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Show Friday, April 28, 2000 | The Salt Lake Tribune BUSINESS America increasing $2.70 over last season to $37. That's the largest increase in seven years, according to a survey of 30 theme parks by Amusement Business, a trade magazine. {Someparks are also raising the price of children’s tickets. Last week, Disneyland began applying its adult price of $41 to visitors 10 and older. The price previously started at age 12. Industry officials said the increases are justified by the investments parks have made in new and better rides. Andhalfofall visitors receive somekind of discount, said John Graff, president of the International Association of AmusementParks andAttractions in Alexandria, Va. Theme parks in Florida and California are amongthecostliest, charging as muchas $46 peradult. Parks in the Midwest, such as Holiday World in Santa Claus, Ind., costaslittle as $27 per adult. Interest Rate Falls For 30-Year Mortgage MCLEAN, Va. — The average interest rate on a 30-year home mortgage fell this week, Freddie Mac said. Rates on one-year adjustable mortgagesrose. The 30-year,fixed-rate mortgage fell to 8:13 percent in the week that ends tomorrow from 8.16 percent last week, according to Freddie Mac, the No. 2 buyer of US. mortgages. The average rate on a one-year adjustable mortgage, meanwhile, rose to 6.77 percentthis week from 6.76 percent the previous week. ‘The average 15-year mortgage rate fell to 7.79 percent from 7.82 percent. This week's 30-year rate puts the average principal and interest paymentwith 1 point on a $100,000 loan at $742.85, compared with $660.61 when therate was 6.93 percent a year ago. For manyinvestors, Friday, April 14, was a frightening day, as the Nasdaq Composite Index plunged a record 355.49 points, or 9.7 percent. For Mehrdad Bradaran, who had been trading on margin — with borrowed funds — it was a reputation amongairlines ina new surveyof U.S. adults, while SouthwestAirlines Co., in the No. 2 position, topped domestic carriers. The survey was conducted over the Internet by the Reputation Institute and opinion research firm Harris Interactive. The poll asked respondents to take into account factors including safety, on-time performance, customer service and food quality. Other than Southwest, Delta Air Lines Inc. wasthe onlyU.S.airline to crack the survey's top 10. Deutsche Lufthansa AG, Scandinavian Airlines System and KLM Royal Dutch Airlines NV rounded out the top five. “Foreign-based airlines clearly Callers Face New Area Code @ Continued from E-1 a neighbor or a second phone line within a home.Also, if the state ever needed additional area codes, some areas could end up with overlay upon overlay, creating mass confusion, the commission said. “We know theplan is not perfect, but given the alternatives before us, (the 801] split is the least confusing and causes the fewest Mechanics Compete to See Who’s Best @ Continued from E-1 i 4 off the hook wiith these mar gin issues. In part, brokerage firms are seeking to avoid a repeatof past difficulties in collecting margin loans frorh customers. After the 1987 stockmarket crash, brokerage firms were “chasing customers . . . because they didn’t act quickly enough,” notes Richard Ryder,editor ofSecurities Arbitration Commentator, a Maplewood, funds, is now worth just $8,000, he says. “If they Investors can generally borrow as much as funds — alwaysa risky strategy — can be risk- ier than they ever imagined whenthe marketis going wild. That’s because some brokerage firms exercised their right to change marginloan practices without notice during the mar- ket's recent nose dive. The result: Customers were given only a few hours orless to meet a margin call, rather than the several days they are typically given to de- positadditional cashorstockin their brokerage account,or to decide whichsecurities they want tosell to cover their debts. And somefirms, such as Waterhouse,also sold out some customers’ accounts without any prior notice, as they are allowed to under margin-loan agreements signed by customers. Melissa Gitter, a Waterhouse spokeswoman, saysit is the firm's policy not to discuss individual customers. But she acknowledged that someinvestors were sold out without notice. “We acted prudently and did what webelieved wasin the best interest of customers and the firm,” she says. “All the actions were in accordancewith thefirm’s margin agreements.” This tougher posture regarding margin calls comes ata time when investors have been borrowingrecord sumsto buy stocks — $278.5 billion at the end of March, according to New York Stock Exchange figures. Though margin lending has been highlyprofitable for brokers, regulators fear that firms could wind up on the hookif falling share prices leave customers unable to pay off their debts. N.J., newsletter. “It's the memory of 1987 that’s got regulators standing atattention andcalling brokers to heed.” 50 percentof the valueof their stocks. Once the purchase is completed, an investor's equity — the currentvalueofthe stocksless the amount of the loan — mustbe equal to at least 25 percent