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The head of Mexico’s detective service says his country is the ‘champion’ of fentanyl production 2024-04-23 19:06:26+00:00 - MEXICO CITY (AP) — The head of Mexico’s detective service acknowledged Tuesday that the country is “the champion” of fentanyl production, contradicting President Andrés Manuel López Obrador. López Obrador hotly denies that any fentanyl is produced in Mexico, saying Mexican cartels only press it into pills or add finishing touches. But Felipe de Jesus Gallo, the head of Mexico’s Criminal Investigation Agency, said that since the 1990s “Mexico has been the champion of methamphetamine production, and now fentanyl.” He spoke at a U.S.-Mexico conference on synthetic drugs in Mexico City. Experts agree that cartels in Mexico use precursor chemicals from China and India to make the synthetic opioid and smuggle it into the United States, where it causes about 70,000 overdose deaths annually. While fentanyl is not widely abused in Mexico, methamphetamine addiction is commonplace. Gallo said that Mexican cartels have launched industrial-scale production of meth in many states throughout the country and now export the drug around the world. “Believe me, methamphetamine production has become industrialized, it’s not just in the mountains anymore,” Gallo said. “We now expect to see (drug) laboratories not just in the mountains of Sinaloa and Sonora, but in Hidalgo as well, Puebla, and also in Jalisco.” He was apparently referring to thousands of drug labs detected in previous years in the hills and scrublands around Culiacan, the capital of the northern state of Sinaloa. Those clandestine, rural production sites were often bare-bones, improvised labs covered with tree branches and tarpaulins. Now, the meth trade has become so lucrative and so sophisticated that Mexican meth is exported as far away as Hong Kong or Australia, and the cartels have found ways to avoid detection of their drug money. “The business models have become very innovative, or as old and antiquated as barter; ‘I’ll trade you precursor chemicals for meth,’ to avoid leaving a money trail,” Gallo said. There is little question that drug production goes on at a huge scale in Mexico. In February, Mexico’s Navy seized over 45 tons of methamphetamine at the biggest drug lab found during the current administration. The lab was in Quiriego, a township in a remote part of the northern border state of Sonora. The 91,000 pounds (41,310 kilograms) of meth found there was more than half of the 162,000 pounds of the drug Mexico has seized so far this year. Fentanyl production is also huge, though because it is a more potent drug, the volume is smaller. A year ago, soldiers seized more than a half-million fentanyl pills in Culiacan in what the army at the time described as the largest synthetic drug lab found to date. Soldiers found almost 630,000 pills that appeared to contain fentanyl, the army said. They also reported seizing 282 pounds (128 kilograms) of powdered fentanyl and about 220 pounds (100 kilograms) of suspected methamphetamine. López Obrador, who took office on Dec. 1 2018, also claims that Mexicans are culturally immune to drug addiction.
Supreme court appears to side with Starbucks in fight over fired employees 2024-04-23 19:03:00+00:00 - US supreme court justices on Tuesday appeared to agree with Starbucks in the coffee chain’s challenge to a judicial order requiring it to rehire seven employees at a Tennessee cafe who were fired as they pursued efforts to unionize. The justices heard arguments in the company’s appeal of a lower court’s approval of an injunction sought by the National Labor Relations Board (NLRB) ordering the reinstatement of the workers. It is a case that could make it harder to bring a quick halt to labor practices challenged as unfair under federal law while the NLRB resolves complaints. The case centers on the legal standard that federal courts must use to issue a preliminary injunction requested by the NLRB under the a federal law called the National Labor Relations Act. Such orders are intended as an interim tool to halt unfair labor practices while a case is proceeding before the board. Under section 10(j) of the labor law, a court may grant an injunction if it is deemed “just and proper” Starbucks contends that if the lower courts had applied stricter criteria, similar to the standard used by some other courts and in non-labor legal disputes, the case would have come out differently. Some justices appeared to agree that courts should have the primary role in determining a “likelihood of success” in the case before issuing an injunction. The conservative justice Neil Gorsuch told the justice department lawyer Austin Raynor, who was defending the injunction against Starbucks, that other federal agencies were subject to the stricter standard. “In all sorts of alphabet soup agencies, we don’t do this. District courts apply the ‘likelihood of success’ test as we normally conceive it. So why is this particular statutory regime different than so many others?” Gorsuch asked. Raynor told the justices that the NLRB seeks this kind of injunction only in “the cream-of-the-crop cases”. “The board receives 20,000 unfair labor charges every year. It issues 750 complaints. Last year, it authorized 14 petitions and filed seven. That’s seven out of 20,000,” Raynor said. “This is an expert agency that has said, ‘We think these are the most deserving of relief,’” Raynor added. But the conservative chief justice, John Roberts, said that “I don’t know why the inference isn’t the exact opposite.” Roberts said these could be the cases that the board feels “are the most vulnerable”. The liberal justice Ketanji Brown Jackson told Lisa Blatt, the lawyer arguing for Starbucks, that the agency had sought this type of injunction “in a very, very small number of cases”. “This is not sounding like a huge problem,” Jackson said. About 400 Starbucks locations in the United States have unionized, involving more than 10,000 employees. Both sides at times have accused the other of unlawful or improper conduct. Hundreds of complaints have been filed with the NLRB accusing Starbucks of unlawful labor practices such as firing union supporters, spying on workers and closing stores during labor campaigns. Starbucks has denied wrongdoing and said it respects the right of workers to choose whether to unionize. In a break from the acrimony, both sides in February said they had agreed to create a “framework” to guide organizing and collective bargaining and potentially settle scores of pending legal disputes. The case began in 2022, when the workers at the Poplar Avenue store in Memphis became among the first to unionize. Early in their efforts, they allowed a television news crew into the Starbucks cafe after hours to talk about the union campaign. Seven workers present that evening were fired, including several who belonged to the union organizing committee. Despite the dismissals, employees there later voted to join Workers United. The supreme court’s ruling is expected by the end of June.
