State report asks business to close gender wage gap

Gov. Deval Patrick is challenging businesses to close the wage gap and recruit more women to senior positions as a task force yesterday released a report showing women still earn less than men in comparable positions.

The "Successful Women, Successful Families" task force, led by state Secretary for Labor and Workforce Development Rachel Kaprielian, outlined recommendations, including promoting science, math and technology careers to young women, and developing training programs to increase the number of women executives.

It also called for more family-friendly policies such as flexible work schedules.

"This is an ongoing, important issue, and will become an even greater issue over time," said Kaprielian. "To have the kind of talent we need to compete in a global economy, we need to have all our players dressed and ready to play."

The report found that women earn 77 cents for every dollar earned by men in the state, creating a $12.2 billion wage gap.

Patrick yesterday said that 14 businesses had agreed to take part in a corporate challenge and work with Bentley University's Center for Women and Business to close the wage gap and put more women in leadership roles.

"I appeal to other business leaders to participate in this program and help break down the barriers facing women in the workplace so we can even the playing field and ensure that Massachusetts strengthens its leadership position in our global economy," Suffolk Construction CEO John Fish said in a statement.

C.A. Webb, executive director of the New England Venture Capital Association and a task force member, said it's up to the private sector to address workplace inequality.

"The governor and his staff are only in office for a few months ... We have to see what efforts private entities can take on," Webb said. 'We can't just keep talking about this stuff."

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The Ticker

Kmart hit by data breach

Retailer Sears Holdings Corp. said the payment data systems at its Kmart stores had been compromised, the latest in a series of computer security breaches to hit U.S. companies in recent months.

The U.S. Secret Service confirmed it was investigating the breach, which occurred in September and compromised the systems of Kmart, which has about 1,200 stores across the United States. The breach did not affect the Sears department store chain.

Sears said it believes hackers made off with some credit and debit card numbers.

More e-cig regs eyed on planes

Federal regulators should consider further regulations on electronic cigarettes on airplanes, the state's top fire official said after his office recently concluded one of the devices caused a small fire on a plane at Logan International Airport.

The Aug. 9 fire, confined to a single piece of luggage in the cargo hold, forced an evacuation of the plane. It was extinguished before the JetBlue aircraft took off. State Fire Marshal Stephen Coan said his office's investigators confirmed that an e-cigarette in a passenger's checked luggage turned on, causing the fire.

Coan sent a letter to the FAA this week about the incident, and U.S. Sen. Edward Markey said he'll ask the FAA to investigate whether e-cigarettes should be allowed on airplanes at all.

Corcoran Jennison files hotel plan

Corcoran Jennison Co. has filed a project notification form with the city to expand the DoubleTree Club by Hilton hotel in Dorchester's Columbia Point.

The Boston developer proposed a six-story, 89,500-square-foot addition that would include 96 new rooms for a total of 187 rooms, an expanded ground-floor restaurant, kitchen and back-of-house space, function rooms and a ballroom.

The addition would take the place of a parking lot on the northeast side of the Mount Vernon Street hotel, which is next to the former 20-acre Bayside Exposition Center site that Corcoran Jennison lost to foreclosure in 2009 and is now owned by the University of Massachusetts-Boston.

Raytheon, UMass Lowell open center

Raytheon and the University of Massachusetts Lowell yesterday officially opened a new collaborative research facility that will advance innovative technologies in a state-of-the-art setting.

The Raytheon-UMass Lowell Research Institute is located at the university's Mark and Elisia Saab Emerging Technologies and Innovation Center. Raytheon has committed $3 million with options to $5 million throughout the next 10 years to establish the facility. Initial research will focus on technologies for radar and communication systems.

Boston-based Phoodeez catering services has hired three new employees: Ian Danielson as director of business development, Brian Vicente as director of operations, and Tyler Smith as part of the business development team.

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Artists for Humanity to be big draw

A South Boston nonprofit that pays Hub teens to work with professional artists and designers is planning a major expansion of its flagship facility that's a model for economical green building.

The Artists for Humanity EpiCenter would nearly quadruple in size under an approximately $25 million, 63,500-square-foot expansion that would create an "energy-positive" building.

"We'll create more energy than we'll use, using a lot of solar and geothermal and some wind and really illustrating some of the great and progressive technologies that are out there," executive and artistic director Susan Rodgerson said. "It's a big challenge, but I think we can do it."

There currently are no such buildings on the East Coast that are 50,000 square feet or larger, according to the organization.