of the current marketvalueof the shares. Many brokerage firms set stricter requirements. If falling stock prices reduce equity below the minimum, an investor may receive a margin call. The actual amount an investor must fork over to meet a margin call can be a multiple of the amountofthe call. Thatis because the value ofthe loan stays constanteven whenthe market valueofthe securities falls. Manyinvestors were stunned bytheir firms’ actions, either because they didn’t understand the margin rulesor ignored thepotential risks. There aren't any public statistics on the numberof investors affected, but the margin calls accompanying April’s market roller coaster haveclearly hit a nerve. “My phone has been ringing off the hook with these margin issues,” says Brian Carlis, a Princeton, N.J., securities lawyer whoreceived calls from investors wondering if they had a claim against their brokerage firm. Disgruntled investors have also been sharing tales ofwoe on Internet message boards. William Nelson, a real-estate salesman in South Brunswick, N.J., says he called Waterhouse on April 14 to check on the statusof his account, which had received margin calls earlier in the month whenstock prices dropped. Nelson says he was told that he needed to immediately bring in $2,533. But whenhearrived at his Waterhouse branchoffice in Iselin, N.J., later that morning with $2,600, he wastold that he actually owed $6,000. Nelson says he couldn't come up with the Service in SomeCities THE ASSOCIATED PRESS e NEW YORK — AetnaInc., the nation’s biggest health insurer, plans to stop offering HMO coverage to seniorsin several cities next year because the business is no longerprofitable. Aetna, whose stock has slumped in recent months, said Thursday that a “substantial” numberofits 670,000 Medicare health maintenance organization members will be affected. ‘The Hartford, Conn.-based company said it will disclose which cities it will exit on July 1, whenit is required to inform the federal government. The members are located mainly in the Northeast, California and Texas. Aetna is one of several large HMOstocurtail its Medicare business in the past two years because they say the federal government no longer pays them enough. disruptions,” said Steve Mecham, chairman of the Public Service Commission. “It also reflects the sentiment of the people whoattended the four public hearings we held on the issue in March.” The FCC and the NANPArequired the commission late last year to create a relief plan for the 801 code. NANPA,which oversees area-code assignments nationwide, has estimated that 801 numbers will be exhausted by mid-2001. Officials have said Utahns can blame declining numberavailability on the growing population and all the fax machines, wireless phones, pagers and telephone company competitors that have emerged in recent years. But the commission wants to hold off a new area codefor as long as possible by conserving numbers, largely by requiring phone companies to donate any unused numbers they are storing. Many states, concerned with minimizing disruption to consumers and businesses, have been proposing conservation efforts. Since last fall, 25 states have petitioned the FCC for mandatory conservation authority; 10 have been granted and 15 are pending, said Rebecca Barnhart, spokeswoman for NANPA. The FCC has notindicated when it will rule on the Utah proposal. If imposed in 2001, the new area code would come aboutfour years after Utahns living outside of Davis, Morgan, Salt Lake, Utah and Webercounties were assigned the “435” area code.Its use became mandatory inlate 1998. Cindy Longacre of Ford Motor Co, And those who continue training while on the job can earn $75,000 a and took high school to the national finals 15 coached the team that won the national competition in 1987. domestic airlines,” said Gordon Black, chairman and chief executive Harris Interactive. U.S. domestic carriers “trailed their foreign counterparts in measures of service, food, and fety.” The survey of 20,867 U.S. adults was conducted in a one-week period ending March 10. Respondents were asked to indicate their familiarity with 10 U.S. carriers and 15 international carriers. Each person wasthen asked to rank two of the airlines they were familiar with based onthecriteria. Congress investigated the performance of majorU.S.airlines last year in response to a dramatic rise in consumer complaints, prompting carriers to take steps to im- prove service. When he checked the value of his accountat firm $2,200. “I understand they have to protect their interest, but they gave me no chance to protect myinterest,” he says. Another Waterhouse customer, Mohammad Shaikhsaheb,an electrical engineerliving near Los Angeles, complains that his account was liquidated without notice as plunging stock prices drovethe valueof his equity below what he owed. Whenhecalled to complain,he says, a Waterhouse employee told him that “even if we wanted to give you call, there were about 20,000 people [with margin calls] and we couldn't have donethat.” Gitter says Waterhouse's policy is notto disclose margin statistics, She says