Travel agents sue airlines over Orbitz antitrust issue

Los Angeles >> UAL Corp.'s United Airlines, AMR Corp.'s American Airlines and Delta Air Lines Inc. face a suit by travel agents who say the carriers are using their Orbitz LLC online ticket service to drive them out of business.

Travel Galore, based in Encino, Calif., and five other agencies claim that the airlines want to eliminate agents so they can illegally control fares. Chicago-based Orbitz is owned by five U.S. airlines, including American, United and Delta.

The suit, which seeks class-action status on behalf of an estimated 18,600 travel agents, asks the court to dissolve Orbitz and reinstate the practice of paying travel agents' commissions. It also asks for unspecified damages, which would be tripled under antitrust law.

Northwest Airlines Corp. and Continental Airlines Inc., which also own Orbitz, aren't named as defendants. The suit claims, among other things, that Orbitz has an unfair advantage because the airlines agreed to give the Internet service the lowest published fares and refuses compe- ting advertising from travel agencies. At the same time, the airlines raised travel agents' costs by cutting commissions and raising fees, the suit said.

Prudential tightens rules on workers owning stocks

NEW YORK >> In effort to stay one step ahead of regulators, Prudential Securities has told employees in its research department they can't buy or sell stocks without the firm's permission.

The edict, being called one of the strictest on Wall Street, went into effect this week and extends from top analysts to clerical workers in the Newark, N.J., firm's research department. That's 251 people, including 50 senior analysts.

Employees were told they must go to Prudential research director Steve Buell or his lieutenant to see if they can make a trade. This includes stocks in any of the companies Prudential covers. Stock market watchers said Prudential's limitations on its research staff may be the furthest Wall Street has gone to date to try to present a completely unbiased front.

Merrill CEO apologizes for analysts' e-mails

Plainsboro, N.J. >> Merrill Lynch & Co. Chairman and Chief Executive Officer David Komansky apologized for e-mails sent by some of the firm's research analysts that denigrated stocks it recommended investors buy.

"The e-mails that have come to light are very distressing and disappointing to us," Komansky said at Merrill's annual shareholders meeting. "They fall far short of our professional standards and some are inconsistent with our policies."

Komansky's apology came as regulators widened probes into whether analysts gave favorable ratings in order to win or retain investment-banking clients. Merrill is a focus of an inquiry by New York Attorney General Eliot Spitzer, who released copies of the e-mails this month. The firm's market value has dropped $8.5 billion since the probe was announced April 8.

One Merrill e-mail called At Home Corp., an Internet-access provider that filed for bank- ruptcy protection in September, "a piece of crap" at the same time Merrill was recommending investors buy the stock.