The expansion would allow the 23-year-old Artists for Humanity — which counts itself as the largest single employer of Boston teens — to double the number of youths served. This year 250 teens are working with artists to create fine art, industrial design and provide digital graphic services.

"The need to create jobs for teens is really important," Rodgerson said. "And the fact that there will be this space in the Innovation District providing access to technology and maker space and innovation … is really important for the kids in the city who don't really have access to that kind of stuff."

The teens, who work on projects ranging from a video for National Grid to public art for State Street Corp., are paid wages plus commissions. Last year they received close to $1 million.

The expansion also would add a "maker's studio," new gallery, meeting and conference space, a retail store and a cafe in addition to 25,000 square feet of leasable space for creative industry tenants.

Artists for Humanity plans a capital campaign to raise funds for the expansion, which will take advantage of a 9,000-square-foot parking lot donated by Gillette last year. It already has received some funding commitments, which Rodgerson declined to divulge.

The group moved into the 23,500-square-foot EpiCenter, built at a cost of $7 million, in 2004.

The Platinum Leadership in Energy and Environmental Design (LEED)-certified facility has become a popular place for weddings and other events.

"It was built on a budget, and we've become a really popular place for folks to come and see sustainability at a value," Rodgerson said.

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Bernanke defends AIG bailout in court

WASHINGTON — Former Federal Reserve Chairman Ben Bernanke testified in federal court Thursday that insurance giant American International Group Inc. had to be rescued by the government in 2008 to avert global catastrophe.

Bernanke took the stand at a trial of a lawsuit brought by former AIG Chairman and CEO Maurice Greenberg, who is suing the government over its handling of AIG's bailout loan. Bernanke was one of the key decision makers on the bailout, which began with an $85 billion rescue loan from the New York Federal Reserve in September 2008 and grew to nearly $185 billion in federal aid.

In early questioning, Bernanke kept his answers terse when asked about the potential damage an AIG collapse might inflict and details of how the Fed came to approve the bailout. He frequently responded "yes, sir" to questions posed by Greenberg's lead attorney.

"Certainly there was an enormous amount of stress on financial institutions" in the fall of 2008 after mortgage financiers Fannie Mae and Freddie Mac had been taken over by the government and fear cascaded through financial markets, Bernanke said.

It was a rare appearance by a former Fed chairman on the witness stand. Thomas Wheeler, the judge presiding over the nonjury trial in the U.S. Court of Federal Claims, said last year he would make an exception and allowed Greenberg's lawyers to depose Bernanke because the former Fed chief has firsthand knowledge of the government's decision to bail out AIG.

Greenberg, who was AIG's biggest shareholder, is suing the federal government for about $40 billion in damages. He asserts that it violated the Constitution's Fifth Amendment by taking control of AIG without "just compensation" for the shares it received. The government took control of 80 percent of AIG's stock in exchange for the bailout aid.

New York-based AIG, which had operations around the globe, spiraled toward collapse after making huge bets on mortgage securities that soured. It has since repaid the loan, and the government says taxpayers ultimately earned $25 billion on the investment in the company.

David Boies, the attorney representing Greenberg, questioned Bernanke about a meeting of the Fed governors on Sept. 16, 2008 to approve the emergency loan to AIG, and the extent to which details of the proposed terms of the loan were discussed.

Bernanke said he couldn't recall whether specific details, such as various fees to AIG, were discussed before central bank officials voted. During a couple of hours of testimony, he appeared at least slightly annoyed and shifted several times in his chair.

The terms of the loan included the huge government stake in the company and an interest rate called "crazily high" by a government official, according to an email produced in court Wednesday.

In the days before the Fed governors voted on the loan, Bernanke said, there was concern that AIG "didn't have a clear idea" of how much it would be able to repay the government. Two years later, in September 2010, Bernanke testified before a panel investigating the crisis that AIG "did worse than I had anticipated."

He said Thursday that the AIG bailout didn't comply with time-honored principles for central bank lending to financial companies in a crisis, such as lending to companies that are cash-strapped yet still solvent and demanding valuable collateral in return.

As he had done earlier with former Treasury Secretary Timothy Geithner, Boies tried to point up contradictions in Bernanke's statements about AIG and the bailout.

On the issue of collateral, Boies cited Bernanke's 2010 testimony that AIG was looking to sell insurance subsidiaries "that have substantial value ... so it was our assessment that they had plenty of collateral to repay our loan."

