State bill eyes easing of fed flood insurance rates

State lawmakers will hold a hearing today to see if they can bring relief to thousands of Massachusetts homeowners and businesses facing a dramatic rise in flood insurance rates under new federal law and a redrawing of flood lines by the Federal Emergency Management Agency.

House Bill 865 would have the state insurance commissioner investigate how rates are set by the National Flood Insurance program and make suggestions to ensure that rates are not excessive.

State Rep. Jim Cantwell introduced the bill because of FEMA's decision to redraw flood lines and because the Biggert-Waters Flood Insurance Reform Act of 2012 will do away with the grandfathering of properties that used old flood-risk data.

"This is the most significant fiscal threat to coastal communities and inland communities that have water running through them because rates in some instances are quadrupling," said Cantwell (D-Marshfield).

Kerry Bogdan, senior engineer at FEMA, said the agency updated its maps for every coastal community in Massachusetts because "key updates to engineering and modelling approaches were not accounted for in the 1980s maps."

Her explanation comes as little solace to Mitch Haddad of Haddad's Ocean Cafe in Marshfield, who said he and his brother rebuilt their restaurant last year 2 feet above the then-required elevation at a cost of $3.3 million, only to learn six weeks ago that the new required elevation is another 3 feet higher.

"It's just insane," Haddad said. "We tried to be proactive. ... We certainly could have built it another 3 feet higher."

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Patrick seeks SBA help for Mass. fishermen

BOSTON — Massachusetts Gov. Deval Patrick has taken a step toward making his state's battered fishing industry eligible for federal disaster assistance from the U.S. Small Business Administration.

Earlier this month, Patrick officially certified that Massachusetts fishermen who chase bottom-dwelling groundfish had suffered "substantial economic injury."

He cited the poor health of key fish stocks and this year's devastating cuts in the allowed catch.

Patrick wrote further in a letter to the SBA that the industry has been so economically damaged, that federal subsidized loans are essential.

An industry group, the Northeast Seafood Coalition, initiated the appeal to the SBA. In the meantime, fishermen are also pursuing Congressional assistance.

Tens of millions in disaster aid for New England fishermen has been included in a U.S. Senate appropriations bill, but the House must approve the allocation.

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European auto sales hit new low

FRANKFURT, Germany — European Union car sales are still sagging despite the return of modest economic growth.

For the first eight months of the year, passenger car sales were off 5.2 percent to 7.84 million compared with the same period last year, the European Auto Manufacturers' Association said Tuesday. That's the lowest January-August figure since the group started keeping track in 1990.

New car registrations in August fell 5 percent from a year ago to 653,872, the association said.

The economy in the 28-country EU grew 0.4 percent in the second quarter, ending a recession. But the unemployment rate remains high at 11.0 percent, making many consumers unable or afraid to buy a new car. Countries hit by the eurozone debt crisis, such as Greece and Spain, face even higher jobless rates that have hurt sales of moderately priced vehicles especially hard. Luxury carmakers are doing better.

The August downturn was distributed across Europe's biggest markets. Germany saw a 5.5 percent drop, despite a stronger economy than in other members of the 17-county eurozone. Registrations fell 10.5 percent in France, 18.3 percent in Spain, and 6.6 percent in Italy.

Britain's was the only major market to expand, rising 10.5 percent.

Among the major carmakers, Germany's Volkswagen Group was off 11.2 percent in August while France's PSA Peugeot Citroen slipped 17.3 percent. Renault Group rose 6.0 percent and General Motors was up 0.5 percent — as a large jump in sales of Chevrolet-branded vehicles made up for a 3.4 percent fall in sales of its main European Opel and Vauxhall brands. Ford was off 1.5 percent.

Luxury brands did better. Daimler's Mercedes was up 8.9 percent, excluding its compact Smart city car, and BMW AG rose 9.5 percent, excluding its Mini brand. However, VW's Audi luxury brand, a chief competitor for Mercedes and BMW, was off 5.6 percent.

The biggest market share over the first eight months remained with Volkswagen Group, including the company's other brands such as Audi, Seat and Skoda, with 24.9 percent, up slightly from 24.8 percent.

