Nov 28 (Reuters) – Facebook Inc said on Monday that it made a mistake in letting Merck & Co take over a page on the social networking website from its German rival Merck KGaA .

The takeover had prompted an unusual Nov. 21 filing by Merck KGaA with a New York state court.

In it, Merck KGaA sought to force Facebook to explain how it lost the page,and the ability to administer it to Merck & Co, a separate company.

Facebook plans to remove the page until both Mercks agree which company may use it.

“The transfer of the vanity URL Facebook.com/Merck from Merck KGaA to Merck & Co was due to an administrative error,” Facebook said in a statement, referring to the website address. “We apologize for any inconvenience this may have caused.”

Merck & Co spokesman Ronald Rogers said: “We are going to continue to have a Facebook page. It is an active webpage. We are continuing to look into the matter of the vanity URL.”

Merck KGaA did not immediately respond to an emailed request for comment after business hours in Germany.

NEW YORK (Reuters) – A federal judge angrily blocked Citigroup Inc’s proposed $285 million settlement over the sale of toxic mortgage debt, excoriating the top U.S. market regulator over how it reaches corporate fraud settlements.

U.S. District Judge Jed Rakoff in Manhattan said the U.S. Securities and Exchange Commission appeared uninterested in actually learning what Citigroup did wrong, and erred by asking him to ignore the interests of the public.

“An application of judicial power that does not rest on facts is worse than mindless, it is inherently dangerous,” Rakoff wrote in an opinion dated on Monday.

The judge added that it was difficult to discern “from the limited information before the court what the SEC is getting from this settlement other than a quick headline.”

He said the proposed settlement was “neither reasonable, nor fair, nor adequate, nor in the public interest.”

Danielle Romero-Apsilos, a Citigroup spokeswoman, declined immediate comment, as did the SEC.

In its complaint, the SEC accused Citigroup of selling a $1 billion mortgage-linked collateralized debt obligation, Class V Funding III, in 2007 as the housing market was beginning to collapse, and then betting against the transaction.

NEW YORK, Nov 28 (Reuters) – A federal judge angrily blocked Citigroup Inc’s proposed $285 million settlement over the sale of toxic mortgage debt, excoriating the top U.S. market regulator over how it reaches corporate fraud settlements.

U.S. District Judge Jed Rakoff in Manhattan said the U.S. Securities and Exchange Commission appeared uninterested in actually learning what Citigroup did wrong, and erred by asking him to ignore the interests of the public.

“An application of judicial power that does not rest on facts is worse than mindless, it is inherently dangerous,” Rakoff wrote in an opinion dated on Monday.

The judge added that it was difficult to discern “from the limited information before the court what the SEC is getting from this settlement other than a quick headline.”

He said the proposed settlement was “neither reasonable, nor fair, nor adequate, nor in the public interest.”

Danielle Romero-Apsilos, a Citigroup spokeswoman, declined immediate comment, as did the SEC.

In its complaint, the SEC accused Citigroup of selling a $1 billion mortgage-linked collateralized debt obligation, Class V Funding III, in 2007 as the housing market was beginning to collapse, and then betting against the transaction.

By Jonathan Stempel

(Reuters) – HSBC Holdings Plc has proposed a revised $62.5 million settlement with investors in an Irish fund that lost money in Bernard Madoff’s Ponzi scheme, after a U.S. judge rejected an earlier accord.

The British bank said the revised settlement for investors, in Thema International Fund Plc, addresses issues raised by U.S. District Judge Richard Berman in Manhattan, who on September 7 called the original accord “not fair, reasonable or adequate.”

Berman said that accord had several “obvious deficiencies,” including inadequate disclosure of legal costs and the setting aside of a $10 million reserve for legal fees and expenses for investors to pursue claims against non-settling defendants outside the United States.

HSBC had acted as a custodian to the Thema fund, and provided administration and other services. It has estimated that Thema investors lost about $312 million, and that various funds that the bank serviced transferred a net $4.3 billion to Madoff’s firm during the period it serviced those funds.

According to the revised settlement, the total payout to investors would range from $52.5 million to $62.5 million, depending on how many investors choose not to join the accord.

Lawyers for the investors will seek court approval for fees equal to 18 percent of the gross settlement fund.

By Jonathan Stempel

(Reuters) – A federal judge has said credit ratings are not always protected opinion under the First Amendment, a defeat for credit rating agencies in a lawsuit brought by investors who lost money on mortgage-backed securities.

The November 12 decision was a little-noticed setback for McGraw-Hill Cos’ Standard & Poor’s, Moody’s Corp’s Moody’s Investors Service and Fimalac SA’s Fitch Ratings, which have long invoked First Amendment free speech protection to defend against lawsuits over their ratings.

These agencies had argued that the Constitution protected them from claims they issued inflated ratings on more than $5 billion of securities issued in 2006 and 2007, and backed by loans from former Thornburg Mortgage Inc and other lenders.

But the judge said the ratings were shared with too small a group of investors to deserve the broad protection sought.

“The court rejects the rating agency defendants’ arguments that the First Amendment provides any protection to them under the facts of this case,” U.S. District Judge James Browning in Albuquerque, New Mexico, wrote in a 273-page opinion.

Browning nonetheless dismissed claims accusing Moody’s and Fitch, but not S&P, of misrepresentations, saying the investors did not adequately allege that the two agencies did not believe their ratings, or knowingly concealed their inaccuracy.

