The Ticker

Five ex-Madoff aides 
guilty of Ponzi scheme

Five former aides to Bernard Madoff who spent decades working for his firm were found guilty of helping run the biggest Ponzi scheme in U.S. history, a 
$17.5 billion fraud exposed by the 2008 financial crisis.

The three men and two women, hired by Madoff with little or no financial experience, were convicted on all counts. The defendants failed to convince a federal jury in Manhattan they were ignorant of the fraud while being part of the inner circle at his New York-based firm.
 The defendants are Annette Bongiorno, who ran the investment advisory unit at the center of the fraud; Joann Crupi, who managed large accounts; Daniel Bonventre, the ex-operations chief of Madoff's broker-dealer; and computer programmers George Perez and Jerome O'Hara, accused of automating the scam as it grew rapidly in the 1990s.

GrubHub eyes $148 million through IPO

Investors will soon be able to order shares of GrubHub for roughly the price of one of the online food delivery service's meals.

The Chicago-based company filed for an initial public offering in February but announced the terms of the deal yesterday. GrubHub plans to raise $148 million through the sale of 7 million shares, priced between $20 and $22. This figure is up from the $100 million proposed in the company's S-1 filing.

The company, founded in 1992, creates contracts with restaurants, primarily located in large metropolitan areas, to facilitate food orders for both pickup and delivery. As of Dec. 31, GrubHub provides services for almost 29,000 restaurants and processes 135,000 daily orders on average.

Today

 Standard & Poor's releases S&P/Case-Shiller index of home prices for January.

 Commerce Department releases new home sales for February.

 Conference Board releases the Consumer Confidence Index for March.

TOMORROW

 Commerce Department releases durable goods for February.

THE SHUFFLE

Timberline Construction Corp. of Canton has announced that Marc Cooperstein has joined the team as vice president and project executive.

And Bud Fraumeni recently joined the company as director of business development.

Cooperstein will be responsible for overseeing all aspects of each project's delivery and construction.

Fraumeni will focus his efforts on building existing and new client relationships for Timberline in the retail, restaurant, hospitality and multi-unit markets in the Northeast.

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Friendly’s puts it on the line

Friendly's CEO John Maguire — promising a friendlier, cleaner and tastier dining experience — said he's so confident of recent improvements to the struggling 79-year-old restaurant chain he's offering customers a free meal if they're not satisfied.

The Wilbraham company rolled out its "Great Memories Guarantee" in the Boston area last week to lure back customers with the promise that Friendly's has upped its game and is now living up to its name. The offer launches chain-wide on April 29.

"We heard loud and clear that our people were not that friendly, our food was mediocre and our restaurants were dirty," said Maguire, who was hired in April 2012. "We've been on a relentless mission to really improve our guest experience. We believe we've made enough progress to put our money where our mouth is."

Friendly's has updated its menu with items such as steel-cut oatmeal, Greek yogurt, spinach salad and turkey tips. It's returned to using fresh, never-frozen burgers and haddock for its Fishamajigs, and real ice cream rather than soft-serve in its Fribbles.

The chain has remodeled 45 of its 350 locations with modern touches such as high-top tables, free Wi-Fi and updated music. It's also developing employees more, Maguire said.

"Things are going well," said Maguire, who wouldn't quantify the progress.

Friendly's risk-free guarantee is a strong one, said food industry consultant Ron Paul. Though most eateries will comp some portion of an unhappy customer's bill, nobody else is advertising it, he said. "But I think they have to advertise the food. Why is it a better place to get a burger? Menu is most important."

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Giving back pain the chair

Like many people, Simon Hong works long hours sitting at a desk, and after years of doing this, the 44-year-old MIT neuroscientist had the back pain to prove it.

He tried standing desks and high chairs. But while some of them helped his posture, none of them addressed the other major problem he experienced: immobility.

"It's a fact that the discs in the spine don't have blood vessels," Hong said. "Instead, they get nutrients through diffusion. So if you sit tight and don't move for hours, that's when the diffusion is at its minimum, and the discs become dry and, eventually, deformed."

As far as he could tell, the office furniture manufacturing industry had not even attempted to tackle this problem. So Hong decided to draw on his understanding of the nervous system and his undergraduate work in mechanical dynamics to invent his own solution.

With a unique split seat, the patented Chairbot allows users to either sit on the full seat or sit on one side and stand on the opposite leg. Half the seat can be either manually lowered or raised, or a timer set to alternate the sitting side every few minutes.

