Zuckerberg says employees moving out of Silicon Valley may face pay cuts (CNBC by Salvador Rodriguez)Many Americans used part of their coronavirus stimulus check to trade stocks (CNBC by Maggie Fitzgerald)The Winners and Losers When New York's Luxury Home Market Reopens / The real estate industry prepares for a summer sales season without precedent. (Bloomberg by James Tarmy)Natixis' Equity Derivatives Losses Soar to 250 Million Euros (Bloomberg by Donal Griffin)Specter of Negative Rates Is Putting Wall Street Bankers on Edge (Bloomberg by Yalman Onaran and Liz McCormick)SEC Adopts Amendments to Improve Financial Disclosures about Acquisitions and Dispositions of Businesses (SEC Release)Statement on Financial Disclosures About Acquired and Disposed Businesses by SEC Commissioner Allison Herren LeeChinese National Arrested For $20 Million Scheme To Fraudulently Obtain Loans Intended To Help Small Businesses During COVID-19 Pandemic / MUGE MA, a/k/a "Hummer Mars," Lied that His Phony Companies Had Hundreds of Employees and Paid Millions in Wages to Receive COVID-19 Loan Funds; MA's Company Also Fraudulently Held Itself Out as Representing New York State in Procuring COVID-19 Supplies (DOJ Release)
The company will begin allowing certain employees to work remotely full time, he said. Those employees will have to notify the company if they move to a different location by Jan. 1, 2021. As a result, those employees may have their compensations adjusted based on their new locations, Zuckerberg said."We'll adjust salary to your location at that point," said Zuckerberg, citing that this is necessary for taxes and accounting. "There'll be severe ramifications for people who are not honest about this."
The coronavirus rout brought a copious amount of new accounts to online brokers in the first quarter, especially younger investors. Exact reasons for that surge in interest is unclear. Most analysts chalk it up to the attractiveness of the market comeback, but it appears the stimulus money at least played a part.New accounts at most major online brokers - Charles Schwab, TD Ameritrade, Etrade, Interactive Brokers and Robinhood - were also likely bolstered by a recent move to zero commissions and fractional trading.Schwab saw "monumental volumes" with a record 609,000 new accounts in Q1 and millennial favored stock trading app Robinhood saw daily trades up 300% in March year-over-year. Robinhood also told CNBC "over half" of its customers are first time investors.
The supply of homes for sale fell 19.7% annually to 1.47 million units for sale at the end of April. That is the lowest April inventory figure ever. Not only did potential sellers decide not to list their homes, as job losses mounted and the economy shut down, but some sellers already on the market pulled their listings.That drop in inventory pushed prices to a new record high. The median price of an existing home sold in April rose 7.4% annually to $286,800. That record does not account for inflation, but is a nominal record-high.
Specter of Negative Rates Is Putting Wall Street Bankers on Edge (Bloomberg by Yalman Onaran and Liz McCormick)The bank's overall equities division reported a 126% plunge in revenues for the first quarter. The result included a 130 million-euro loss linked to companies cutting their dividends, according to a presentation.Natixis and its crosstown rivals BNP Paribas SA and Societe Generale SA fared far worse than their U.S. counterparts in the tumultuous first quarter, thanks to their use of equity derivatives known as structured products, multilayered securities that get increasingly difficult to manage as markets fluctuate.
Bank executives constantly decry negative rates, arguing that the benefits to the economy are elusive while the harm to the banking system is significant. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon has talked about "huge adverse consequences" of negative rates. European banks, which have suffered on their home turf with below-zero rates since 2014, have warned U.S. policy makers not to follow suit.
The Securities and Exchange Commission today announced that it has adopted amendments to the financial disclosure requirements in Regulation S-X for acquisitions and dispositions of businesses, including real estate operations, in Rules 3-05, 3-14, 8-04, 8-05, 8-06, and Article 11, as well as in other related rules and forms. In conjunction with these changes, the Commission also amended the significance tests in the "significant subsidiary" definition in Rule 1-02(w), Securities Act Rule 405, and Exchange Act Rule 12b-2 to improve their application and to assist registrants in making more meaningful determinations of whether a subsidiary or an acquired or disposed business is significant. In addition, to address the unique attributes of investment companies and business development companies, the Commission adopted new requirements regarding fund acquisitions specific to registered investment companies and business development companies.
Today the Commission amends its rules governing disclosures public companies must provide when they buy and sell businesses. Unfortunately, today's rulemaking does not adequately address the risks of reduced transparency for investors with respect to this activity, nor does it properly examine the potential effects on competition, particularly in the present economic climate where the risks that arise from overly concentrated markets are heightened.I want to thank the staff for their hard work on this release. I know it is the product of careful analysis, as well as the incorporation of the policy views of a majority of the Commission. While I may not agree with the final rules on balance,I am, as always, appreciative of the diligence and expertise of the staff. I also note that I do not object to the Commission going forward with this rulemaking in the midst of the ongoing economic and social disruption caused by COVID-19. There has been a lengthy opportunity for public comment, at least nine months of which occurred before the COVID-19 crisis began, and any new obligations imposed by the rules will be delayed by several months.I am, however, concerned that we would push ahead with a rulemaking that will likely facilitate mergers and acquisitions, or M&A activity,without assessing the costs and risks of such activity in two significant regards: the risk to investors of less transparency regarding the economics of an acquisition, and the risk of increasing economic concentration, which is heightened at present where large companies that are better positioned to weather the current economic conditions may pursue predatory takeovers of smaller, struggling businesses.