National Enquirer made up the story about Ted Cruz's father and Lee Harvey Oswald, former publisher says 2024-04-23 18:48:00+00:00 - David Pecker, the former publisher of the National Enquirer, testified at Donald Trump's trial Tuesday that the tabloid completely manufactured a negative story in 2016 about the father of Sen. Ted Cruz, of Texas, who was then Trump's rival for the GOP presidential nomination. The paper had published a photo allegedly showing Cruz's father, Rafael Cruz, with Lee Harvey Oswald handing out pro-Fidel Castro pamphlets in New Orleans in 1963, not long before Oswald assassinated President John F. Kennedy. Trump repeatedly referred to the story on the campaign trail and in interviews. “I mean, what was he doing — what was he doing with Lee Harvey Oswald shortly before the death? Before the shooting?” Trump said in an interview with Fox News in May 2016. “It’s horrible.” Manhattan prosecutor Joshua Steinglass asked Pecker about the story's origins during the trial Tuesday in Manhattan. Pecker said that then-National Enquirer editor-in-chief Dylan Howard and the tabloid's research department got involved, and Pecker indicated that they faked the photo that was the foundation for the story. “We mashed the photos and the different picture with Lee Harvey Oswald. And mashed the two together. And that’s how that story was prepared — created I would say," Pecker said on the witness stand. Asked by Steinglass whether Cruz had gained popularity in the presidential race at the time, Pecker said, “I believe so.” David Pecker on the witness stand Monday. Elizabeth Williams / AP The revelation came up as the prosecution focused on negative articles that were published by the tabloid about Trump's Republican opponents at the time. Pecker explained that it was Michael Cohen, Trump's personal lawyer, who would orchestrate the planting of these stories. Pecker said Cohen would call and say they'd like his publication to run an article on a certain candidate, adding that Cohen would then send him a piece about Cruz, for example, and the National Enquirer "would embellish it from there." Pecker suggested that Trump was directly involved in the process, too. He said that the negative stories about Trump's opponents were published as part of an arrangement that was struck in 2015 at a Trump Tower meeting that also included a directive to write positive stories about the real estate mogul. Steinglass also entered into evidence National Enquirer headlines published during the 2016 race about Sen. Marco Rubio, R-Fla., who was also running for president. They suggested that he had a love child and had a connection to cocaine. Asked why the tabloid ran stories about the senators and candidate Ben Carson, Pecker said, "After the Republican debates, and based on the success that some of the other candidates had, I would receive a call from Michael Cohen, and he would direct me and direct Dylan Howard which candidate and which direction we should go.” When asked for his response Tuesday, Cruz told NBC News he's “not interested in revisiting ancient history.” Rubio's office did not immediately return a request for comment. When the story about Cruz's dad was published, the senator told reporters that Trump was a "pathological liar" after he promoted the story. “He doesn’t know the difference between truth and lies," he said. "He lies practically every word that comes out of his mouth. And in a pattern that I think is straight out of a psychology textbook, his response is to accuse everyone else of lying.”