"I thought it would be a perfect solution because sometimes I could sit, and sometimes I could stand," he said, "and the chair would do it for me automatically."

Beginning April 2, Hong will attempt to raise $200,000 in one month on the crowdfunding site Kickstarter to finance his robotic chair by accepting pre-orders for $2,700, or by offering a 137 percent credit toward a Chairbot, which will retail for $3,700 after May 2.

"Unfortunately, there are no stock components; everything is custom-made," he said. "But the hope is that if enough people buy the chair, it will be able to be mass-produced within a couple of years, bringing the price down to about $2,000."

Doris Peterkin, the CEO of the biotech OncoPep and a member of Massachusetts Institute of Technology's Venture Mentoring Service, said she tried the chair for a couple of hours a day over a one-week period and initially found the frequent seat changes "a bit disruptive" but got the hang of it by the second day.

"I can really see how this would be of benefit to people with back problems," Peterkin said. "I spend my entire work day at the computer and currently address discomfort by leaving my desk. The chair does remove the need to do that."

Dr. Jeffrey C. Schneider, an assistant professor in the Department of Physical Medicine and Rehabilitation at Harvard Medical School, said it's too early to tell exactly how useful the Chairbot will be.

"It is an interesting idea," Schneider said. "With more users and data, we will get a better sense of how well it works and if there are benefits."

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Survey: Economists see US growth pickup this year

WASHINGTON — With the pace of U.S. economic growth seen speeding up later this year and next, many business economists expect the Federal Reserve to end its bond purchases this fall.

The consensus of the economists surveyed by the National Association for Business Economics is that bad weather cut first-quarter growth to a weak annual rate of 1.9 percent. But they think growth could exceed 3 percent by year's end, bringing the annual rate to 2.8 percent.

Given the stronger growth forecast, 57 percent of the economists surveyed believe the Federal Reserve will end its bond purchases in the fourth quarter, as the central bank has signaled it plans to do. Some think it could happen even sooner.

NABE surveyed its 48 forecasters between Feb. 19 and March 5 for the report, released Monday.

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Driver wonders if antilock brakes all that effective

I have two cars with ABS — a 1999 Buick Regal and 2013 Toyota Corolla. I am wondering if ABS is really the best way for stopping on an icy road. This past week I had several occasions where I tried to stop as I approached a stop sign, but when applying and maintaining brake pressure the ABS engaged but did little to stop the car as I kept sliding. Then I did the old-fashioned pumping of the brakes with much better results! The ABS seemed to not work well on icy roads compared to the pumping technique. Is this only my experience or am I using ABS incorrectly?

Considering that antilock braking systems are capable of recognizing wheel lockup and modulating/releasing hydraulic pressure to restore rotation of the wheel many times per second — much, much faster than the human foot can accomplish — ABS should be more effective than pumping the brakes in slippery conditions.

But there may be mitigating factors. First, if the anxiety of not stopping as quickly as the situation warrants causes the driver to continue to press harder and harder on the brake pedal, the ABS tends to cycle more slowly because of the much larger releases of hydraulic pressure required to restore wheel rotation. These much deeper modulations will increase stopping distance measurably.

Recognize what provides the "best" stopping traction on ice — it's that moment just before and as the wheel/tire begins to lock up. At that instant the tread blocks on the tire surface are at the edge of their maximum traction, just before sliding. Since the ABS system can recognize and release hydraulic pressure at that precise moment much faster than the human foot, ABS should stop better on ice.

Is it possible the pumping action can be more effective? Not in my experience, but perhaps in a scenario where the locked wheel/tire is actually melting the ice under the tread. This is entirely speculative on my part — just trying to envision a scenario where pumping the brakes might be more effective.

But here's the bottom line. Neither ABS nor pumping the brakes can overcome the laws of physics. Experiencing either action is confirmation of going too fast and/or braking too late for existing conditions. On glare ice, I still want an ABS system to minimize the consequences of my mistake.

I have a 2014 Hyundai Sonata. Since I purchased it the catalytic converter makes a ticking noise when it gets hot. I had a previous 2012 Sonata that never had this issue — any thoughts?

The ticking sound from the exhaust as it cools down is completely normal. The sound is generated by the extraordinarily hot metal in the forward sections of the exhaust, including the converter and its heat shield, contracting as it cools. No worries. And I think you'll find that this ticking during cooldown will fade as you accumulate more miles on the vehicle.

