Wednesday morning headlines

Market watch: Could be an interesting day, with the Fed coming out of its two-day meeting and investors likely to sell off some recent gains. In early trading, the Dow is down 100 points.

All AIG all the time: The outcry over the $165 million in bonuses continues to take center stage as AIG CEO Edward Liddy offers little defense. Liddy was brought in after the government intervened last fall and he's only making $1 a year. Meantime, is anyone talking about the much more important issue - specifically, the government's plan to handle all those toxic assets? MSNBC has the live feed. (AP)

Madoff's accountant charged: David Friehling, who ran a two man firm, surrendered to federal authorities this morning. He's been charged with securities and investment adviser fraud in connection with the Madoff Ponzi scheme. A tiny accounting firm in charge of such a large enterprise was always considered a red flag. From the NYT:

Mr. Friehling’s arrest comes days after his 80-year-old father-in-law and former partner, Jeremy Horowitz, who had been suffering from cancer, died in Florida, on the same morning Mr. Madoff pleaded guilty in United States District Court in Lower Manhattan, the same courthouse where Mr. Frielhling will appear to be arraigned later Wednesday. Mr. Horowitz had in recent days been interviewed by federal investigators who have been piecing together information about Mr. Madoff’s Ponzi scheme, the person briefed on the matter said.

More troubles for Dreier: The government now says that he sold more than $700 million in phony real estate development notes and fake pension plan notes during his four-year scam. The new indictment adds a count of money laundering and alleges there were more victims than initially thought. (The NY attorney opened a large L.A. office a few years back.) From the National Law Journal:

In addition to the 13 different funds and three individuals who are now alleged victims of his scams, the indictment states that Dreier "enlisted financial professionals to assist him in finding purchasers of the fictitious promissory notes and paid those individuals a percentage of the proceeds received." It also states that Dreier "attempted to sell the notes to numerous additional potential investors and funds."

California ranks last: CEOs surveyed by Chief Executive magazine say it's the worst state for doing business. We're near the bottom for cost and business unfriendliness.

Details on bankruptcy: Namco Capital Group, which is controlled by L.A. businessman Ezri Namvar, owes $545 million to 464 creditors. He was forced into bankruptcy in December by creditors who had not been paid and who were fearful he was paying other creditors preferentially. Many of his investors were members of the Persian Jewish community in and around Bev Hills. (Business Journal)

Lions Gate mounts defense: The movie/TV studio, looking to brush back the demands of shareholder activist Carl Icahn, has hired Morgan Stanley and the law firm Wachtell, Lipton, Rosen and Katz. Icahn has threatened to mount a proxy battle, saying he may call a special shareholders meeting to elect directors. (Reuters)

Zucker defends CNBC: The CEO of NBC Universal said it was "incredibly unfair" for Jon Stewart to take shots at his financial cable network. Zucker was at a McGraw-Hill media summit. From paidContent.org:

Everybody wants to find a scapegoat. I’m upset that my 401(k) isn’t what it was. But to suggest that CNBC is responsible is absurd. Last year, Jim Cramer was out in front during two days in particular, when he went after Ben Bernanke. He told viewers six months ago to go to cash now. It’s like holding BusinessWeek responsible for Nov. 2007 for suggesting that AIG was the best stock to buy. You can’t look at any singular call that CNBC or Jim Cramer makes. I’m incredibly proud of what we’ve done.”