By Bernie Woodall

DETROIT (Reuters) - Chrysler Group LLC said it would recall 2.7 million older Jeep models after initially fighting a recall request from U.S. regulators in a dispute over crash protection for their fuel tanks.

The recall will affect Jeep Grand Cherokee SUVs from model years 1993 to 2004 and Jeep Liberty SUVs from 2002 to 2007.

While Chrysler stood by its assertion that the vehicles are not defective, the automaker acknowledged consumer concerns and said it may upgrade the rear structure of the vehicles, which have their fuel tanks situated behind the rear axle.

"Chrysler Group's analysis of the data confirms that these vehicles are not defective and are among the safest in the peer group," said a statement from Chrysler, controlled by Italy's Fiat .

The National Highway Traffic Safety Administration on June 3 asked Chrysler to recall the two Jeep models because the placement of the fuel tank leaves them less protected in the event of rear-end crash and could lead to a leak and fire.

NHTSA said on Tuesday it was pleased with Chrysler's decision to recall the vehicles, but said it will continue to investigate the issue, including a review of the documents provided by Chrysler.

The safety agency's data shows that 51 people have been killed in rear-end crashes involving the two Jeep models affected. Chrysler early this month said NHTSA's investigation was flawed, and that fuel leaks and fires were extremely rare.

Alec Gutierrez, analyst with industry consultant Kelley Blue Book, said consumers have recently been forgiving of automakers who comply with recalls.

"This outcome will not only help consumers, but also Chrysler, as there was also danger that sales could decline if they had refused the recall," said Gutierrez.

A company spokesman declined to estimate the cost of the recall.

Sandy Munro, president of consultancy Munro & Associates in suburban Detroit, said a conservative estimate of the recall's cost is $300 million.

Chrysler's net income for the first quarter was $166 million.

Resisting a recall requested by federal regulators is rare in the auto industry. The last time Chrysler fought a recall request for one of its vehicles was in 1997.

Munro said that Chrysler was being forced to "fix something that doesn't need to be fixed" and said the incidence of problems for the Jeep models is low considering how many miles they have been driven.

Chrysler earlier this month said that the Grand Cherokee and Liberty SUVs met safety requirements in effect at the time of their manufacture.

(Reporting by Bernie Woodall; Editing by Gerald E. McCormick and Tim Dobbyn)

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By Nate Raymond

NEW YORK (Reuters) - Two former hedge fund managers persuaded a U.S. appeals court on Tuesday to allow them to remain free on bail as they seek to have their insider-trading convictions thrown out.

Todd Newman, a former portfolio manager at hedge fund Diamondback Capital Management, and Anthony Chiasson, co-founder of hedge fund Level Global Investors, had been set to begin prison sentences later this summer.

The two were convicted in December of illegally trading in Dell Inc and Nvidia Corp stock based on non-public information supplied by research analysts.

After a hearing on Tuesday, the 2nd U.S. Circuit Court of Appeals in New York granted their request to remain free on bail while they pursued their appeal, which they argued raised substantial issues under the law.

Chiasson, 48, and Newman, 45, have been free on $2.5 million and $3 million bonds, respectively, since their arrests in January 2012.

Newman was scheduled to begin serving his sentence on July 8 after a judge gave him a 4-1/2-year prison term in May. Chiasson was set to begin serving on August 13 after being sentenced to 6-1/2 years in prison.

The case raises legal issues of whether prosecutors at trial must prove a recipient of a tip knew that the person who provided the illegal information did so for a personal benefit.

Judges have disagreed on this point in recent cases.

Lawyers for Chiasson and Newman argued that in their case, U.S. District Judge Richard Sullivan declined to instruct the jury that the two men had to have knowledge of the alleged benefit received by the tipper.

Mark Pomerantz, a lawyer for Chiasson, said the jury was improperly instructed, affecting how the trial was conducted.

"The trial would have assumed an entirely different dynamic," he said.

The same legal issue was recently raised in the case of Michael Steinberg, a fund manager at SAC Capital Advisors who was indicted in March on insider trading charges.

Steinberg, who is set to face trial on November 18, sought unsuccessfully to reassign his case to a judge other than Sullivan on the basis of his ruling on the issue of tip recipients in the Newman and Chiasson case.

In granting Newman and Chiasson's bail motion on Tuesday, Circuit Judge Jose Cabranes said the appeals court would send their case back to Sullivan for any bail modifications that become necessary.

A spokeswoman for Manhattan U.S. Attorney Preet Bharara declined comment.

The case is US v. Newman et al, 2nd U.S. Circuit Court of Appeals, No. 13-1837.

(Editing by Matthew Lewis)

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By Jennifer Saba

(Reuters) - Facebook Inc said on Tuesday it now has 1 million active advertisers globally who used the platform in the last 28 days, a milestone for the company that is seeking to revive its revenue growth.

A vast majority of those advertisers are small business owners who have flocked to the world's No. 1 social network.

Facebook executives are hoping to net even more small advertisers since 16 million local businesses, ranging from jewelry sellers to clothing stores, set up free pages on the network.

While pinpointing how much money small advertisers spend only online is difficult, in total they spent approximately $32 billion during 2012 in the United States, according to market research firm eMarketer.

"Most small business owners start off as Facebook users, then migrate to become page owners, and from there migrate to become advertisers," said Dan Levy, Facebook director of small business.

He said that Facebook does not plan to start charging businesses to set up pages.

Advertising accounts for 85 percent of Facebook's revenue - which also includes dollars from the world's largest brands and advertising agencies. But the company is trying to spark its ad growth following a sharp slowdown last year.

Last quarter, Facebook reported first-quarter revenue of $1.46 billion. Advertising revenue rose 43 percent, the fastest growth rate since the end of 2011.

Facebook declined to break out how much ad revenue comes from small businesses and did not indicate how long it took to reach the 1 million milestone.

It has introduced several initiatives to help boost growth, including an overhaul of its newsfeed and changes to how advertisers buy ads on the network in order to simplify the process.

Small business owners are "critical" to Facebook's success, said Brian Wieser, an analyst with Pivotal Research Group.

"Once they launched new ad products targeted to small businesses in the middle of last year, they were able to significantly accelerate their revenue growth," he said.

Kim Caulfield, a small business owner in Orange County, California who sells custom jewelry made from horse tail hair, started using Facebook advertising to reach more customers for her company Tail Spin.

"You only can invite so many of your friends over and most of them don't own horses," she said.

She now spends approximately $25 a day with Facebook on advertisements directed to horse enthusiasts with the potential of reaching over 5 million people.

Facebook also reaches out to local businesses order to help them through the process. Dallas-area clothing boutique owner Lucy Huang said she was part of a Facebook incubator program to mentor businesses and walk them through the ad buying process.

Huang said she spends roughly $50 a month advertising Accents retail stores with Facebook, saying it is cheaper and more effective than print or online rivals like Yelp.

More than 50 percent of small business owners use Facebook pages to promote their products, but only 16 percent use Facebook ads, according to BIA Kelsey, a research firm specializing in local advertising.

(Reporting by Jennifer Saba in New York; Editing by Nick Zieminski)

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