How does really cold weather affect hybrid vehicles? I am thinking of buying one but not if they don't work well in really cold weather. Also, what if I go south in the winter — can my hybrid just sit in the garage for several weeks without any problem?

With a gas/electric vehicle, expect to see more "gas" operation in cold weather. More energy is needed to operate the vehicle and warm its interior. So the car likely will rely more heavily on its internal combustion engine and use more fuel. But even with the lower efficiency and reduced "hybrid benefits," the vehicle still will "work" reliably. And parking a hybrid for weeks, even months, won't be any more of an issue than with a conventional vehicle.

Paul Brand, author of "How to Repair Your Car," is an automotive troubleshooter, driving instructor, and former race-car driver. Readers may write to him at Star Tribune, 425 Portland Ave. S., Minneapolis, MN 55488 or via email at paulbrand@startribune.com. Leave a daytime phone number.

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Hope for mortgage forgiveness tax relief, extenders

WASHINGTON — Here's some good news for 
homeowners worried that Congress will fail again to renew popular tax benefits for use in 2014 — especially those allowing for mortgage debt forgiveness, write-offs for energy-saving improvements and mortgage insurance premiums.

Though there has been no formal announcement, the Senate Finance Committee under new Chairman Ron Wyden (D-Ore.), expects to take up a so-called "extenders" package within weeks, sometime this spring. "This is high on 'Wyden's' priority list," according to a source with direct knowledge of the committee's plans. That's an important change from last December, when then-Chairman Max Baucus (D-Mont.), who is now ambassador to China, let 50-plus corporate and individual tax benefits expire. The House also took no action to extend.

As a result, several key tax code housing provisions lapsed into a legislative coma. Without reauthorization retroactive to Jan. 1, they could disappear from the code and not be available for transactions this year. Both Baucus and House Ways and Means Committee Chairman Dave Camp (R-Mich.) focused on wholesale rewrites of the tax code last year rather than spending time on extending special-interest tax provisions.

But now there are signs that at least some of the expired housing benefits could be back on Congress' to-do list. What are these "extenders," as they are called on Capitol Hill?

Tops on the list is the Mortgage Forgiveness Debt Relief Act, a law that has saved large numbers of 
homeowners from hefty tax bills — close to an estimated 100,000 taxpayers in 2011, the latest year for which IRS estimates are available. First enacted in 2007 with menacing clouds of the housing bust on the horizon, the law carved out a special exception to the general rule in the tax code: When you are relieved of a debt burden by a creditor, the amount forgiven is treated as income subject to taxation at ordinary rates.

For qualified homeowners whose mortgage debt was reduced or written off by lenders in connection with loan modifications and short sales, the law said, the forgiven amounts would not be taxable. However, the 2007 carve-out for mortgages was temporary. Congress was required to extend it periodically — which it failed to do last Dec. 31. At least one state has a partial remedy for congressional inaction, however: California owners who sell homes through short sales are not subject to taxation on the amounts forgiven, a legal interpretation confirmed by the IRS.

Also part of the housing benefits that Congress failed to extend last December: A $2,000 tax credit for construction of energy-efficient new homes, deductions for home improvements that conserve energy, and write-offs for the mortgage insurance premiums that many borrowers pay in connection with low-downpayment loans.

Though Wyden is planning to take up an extenders bill soon, that does not guarantee that any specific tax law provision will be part of the bill the Finance Committee ultimately considers. Most tax analysts expect that a final bill will include some form of renewal.

The home energy conservation tax programs also are likely to be included in the Senate bill.

Meanwhile, in the House, Camp has not indicated when he plans to take up the extenders. He recently unveiled a comprehensive tax reform plan that would lower tax brackets, increase standard deductions and eliminate or sharply curtail most longtime housing tax benefits — including mortgage interest and property tax write-offs. Camp's bill did not mention reauthorization of the now-expired housing extender items, but he asked colleagues for their views on what might be retained in a large bill.

If, as expected, the Senate Finance Committee approves and the full Senate passes some form of extender package — including two or three of the housing provisions — election-year pressure on Camp to pass some version will be intense, despite his preference for comprehensive tax reform, which has no chance of passage in 2014.

Bottom line: Though there are hurdles ahead, the outlook for renewal of mortgage forgiveness debt relief — and possibly other housing benefits — looks more promising now than it has in months.

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Southboro’s Globoforce cancels IPO

A Southboro tech company canceled its initial public offering hours before markets opened yesterday, a move experts said was a sign of low demand for shares of Globoforce, not a trend that will drag down other tech companies looking to go public soon.

