BRIEFCASE FTC STOPS SALES OF BUST TREATMENT.

Byline: - Staff and Wire Services

CANOGA PARK - Vital Dynamics Inc. has agreed to stop selling a breast enhancement pill and cream that the Federal Trade Commission said didn't do what the company promised.

The Canoga Park company marketed its Isis system - one of dozens of breast enhancement products available by telephone and over the Internet - as a safe and effective way for women to increase their breast size. Consumers spent more than $22 million on the herbal capsules and cream beginning in 1999, the FTC said.

But federal regulators, in a complaint filed in federal court in Los Angeles, said the company had no basis for its claims in radio, TV and print advertising that its product worked in most cases and did so without negative side effects.

Vital Dynamics received ``hundreds of complaints about side effects, including headache, nausea and allergic reactions,'' the FTC said.

Vital Dynamics' three top officers, Geoffrey V. Knight, Mark D. Berman and Allen Smith, agreed to pay a total of $50,000 to settle the complaint. Knight has filed for Chapter 7 bankruptcy protection.

T-bills end mixed on Monday sales

WASHINGTON - Interest rates on short-term Treasury securities were mixed in Monday's auction, with rates on six-month bills dropping to their lowest level on record.

The Treasury Department sold $14 billion in three-month bills at a discount rate of 1.185 percent, unchanged from last week. An additional $16 billion was sold in six-month bills at a rate of 1.220 percent, down from 1.240 percent.

The six-month rate was the lowest since the government began selling these bills on a regular basis in 1958.

In a separate report, the Federal Reserve said Monday that the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable rate mortgages, dipped to 1.41 percent last week from 1.43 percent the previous week.

SEC concludes Tyco exaggerated

CONCORD, N.H. - Tyco International Inc. used aggressive accounting to inflate financial results by nearly $400 million this year, but an exhaustive internal review found no ``systemic or significant fraud,'' the company said Monday.

In a long-awaited report to the Securities and Exchange Commission, the diversified manufacturing conglomerate said several accounting errors had been found and corrected, but that they were not material to the company's overall finances.

The report described a pattern of aggressive accounting by former management with the purpose of increasing reported profits.

Existing homes down for month

WASHINGTON - Fewer previously owned homes were sold in November, but sales for all of 2002 are on track for the best year on record as some of the lowest mortgage rates seen in decades beckon people to buy.

The National Association of Realtors reported Monday that sales of existing homes slipped to a seasonally adjusted annual rate of 5.56 million in November, a 3.5 percent decline from the previous month.

The slippage came after sales jumped by 5.9 percent in October to a rate of 5.76 million, the fourth-highest monthly pace on record.

J.P. Morgan signs contract with IBM 

NEW YORK - IBM Corp. and investment bank J.P. Morgan Chase & Co. signed a massive $5 billion contract Monday that will transfer the bank's computing responsibilities - along with 4,000 workers - to the technology giant.

The deal had been expected since November, when J.P. Morgan said it was focusing only on Armonk, N.Y.-based IBM for the outsourcing contract.

The seven-year contract, estimated by J.P. Morgan at $5 billion-plus, is one of the largest-ever technology services deals, and the biggest of four IBM outsourcing deals signed in the past month. Together, those contracts are worth close to $9 billion.