The Desert Sun from Palm Springs, California • 25

the Desert Sun i THURSDAY September 12 1991 Gavin Murphy Business Editor: 778-4650 Inside: Stocks C2-3 Classified C4-12 Drexel sues Milken Tribune to merge Tht Associated Prtta SAN The San Diego Tribune and The San Diego Union will become a single all-day newspaper the owner announced Wednesday Layoffs wen expected but Copley Press Inc did not Immediately say how many of the 1875 workers at the evening Tribune or morning Union might lose their Jobe Helen Copley publisher of the newspapers said the staffs will merge in early 1992 to produce The San Diego Union-Tribune with morning and afternoon editions -The merger wee forced by falling circulation part of a national trend favoring morning newspa- pert Copley said in a statement Tribune la a wonderful paper' and that we haven't tried our very best to maintain it as a separate end independent Mid Copley chairwoman and chief executive officer of the Copley Press Tor many yean we have competed against The Associated Press NEW YORK Drexel Burnham Lambert Inc the one-time Wall Street dynamo enriched by financier Michael Milken sued the former star employee and junk-bond pioneer Wednesday seeking billions in back pay and damages The lawsuit filed in federal court accused Milken of racketeering theft and other alleged wrongdoing and claimed Milken concealed his illegal activities exploited the firm to make private investments and tricked Drexel into believing for years he was innocent Milken has long been credited with almost single-handedly pioneering a market in high-yield bonds that financed corporate expansion and hostile takeovers and transformed Drexel from a second-tier firm to Wall Street titan After a lengthy investigation Drexel in 1989 pleaded guilty to six felonies related to illegal trading in deals involving Milken and agreed to pay 8650 million in penalties Milken last year admitted six felonies paid 8600 million and is serving a 10-year prison term in California Drexel's lawsuit claims Milken violated financial duties and that his lawbreaking caused Drexel's collapse It also alleges Milken misappropriated corporate assets for personal gain via hundreds of Drexel-related partnerships The complaint also names Milken's brother Lowell who worked in Drexel's junk-bond department in Beverly Hills It asserts that Michael Milken received more than 81 billion in compensation from 1985 to 1989 and Lowell Milken received more than 8100 million in the period 'ft The Associated Press UNCERTAINTY: San Diego Union editors John Muncie (left) Loo Grant (center) and Bob Wright lieton to discussion of the merger with the San Diego Tribune The Tribune won a Pulitzer Prize in 1 979 for local reporting for staff coverage of a plane collision and in 1987 for editorial writing for a aeries of editorials on Mexican border immigration affairs Banker says innocent Stocks mixed as Dow climbs 447 points NEW YORK The stock market ended with a rally Wednesday and stock prices were mixed as investors settled down to await the next round of economic data beginning with today's release of the Producer Price Index for August The Dow Jones industrial average me 447 to end the day at 298703 while the New York Stock Exchange composite index increased by 021 to 21121 Landmark deal nears close on valley sites PALM SPRINGS Escrow now is expected to close Sept 30 on the S739 million real estate package that Includes Landmark Land Co1! golf courses at PGA West in La Quinta La Quinta Golf and Tennis Resort and Mission Hills Country Club Carmel-based Landmark Land Co is selling the trophy Coachella Valley golf courses and other resort properties in Florida and Oklahoma to the Daiichi Real Estate Co of Japan Last month Landmark officials expected escrow would close by Wednesday but the closing date has since been pushed back to the end of September said Gerald Barton president trust approves $11 billion sale to GE WASHINGTON The agency conducting the government's cleanup of the savings and loan industry approved its biggest sale of a package of sour loans The Resolution Trust Corp is selling a portfolio of loans on California and Arizona real estate with a face value of 81 1 billion to General Electric Capital Corp and a company affiliated with the Robert Bass Group American to slow growth cites profits NEW YORK American Airlines announced a slowdown in the top US carrier's rapid expansion pace