UK bankers warned of ‘severe losses’ if they fail to monitor private equity exposures 2024-04-23 18:48:00+00:00 - UK banks are leaving themselves open to “severe, unexpected losses”, by failing to properly measure how exposed they are to the $8tn private equity industry, the Bank of England has warned. In a speech on Tuesday, Rebecca Jackson, a senior executive at the central bank, said there was a “creeping sense of complacency” among lenders, who – despite a boom in loans and financing to the sector – had almost no ability to put together data “or even appreciate its crucial importance”. She said the issue was partly due to the fact that banks had not previously been exposed to a private equity downturn. Under the private equity model, large sums are borrowed from banks to finance the purchase of businesses, with profits from those businesses then relied on to make interest payments on the loans. It means banks could be accruing huge and unintentional exposures to the private equity industry, which would be unable to immediately sell assets to pay down loans in a crisis. “It’s not difficult to imagine a scenario, such as malpractice at a financial sponsor or the bankruptcy of multiple portfolio companies, where risk correlations increase significantly and liquidity evaporates, leaving banks open to severe, unexpected losses,” Jackson said in a speech to the City lobby group UK Finance on Tuesday. “This is a systemic risk too.” The amount of assets managed by private equity businesses globally has grown at a rate of aabout 13% a year, Jackson explained, rising from $2tn (£1.6tn) dollars in 2012 to about $8tn last year. Individual funds have grown exponentially too, with the largest fund – run by the private equity business CVC – having set a record by raising $29bn last summer. Back in 2006, the record for fundraising stood at $15.6bn, Jackson explained. The Bank of England said it was running out of patience, having raised similar concerns about the exposure of banks to risky loans after the collapse of the hedge fund Archegos – which left big banks such as Goldman Sachs and Credit Suisse nursing more than $10bn in losses – as well as the bond market crisis that followed the disastrous mini-budget led by the former prime minster Liz Truss in 2022. “The risk of outsized, illiquid, and unintentionally concentrated exposures is something that we have been pointing out for some time now, and for which we have very little patience,” Jackson said. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion The Bank of England has written to executives, giving UK lenders four months to get a handle on their dealings with private equity businesses, saying they will have to report back to the regulator by 30 August. “The need for significant improvements in risk management is clear, and it’s clear that these need to happen now. It’s better, as Shakespeare said, to be three hours too soon than a minute too late,” Jackson said.
Post Office boss ‘obsessed with his pay’, claims former HR director 2024-04-23 18:44:00+00:00 - The chief executive of the Post Office was “obsessed” with his pay and threatened to resign unless it was increased even as the Horizon scandal escalated, a former HR director at the postal service has claimed. The former chief people officer, Jane Davies, said Nick Read repeatedly demanded pay increases from the government, the company’s sole shareholder, and described his bonus as “intolerable”. Davies has previously accused Read of bullying, an allegation of which he was cleared in an external report published earlier this month. But on Tuesday, the business select committee published a lengthy letter from Davies in which she further addressed her relationship with Read, who she said blamed her for failing to help him secure improved terms. Davies told MPs that Read repeatedly threatened to resign over his pay deal, which she claimed “dominated” her first eight weeks at the Post Office after she joined in December 2022, in the middle of a judge-led inquiry into the Horizon scandal. Davies described more than 30 emails and instant messages in December 2022 and January 2023 discussing Read’s growing disgruntlement over his remuneration. The issue became a “huge distraction” from her duties, Davies claimed, which included efforts to secure compensation for victims of the Horizon scandal, widely seen as one of the worst miscarriages of justice in British history. Post Office annual reports show that Read has earned £2.28m in the four years since 2020, his first full year in office, of which £1.68m was basic salary. The remaining £600,000 came from performance-related extras, including a £455,000 bonus for 2021-22. In a business select committee session about the Horizon scandal in June 2023, Read said he was “very conscious that I am very well paid”. View image in fullscreen Nick Read allegedly threatened to resign unless his pay was increased. Photograph: Graeme Robertson/The Guardian The alleged exchanges took place as post office operators, hundreds of whom were wrongfully convicted of crimes such as fraud and theft due to the flawed Horizon IT system, were still battling for compensation. According to Davies, Read wrote in an email on 16 December 2022 that his “bonus situation is intolerable”. The Post Office annual report shows that he was paid £137,000 in bonuses for the year 2022-23. In the same email he allegedly asked: “Can the business afford to be rudderless”? Davies also claimed that in December 2022, Read came into the office of the Post Office’s recently appointed chair, Henry Staunton, and threatened to immediately resign unless Staunton could “appease” him with an incentive to stay. Staunton was initially supportive of Read, Davies claims, taking the request for higher pay to the government, which is the sole shareholder in the Post Office. The request met with “short shrift”, she said, adding that Read had previously threatened to resign unless the government lifted a freeze on his pay twice in the previous year. “Nick had cried wolf at least three times,” she claims a board member told her. After Davies prepared a new pay proposal to ministers, Read allegedly remained unhappy, saying: “I am prepared to submit a formal grievance and or make a claim for constructive dismissal.” Davies alleged the pay feud with the government continued but that Staunton eventually told Read he would get a 5% salary increase from £415,000 to £436,000 in 2023, as well as an agreement that the previous year’s bonus did not need to be repaid. She did not explain why the bonus might have been repaid. She also claimed that Read had previously recalculated the methodology used to calculate his bonus, resulting in an inflated bonus being paid that had not been rubber-stamped by the government. Other executives referred to this as an “unauthorised” bonus and were unhappy about it, she claimed. She said this demonstrated “a pattern of behaviour, which was centred on maximising his own pay, not erring on the side of caution and not taking into consideration the wide inequalities of pay in [the Post Office]”. A Post Office spokesperson said: “Just last week a highly reputable barrister produced an extensive, robust, and impartial report that fully exonerated Nick Read of all the misconduct allegations levelled against him, and in so doing discredited many of the claims raised in these letters. “For the avoidance of doubt the barrister was fully empowered to investigate and conclude as she saw fit. Our focus remains on providing redress for postmasters; learning from the grievous errors of the past; and building an organisation able to meet the challenges of the future.” The company did not directly address Davies’ allegations about Read’s pay.
