Wednesday morning headlines

Day-after selling: Wall Street still can't sustain a rally. Yesterday's big gain has been followed by a down day, with the Dow off over 100 points in early trading. (AP)

More on Madoff: Here's an interesting slant: A Bev Hills investment firm, Brighton Co., has been sued over losses related to the Madoff scandal. But the head of Brighton, according to the suit, is Stanley Chaiss, a philanthropist who had served on charitable boards with Madoff - and who says that he was himself a victim. (LAT)

And what of the SEC?: Er, it sort of messed up by not going after that bad boy. And there apparently were plenty of chances. From the NYT:

“Our initial findings have been deeply troubling,” Christopher Cox, the S.E.C. chairman, said in his statement. The commission received “credible and specific allegations regarding Mr. Madoff’s financial wrongdoing,” but did not respond aggressively, he said. “I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them,” Mr. Cox said. Moreover, Mr. Cox said, the commission will investigate “all staff contact and relationships with the Madoff family and firm, and their impact, if any, on decisions by staff regarding the firm.”

[CUT]

One of the commission’s investigative teams that had examined the Madoff firm was headed by a lawyer named Eric Swanson, who served for 10 years as a lawyer at the commission and left in 2006 while he was an assistant director of the office of compliance inspections and examinations in Washington. In 2007, Mr. Swanson married Shana Madoff, a niece of Bernard L. Madoff and daughter of his brother, Peter Madoff, the firm’s chief compliance officer. Ms. Madoff is the firm’s compliance attorney.

Job cuts at Western Digital: The Lake Forest maker of hard drives plans to cut 2,500 positions, or 5 percent of its work force. It's also reducing executive pay. The company says demand for the current quarter is "significantly below" what it expected when it gave a revenue guidance in October. (AP)

Businessman indicted: Milton Retana is charged with fraud and making false statements in connection with a scheme that allegedly lured more than 2,000 people into investing $62 million. The case was apparently cracked when postal inspectors raided a Spanish-language religious bookstore in Huntington Park and found envelopes filled with $3 million in cash. (LAT)

Hotel workers sue: Owners of the LAX Hilton are accused of violating California wage and hour laws (this is the same place where workers have tried to unionize. The lawsuit, filed in L.A. Country Superior Court, charges management with denying employees the meal and rest breaks. (LABJ)

Another nail for SAG?: Fox has pulled back from yesterday's statement that it would not rule out switching its current TV series from SAG to AFTRA contracts. SAG says the network is using illegal scare tactics. From Variety:

SAG and AFTRA share jurisdiction over primetime series, with the longstanding agreement that SAG covers shows shot on film, while AFTRA covers shows shot on video such as multicamera sitcoms, soaps, daytime and latenight talkshows. But the unions haven't sorted out which covers primetime shot in high-definition digital formats, and that's led to AFTRA expanding its jurisdiction by signing pilots. Fox, regarded as being among the most hawkish of the congloms toward unions, could have conceivably decided to change the format of its studio's key SAG series ("24," "My Name Is Earl," "How I Met Your Mother," "Bones") from film to digital -- thus paving the way for signing those shows with AFTRA.