Global auto executives expressed caution about the future in interviews at the Frankfurt Auto Show last week. They said the European market may have reached the bottom but do not see any significant increase in demand this year.

The European market contrasts with a rebound in the United States, where figures show that sales are on track to reach 16 million vehicles a year — the level from before the recession. European annual sales were 15.6 million in 2007 but are heading for just under 12 million for all of this year.

The auto association also issued figures for July, which showed a 5 percent increase over the previous year. July had one more working day than the previous July, while August had one less. In July, the only major market to shrink was Italy, which was down 1.6 percent. The association releases figures for July and August together.

The figures excluded Croatia, which only joined the EU on July 1.

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Mini-T speakers will do in a pinch

These round little orbs are designed to work with computers, televisions and iPhones. At less than 6 inches wide and high, these ultra-compact speakers come in a variety of color options including antique copper and bronze, polished steel and hammered earth.

THE GOOD: There's no denying the craftsmanship of these perfectly round, sleek speakers, compact "subMini" subwoofer and nondescript amplifier. They'll bring style to any shelf, and the overall audio performance was decent to good.

THE BAD: Using a five-year-old pair of Monitor Audio Silver S1 speakers as my reference, the Mini-T speakers failed on some high-range tones. An entire acoustic guitar track was missing when I played my go-to song for audio testing, "Weak and Powerless" by A Perfect Circle.

THE VERDICT: This is a solid audio bundle for small-space living. While unlikely to appeal to steadfast audiophiles, the Mini-T subwoofer and amplifier bundle is a definite upgrade from those speakers that came with your computer, and the price for the bundle is more than reasonable.

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Harvard profs target cure for Lou Gehrig’s

Two Harvard stem-cell scientists are teaming up with a German biotech company to expand the search for a cure for Lou Gehrig's Disease.

Harvard University professors Kevin Eggan and Lee Rubin will conduct amyotrophic lateral sclerosis trials in partnership with Evotec, the university and the company announced.

"We're not a pharmacy company and they're set up for this," said Harvard science spokesman B.D. Colen. "We are doing some of that already, but they're able to do it on a much larger scale."

ALS destroys nerve cells in the brain and the spinal cord, eventually leading to paralysis and death. There is currently no known cure or treatment that halts or reverses ALS, although several drugs in clinical trials hold promise.

The new amyotrophic lateral sclerosis trials will expand on Eggan and Rubin's brain motor neuron research and is the university's fourth collaboration with Evotec. The company is led by the former student of another Harvard researcher whose hormone treatment of diabetes sparked an earlier Evotec deal, said Colen.

Eggan, the first researcher to link the deterioration of motor neurons with the onset of ALS, is known for his development of a revolutionary use of stem cells in research that spares patients the danger of taking experimental drugs across the spectrum of human disease, Colen said.

"It literally moves the disease out of the patient and into a lab dish so then you can use it to screen for possible drug treatments," Colen said,

The finances for the ALS deal are confidential, Colen said. "But if ... down the road this does prove successful and it becomes a drug, there will be revenue coming back to the discoverers and to the university."

Efforts by former Gov. Paul Cellucci to fight the debilitating disease that claimed his life did not contribute directly to Rubin and Eggan's research, Colen said, "But in terms of making Massachusetts a hospitable environment to do this kind of research, absolutely."

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Tech talk on tap at cop confab

Tech companies are targeting the law-enforcement market as 3-D printing, Google Glass and other advances open new crime-fighting frontiers — innovations to be showcased at a conference in Cambridge this week that is drawing cops from around the country.

"Technology can help in every aspect of policing," said Dan Riviello, spokesman for the Cambridge Police Department and co-director of the two-day Police Innovation Conference at Microsoft New England, where representatives from police departments including Boston, Cambridge, New Mexico and Michigan will work to improve their use of technology and learn how to use new technology.

"As police forces have had to downsize because of the recession, their workload hasn't decreased," said Joe Rozek, executive director of homeland security and counterterrorism for Microsoft, who helps to put together "fusion centers" — police hubs where cameras, sensors and other real-time information can be collected and disbursed to responders.

"(The center) takes the information and raw data and turns it into actionable intelligence," Rozek said.

The conference will touch on social media, but also new and emerging technologies, like drones and 3-D printing.