Kingsmill owner warns of price rises due to ‘very small’ expected harvests in UK 2024-04-23 18:42:00+00:00 - One of the UK’s biggest bread makers has warned of potentially higher prices as it expects “very small” grain harvests in the UK, making the company more reliant on imports. George Weston, the head of Associated British Foods (ABF), which owns Kingsmill and Ryvita as well as Twinings tea, Dorset Cereals and the cut-price fashion retailer Primark, said the group had not increased its food prices in the past six months after a hefty period of inflation last year. However, he added: “One to watch out for is UK cereal. The harvest in July and August may be very small and we may be importing quite a lot of grain to the UK and that will come at a cost.” He said the rise in cost of UK grains such as wheat might be offset by larger harvests elsewhere in the world but that was not yet clear. “We are not planning to put prices up at this stage but commodities and other input costs may go up more than we anticipate,” he said. “The situation, if not benign, is more settled than it’s been for a while.” Record rainfall has meant farmers in many parts of the UK have been unable to plant crops such as potatoes, wheat and vegetables during the key spring season. Many winter and spring crops that have been planted, including oilseed rape, are of poor quality, with some rotting in the ground. Weston’s comments came as MPs warned of a “perfect storm brewing” on cooking oil. Prices are expected to rise due to the drop in production of oilseed rape in the UK, which has come alongside poor harvests in southern Europe and the continuing effect of war on sunflower crops in Ukraine. Robert Goodwill, chair of the environment, food and rural affairs select committee, told a hearing on Tuesday: “A perfect storm is brewing on vegetable oil and oil supplies.” He warned many were predicting that oilseed rape production could “disappear from our fields”. UK yields of oilseed rape, which is used to make domestic and commercial cooking oil, are projected to be as much as 38% lower this year compared with 2023 and as much as 54% down on the average yield since 2015, according to analysis from the Energy and Climate Intelligence Unit. Weston also said he was not expecting prices to drop on clothing, despite a drop in the cost of core materials such as cotton as well as shipping fees and production costs. Weston said higher costs of labour in the UK, where the minimum legal wage rose this month, and issues such as business rates were offsetting savings elsewhere. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion The company is also rebuilding its profit margins after a slide in recent years, when costs rose and it kept prices down during the cost of living crisis and the pandemic. Weston said margins had returned to pre-Covid levels and added that Primark would “remain the most competitive retailer” in the fashion market. He made the comment as ABF revealed a 37% rise in pre-tax profits to £881m in the six months to 2 March as sales rose 2% to £9.7bn.
US defense firms tout ‘essential’ services as sales rise amid global tensions 2024-04-23 18:37:00+00:00 - “Exceptionally strong” demand boosted sales at two US defense giants, the companies announced on Tuesday as geopolitical tensions flare in the Middle East and Ukraine continues to fight Russia’s invasion. RTX and Lockheed Martin exceeded Wall Street’s expectations for the latest quarter as conflicts including Israel’s war on Gaza prompted countries to bolster arms spending, both by striking new deals and accelerating established contracts. “The increasingly unstable geopolitical environment in the world today makes it essential for industry and government to strengthen our nation’s capabilities to deter and defend against further aggressive behavior against the US and our allies,” Jim Taiclet, Lockheed’s chairman and chief executive, said. Global military expenditure reached a record high of $2,440bn last year. The US and China led the way. Revenue at Raytheon, RTX’s defense division, rose 6% to $6.66bn in the latest quarter amid robust demand for its Patriot missile defense system. Profits at the division jumped 74% to $996m after the firm sold its cybersecurity business. “If you just think about what’s going on out there today, the integrated air and missile defense, the demand there is exceptionally strong,” Chris Calio, chief operating officer at RTX, and the firm’s incoming chief executive, told analysts on Tuesday. RTX is “well positioned” to capitalize on the military aid bills passed over the weekend by the House of Representatives, Calio added, amid “heightened demand from US allies”. Lockheed, meanwhile, revealed that sales generated by its missiles and fire control division increased 25% to $2.99bn in the three months to 31 March. The increase was “primarily” down to higher sales of tactical and strike missile programs, it said. The division’s profits were dented by a $100m loss tied to a classified program. The firm’s high mobility artillery rocket system and guided multiple launch rocket system are used by the Ukrainian military. Planned US defense spending will provide “strong underpinning for future growth over the next several years for our company”, Taiclet told analysts on a conference call. Shares in Lockheed increased 0.5% in New York on Tuesday. RTX gained 0.2%.