illustrating the industry's financial pain and sending a chill through the world of aircraft manufacturing simply aren't what they need to be" said Robert Crandall chairman of the airline's parent AMR Corp He did not say where all the ruts will be made but one big item will be reduced spending on aircraft IBM introduces seven mainframe computers NEW YORK A top IBM executive is expressing confidence thecom puter giant's sales of mainframe computers will keep growing as the company announced seven new models of the powerful machines Some experts predict a bleak future for mainframes the multimillinn-dollar computers favored by major companies like banks and airlines Clifford declared referring to BCCI's involvement with his bank First American Bankshares the largest bank holding company in Washington "I guess I should have learned it some way I guess 1 should have some way sensed it I did not I would have given anything if I could have avoided what I've gone through this past he continued with his partner and protege Robert A Altman at his side I have to face it In the process I'm going to work as hard as I can in an effort to try to preserve my good name His opening statement was a monument to an old man self-control For an hour and 20 minutes referring only occasionally to notes Gifford 84 gave an extemporaneous narrative ot how he got involved with BCCI and First American in the first place and how he had been deceived into believing that the corrupt international bank had nothing to do with the one he operated In the afternoon he and Altman fielded questions from members of the Ranking Committee most of whom seemed ill informed and none of whom managed to crack Clifford's dignified demeanor Some Republicans were outright hostile Rep Toby Roth of Wisconsin asserted Others may believe your statement but I don't believe a word of it BCCI duped him and partner Clifford says By DAVID ROSENBAUM New York Times News Service WASHINGTON His reputatiun on the line Clark Clifford defended himself in public under oath for the first time Wednesday against accusations he betrayed his standing in political and legal circles by conducting shady dealings with a corrupt bank Lawmakers were unable to dent Clifford's account but those of both parties were clearly skeptical Clifford a mainstay of the Washington establishment a top adviser to every Democratic President since World War II a man whose professional life has hinged on his probity told the House Banking Committee he was duped by the Bank of Credit and Commerce International that he had no idea it owned the controlling stock in the Washington bank he ran that it had no say whatsoever in how the Washington bank was operated and that the millions he borrowed from BCCI and the millions he earned from stock in the Washington hank were completely aboveboard and justified judgment is questionable" The Associated Press SWORN IN: Former First American Bankshares House Banking Committee on Capitol Hill Wednes-Chairman Clark Clifford (left) and former First Ameri- day The committee is holding hearings on the Bank can President Robert Altman are sworn in before the of Credit and Commerce International investigation CLARK CLIFFORD ROBERT ALTMAN Biographies at a glance ROBERT A ALTMAN AGE: 44 BORN: Feb 23 1947 BIRTHPLACE: Washington MARRIED: Lynda Carter Jan 29 1984 COLLEGE: University ot Wisconsin George Washington University CAREER: 1971-current Partner Clifford Warnke 1982-91 President First American Bankshares Inc Resigned Aug 13 Gannett News Service CLARK McADAMS CLIFFORD AGE: 84 BORN: Dec 26 1906 BIRTHPLACE: Fort Scott Kan MARRIED: Margery Peppered Kimball Oct 3 1931 COLLEGE: Washington University St Louis CAREER: 1968-69: Secretary Department of Defense in administration of Democratic President Lyndon Johnson 1969-current: Senior partner Clifford Warnke 1982-91: Chairman of board First American Bank-hares Inc Resigned Aug 13 amid turmoil created by BCCI probe Assess mutual risk by reading the prospectus Gavin Murphy degree of risk involved So if you are looking for a conservative investment this is a good tip-off that the fund Is not for you if you are looking for income the fund objective should be to generate income not appreciation Sales Charges This is the amount charged to purchase share's in funds sold by brokers Typically they range from 4 to 8 5 percent of the initial investment The sales charge usually decreases