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Spokane, Washington  Est. May 19, 1883
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FDA chides Cheerios claims

The Food and Drug Administration has rapped General Mills’ corporate knuckles, telling it to quit promoting its flagship Cheerios cereal as a cholesterol fighter.

For its part, General Mills says the complaint is only about how Cheerios is promoted, and the FDA isn’t questioning whether the cereal actually lowers cholesterol.

Specifically, the FDA says the company’s claim that “you can lower your cholesterol 4 percent in six weeks” amount to marketing the cereal as a drug.

That claim, along with similar assertions about Cheerios’ cancer-fighting and heart-healthy qualities, amount to “unauthorized health claims” and violate the federal Food, Drug and Cosmetic Act, the agency said.

In a warning letter sent to General Mills a week ago, the local FDA office gave the company 15 days to explain how it will correct the violations.

Washington

Freddie Mac seeks $6.1 billion more

Mortgage giant Freddie Mac is looking for $6.1 billion in additional government aid as the cost to taxpayers from the housing market bust keeps growing.

The McLean, Va.-based company, seized by federal regulators in September, on Tuesday posted a loss of $9.9 billion, or $3.14 per share, for the quarter ending March 31. That compared with a loss of $149 million, or 66 cents a share, in the year-ago period.

The request for federal aid is Freddie Mac’s third since the takeover, for a total of about $51 billion.

Lawsuits near on auto warranty calls

Federal regulators are close to filing lawsuits against companies behind a national wave of spam “robo-calls” that warn people their auto warranties are about to expire and offer new service plans, two senators said Tuesday.

The Federal Trade Commission has started investigations into several companies involved in the deceptive calls, and the agency expects to bring cases against them within days, Sens. Charles Schumer, D-N.Y., and Mark Warner, D-Va., said at a news conference. The FTC also is providing a link on its Web site for consumers to file complaints.

The message “Your Car Warranty Has Expired,” offering a deal on an extended warranty, already has brought some 300,000 inquiries and 4,000 complaints to the Better Business Bureau from consumers who received the calls over the past two years.

Detroit

Ford shares fall on stock sale news

Shares of Ford Motor Co. tumbled nearly 18 percent Tuesday after the automaker said it will sell 300 million common shares to help fund its health care trust for retired autoworkers and general operations.

Ford, the only major U.S. automaker that has not accepted government aid, had seen shares rally in recent weeks while its bailed-out Detroit competitors fight for survival. But shares of Dearborn, Mich.-based Ford fell $1.07 Tuesday to close at $5.01 on news of the stock sale. Analysts noted that share value generally falls once a large offering is disclosed as existing investors shrink positions before they can be diluted.

Miami

Foreclosure notices rose 32 percent

The number of U.S. households faced with losing their homes to foreclosure jumped 32 percent in April compared with the same month last year, with Nevada, Florida and California showing the highest rates, according to data released today.

More than 342,000 households received at least one foreclosure-related notice in April, RealtyTrac Inc. said. That means one in every 374 U.S. housing units received a foreclosure filing last month, the highest monthly rate since the Irvine, Calif.-based foreclosure listing firm began its report in January 2005.

April was the second straight month with more than 300,000 households receiving a foreclosure filing, as the number of borrowers with mortgage troubles failed to abate.

From wire reports
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