New federal rule would bar ‘noncompete’ agreements for most employees 2024-04-23 18:35:26+00:00 - WASHINGTON (AP) — U.S. companies would no longer be able to bar employees from taking jobs with competitors under a rule approved by a federal agency Tuesday, though the rule is sure to be challenged in court. The Federal Trade Commission voted Tuesday 3-2 to ban measures known as noncompete agreements, which bar workers from jumping to or starting competing companies for a prescribed period of time. According to the FTC, 30 million people — roughly one in five workers — are now subject to such restrictions. The Biden administration has taken aim at noncompete measures, which are commonly associated with high-level executives at technology and financial companies but in recent years have also ensnared lower-paid workers, such as security guards and sandwich-shop employees. A 2021 study by the Federal Reserve Bank of Minneapolis found that more than one in 10 workers who earn $20 or less an hour are covered by noncompete agreements. When it proposed the ban in January 2023, FTC officials asserted that noncompete agreements harm workers by reducing their ability to switch jobs for higher pay, a step that often provides most workers with their biggest pay increases. By reducing overall churn in the job market, the agency argued, the measures also disadvantage workers who aren’t covered by them because fewer jobs become available as fewer people leave their positions. They can also hurt the economy overall by limiting the ability of other businesses to hire needed employees, the FTC said. The rule, which doesn’t apply to workers at non-profits, is to take effect in four months unless it is blocked by legal challenges. “Noncompete clauses keep wages low, suppress new ideas and rob the American economy of dynamism,” FTC Chair Lina Khan said. “We heard from employees who, because of noncompetes, were stuck in abusive workplaces.” Some doctors, she added, have been prevented from practicing medicine after leaving practices. Business groups have criticized the measure as casting too wide a net by blocking nearly all noncompetes. They argue that highly paid executives are often able to win greater pay in return for accepting a noncompete. “It’ll represent a sea change,” said Amanda Sonneborn, a partner at King & Spalding in Chicago who represents employers that use noncompetes. “They don’t want somebody to go to a competitor and take their customer list or take their information about their business strategy to that competitor.” But Alexander Hertzel-Fernandez, a professor at Columbia University who is a former Biden administration Labor Department official, argued that lower-income workers don’t have the ability to negotiate over such provisions. “When they get their job offer,” he said, “it’s really a take-it-or-leave-it-as-a-whole,” he said. The U.S. Chamber of Commerce said Tuesday that it will file a lawsuit to block the rule. It accused the FTC of overstepping its authority. “Noncompete agreements are either upheld or dismissed under well-established state laws governing their use,” said Suzanne Clark, the chamber’s CEO. “Yet today, three unelected commissioners have unilaterally decided they have the authority to declare what’s a legitimate business decision and what’s not by moving to ban noncompete agreements in all sectors of the economy.” Two Republican appointees to the FTC, Melissa Holyoak and Andrew Ferguson, voted against the proposal. They asserted that the agency was exceeding its authority by approving such a sweeping rule. Noncompete agreements are banned in three states, including California, and some opponents of noncompetes argue that California’s ban has been a key contributor to that state’s innovative tech economy. John Lettieri, CEO of the Economic Innovation Group, a tech-backed think tank, argues that the ability of early innovators to leave one company and start a competitor was key to the development of the semiconductor industry. “The birth of so many important foundational companies could not have happened, at least not in the same way or on the same timeline and definitely not in the same place, had it not been for the ability of entrepreneurs to spin out, start their own companies, or go to a better company,” Lettieri said. The White House has been stepping up its efforts to protect workers as the presidential campaign heats up. On Tuesday, the Labor Department issued a rule that would guarantee overtime pay for more lower-paid workers. The rule would increase the required minimum salary level to exempt an employee from overtime pay, from about $35,600 currently to nearly $43,900 effective July 1 and $58,700 by Jan. 1, 2025. Companies will be required to pay overtime for workers below those thresholds who work more than 40 hours a week. “This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time,” said Acting Labor Secretary Julie Su.
