Lawsuit settled over derailed Sallie Mae deal

Sallie Mae, the embattled student-lending giant, reached a settlement Sunday over its scuttled $25 billion buyout, ending months of legal fighting that had cast a cloud over the company, according to people briefed on the agreement.

The company, formally known as SLM, agreed to settle with its onetime buyers, which include the private equity firm J.C. Flowers & Co., JPMorgan Chase and Bank of America, in exchange for a deal to refinance about $30 billion in debt due next month.

Both Sallie Mae's lawsuit and the buyers' counterclaims will be dismissed, and the merger agreement has been terminated, these people said.

A spokesman for Sallie Mae declined to comment, as did a spokeswoman for the buyers' consortium.

Since the near shutdown of the credit markets last summer, the company has been unable to issue new debt backed by its student loans.

Countrywide Financial

CEO to give up $37 million on exit

Countrywide Financial CEO Angelo Mozilo, under fire over his potential payout from the planned sale of his troubled mortgage company, says he is forfeiting $37.5 million in severance pay, fees and perks he was to receive upon his retirement.

Mozilo will still keep retirement benefits and deferred compensation already earned, Countrywide said in a statement being released today.

In addition to cash severance payments, Mozilo walked away from $400,000 per year to be a consultant to Countrywide, Countrywide agreed earlier this month to be acquired by Bank of America for $4.1 billion.

Cisco Systems

New network switch for remote storage

Cisco Systems plans today to introduce a network switch for corporations facing growing Internet data transfers and the increased use of applications that draw on remote data storage, known as cloud computing.

The switch, Nexus 7000, will increase traffic capacity to 15 trillion bits of data a second.

Cisco, the world's largest producer of network equipment, gave examples to illustrate the speed.

It said the switch could transfer all 90,000 Netflix movies in 38.4 seconds or send a 2-megapixel digital image to every person on Earth in 28 minutes.

Cisco has made a significant bet on the rapidly expanding data demands of the consumer Internet.

Its Nexus system, which will eventually replace a product line that represents about a third of its $35 billion business, has required roughly $1 billion in research and development and the efforts of more than 500 engineers in the last four years, the company said.

Cisco sees the market for the product as corporate computing operations and Internet service providers struggle to keep up with the torrent of data from new online services including movie downloads and Internet video games.

Industry analysts said the system is likely to have a notable impact on the way companies design data centers.

Internet commerce

Online shoppers up 40% worldwide

The number of people who have shopped on the Internet rose 40 percent worldwide in the past two years as more consumers bought goods on the Web, Nielsen said today.

More than 875 million people have gone online to shop, Nielsen said today in an e-mailed statement, citing research carried out in October and November.

That compares with about 627 million people in a similar survey two years ago.

South Korea had the highest percentage of online shoppers at 99 percent, followed by Great Britain, Germany and Japan at 97 percent.

Books were the top category, followed by clothes, shoes and videos, games and DVDs.

The most popular Web sites were those of eBay, Amazon.com and Target.

Gasoline

Pump price slips below $3 a gallon

The average price of regular gasoline at the pump fell 9 cents in the past two weeks to $2.98 a gallon, according to analyst Trilby Lundberg's survey of 7,000 filling stations nationwide.

Pump prices followed a drop in energy futures on concern about a slowing economy, and reports showing rising gasoline inventories.

The highest average price for self-serve regular was $3.35 in Honolulu. The lowest was in Tulsa, Okla., at $2.70.

Compiled from The Associated Press, The New York Times and Bloomberg News