Waterhouse “reached out to customers whose equity levels were in violation of the 25 percent requirement.” She adds, “we prioritized our efforts based on thesize of the margincall, with priority calls madeto those whose [margin]calls exceeded $10,000.” Gitter says “a special pop-up screen” was put in place after Friday's plunge that automatically notified customers that margin calls were due immediately. “In cases where customers did meettheir margin obligation [but had their accounts liquidated anyway], we already have, and will, adjust the account accordingly,” she adds. i Someclients of other brokerage firms were affected as well. Larry Marshall, the ownerofan executive-search firm wholives in Malibu, Calif., says Merrill Lynch & Co. told him the Monday after the market's drop that he would have to meet an $850,000 margin call immediately. Normally, he says, the firm gives him three to five days to come up with additional funds. Becauseoffalling share prices and margin calls, Marshall says,the value ofhis account has dropped from roughly $10 million to about $5 million. “They pulled the rug out from under me,”he says. A Merrill Lynch spokeswoman says “as a matter of good businesspractice in periods of extreme volatility, offices may be asked to exercise the most prudent measures — clearly outlined in our margin policy — to responsibly manage the risk associated with leveraged accounts.” Meanwhile,securities lawyers sayit is difficult, though not impossible, for investors to recover damages whenbrokers sell them out to meet margin calls. “While the firms can do pretty much anything they want it has to be reasonable,” says one attorney. City, SOS provides staffing and information technology services. Qa FirstWorld Communications Inc., a company that provides In- ternet services and hosting, has moved to a new 30,000-square-foot Internet data center at the Triad Center in downtown Salt Lake City. The company, which employs about 20 people in Salt Lake City, focuses on small- to-mid-sized businesses. FirstWorld, based in Denver, bought InQuo, a Utah Internetservice provider, in June. Q i Nature’s Sunshine Products Inc. reported net income of $4.5 million, or 26 cents a share,for the quarter ended March31,cot with net incomeof$5 million, or’28 cents a share, for the same period last year. Revenue increased to $80 million for the quarter compared with $72.2 million for the same périod in 1999. Nature’s Sunshine, based in Provo,sells nutritional andrelated products. Q Simon Transportation Services Inc., a West Valley Citybased truckingfirm specializing in temperature-controlled product delivery in the United States, Canada and Mexico, has retained Carl Thompson Associates, an investor relations firm, to enhance the company’s communications with its shareholders and the financial community. “e Aetna to Stop HMO enjoy a better reputation than most customer divi -reinvestment program. Waterhouse told him there wasn’t enough time. had liquidated his account and that he owed the Group,to reduce his $52,000 in borrowings. At least the worst was over, Bradaran figured, as tech stocks soared the following Monday — only to learn Monday evening that Waterhouse’s Santa Monica,Calif., branch had sold an additional $20,000 of stock “without even notifying me,” he says. His account, which had been worth $28,000 notincluding his borrowed had given me a call, and I had deposited the money, I would have gained backatleast half” of the $20,000 in losses when the market rebounded,he claims. Bradaranis one of manyinvestors who have discovered that buying stocks with borrowed cash i because he had to be at work by noonbutoffered to transfer funds from an- otheronline brokerage account or from a 2 p.m., Nelson says he found that Waterhouse Brian Carlis Securities lawyer ee margin call from his broker, TD Waterhouse Of Americans for Best Airline BLOOMBERG NEWS . disaster. The value of the California engineer’s technology-laden portfolio plummeted, forcing him to sell $18,000 of stock and to deposit an additional $2,000 in cash in his account to meet a Singapore, Southwest Top Survey WASHINGTON — Singapore Airlines Ltd. had the best overall _ “My phone has been ringing year. Going into the contest, Dixie High's team was not a favorite. Cottonwood and Viewmont have dominated the competition in recent years. Viewmont fifth this year. Romney is in his first year of teaching auto mechanics at the Driving oneofthe new Jaguars —an XK edan or the new sports car, an S-TYPE sedan- perhaps thebest way to ease stress and tension. Their sensuous Connolly leatherinter He is familiar with such competitions, however. He taught automobile mechanics in gprizona for embraceyouin soothing comfort. And their powerful AJ-V8enginesenable youto outrun nearlyevery carein the world. If onlyall therapists were this effective. GROUP THERAPY. 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JAGUAR ss SBESPSSSEVTErereerereeee PESVEVrer Amusement Park Fans . . . Paying HigherPrices Mme <2zz-cor . Investors Feel Downside of Margin Buying | RsPe ySOE=z12 — PPeroescexrvizt- , O9everoOess. 22 ae CENTERPIECE |