firm gave to officials in Springfield. Officials there have blamed Merrill Lynch for inappropriately steering the city to invest in collateralized debt obligations that have lost more than $10 million in value. Galvin had previously sent subpoenas to the company. Merrill Lynch has said city officials were aware of the risks. Yesterday, a firm spokesman said it cooperates with regulatory inquiries and "we are conducting an extended review of the circumstances of these transactions and expect to respond further to the city shortly," (Ross Kerber)

Insurance Commissioner Nonnie S. Burnes ordered an unlicensed health insurance company to stop advertising healthcare policies in Massachusetts that she said are fraudulent. The company, based in Blackwood, N.J., has done business under the names Healthcare Alliance, National Alliance of Associations, Association Healthcare, and Promotion Healthcare, and offers coverage for individuals for $199 a month. Burnes said it solicits business with faxes urging rapid action from consumers, who are sometimes asked to provide credit card information or copies of checks by fax. She said her office has received numerous complaints recently. Kevin Fredericks, a supervisor at a company call center, said, "This is not a bogus policy and there is no fraud. This is a very serious matter. If there's been a cease-and-desist order, we'll have to comply." (Jeffrey Krasner)

The Massachusetts Convention Center Authority said its two Boston venues set single-month records in December. The Boston Convention & Exhibition Center and John B. Hynes Veterans Memorial Convention Center set records for events booked (46), expected future attendees (400,000), and generated 450,000 future hotel room reservations, a rise of 38 percent. According to the authority, these milestones will generate approximately $282 million in 2007 dollars in future economic impact in and around Boston. (Chris Reidy)

Hanover Insurance Group Inc. said it has agreed to acquire chemical company insurer Verlan Holdings Inc., further expanding its insurance offerings. Financial terms were not disclosed. Worcester-based Hanover expects the acquisition to close in the first quarter. (AP)

Internet phone company iBasis, of Burlington, said it will take over Danish telecommunications company TDC's online phone service for five years. IBasis will pay TDC about $10 million and expects $80 million in revenue per year. As part of the deal, it will acquire the Internet phone assets, contracts, office rental, and employees of a TDC subsidiary, TDC Carrier Services US. IBasis sells access to its international communications system, through which users can make phone calls online. It also sells prepaid phone cards. (AP)

Sprint Nextel Corp., the nation's third-largest wireless carrier, plans to cut thousands of jobs in an attempt to reassure investors that new chief executive Dan Hesse is serious about streamlining operations, The Wall Street Journal reported, citing unidentified people familiar with the matter. A Sprint spokeswoman declined to comment. (AP)

Current and former chief executives of three major US financial institutions deeply involved in the widening subprime mortgage crisis were asked by a congressional committee to testify at a hearing Feb. 7 on their massive pay and severance packages. A House panel invited Countrywide Financial Corp. CEO Angelo Mozilo, former Citigroup Inc. CEO Charles Prince, and former Merrill Lynch & Co Inc. CEO Stanley O'Neal to appear. In a letter sent to Mozilo, House Oversight and Government Reform Committee chairman Henry Waxman, a 17-term California Democrat, wrote: "According to recent press reports, if Bank of America Corp. completes its proposed purchase of Countrywide Financial, you stand to collect tens of millions of dollars in severance payments and other compensation." Waxman asked Mozilo to be prepared to explain how his compensation package aligns with shareholders' interests and whether it "is justified in light of your company's recent performance and its role in the national mortgage crisis." (Reuters)