Judges reject HMRC appeal and rule firm’s marshmallows are not sweets 2024-04-23 18:30:00+00:00 - A food company has won a sweet-tasting victory against the UK tax authorities after a court decided that it did not have to pay VAT on its marshmallows because they were not confectionery. HMRC’s appeal against a 2022 decision by the first tier tribunal (FTT) that Innovative Bites Ltd did not have to pay a £472,928 demand for sales tax on its “Mega Marshmallows” was unsuccessful because they were “sold and purchased as a product specifically for roasting”, the judges decided. VAT is paid on confectionery at 20% including “sweetened prepared food which is normally eaten with the fingers” – a description HMRC argued applied to Mega Marshmallows. In an appeal to the upper tier tribunal, Charlotte Brown, for HMRC, said that the FTT had erred in not giving “particular weight to the means of eating”, pointing out that normal sized marshmallows were subject to the standard 20% rate of VAT. However, Tim Brown, for Innovative Bites, sought to draw on the similarities with cooking chocolate and tiny marshmallows, which, although confectionery, are not taxed because they are cooking ingredients. The judges ultimately endorsed the view taken by the FTT, which noted: “Clearly if the product is not roasted then it will be eaten with the fingers, perhaps having been cut up for children under six. However, once roasted and cooled, the product might be either eaten off the stick or with the fingers. In the circumstances of this product, we do not give particular weight to the means of eating.” In a written judgment from earlier this month, appeal judges Phyllis Ramshaw and Nicholas Aleksander said: “Although not explicit it is reasonably clear that by finding that there were different ways of eating the product (and in the context of its other findings that the product was sold and packaged as specifically for roasting) the FTT seemed unable to conclude what method was more usually or more often used to eat the product hence the, perhaps infelicitous, reference to the weight to be attached.” They said it was reasonable to take into account the fact that the product was intended to be subject to a cooking process before being eaten when considering if the typical consumer would view it as confectionery, adding: “We do not accept Ms Brown’s submission that roasting a marshmallow is ‘simply heating’ it … the FTT held that ‘roasting the marshmallows gives them a different texture and flavour … Roasting larger marshmallows also gives a different result in terms of the ratio of crisp outer to soft inner mallow.’ Roasting a marshmallow gives rise to a physical change in the product, caramelising the outer skin and making the interior molten.” The judges also deemed “the finding that more Mega Marshmallows were eaten during the warmer months [and so more likely to be roasted] is not unreasonable”. The case bears similarities to previous battles fought over which sweet treats are subject to tax. In the 1990s, in a famous case against McVitie’s, HM Customs and Excise (now HMRC) unsuccessfully argued that Jaffa Cakes were biscuits as opposed to cakes, which are zero-rated, and so should attract VAT. More recently, the tax tribunal ruled that 36 flapjacks produced by Glanbia Milk were not cakes because they would not be eaten for afternoon tea, were more commonly eaten on the go, were not baked and contained significant amounts of protein.
I was in the courtroom with Trump. He seemed miserable. 2024-04-23 18:14:36+00:00 - I was at the courthouse Monday for opening statements in the first criminal trial of former President Donald Trump, the New York State case that alleges he falsified business records to cover up an affair with an adult film star and director, Stormy Daniels, in order to boost his 2016 run for president. It’s a real privilege to be in the courtroom — news organizations have been fighting tooth and nail to get seats; I was very grateful for a chance to be there. Some of my purely subjective observations about what it’s like to be there in person: The courtroom is barebones and inelegant. It has unflattering lighting. Think DMV office with a high ceiling. The courtroom doesn’t smell good. Think old soup and stale breath. The overall atmosphere is one I would describe as tense. The police officers who police the courtroom are working very hard and they appear to be very stressed. The judge in the case is soft-spoken and has a pleasant voice. Prosecutor Matthew Colangelo speaks just like Seth Meyers when Seth Meyers is not telling jokes. Trump looks a lot older than he used to. It seemed to me — again, in my purely subjective take — that Trump seemed miserable to be there. That said, a lot of us look older than we did at the start of the Trump era in news and politics (myself very much included). It seemed to me — again, in my purely subjective take — that Trump seemed miserable to be there. I also think anyone’s got a right to look miserable when they’re sitting in a courtroom charged with dozens of felonies as a criminal defendant. From the opening statement by defense counsel for Trump, we got a sense about how they’re going to defend their client. They’re going to stress that he’s a former president, that he’s the presumptive Republican nominee for president again. They’re going to claim that every aspect of his conduct was innocent — that there wasn’t an underlying sexual encounter to cover up, that former Trump attorney Michael Cohen paid a porn star on his own accord and for his own reasons, that Trump paid Cohen purely and only for normal legal services. In short, their message to the jury is that Trump had nothing to do with any affair or any cover-up of an alleged affair, and none of it had anything to do with the election. If that is basic strategy from the defense, the prosecution’s opening statements presented one fact pattern in particular that might be the most difficult thing for the defense to explain away. The prosecution’s opening statements presented one fact pattern in particular that might be the most difficult thing for the defense to explain away. In the prosecution’s opening statement, Matthew Colangelo explained to the jury that there was what he called a criminal conspiracy between Trump and AMI to publish positive stories about Trump in the National Enquirer, and negative stories about his rivals, while