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Business Highlights

The Associated Press

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HP claims fraud prompted $5 billion overpayment for company

NEW YORK (AP) â¿¿ Hewlett-Packard Co. said Tuesday that it's the victim of a multi-billion dollar fraud at the hands of a British company it bought last year that lied about its finances.

HP CEO Meg Whitman said executives at Autonomy Corporation PLC "willfully" boosted the company's figures through various accounting tricks, which convinced HP to pay $9.7 billion for the company in October 2011.

Autonomy's former CEO said HP's allegations are false.

HP is now taking an $8.8 billion charge to align Autonomy's purchase price with what HP now says is its real value. More than $5 billion of that charge is due to false accounting, HP said.

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Ex-hedge fund trader charged in $276 million insider scheme

NEW YORK (AP) â¿¿ A former hedge fund portfolio manager was arrested Tuesday in what prosecutors are calling perhaps the most lucrative insider trading scheme of all time â¿¿ an arrangement to obtain confidential, advance results of tests on an experimental Alzheimer's drug that helped investment firms make more than $276 million.

Mathew Martoma, 38, was charged in U.S. District Court in Manhattan with using the information to advise a hedge fund owner to buy shares in the companies developing the drug, then later to dump those investments and place financial bets against the companies when the tests returned disappointing results.

Martoma's trades helped reap a hefty profit from 2006 through July 2008, while he worked for CR Intrinsic Investors LLC of Stamford, Conn., an affiliate of SAC Capital Advisors, a firm owned by Steven A. Cohen, one of the nation's wealthiest hedge fund managers.

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Bernanke warns Congress to avoid 'fiscal cliff'

WASHINGTON (AP) â¿¿ Federal Reserve Chairman Ben Bernanke on Tuesday urged Congress and the Obama administration to strike a budget deal to avert tax increases and spending cuts that could trigger a recession next year.

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