"There's a lot to learn about and to harness and to understand. It's all moving very fast," said Peter Olson, founder of WiredBlue, makers of an app police departments can sign up for to better connect with the public.

Riviello will be speaking about the CPD's unique use of Twitter, where dispatch calls are automatically tweeted with the reason for the call and rough location.

"We think an informed community is a safer community," he said.

Mutualink, a Westford company that creates a secure method of interagency communication that is private for both parties, will show off its method for giving hands-free context and tactical awareness to first responders using Google Glass.

That would allow police responding to an incident to see vital information — like a map or surveillance camera feed — without using their hands. For example, in a school shooting, the school could provide law enforcement with a map and live feeds of video cameras that show up on Glass so first responders could make better and quicker decisions.

Still, all the information in the world is only as useful as the back-end system to put it together, experts said.

The key, Rozek said, is not looking at one technology as the "end-all solution."

The answer, and the way to use technology, "is one based on logic and reason."

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The Ticker

Wal-Mart to open more smaller stores

Wal-Mart Stores Inc. plans to increase the number of so-called "Neighborhood Market" stores, its smaller concept store, by nearly 75 percent over the next 18 months.

The world's largest retailer plans to have 500 of the smaller stores open within the next 18 months, up from a current 290.

In an effort to reach more customers in urban settings and geographies that can't support a traditional "Supercenter," the Bentonville, Ark.-based company is focusing on two small-store concepts: its Neighborhood Market and Walmart Express, that are meant to compete directly with grocery stores, discount/dollar stores and drug stores.

Wal-Mart's Neighborhood Market stores are sized on average at 38,000 square feet and the small-concept Walmart Express stores average about 15,000 square feet.

TOMORROW

• Federal Reserve releases industrial production for August.

TUESDAY

• Labor Department releases Consumer Price Index for August.
• National Association of Home Builders releases housing market index for September.
• Federal Reserve policymakers begin a two-day meeting to set interest rates.

WEDNESDAY

• Commerce Department releases housing starts for August.
• Federal Reserve policymakers meet to set interest rates.
• FedEx Corp. reports quarterly earnings before the market opens.
• Oracle Corp. reports quarterly earnings after the market closes.

THURSDAY

• Labor Department releases weekly jobless claims.
• Commerce Department releases current account trade deficit for the second quarter.
• Freddie Mac, the mortgage company, releases weekly mortgage rates.
• Conference Board releases leading indicators for August.
• National Association of Realtors releases existing home sales for August.

THE SHUFFLE

• Coldwell Banker Residential Brokerage in New England announced that Lauren Rabb, left, has been appointed sales manager of the company's Newton and Chestnut Hill offices. Rabb will be responsible for the day-to-day sales and operations of 74 sales associates serving Newton, Brookline and the surrounding communities.
• Putney Inc., a pharmaceutical company focused on the development and sale of generic prescription medicines for pets, has named Ellen Tobias as vice president of technical operations.

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Ponzi schemes proliferate

The Securities and Exchange Commission and law enforcement continue to see a steady stream of Ponzi schemes nearly five years after the Bernard Madoff scandal rocked the securities world.

Since fiscal year 2010 alone, the SEC has brought more than 100 enforcement actions across the nation against nearly 200 people for carrying out Ponzi schemes, prompting the commission to launch a Web page in 2011 for whistle-blowers to report violations of federal securities laws and apply for a financial award.

"Investors should continue to be wary of Ponzi schemes, which we steadily uncover and prosecute in regions throughout the country," said Kevin Callahan, an SEC spokesman. Red flags, such as promises of extraordinarily high returns with little or no risk, can signal that something may be amiss."

Among the recent local cases is that of Steven and Lori Palladino of West Roxbury, who were indicted earlier this year for allegedly running a multimillion-dollar Ponzi scheme. Prosecutors allege the couple used their company, Viking Financial Group, to borrow investors' money, which often went into the Palladinos' personal bank accounts to fund their lavish lifestyle. Money from new investors then allegedly was used to repay earlier ones and make monthly payments to all of them. But prosecutors allege it didn't stop there. Earlier this month, Palladino also was charged with one count of usury, or loan-sharking, for allegedly demanding a 40 percent interest rate on a loan his company made to a businesswoman.

