Judge: Spammer owes Facebook $711 million

SAN JOSE, Calif., Oct. 31 (UPI) -- A U.S. judge says an Internet marketer known as the "Spam King" must pay the Facebook Web site $711 million in damages.

U.S. District Court Judge Jeremy Fogel ruled in San Jose, Calif., Thursday that Sanford Wallace must pay Facebook after employing compromised user accounts to send out 14 million junk e-mails to the Web site's members, the San Francisco Chronicle reported.

Fogel, who had already slapped a temporary restraining order and then a preliminary injunction against Wallace, said this week that Wallace had violated the so-called CAN-SPAM law "with blatant disregard" for the rights of Facebook and its members.

The newspaper said Fogel also referred Wallace to the U.S. Justice Department for possible contempt of court charges for not showing up at Thursday's hearing.

Wallace filed for bankruptcy in June after Facebook rival MySpace won a $234 million judgment against him and fellow Internet marketer Walter Rines, the Chronicle said.

Madoff: SEC could have had him earlier

NEW YORK, Oct. 31 (UPI) -- Jailed former financier Bernard Madoff says lack of basic investigatory moves by the U.S. Securities Exchange Commission allowed his Ponzi scheme to flourish.

In a jailhouse interview given by Madoff to the SEC and released Friday, the disgraced financier said investigators failed to check basics, such as his account with Wall Street's central clearinghouse and records of the firms he falsely claimed were handling his trades, The New York Times reported.

In the interview, Madoff contended that those simple moves could have revealed his $65 billion scheme far earlier, reportedly saying, "It would have been easy for them to see."

The transcripts were released as part of a 6,157-page trove of documents amassed by the SEC's inspector general, H. David Kotz, who last month concluded a lengthy probe of how the commission dealt with Madoff over the years.

The Times said Madoff told Kotz that on two occasions he felt sure the SEC was closing in on his Ponzi operation, but each time he escaped. Madoff said he believed the SEC failed to check his clearinghouse account because of his stature in the industry, the transcripts indicated.

California National, other banks seized

LOS ANGELES, Oct. 31 (UPI) -- California National Bank and eight others owned by an Illinois company have become the country's fourth-largest bank failure this year, U.S. officials said.

The Federal Deposit Insurance Corp. said the 68-branch California National, of Los Angeles, and eight smaller banks also owned by FBOP, a privately held Oak Park, Ill., company, were seized by regulators Friday and acquired by U.S. Bank, the Los Angeles Times reported.

Among the other FBOP banks taken over were San Diego National Bank, with 28 offices, and San Francisco's Pacific National Bank, which has 17, the newspaper said. It quoted FDIC officials as saying the seizure of the nine FBOP banks -- which had combined loans and other assets totaling $19.4 billion as of Sept. 30 -- will cost the federal deposit insurance fund $2.5 billion.

A letter to California National employees, obtained by KTLA-TV, Los Angeles, blamed the bank's failure on its purchase of $855 million in preferred shares of Fannie Mae and Freddie Mac -- rendered worthless when the government placed the giant mortgage firms into conservatorship in September 2008, the Times said.

Before Friday's moves, 106 U.S. banks had failed this year, the newspaper reported.

Study: Inheritance produces inequality

TALLAHASSEE, Fla., Oct. 31 (UPI) -- A large-scale anthropological study indicates there is less wealth inequality in societies where inheritance isn't prevalent, U.S. researchers say.

A team of anthropologists from Florida State University studied small scale societies ranging from egalitarian hunter-gatherers to hierarchical farmers and herders in Africa, Asia, Europe and Latin America. They found that the less a society passes down in the form of inheritance and the more its members rely on their wits, social connections and strength to make a living, the narrower the wealth disparities, the school said in a release Friday.

In that respect, they said, African hunter-gatherers are like those in knowledge-based economies in that members rely on wits and skill to make a living but have relatively few material assets to bequeath to children. Those societies have little economic inequality. But in pre-industrial farming societies researchers found inequalities stemming from inherited livestock.

"Wealth inequality is influenced by wealth inheritance," said FSU anthropology Professor Frank Marlowe. "But it may still come as a surprise that people who live in liberal democracies with knowledge based economies ... have less disparity than those herding and farming based societies that long ago gave up foraging but have not yet undergone the Industrial Revolution."

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