Globoforce, which makes employee recognition software for businesses, said late Thursday night it had canceled the deal after initially scaling down the IPO earlier Thursday.

"Despite receiving overwhelming interest in our initial public offering, we have decided to postpone our offering until market conditions are more favorable for our company and our customers," said Eric Mosley, CEO of Globoforce, in a statement.

Scott Johnson, managing partner of New Atlantic Ventures in Cambridge and an investor in Enernoc when it went public, said those "market conditions" were likely related to Globoforce, not the market in general.

"It's hard to conclude that this is the canary in the coal mine," Johnson said. "I would say the odds are this is a company-specific situation, where the investors' appetite for this particular offer was below the expectations of the company."

Matt Wong, an analyst with CB Insights, said one possible red flag was the company's distribution of revenue.

"Their 10 largest clients make up 70 percent of their revenue," Wong said.

A Globoforce spokeswoman declined to comment beyond the company's statement.

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'20s charm abounds in Belmont home

This classic colonial in Belmont has been updated but retains much of its woodwork and charming details, such as arched doorways.

Built in 1928, the five-bedroom home at 22 Adams St. lies in the town's high-end Presidential Estates subdivision. The gabled, hip-roofed house, with an attached two-car rear garage, has seen major kitchen and bathroom updates and new heating and central air systems. It's on the market for $1,395,000.

There's a custom stone wall-enclosed patio in the front yard, and a granite walkway leads up to the house, which has a brick exterior first floor and newly repainted light-blue clapboard above. There's a stone-floored entry with a coat closet to one side that opens into a large hardwood-floored foyer with a turning staircase.

To the left is a formal living room with hardwood floors, a beamed ceiling and sconce lighting. The sunny room has six windows and a wood-burning fireplace with a restored mantel.

A french door from the living room leads into a home office with built-in shelving. To the right of the foyer is a sitting room with hardwood floors and crown molding that leads through french doors into a formal dining room. This sunny room has five windows and restored maple floors.

It segues into an L-shaped recessed-lit kitchen that underwent a major renovation in 1997, including restored maple floors. There are over 40 custom hand-painted white cabinets in three distinct areas above and below black granite countertops. There's a dining area with two windows and six glass-fronted cabinets. The main preparation area has lots of drawers and shelves, and an adjacent pantry area has large cabinets. There's a stainless-steel Thermador gas stove and two black Thermador wall ovens, a stainless-steel LG dishwasher and Kitchen Aid compactor and a Maytag side-by-side refrigerator that was added last year.

There's a door from the pantry area out to a rear deck with cedar floors and mahogany railings that has stairs down to a small grass backyard. Back inside, at the back of the first floor, is a guest bedroom with two windows as well a full bathroom added in 1998 that has a blue tile floor, white-tiled walk-in shower and a white pedestal sink.

There are three bedrooms on the home's second floor reached via a turning staircase in the foyer.

The master bedroom suite underwent a major renovation in 1998 with restored hardwood floors and a custom walk-in closet with built-in drawers and cabinets. The en-suite bathroom has a beige marble floor and marble-topped double-sink vanity. There's a white-tiled double steam shower with a marble bench and a skylight above.

The second and third bedrooms are good-sized, and both have hardwood floors and alcoves with built-in desks on one side and dresser drawers on the other,

A second full bath was redone in 1998 with a white marble floor and marble-topped double sink vanity and a white-tiled walled whirlpool tub and shower.

The carpeted fifth bedroom is one floor above in a converted attic with a window.

The home's basement was remodeled in 2001. Stairs lead down to a ceramic-tiled laundry and storage room with a wall of floor-to-ceiling cabinets and a full-size Maytag washer and dryer.

Off this room is a large, carpeted recessed-lit family room with a wood-burning fireplace.

A closet holds a heating and central air-conditioning system added in 2001, at which time new electrical,. plumbing and coaxial cable wiring were also upgraded.

There's also an attached two-car garage in the basement, with automated doors and parking for an additional vehicle under the deck and in a long driveway. But there's no direct access to the house from the garage.

There's not a lot of yard space, but the area around the home is nicely landscaped with birch trees and flowering bushes.

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Health Connector tab grows

The state could lose up to $90 million in federal funds because lingering problems with its disastrous Obama­care website have kept tens of thousands of people on health plans that were supposed to expire in January — forcing it to burn up cigarette tax funds to fill the gap — and that's only part of a fast-approaching hit on taxpayers, experts told the Herald.