also finding as-yet unpublished negative stories about Trump and paying people who might tell those stories to be quiet about them before the election. The last part of that alleged conspiracy — the so-called “catch and kill” part of the scheme — is what is of most interest to prosecutors and what led to the charges that landed Trump in court. Colangelo explained to the jury that AMI, which owns the National Enquirer, first found Dino Sajudin, a doorman at a Trump building, who said Trump had fathered a secret child with a housekeeper. The doorman was the first person they paid to keep quiet about a Trump-related story, Colangelo said. Then there was a second person — a woman named Karen McDougal who said she had had an affair with Trump. Colangelo told the jury they paid her to keep quiet about her story, too. Then there was Stormy Daniels, and although the National Enquirer also made arrangements to pay her for staying quiet, after their earlier two payoffs to benefit Trump’s campaign, Colangelo said, they decided they were not interested in putting up yet more money for this third catch-and-kill. Instead, it was Michael Cohen who had to put up the money for the payment to Daniels. Here’s what Colangelo explained next: "Cohen made that payment at Donald Trump’s direction and for his benefit, and he did it with a specific goal of influencing the outcome of the election. Now, look, no politician wants bad press, but the evidence at trial will show that this was not spin or communication strategy; this was a planned, coordinated long-running conspiracy to influence the 2016 election, to help Donald Trump get elected, through illegal expenditures, to silence people who had something bad to say about his behavior, using doctored corporate records and bank forms to conceal those payments along the way. It was election fraud. Pure and simple." Standing before the jury, Colangelo noted that the 2016 election was close, and that the potential impact of this alleged criminal conspiracy on the outcome of the race will never be known. He continued: "We will never know, and it doesn’t matter, if this conspiracy was the difference-maker in a close election. But you will see evidence in the defendant’s own words from his social media posts, from his speeches at campaign rallies and other events, you will see in his own words, making crystal clear that he was certainly concerned about how all of this could hurt his standing with voters and with female voters in particular. You will also see evidence that on election night, as news outlets got closer to calling the election for Donald Trump... the lawyer for both Stormy Daniels and Karen McDougal texted [editor] Dylan Howard at the National Enquirer and he said, 'What have we done?' About a month after the election, Pecker then authorized AMI to release both Sajudin and McDougal from their non-disclosure agreements." So, having paid for the stories in order to keep them from the public before Election Day, Pecker and AMI then told both McDougal and Sajudin a month after the election that they were no longer bound by the non-disclosure agreements. For context, it is important to know that the defense has claimed none of these payments had anything to do with the election. But the prosecution says it will present evidence that Trump and AMI paid for these people to be silent until the election was over, and then once the election was over, they released these people from their agreements. Logically, if not legally, this just bluntly gives lie to the defense’s portrayal of Trump’s actions, as described in their opening statement. The unavoidable implication is that, once the election happened, Trump and AMI didn’t care anymore about keeping those stories away from the public. Because at that point, it was “mission accomplished”; the mission had been to influence the election. From what I heard in court Monday, this is the prosecution’s argument that is most troublesome for the defense. If prosecutors can support these claims with evidence and convince the jury of the truth of this fact pattern, it presents a nearly irrefutable logical inference showing what the payoffs were for: Trump was not acting not to protect his brand or to save his family from embarrassment. The payments were made purely and only for the purpose of influencing the election. Full stop. The prosecution calls what Trump and AMI did “a criminal scheme to corrupt the 2016 presidential election,” one that was “covered up” by lying in Trump Organization business records. Logically, that would seem like the crux of the case. Legally — we’ll see.
Who Can Be Trusted for Retirement Advice? New Rules Strengthen Protections. 2024-04-23 17:08:06+00:00 - When you walk into a financial adviser’s office, you expect them to put your best interests above all else — in the same way a doctor would, rather than, say, a car salesman. But many people don’t realize that the rules financial professionals must follow vary, depending on where they work and what products they’re selling. One of those federal regulations, which governs retirement plans, was just tightened: The Biden administration announced new rules on Tuesday that will require more financial professionals to adhere to a higher standard when providing financial advice about your retirement money. Starting Sept. 23, investment professionals who hold themselves out as trusted advisers will be required to act as fiduciaries — that is, they can’t place their interests ahead of the investor — when customers pay them for advice on individual retirement accounts, 401(k)s and similar buckets of tax-advantaged dollars. The goal is to minimize conflicts of interest, or at least ensure that they aren’t influencing investment professionals’ advice that lines their pockets at the customers’ expense. The rule, which will be published in the Federal Register on Thursday, will be fully effective in September 2025. The changes, issued by the Department of Labor, which oversees retirement plans, close loopholes that made it easier for many investment professionals to avoid fiduciary status — including, for example, when workers roll over their savings from a 401(k) plan to an individual retirement account. Those transactions, which totaled nearly $800 billion in 2022, weren’t always covered by these investor protections, even though these sums often amount to a person’s life savings.