Bernanke is scheduled to continue his testimony Friday.

On Tuesday and Wednesday and earlier Thursday before Bernanke's appearance, Boies had tenaciously questioned Geithner, who headed the New York Fed at the time of the AIG loan. Geithner said he and his colleagues at the Fed and the Treasury Department believed that AIG's dire financial condition was "substantially" the result of its management taking on excessive risk.

Bernanke, who stepped down in January after eight years as Fed chairman, is a fellow at the Brookings Institution think tank in Washington and has been writing a memoir. The financial crisis, which plunged the economy into the deepest recession since the 1930s, was the defining moment of his tenure. Under his leadership, the Fed invoked all its conventional tools to salvage the economy. Once those were exhausted, Bernanke turned to extraordinary steps never before tried by the Fed.

AIG became a symbol for excessive risk on Wall Street and a touchstone of public anger. It was criticized, among other things, for paying millions of dollars in bonuses to executives after it was bailed out.

On Monday Henry Paulson, a Treasury secretary under George W. Bush, testified that the AIG bailout was specifically designed by the government to punish the company. Paulson, who headed Treasury at the time of the rescue, said AIG shareholders should have faced punishment for the company's troubled balance sheet.

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Ex-wife of Glock founder sues him over millions

ATLANTA — After working decades to build a wildly successful firearms company, Gaston Glock conspired with associates to push out his ex-wife and business partner of almost 50 years and steal millions of dollars she was entitled to, according to a lawsuit filed Thursday in federal court in Atlanta.

They participated in a worldwide racketeering scheme over decades aimed at taking money from Helga Glock, who was divorced from her husband in 2011, through various criminal methods, including improper royalty payments, laundering money through fraudulent billing companies, and sham lease and loan agreements, the lawsuit claims.

A woman who answered the phone Thursday in the media relations department at Glock Inc., the company's U.S. headquarters, referred questions to the company's lawyer but then hung up before giving a name or contact number. She did not answer when called back and did not immediately respond to a voice message.

Several lawyers who have previously represented Glock Inc. in legal disputes did not immediately respond to emails seeking comment.

The lawsuit details what it claims are the exploits of a man who regularly engaged in unscrupulous business practices and kept a stash of "fun money" used to "cavort with women around the world," going so far as to buy homes for some mistresses in the Atlanta area.

Glock's actions toward his family "resemble the senseless and self-destructive rage of Shakespeare's King Lear, when he foolishly mistreats a loyal but candid daughter, Cordelia, in favor of cunning and ruthless flatterers," the lawsuit says. "Perhaps neither pathology nor psychology can provide a satisfactory explanation for why an aging billionaire would spend his twilight years seeking to terrorize members of his own family."

Other defendants include companies owned by Glock around the world and several former Glock executives.

Helga Glock's lawsuit asks for a jury trial and seeks potential total damages of approximately $500 million, as well as attorney fees. She also asks a judge to remove Gaston Glock and others from their roles in the company, reorganize the companies owned by Glock and restore a larger ownership interest for Helga Glock.

Helga and Gaston Glock met in 1958 and married in 1962. They started a company in 1963 that eventually became a gun manufacturer called Glock Ges.m.b.H. in 1983, according to the lawsuit. Gaston Glock established a U.S. subsidiary of the company in Smyrna, just outside Atlanta, in 1985.

Glock's pistols quickly became popular among law enforcement officers and civilians alike, and the U.S. subsidiary became a main economic engine for the company, the lawsuit says.

Gaston Glock and his associates had complete disregard for any form of corporate structure and set up a network of sham companies in locations that included Bermuda, Curacao, Hong Kong, Ireland, Liberia, Luxembourg and Panama, the lawsuit says. They transferred money out of Glock Inc., and into shell companies he owned or controlled to hide the origins of the money, the lawsuit says.

Gaston Glock avoided questions from his wife and business partner using intimidation and demanding trust, telling her it would be better if she wasn't involved in their finances, the lawsuit says. She trusted and relied on him.

"While Glock Sr. had been promising his wife that all of his efforts were directed at building up the Company, and preserving it for the family's future, he and his associates had instead been systematically stealing from, and laundering the proceeds through separately-owned business entities and bank accounts," the lawsuit says.

Until 1999, Gaston Glock owned 85 percent of the shares of the Austrian parent company and Helga Glock owned 15 percent.