"Ninety million extra is a floor for what the coming taxpayer bill will be," said Joshua Archambault, a health care expert at the Pioneer Institute. "Taxpayers will pay for all the pieces of this puzzle that they wouldn't be paying for if the site had worked."

The Health Connector is asking for an extension through Sept. 30 for more than 100,000 people on subsidized plans known as Commonwealth Care — who haven't been able to move to Obamacare-compliant plans because of the bad site, leaving the Bay State with an approximately $10 million a month penalty in federal funding.

"This is the impact of lost federal revenue, lost federal support, due to IT system challenges," Administration and Finance Secretary Glen Shor told the Herald yesterday. So the state will now tap a Connector trust fund used to subsidize health care costs — including cigarette tax revenue — to help fix the mess.

But the $90 million is just one of the costs piling up in the signature Democratic program that has become a headache for Gov. Deval Patrick. Optum, the company hired earlier this year to address technology issues, is charging $16.4 million just through March. Consulting group MITRE also reviewed the system and filed two different reports, though it's unclear how much they'll be paid.

Developer CGI has only been paid $15 million of its $69 million milestone-based contract, but it is unclear whether the state will have to shell out more. Then there is the cost of placing 84,000 Bay Staters on temporary Medicaid coverage — after the state was overwhelmed by the backlog of applications and couldn't process them before applicants' plans expired.

"The cost of temporary coverage will still need to unfold," Shor said. "There are a number of variables."

Stakeholders find the uncertainty unacceptable.

"It's concerning that the state remains unable to quantify the total cost of ownership for their utter failure to comply with the federal health care overhaul," said David A. Shore of the Massachusetts Association of Health Underwriters. "Perhaps more concerning is their complete lack of transparency and accountability on these complex financial issues to residents of the commonwealth."

The experts say with temporary insurance, some new customers who are eligible for some subsidies are essentially getting a free ride now — avoiding hundreds of dollars in premiums and out-of-pocket costs — while the state figures out their eligibility. An unknown number of applicants may not be eligible at all.

"Literally anybody in the commonwealth could sign up right now and be put onto the program," Archambault said.

Exactly who pays for the expenses they rack up in the meantime is still unclear, but Shore predicted all of this will simply drive up health care costs in the end.

"History suggests that the administration will attempt to recoup these monies through assessments on health insurance premiums paid for by small businesses and individual consumers," Shore said. "This is something that all consumers should watch carefully."

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Howard Johnson Inn to get ‘edgy’ redo

An "edgy" and "irreverent" 94-room boutique hotel paying homage to the Fenway's musical and artistic history will replace the shuttered and past-its-prime Howard Johnson Inn.

Samuels & Associates plans to open The Verb this summer after an 
$18.8 million-plus redevelopment that will include an interior gut-renovation of the Boylston Street property while preserving the 1959 building's mid-century facade and architecture.

It will be the first hotel for Samuels, which is credited with breathing new life into the Fenway with numerous residential, retail and office projects, including Fenway Triangle Trilogy, 1330 Boylston St. and the Van Ness Building. For this development, it is partnering with Weiner Ventures and Spot-On Ventures, developers of the Mandarin Oriental Boston.

"We're completely refurbishing the entire building," said Spot-On principal Robin Brown, a former 13-year general manager of the Four Seasons Hotel Boston. "It was a very high-quality building that lacked in love. We're more than tipping our hat to the original architects' design intent, making it authentic, but modern."

The team hired a London branding firm to brainstorm about the hotel's positioning, its style of service and attitude, and its name.

"Everything about the hotel will be a little bit irreverent," Brown said. "This is like me having a midlife crisis of hotels that's grounded with superb service and superb details, nailed with a huge sense of humor. This is not going to be a serious hotel."

The hotel's lobby will include a DJ spinning vinyl albums that will be on display. Boston music and pop-culture memorabilia ranging from historic Boston Phoenix covers to photos of musicians who performed in Boston or appeared on WFNX-FM radio also will decorate the public spaces.

"Once we really got to know the building, we saw that (it) really had great bones," said Leslie Cohen, Samuels' executive vice president of development. "We thought this was a great opportunity to create a spectacular new product in short order. Hotel rooms are in high demand."

Room rates are expected to start in the $200 range.

The hotel will include a heated outdoor pool and deck, along with a 4,000-square-foot, three-meal restaurant and bar.

"We're looking for (a chef) that fits in with the vibe of the Fenway — someone who is up-and-coming and consistent with our restaurateurs," Cohen said.

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