From at least in or about March 2020 through at least on or about May 15, 2020, MA applied to the SBA and at least five banks for a total of over $20 million in Government-guaranteed loans for the his companies NYIC and Hurley (together, the "Ma Companies") through the SBA's PPP and EIDL Program. In connection with these loan applications, MA represented, among other things, that he was the sole owner and executive director of the Ma Companies, that the Ma Companies were located on the sixth floor of his luxury condominium building in New York, New York, and that NYIC and Hurley together had hundreds of employees and paid millions of dollars in wages to those employees on a monthly basis. In fact, however, MA appears to have been the only employee of NYIC since at least in or about 2019, and Hurley does not appear to have any employees. In order to support the false representations made by MA in the loan applications about the number of employees at, and the wages paid by, the Ma Companies, MA submitted fraudulent and doctored bank records, tax records, insurance records, payroll records, and/or audited financial statements to five different banks, and also provided links to the Ma Companies' websites, which describe them as purportedly "global" companies. In the course of these loan applications, MA also misrepresented that he was a United States citizen, when, in fact, he is a Chinese national with lawful permanent resident status in the United States.Before the discovery of the fraudulent conduct by MA, the SBA approved a $500,000 EIDL Program loan for NYIC and a $150,000 EIDL Program loan for Hurley, and at least a $10,000 loan advance was provided to NYIC. In addition, a bank approved and disbursed over approximately $800,000 in PPP loan funds for Hurley, which were frozen in connection with this investigation. As a result, MA sought to withdraw his loan applications from the banks and return the funds.MA and individuals purporting to work for NYIC have also fraudulently represented to a COVID-19 test kit manufacturer and a medical equipment supplier that NYIC is representing the New York State Government and the Governor of New York in procuring COVID-19 test kits and personal protective equipment ("PPE") to respond to the COVID-19 pandemic. Among other incidents, in a recorded call that took place on or about May 18, 2020, MA represented, in substance and in part, that his company NYIC was a registered vendor for New York State, among other state governments, and that NYIC had a big team working on a deal for the State. NYIC is not, however, an authorized vendor of New York State, nor has NYIC been authorized to represent New York State in connection with the procurement of COVID-19 supplies.
FINRA Department of Enforcement, Complainant, v. Shopoff Securities, Inc., William A. Shopoff, and Stephen R. Shopoff, Respondents (Decision, Office of Hearing Officers Extended Hearing Panel Decision, Disciplinary Proceeding No. 2016048393501)"Small businesses like us need your support in this time of crisis," Stamos writes in each note. "Online apps such as GRUBHUB ARE CHARGING US 30% of each order and $9 or more on orders made using phone numbers on their app or website . . . please help save the restaurant industry by ordering directly with us."Restaurateurs like Stamos are mounting guerrilla campaigns to persuade customers to skip the delivery platforms they say are squeezing their businesses at a particularly difficult time. Some are looking to use social media to get the word out or coming up with special offers. Others are ditching the apps altogether.
The underlying premise of the Complaint in this disciplinary proceeding is that from December 22010 through March 2017, Respondent Shopoff Securities, Inc., through Respondents William and Stephen Shopoff, defrauded investors to obtain desperately needed cash to prop up a failing enterprise. They allegedly did so by selling $12.47 million in promissory notes to fund the real estate investment business belonging to William Shopoff and his wife. Three of the Complaint's four causes of action allege violations of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), Rule 10b-5 thereunder, and FINRA Rules 2020 and 2010. The remaining cause of action alleges that Respondents' recommendations were unsuitable in violation of NASD Rule 2310(b) and FINRA Rules 2111(a) and 2010. Based on the egregiousness of their alleged wrongdoing, Enforcement seeks to permanently bar William and Stephen Shopoff from associating with any FINRA member firm in any capacity, expel Shopoff Securities, Inc. from the securities industry, and compel Respondents to disgorge $134,070 in commissions gained from sales of securities they offered to investors through other brokerdealers.It is undisputed that Respondents limited their solicitations to 29 family members and friends, all affluent customers who knew Respondents and had previously invested with them. None of the customers lost money or complained that Respondents misled them. The non-family members have been repaid in full with interest as promised. At the time of the hearing, of the $12.47 million in notes issued over roughly six years, about $1.1 million in principal and interest remained to be repaid to several family members.After carefully reviewing the evidence presented and the testimony given during the hearing, assessing the credibility of the witnesses, and considering the parties' extensive prehearing and post-hearing briefing and the applicable rules and law, the Panel concludes that the evidence is insufficient to establish the elements essential to prove fraud. Critically, there is insufficient evidence to support the allegations that Respondents made material misrepresentations and omissions, acted intentionally or recklessly to defraud the note purchasers, and recommended the notes without a reasonable basis to believe the notes were suitable investments for the purchasers.The Complaint is therefore dismissed.