By Jonathan Stempel

(Reuters) – The trustee seeking money for Bernard Madoff’s victims has a constitutional right to have his $386 million lawsuit against owners of the New York Mets baseball team heard before a jury, a federal judge ruled on Wednesday.

U.S. District Judge Jed Rakoff in Manhattan rejected the owners’ contention that the Seventh Amendment does not give trustee Irving Picard a right to have a jury rather than the judge decide the case from the bench. He said courts must “jealously guard” litigants’ Seventh Amendment rights.

Picard accused Mets owners, including Fred Wilpon and Saul Katz, of fraudulently taking money out of Bernard L. Madoff Investment Securities LLC, which the trustee is liquidating.

Rakoff rejected the Mets’ argument that Picard did not have the right to a jury trial because he, like Madoff’s firm itself, could not bring fraudulent transfer claims.

“This confuses the right to a jury trial with a right to bring a claim,” Rakoff wrote. “(Madoff’s firm) might well be barred from bringing fraudulent conveyance claims on the facts of this case; but if it could bring such claims, it would have a right to a jury trial on those claims.”

A Mets spokesman declined to comment. Rakoff has set a March 19, 2012 trial date.

Nov 23 (Reuters) – Mortgage insurer PMI Group Inc filed for Chapter 11 bankruptcy protection on Wednesday, following the seizure last month of its main operating unit by Arizona insurance regulators.

PMI’s filing came one day after Richard Gama, an Arizona Superior Court judge in Phoenix, rejected its request to overturn the seizure by the Arizona Department of Insurance.

That department took control of PMI’s main unit, PMI Mortgage Insurance Co, on Oct. 20, and directed that it pay claims at just 50 cents on the dollar.

The seizure came two months after Arizona told PMI to stop writing new policies because the company did not have enough capital.

A call to the office of Christina Urias, Arizona’s director of insurance, was not immediately returned. None of PMI’s units is part of the Chapter 11 filing with the U.S. bankruptcy court in Wilmington, Delaware.

PMI’s bankruptcy reflects broad deterioration among mortgage insurers, many of which suffered big losses as the nation’s housing downturn and weakened economy left the industry facing large claims on unpaid home loans.

In its bankruptcy petition, PMI said it had more than $225 million of assets and $736 million of debts as of Aug. 4.

By Jonathan Stempel

(Reuters) – German drugmaker Merck KGaA accused U.S. rival Merck & Co of hijacking its Facebook page and said it plans to sue to get it back.

Merck KGaA asked a New York judge to force Facebook Inc to turn over information to help determine how the German company lost the page, www.facebook.com/merck, and the ability to administer it.

According to a Monday filing with a New York state court in Manhattan, Merck KGaA contracted with Facebook in March 2010 for exclusive use of the page, but discovered last month that the unrelated Merck & Co was using it.

Facebook “has not been cooperative” in restoring the page, and in several alleged communications appeared nonresponsive or evasive in dealing with Merck KGaA, the filing said.

“Because Facebook is an important marketing device, the page is of great value to Merck, and its misappropriation is causing harm to Merck,” Merck KGaA said. “It is not clear how that happened or who is at fault nor … is Facebook providing clear information about what happened.”

Merck KGaA said it may bring legal action alleging breach of contract and interference with its business. It did not indicate whom it may sue.

Nov 22 (Reuters) – Citigroup Inc and its Chief Executive Vikram Pandit won the dismissal of a lawsuit by New York real estate developer Sheldon Solow, accusing them of hiding the bank’s risks during the 2008 financial crisis.

U.S. District Judge Robert Sweet in Manhattan said Solow failed to establish that his losses in Citigroup stock were caused when the liquidity and capitalization risks that Citigroup supposedly concealed came to the surface.

The judge nonetheless said Solow “has presented sufficient evidence of the defendants’ intent to defraud,” and gave him 20 days to refile his case.

“We are pleased that the judge found we adequately pleaded recklessness,” Ira Lee Sorkin, a partner at Lowenstein Sandler representing Solow, said in an interview. “We are reviewing the decision to determine whether to replead on the issue of loss causation.”

A Citigroup spokeswoman had no immediate comment.

The lawsuit is separate from litigation by groups of Citigroup stock and bond investors before Sweet’s colleague, U.S. District Judge Sidney Stein, regarding the bank’s disclosures about its exposure to toxic mortgage debt.

Solow said he paid about $510,000 for 40,000 Citigroup shares in September and November 2008, and lost 87 percent when he sold the stock in March 2009.

Nov 22 (Reuters) – A federal judge dismissed parts of a lawsuit in which American Airlines parent AMR Corp accused online travel service and data providers of antitrust violations for monopolizing how fare and flight data are distributed to travel agents.

U.S. District Judge Terry Means in Fort Worth, Texas, dismissed all of AMR’s claims against Orbitz Worldwide Inc , and some of its claims against Sabre Holdings Corp and Travelport Ltd.

The judge’s order on Monday was sealed, and further details from it were not immediately available, court records show.

Orbitz is an online travel agency, Travelport provides transaction processing, and Sabre runs a distribution system that delivers fare and flight information to travel agents. Travelport owns nearly half of Orbitz.

In recent years, Fort Worth-based AMR has tried to provide more fare and flight information directly to travel agents and travelers, rather than through intermediaries, which could lower costs.

The third-largest U.S. carrier also believes this could help it better tailor offers, especially to business travelers who might use agents more frequently than leisure travelers.

It said the online providers have retaliated in part by altering their displays to disfavor American’s flights, or else encouraging travelers to shop elsewhere.