Gaston Glock and his associates created foundations and convinced Helga Glock and their children to contribute their assets and waive inheritance rights, ostensibly to benefit them and protect the family's control of the company, the lawsuit says. Helga Glock was left with a 1 percent interest in the company, and Gaston Glock had complete control of the trusts, the lawsuit says.

After they divorced, Gaston Glock removed his wife and three adult children as beneficiaries of the foundations and said they and their descendants could not have any further association with the company, the lawsuit says. Shortly after the divorce, Gaston Glock married a woman roughly 50 years his junior.

Thursday's lawsuit is not the first time Helga Glock has turned to this U.S. federal court in a dispute with her ex-husband. In March 2013, she asked the court to help her get financial records for Glock's American companies so she could use them in the couple's divorce proceedings in Austria to establish marital assets and the amount he should pay her in support. The judge in that case granted her request for subpoenas.

Lawyers for the company have responded in court filings that there's no basis for the federal court to compel the company's U.S. entities to turn over the financial documents because Helga Glock can't use any of them in the Austrian proceedings.

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Asian stocks sink after Wall Street plunge

BANGKOK — Asian stocks sank Friday after Wall Street suffered its worst day of the year and weak German trade data fueled worry Europe is sliding into recession.

KEEPING SCORE: Tokyo's Nikkei 225 index plunged 1.3 percent to 15,286.25 points and Hong Kong's Hang Seng lost 1.6 percent to 23,144.81. China's Shanghai Composite Index shed 0.6 percent to 2,375.28. Seoul fell 1.3 percent and Sydney and Singapore also declined.

WALL STREET: Volatility returned to U.S. markets as stocks had their worst day of the year just 24 hours after recording their best. Prices fell after members of the Federal Reserve board expressed concern about inflation, tempering suggestions in minutes of a recent Fed meeting released Wednesday that suggested interest rates would not be raised for now. The Dow Jones industrial average and Nasdaq composite both lost 2 percent and the broader Standard & Poor's 500 fell 2.1 percent.

EUROPE: Concerns Europe is headed for recession rose after Germany, the continent's biggest economy, reported its weakest year-on-year export growth in five years. The president of the European Central Bank, Mario Draghi, gave no indication of any further monetary stimulus, suggesting in a speech in Washington that governments need to do more on the fiscal side.

ANALYST'S TAKE: "Markets are markets are rather unimpressed with the state of global growth (EZ in the most unflattering state) and equally unimpressed with potential policy response," said Mizuho Bank in a report.

HONG KONG: The government called off talks with pro-democracy protesters, possibly extending demonstrations that have blocked streets for almost two weeks. The protesters want a bigger public voice in the selection of the territory's next leader in 2017. The impact on this Asian financial center's economy has been limited but analysts warn it could rise if protests erode its appeal to foreign companies and investors.

ENERGY: Benchmark U.S. crude plunged $2to $83.77 per barrel on concerns slowing global economic growth will reduce demand while production stays high. The contract lost $1.56 on Thursday to $85.77. Brent crude, used to price international oils, lost $2.08 to $88.29.

CURRENCY: The dollar declined to 107.78 yen from Thursday's 107.87. The euro held steady at $1.27.

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The Ticker

HubSpot prices shares at $25 for today's IPO

Cambridge-based HubSpot, an inbound marketing and sales software company, last night priced its initial public offering at $25 a share, above the expected range of $22 to $24 a share.

The 5 million common shares are expected to begin trading on the New York Stock Exchange today under the ticker symbol "HUBS."

Stock market has best day of the year

The stock market surged yesterday, erasing a steep loss from the day before, as investors reacted to minutes from the Federal Reserve's latest policy meeting, which showed that the central bank wants to keep interest rates extremely low for the time being.

The Dow Jones jumped 274.83 points, or 1.6 percent, to 16,994.22. The Standard & Poor's 500 index added 33.79 points, or 1.8 percent, to 1,968.89 and the Nasdaq composite rose 83.39 points, or 1.9 percent, to 4,468.59. All three indexes had their biggest point and percentage gains of the year. The Dow's jump was its biggest gain of the year.

AT&T to pay $105M for phone charges

AT&T Inc. agreed to pay $105 million, including $80 million in consumer refunds, to settle federal and state investigations that the company illegally billed mobile phone customers for unauthorized charges for ringtones and other services, officials said.

The practice, known as mobile cramming, involved hundreds of millions of dollars in charges for third-party services, the Federal Trade Commission said.

