Category: Business & Economy

WASHINGTON – US President Joe Biden on Monday urged House of Representatives Speaker Kevin McCarthy to take the potential for an unprecedented US debt default off the table, warning that it would result in skyrocketing credit card and mortgage rates.

“America is not a deadbeat nation. We have never, ever failed to meet the debt,” Mr Biden told a small business event at the White House.

He said the threat of default by some Republicans in Congress was “totally irresponsible” and that it was essential to take that threat “off the table.”

“It would lead to higher interest rates, higher credit card rates, mortgage rates would skyrocket,” Mr Biden said.

Lordstown Motors is at risk of failing — again.

The EV startup that went public via a SPAC merger cautioned investors Monday that it may be forced to file for bankruptcy because Foxconn may pull out of a critical funding deal, according to a regulatory filing.

Taiwanese manufacturer Foxconn sent a letter April 21 to Lordstown stating the automaker was in breach of the investment agreement because its stock price fell below $1 for 30 days and was at risk of being delisted on the Nasdaq exchange. Foxconn warned it would terminate the investment agreement if the breach is not resolved within 30 days.

While Lordstown disagreed with Foxconn’s assertion and said it intended to enforce its rights, the company also warned that withholding key funding would be detrimental to the company.

Former Goldman Sachs Group banker Roger Ng won postponement of the start of his 10-year prison term for about three months until Aug 7, a federal judge ruled.

US District Judge Margo Brodie, who sentenced Ng in March for his role in the global 1MDB fraud, granted his request for a delay Monday without explanation.

Ng had been set to begin his prison term May 4. 

Defence lawyer Marc Agnifilo on Friday asked for the delay so Ng could spend more time with his wife and 10-year-old daughter, who had travelled to New York from Malaysia.

JPMorgan Chase, one of the biggest banks in the U.S., is buying the troubled First Republic Bank’s deposits, a “substantial amount of their assets and certain liabilities,” JPMorgan Chase said in a press release Monday.

The California Department of Financial Protection and Innovation announced early Monday that the Federal Deposit Insurance Corp had taken possession of First Republic.

This marks the third time the U.S. government has taken control of a U.S. lender this year.

First Republic is the third — and biggest — U.S. bank to fail this year. In March, federal regulators swept in to protect customers of Silicon Valley Bank and Signature Bank. Citing potential risk to the broader financial system, they took unprecedented action to insure all deposits at the two banks — even deposits that exceeded the FDIC’s $250,000 threshold for insurance.

First Republic Bank, on the brink of collapse in the weeks after the Silicon Valley Bank crisis, has finally fallen over, but with a relatively quick resolution into its next chapter: today the FDIC announced that it was being closed by the the California Department of Financial Protection and Innovation, that the FDIC was appointed as receiver, and that the FDIC would be selling the assets to JPMorgan.

Its assets and deposits total just over $330 billion together.

Specifically, “to protect depositors, the FDIC is entering into a purchase and assumption agreement with JPMorgan Chase Bank, National Association, Columbus, Ohio, to assume all of the deposits and substantially all of the assets of First Republic Bank,” it said.

The FDIC also confirmed deposits will continue to be insured by the FDIC at an estimated cost of about $13 billion to its insurance fund.

In February, Hong Kong proposed a set of welcoming rules to regulate crypto-related activities. Under the new legal regime, retail investors will be allowed to trade certain digital assets on licensed exchanges, replacing a 2018 framework that restricted trading to only accredited investors.

The city is also paving the way to legalize stablecoins. One startup, which is backed by popular exchange KuCoin and USDC issuer Circle, recently launched an offshore Chinese yuan (CNH)-pegged stablecoin, the first of its kind in Greater China.

To create a favorable environment for web3 businesses, the city is facilitating communication between banks and crypto startups, many of which are scrambling to find alternatives following Silvergate Bank’s meltdown.

These moves are contrasting with Beijing’s heavy-handed crackdown on the crypto industry; they also highlight the degree to which the former British colony enjoys policy exceptions in certain areas, such as finance.

The US central bank has said it failed to act with “sufficient force and urgency” in its oversight of Silicon Valley Bank, which collapsed last month in the country’s biggest bank failure since 2008.

The conclusion is one of the main findings from the Federal Reserve’s investigation of the episode.

It sparked global fears about the state of the banking industry.

The review comes as another US lender, First Republic, remains in trouble.

US regulators are reported to be working on a potential rescue for the struggling firm, which was the 14th largest bank in the US at the end of last year.

The U.S. government has sounded the alarm about a critical software vulnerability found in genomics giant Illumina’s DNA sequencing devices, which hackers can exploit to modify or steal patients’ sensitive medical data.

In separate advisories released on Thursday, U.S. cybersecurity agency CISA and the U.S. Food and Drug Administration warned that the security flaw — tracked as CVE-2023-1968 with the maximum vulnerability severity rating of 10 out of 10 — allows hackers to remotely access an affected device over the internet without needing a password. If exploited, the bug could allow hackers to compromise devices to produce incorrect or altered results, or none at all.

The FBI carried out a search on Thursday morning at the Potomac, Md., home of former FTX executive Ryan Salame, the New York Times reported, citing two people with knowledge of the matter said.

The FBI, Salame and his attorney did not immediately respond to Reuters requests for comment.

Days before FTX filed for bankruptcy and Bankman-Fried stepped down as CEO, Salame informed the Securities Commission of the Bahamas that client assets held at FTX Digital Markets may have been transferred to Alameda, according to a court filing Wednesday by the agency.

He was one of the top political donors in the 2022 election cycle donating more than $23 million to Republican campaigns, according to OpenSecrets.