as the amount invested increases By law a broker must tell you what these "break points" are if you are investing an amount close to them In other words if you are set to invest 895000 in a fund the broker must tell yuu that at 81011000 your sales charge will he less Most so railed "no load" funds do not hav an up front sales charge Increasingly however there are charges called 1 12b-l fees" which funds charge to help defray advertising costs or brokers tecs Watch these closely It they appear to be too large pass on the fund There are now many funds marketed as no load funds that in reality have hack -end" or "contingent deterred sales charges" which come into pla shares arc sold during the first few years of ownership If vou are planning to ow a tund for mn years such fees shouldn't hi- ol concern Bui it ou think you might sell the shares sooner the should ho taken into consideration Managemenl fees This is the amount paid hv a mutual tund to its investment advisers The average annua! lee is about one half of one ereent of fund assets loner ally the lower these Iocs are the belter The SEl' has made great strides in recent years attempting to simplilv how minima lion is presented in a prospectus Nevertheless it still takes patience to to read one Murphy is business editor ot The Desert Sun His column appears Thursdays In their quest for higher yields many investors are venturing into mutual funds especially bond funds Because such funds entail greater risks than simply keeping your money in a money-market account or bank certificate of deposit it is important to read the prospectus What is a mutual fund prospectus? The prospectus is an official document in the form of a booklet It contains information required by the Securities and Exchange Commission such as investment objectives and policies investment restrictions names of officers and directors how shares are bought and redeemed fund fees and other charges and finanrial statements You usually can obtain a prospectus before investing money or one will be sent to you after you place an order You are supposed to get it in time to read it before you send money The key is to read it Here are the things to look for VALLEY BRIEFCASE PALM DESERT CHAMBER TO HOLD TOUR: The Palm Desert Chamber of Commerce Economic Development Committee will have its Annual Town Center Tour at 7:30 am Oct 9 General Manager for the Town Center Doug Simmons will lead the tour For reservations call the Chamber at 346-6111 There is no cost for the tour Staff wirt reports Investment objectives and statement of risk This will tell you what securities the lurul invests in whether they are stocks I' government bonds tax-exempt bonds or corporate bonds It should also give you an idea of hat type of credit ratings the funds will look for when they buy the securities Watch for references such as yield corporate bonds' which translates to bonds It OK to invest in a fund that buys high yield bonds as long as you know that's what you're doing If you see the term you should immediately realize that there is a fairly high MBpaV'NppNVHMN LOCXlSSTOC yupwy jwyg rs a r'liTuHMr'SiiMW AhfcaW StHeMArk Jr dollar in foreign currencies Prices provided by Paul Sippel financial consultant A Edwards Palm Desert Dow averages Industrial index Transportation index Utilities index Composite index Close 2987 03 1175 42 206 81 1060 02 Open 2989 04 1164 84 20587 105702 Low 2964 67 1156 91 20537 104966 Change 44 47 1304 0 88 4 90 High 3004 70 1180 36 20737 1065 29 Stocks Wed Sept 11 1991 Dow Jones Ind High Low 457 56 454 95 291 45 2B9 07 142 40 141 63 3126 3107 385 60 383 59 364 54 362 12 Closo Chg 456 65 0 46 291 41 2 14239 40 66 31 18 -0 03 385 09 4-0 53 363 91 40 46 Indust Transpt Utilities Financl 500 Stocks 100 Stocks Close: 298703 Vbl el 4 pm: 1479 million Voi ext session: 96600 Press "2" for MONEY Mind your own business with call to find out: Up-to-the-minute stock quotes How your portfolio is faring on Wafl Street Top interest rates on CDs What your monthly payments would be on loans of various amounts and interest rates Just how much that used car is worth 95 cants pe minute 1 AMEX NYSE Prov Wsd day Advanced 731 416 Declined 804 1181 Unchanged 577 520 Total issues 2112 2117 New high 44 37 New low 11 14 Prev Wed day 236 156 295 387 252 259 783 802 20 19 12 13 Spot prices per troy ounce Gold (NY Cerr-eO $345 40 Silver (NY Gome) S3 942 P'a'-num (NY Mem) $344 20.