Massachusetts will receive more than $327,000 as part of the settlement.

Newton couple charged in $5.4M fraud

Secretary of State William F. Galvin has charged a Newton couple with fraud for allegedly failing to disclose important information to real estate investors, including their lack of experience and conflicts of interest.

Eileen and Lawrence Schwartz and their investment firm E. S. Schwartz & Co. allegedly misled clients into thinking they had experience in various real estate markets, causing investors to lose $5.4 million, Galvin said.

TODAY

• Labor Department releases weekly jobless claims.
• Commerce Department releases wholesale trade inventories for August.
• Woburn-based MKA Executive Planners, which provides personalized retirement income planning for executives, business owners and professionals, announced the appointment of Dennis Sexton, left, as senior vice president. He previously managed the employee benefits division of IIG Inc.SentiCare Inc. and WorldClinic Inc.

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Report: Mass. makes 60 percent of N.E. requests for H-1B visas

Although New England accounts for only a small share of the national requests for visas for highly skilled immigrants, it has some of the highest demand for such visas relative to total employment, according to a new report from the Boston Fed's New England Public Policy Center.

New England accounted for 25,000, or about 
7 percent, of the more than 370,000 requests for so-called H-1B visas in 2012, exceeding the region's 5 percent share of national employment, according to the center, and Massachusetts accounts for roughly 60 percent of New England's H-1B visa requests annually. Of those visa requests, 55 percent come from the Boston area, which accounts for just 37 percent of New England's employment.

But despite the demand for highly skilled workers, on Capitol Hill the Republican-controlled House failed to act on a bill the Senate passed last year to raise the cap on H-1B visas from 65,000 to as many as 180,000 per year.

"It's the anti-economy, shoot-yourself-in-the-foot strategy," said Jeffrey Bussgang, general partner at Flybridge Capital in Boston and senior lecturer at Harvard Business School. "I have (international) students in my class who want to start and grow their business here, but are forced to leave. We train them, and then we chase them out the door to create jobs outside the U.S."

To stem that flow of talent, the state enacted the Global Entrepreneur in Residence Program with $3 million from the 2014 Jobs Bill. Under the three-year, pilot program, UMass Boston and UMass Lowell will help foreign entrepreneurs, who started businesses while they earned advanced degrees here, get H-1B visas, said Maeghan Silverberg Welford, chief of staff at the Massachusetts Technology Collaborative. In return, the entrepreneurs will work for the universities part time, helping students launch their own businesses, for 18 months, after which it will be up to the entrepreneurs to apply for another visa or a green card if they want to stay here longer.

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City orders one-day suspension of club’s license

The Boston Licensing Board yesterday slapped a local nightclub with a one-day license suspension for failing to call police about an alleged sexual assault on its dance floor.

Mac Dauber, the Royale's security director, told the board Tuesday that the alleged victim never told him she had been groped Aug. 10.

But the board unanimously agreed yesterday that Dauber erred when he told the 24-year-old woman the police didn't need to be called because he worked closely with them.

"It's clear she made at least some people aware of exactly what transpired," Chairwoman Nicole Murati Ferrer said.

Dauber was not at yesterday's meeting and could not be reached for comment.

Licensing Board records show the Royale has a history of failing to call 911 for emergencies, a charge it denies.

The board issued the Tremont Street club a warning on May 19, 2011, after a patron said he was stabbed, and staff gave him bandages instead of calling for an ambulance. On Jan. 20, 2011, the board suspended the club's license for two days for failing to call 911 after a man reported he was beaten.

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Accelerator teams with French city

Boston startup accelerator and competition host MassChallenge will sign a memorandum of understanding today to forge ties with the city of Lyon, France, home to an international biotechnology cluster and Europe's top center for vaccine production.

"It's basically a general framework for cooperation between the entrepreneurial ecosystems of Lyon and Boston in general, but specifically here with MassChallenge," said Amir Eldad, MassChallenge's international expansion "evangelist."

There's a very distinct sector alignment between the two cities, including in the life sciences, biotech, medical devices, robotics and nanotechnology, Eldad said.

MassChallenge participated in Gov. Deval Patrick's September trade mission that included a Lyon stop. Lyon Mayor Gerard Collomb, slated to be in Boston today, was unavailable for comment.

The second largest metro area in France, Lyon is home to the headquarters of vaccine maker Sanofi Pasteur and in vitro diagnostics company bioMerieux, both of which have operations in Cambridge.

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