A United States judge has ordered a South African executive to pay more than US$3.4 billion (S$4.5 billion) in restitution and fines for a fraud scheme involving Bitcoin – the highest-ever civil monetary penalty in any US Commodity Futures Trading Commission (CFTC) case.

Cornelius Johannes Steynberg, the founder and chief executive officer of Mirror Trading International Proprietary, committed fraud tied to retail foreign currency transactions, among other violations, the agency said in a statement that announced the order by US District Judge Lee Yeakel.

It’s been six weeks since the collapse of Silicon Valley Bank and Signature Bank threatened to kick off a nationwide bank run. Now, U.S. regulators are due to issue their postmortem reports.

The Federal Reserve plans to release a report Friday on whether there were lapses in its oversight of Silicon Valley Bank that may have contributed to the bank’s failure.

Separately, the Federal Deposit Insurance Corp. will also report Friday on how the regulator supervised New York-based Signature Bank, which failed days after the Silicon Valley lender.

The sudden implosion of two big regional banks rattled nerves throughout the financial system last month, forcing the federal government to take emergency steps to prevent a nationwide bank run.

Lyft said Thursday it will cut 26% of its workforce, or about 1,072 people, as part of a restructuring plan aimed at rebuilding its core ride-hailing product and boosting profits.

The company also said in a regulatory filing Thursday that it decided to scale back hiring plans and will eliminate 250 open job positions.

Lyft estimates that it will incur a cost of about $41 million to $47 million related to severance and employee benefits in the second quarter of 2023. The ride-hailing company also said it expects additional costs related to stock-based compensation and the corresponding payroll tax expense related to employees who were impacted by this restructuring.

Last week, Lyft’s newly appointed CEO David Risher told employees in an email that the company would significantly reduce its workforce as part of a restructuring effort. Risher said the restructuring would be part of Lyft’s plan to “better meeting the needs of riders and drivers.”

Germany provides support for Ukraine by supplying equipment and weapons, these come from supplies of the Federal Arms Forces and from deliveries from industry financed from the Federal Government’s funds for security capacity building. An overview.

Disgraced Theranos CEO Elizabeth Holmes has avoided starting her more than 11-year prison sentence on Thursday by deploying the same legal maneuver that enabled her co-conspirator in a blood-testing hoax to remain free for an additional month.

Holmes’ lawyers on Wednesday informed U.S. District Judge Edward Davila that she won’t be reporting to prison as scheduled because she had filed an appeal of a decision that he issued earlier this month ordering her to begin her sentence on April 27.

The appeal, filed with the Ninth Circuit Court of Appeals late Tuesday, automatically delays her reporting date because she has been free on bail since a jury convicted her on four counts of fraud and conspiracy in January 2022. The verdict followed a four-month trial revolving around her downfall from a rising Silicon Valley star to an alleged scam artist chasing fame and fortune while fleecing investors and endangering the health of patients relying on Theranos’ flawed blood tests.

The tactic deployed by Holmes mirrored a move made last month by her former lover and subordinate, Ramesh “Sunny” Balwani, to avoid a prison reporting date of March 16. After the Ninth Circuit rejected his appeal three weeks later, Davila set a new reporting date of April 20.

The Kremlin warned on Wednesday that Russia could widen the list of foreign companies subject to temporary asset seizures in case of the “expropriation” of Russian assets abroad.

The comments came after Putin signed a presidential decree approving the takeover of operations of two Western energy groups in Russia — Finland’s Fortum and Germany’s Uniper — and threatened to do the same with others.

“If necessary, the list of companies could be expanded,” Kremlin spokesman Dmitry Peskov told reporters, a day after President Vladimir Putin signed a decree allowing asset seizures.

As a result of action by the Federal Trade Commission and the Commonwealth of Pennsylvania, debt collection company International Credit Recovery, Inc. (ICR), officer Richard Diorio, Jr., and manager Cynthia Powell, have agreed to a permanent ban from the debt collection industry after being charged with engaging in bogus debt collection efforts against businesses and non-profits. 

The FTC and Pennsylvania alleged that ICR was a key part of a telemarketing scheme run by American Future Systems, Inc., (AFS), which also does business as Progressive Business Publications and the Center for Education and Employment Law. ICR allegedly collected on debts AFS claimed organizations such as businesses, schools, fire and police departments, and non-profits owed for book and newsletter subscriptions they did not order.

 “The defendants in the case were the second half of a one-two punch that targeted small businesses, non-profits and first responders, first with bogus subscription bills and then bogus debt collection,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We’re proud to work with our partners in Pennsylvania to hold them accountable.”

“Through collaboration with our federal partners, we reached an agreement that ensures Pennsylvanians will be protected from these callous defendants that preyed on emergency-responder and non-for-profit organizations to fulfill their selfish greed,” Pennsylvania Attorney General Michelle Henry said.

The FTC and Pennsylvania charged that, in connection with its debt collection activities, ICR contacted consumers that it knew or had reason to know did not agree to order paid subscriptions. They also charged that ICR used false or unsubstantiated representations to try to get consumers to pay, and that ICR illegally threatened consumers if they did not pay.

The court order, which was agreed to by the defendants to settle the case, permanently bans them from the debt collection industry, as well as requires them to cooperate since the case will continue against the other defendants AFS, Progressive Business Publications of New Jersey, Inc. and Edward Satell.

The Commission vote approving the stipulated final order was 3-0-1, with Commissioner Christine S. Wilson not participating. The vote on this matter closed on March 23, 2023, prior to Commissioner Wilson’s departure from the Commission. The U.S. District Court for the Eastern District of Pennsylvania approved the settlement.

NOTE: Stipulated final orders or injunctions have the force of law when approved and signed by the District Court judge.

This matter is being handled by the FTC’s East Central Region.