Exec who cleaned up Enron calls FTX mess ‘unprecedented’
NEW YORK (AP) — The man who had to clean up the mess at Enron says the situation at FTX is even worse, describing what he calls a “complete failure” of corporate control. The filing by John Ray III, the new CEO of the bankrupt cryptocurrency firm, lays out a damning description of FTX’s operations under its founder Sam Bankman-Fried, from a lack of security controls to business funds being used to buy employees homes and luxuries. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Ray said.
Elizabeth Holmes faces judgment day for her Theranos crimes
SAN JOSE, Calif. (AP) — A federal judge on Friday will decide whether disgraced Theranos CEO Elizabeth Holmes should serve a lengthy prison sentence for duping investors and endangering patients while peddling a bogus blood-testing technology. Holmes’ sentencing in the same San Jose, California, courtroom where she was convicted on four counts of investor fraud and conspiracy in January marks a climactic moment in a saga that has been dissected in an HBO documentary and an award-winning Hulu TV series about her meteoric rise and mortifying downfall. U.S. District Judge Edward Davila will take center stage as he weighs the federal government’s recommendation to send Holmes, 38, to federal prison for 15 years.
Average long-term US mortgage rates tumble to 6.61%
WASHINGTON (AP) — The average long-term U.S. mortgage rate tumbled by nearly a half-point this week, but will likely remain a significant barrier for potential homebuyers as Federal Reserve officials have all but promised more rate hikes in the coming months. Mortgage buyer Freddie Mac reported Thursday that the average on the key 30-year rate fell to 6.61% from 7.08% last week. A year ago the average rate was 3.1%. The rate for a 15-year mortgage, popular with those refinancing their homes, fell to 5.98% from 6.38% last week. It was 2.39% one year ago. Late last month, the average long-term U.S.
Senators to FTC: Probe Twitter security, take needed action
WASHINGTON (AP) — Reacting to the tumult and mass layoffs at Twitter under its new owner Elon Musk, a group of Democratic senators on Thursday asked federal regulators to investigate any possible violations by the platform of consumer-protection laws or of its data-security commitments. The senators also asked Lina Khan, head of the Federal Trade Commission, to take enforcement action if needed against Twitter and company executives for “any breaches or business practices that are unfair or deceptive.” The FTC said last week it is “tracking recent developments at Twitter with deep concern.” A key focus is the 2011 consent agreement that Twitter signed with the agency, requiring the San Francisco company to address serious data-security lapses.
Fired SpaceX employees accuse company of violating labor law
NEW YORK (AP) — Several SpaceX employees who were fired after circulating an open letter calling out CEO Elon Musk’s behavior have filed a complaint accusing the company of violating labor laws. The complaint, made Wednesday to the National Labor Relations Board, details the aftermath of what allegedly happened inside SpaceX after employees circulated the letter in June, which, among other things, called on executives to condemn Musk’s public behavior on Twitter — including making light of allegations he sexually harassed a flight attendant — and hold everyone accountable for unacceptable conduct. The letter was sent weeks after a media report surfaced that Musk paid $250,000 to the flight attendant to quash a potential sexual harassment lawsuit against him.
Stocks fall as Fed signals rates need to go still higher
NEW YORK (AP) — Stocks closed lower on Wall Street and Treasury yields rose Thursday afternoon after more indications from the Federal Reserve that it may need to raise interest rates much higher than many people expect to get inflation under control. The S&P 500 fell 0.3%, with retailers and banks among the biggest weights on the benchmark index. The Dow Jones Industrial Average slipped less than 0.1%, while the Nasdaq composite closed 0.3% lower. Decliners outnumbered gainers on the New York Stock Exchange by nearly a 2-to-1 margin. Smaller company stocks fell harder than the rest of the market, pulling the Russell 2000 index 0.8% lower.
Macy’s, Kohl’s, Gap point to cloudy holiday retail picture
NEW YORK (AP) — Results from Macy’s, Kohl’s and Gap on Thursday further underscored the cloudy picture for U.S. retailers heading into the start of the holiday season. A day after Target reported a sharp drop in quarterly profits, it’s clear that inflation-hit shoppers in the last few weeks were waiting for deals and not willing to pay full price for purchases they could put off. The big question will be if U.S. consumers will spend more freely in the coming weeks. “I think everybody believes that Christmas will come, but I don’t think anybody out there knows for sure exactly what’s going to happen,” Kohl’s chairman Peter Boneparth said.
Fed official suggests substantial rate hikes may be needed
WASHINGTON (AP) — The Federal Reserve may have to raise its benchmark interest rate much higher than it has previously projected to get inflation under control, James Bullard, president of the Federal Reserve Bank of St. Louis, said Thursday. Bullard’s comments raised the prospect that the Fed’s rate hikes will make borrowing by consumers and businesses even costlier and further heighten the risk of recession. Wall Street traders registered their concern by sending stock market into the red Thursday. The S&P 500 ended the day down 12.23 points, or 0.3%, at 3,946.56. Bullard’s remarks followed speeches by other Fed officials in recent days that suggested they see only limited progress, at most, in their use of steadily higher rates to fight inflation.
Starbucks workers strike at more than 100 US stores
SEATTLE (AP) — Starbucks workers at more than 100 U.S. stores are on strike Thursday in their largest labor action since a campaign to unionize the company’s stores began late last year. The walkouts coincide with Starbucks’ annual Red Cup Day, when the company gives free reusable cups to customers who order a holiday drink. Workers say it’s often one of the busiest days of the year. Starbucks declined to say how many red cups it plans to distribute. Workers say they’re seeking better pay, more consistent schedules and higher staffing levels in busy stores. Stores in 25 states planned to take part in the labor action, according to Starbucks Workers United, the group organizing the effort. ___
The S&P 500 slipped 12.23 points, or 0.3%, to 3,946.56. The Dow Jones Industrial Average dropped 7.51 points, or less than 0.1%, to 33,546.32. The Nasdaq fell 38.70 points, or 0.3%, to 11,144.96. The Russell 2000 index of smaller companies lost 14.04 points, or 0.8%, to 1,839.12.