"He's continuing to buy time, but inevitably, he needs to answer where our money is," one of their alleged victims, who declined to give his name, said of Steven Palladino. "History tells us we don't always get back what we've lost. But we do want to see justice served."

Prosecutors in the Economic Crimes Unit of the U.S. Attorney's Office in Boston make a point of bringing victims to perpetrators' sentencings so that judges can see firsthand that the impact of the crimes goes beyond dollars.

"People literally find overnight that they're destitute," said Assistant U.S. Attorney Paul Levenson, whose unit has prosecuted 13 Ponzi schemes in the last five years.

Beginning in November, Levenson's office will hold a series of forums to warn the elderly in particular of the dangers of investing with people who promise inordinately high returns.

"It's clear that it is prevalent. It's a form of violence, a form of sociopathology.
 And I think it's becoming increasingly defined that way," said Gaytri Kachroo, a lawyer who has represented hundreds of Madoff victims.

People frustrated with low bank and bond rates "make a very appetizing opportunity" for perpetrators, said Secretary of State William Galvin, whose office has taken action against seven schemes in the past five years.

"The problem with Ponzi schemes is finding them," Galvin said. "They strive for secrecy. When we hear about them, all you have to do is follow the money. The problem is you don't hear about them until they default. It's like a game of musical chairs. Ultimately, the music has to stop, and you're going to be one chair short."

Antonio Planas contributed to this report.

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Prep test for MBA goes mobile

It took Elad Shoushan five tries to master the Graduate Management Admission Test. But Shoushan turned his circuitous route to Massachsuetts Institue of Technology's Sloan School of Management to his advantage by developing an app that he claims is cheaper, more convenient and ultimately more effective than any test-prep course on the market.

The 31-year-old Israeli native used his experience as a serial GMAT underachiever and former professional basketball player to figure out what he'd been missing.

"As a basketball player, it was very simple to identify what I needed to improve," he said. "But with the GMAT, it's really hard to focus on one weakness at a time."

So in 2012, he founded LTG Exam Preparation Platform, a mobile learning platform for standardized tests. The company's first product, Prep4GMAT, is available for the iPhone and iPad, and categorizes questions based on what concepts they're testing.

When a user gets a question wrong, the app breaks it down based on keywords. Over time, Shoushan said, the app helps the user focus more quickly on keywords inside questions, associating them with the concepts learned.

"You start to see where your deficiencies are so you can really hone in on those areas," said Tarlin Ray, Shoushan's mentor in the 
$1 million startup competition and accelerator MassChallenge, where he is now a finalist.

This approach of dissecting a test through pattern recognition, coupled with the fact that LTG was built "from the ground up" to be a mobile company, distinguishes it from other test-prep companies, said Ray, including Kaplan, where he worked for 3 1⁄2 years.

"It's almost like you have a coach in your pocket," he said.

Alba Medina, 28, needed a 650 on the GMAT to get into a top-10 graduate school. So for help, she turned to three programs — Manhattan Prep, Veritas Prep and Knewton.com — spending between $300 and $800 on each.

"After failing four times, I was desperate," Medina said.

So she tried LTG for $20, she said, and improved her score by 120 points, just enough to get into MIT.

"I didn't have to carry around books with me," Medina said. "The software discovered my weaknesses, so it was easy to concentrate on them."

LTG's other advantages are that it doesn't require users to log into a website that might not be available if they don't have an Internet connection, and, for the next few weeks, it's also free until Shoushan and his team finalize LTG's premium version, which will cost between $30 and $50.

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SJC upholds $20.6 million judgment vs. Toys ‘R’ Us

The Supreme Judicial Court upheld a $20.6 million award to the husband of a woman who died when the inflatable pool slide she was using collapsed.

A jury in 2001 awarded the money to Michael Aleo after it found the slide sold by Toys "R" Us did not comply with federal safety standards. Aleo's wife, Robin, 29, died after slamming her head onto the concrete pool deck at a relative's home in Andover in 2006.

The toy company appealed in May but the Supreme Judicial Court yesterday concluded "there was sufficient evidence," to support the verdict.

A Toys "R" Us spokeswoman declined comment.

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