Larry Nassar's victims reach $138.7 million settlement over botched FBI probe 2024-04-23 16:58:00+00:00 - The Justice Department agreed to pay more than $138 million to victims of disgraced sports physician Larry Nassar and apologized for the FBI's failing to act on warnings about the convicted sex abuser, officials said Tuesday. The "FBI failed to conduct an adequate investigation of Nassar’s conduct," Acting Associate Attorney General Benjamin Mizer said in announcing the $138.7 million settlement. “For decades, Lawrence Nassar abused his position, betraying the trust of those under his care and medical supervision while skirting accountability,” Mizer said. “These allegations should have been taken seriously from the outset. While these settlements won’t undo the harm Nassar inflicted, our hope is that they will help give the victims of his crimes some of the critical support they need to continue healing.” It was reported last week that the Justice Department was expected to pay around $100 million. The announcement is a culmination of several years of internal probes which concluded that FBI agents in Indianapolis made “fundamental errors” by failing to notify other FBI offices or state or local authorities about Nassar. A 2021 report by Inspector General Michael Horowitz blasted Indianapolis-based agents, saying officials at that field office "did not take responsibility for their failures" and instead "provided incomplete and inaccurate information to make it appear that they had been diligent in responding to the sexual abuse allegations." Larry Nassar in Eaton County Court in Charlotte, Mich., on Feb. 5, 2018. Matthew Dae Smith / AP file The settlement came after two years of long and complex negotiations between Nassar's victims and the Justice Department, according to multiple sources familiar with the drawn-out talks. "It was a tough negotiation. I think they [DOJ] understood what happened and the gravity of it," one source told NBC News. "There was a real acknowledgment by DOJ that something went very wrong here and they were reasonable in coming to an agreement." Attorney John Manly, who represents more than two dozen of of Nassar's victims, said he's still waiting to hear from former FBI director James Comey, who ran the bureau from 2013 to 2017. "The thing I think is very troubling here, despite numerous requests, the man running the FBI at the time, Jim Comey, has never explained what happened or how this occurred," said Manly, whose clients include Olympians McKayla Maroney and Aly Raisman. Comey could not be immediately reached for comment on Tuesday afternoon. Funds have already been apportioned per claimant with the various amounts determined on a case-by-case basis, multiple sources familiar with negotiations told NBC News. Those funds are expected to be dispersed within the next two months. “The survivors of Larry Nassar’s abuse were betrayed by the institutions they should have been able to trust. At a time when these athletes were in grave need of help, the FBI indefensibly failed to do its job,” U.S. Sen Chuck Grassley, R-Iowa, said in statement. Grassley is a minority member of the Senate Judiciary Committee. “Though the past can never be undone, today’s settlement is an important step to bringing about some justice for what these athletes have suffered," the lawmaker added. "I once again commend the survivors for their bravery and poise, and for courageously speaking out about their experiences. Their steadfast fight for change has forged a better future for the athletes and young women who follow in their footsteps.” Tuesday's deal is the latest in a string of civil settlements acknowledging institutional failures when victims first raised red flags about Nassar. Michigan State University, where Nassar worked, agreed to pay $500 million in 2018 to women and girls who were assaulted by him. USA Gymnastics and the U.S. Olympic and Paralympic Committee reached a $380 million deal with victims in 2021. The settlement announced Tuesday will resolve 139 claims made against the FBI, according to the DOJ. Attorneys Megan Bonanni and Michael Pitt, who represent 77 of those 139 claimants, said the settlement will hold "the DOJ and FBI accountable for their failures." "The FBI fundamentally failed to protect hundreds of women and girls from sexual abuse through inaction and total mishandling of their Larry Nassar investigation," the attorneys said in a statement. "We hope this serves as a lesson for federal law enforcement and they make the changes necessary to prevent anything like this from happening again." The 60-year-old Nassar is serving time at the United States Penitentiary, Lewisburg, where his listed release date is Jan. 30, 2068. It's unlikely the disgraced doctor will ever walk free. He pleaded guilty in 2017 to federal charges stemming from his handling of thousands of images of child pornography, leading to his 60-year prison sentence that he's serving in Lewisburg, Pennsylvania. In 2018, a judge in Ingham County, Michigan, sentenced Nassar to 40 to 175 years in prison for molesting young girls under the guise of treatment. Judge Rosemarie Aquilina told Nassar at his sentencing: "I just signed your death warrant." Also in 2018, a judge in Eaton County sentenced him to 40 to 125 years behind bars on charges in connection with the sexual abuse of girls during supposed medical treatments. More than 265 patients have said Nassar victimized them, including USA Gymnastics national team stars Maroney, Raisman, Gabby Douglas, Sabrina Vega, Ashton Locklear, Kyla Ross, Simone Biles and Alyssa Baumann.
Ex-Post Office boss sought ‘non-emotive words’ for Horizon bugs, inquiry hears 2024-04-23 16:52:00+00:00 - The former Post Office chief executive Paula Vennells and other senior executives searched for “non-emotive” words to describe computer bugs found in the company’s Horizon IT system in an “absolutely Orwellian” use of language, a public inquiry has heard. The inquiry is investigating why the Post Office hounded and prosecuted post office operators for more than a decade because of shortfalls in their branch accounts. It has since emerged that these discrepancies were due to IT problems in the Horizon computer system. Susan Crichton, a former senior lawyer at the Post Office between 2010 and 2013, told the inquiry that an independent investigation by the forensic accountants Second Sight had identified bugs in Horizon by July 2013. The inquiry was shown an email by Vennells, sent in July 2013 to Mark Davies, the Post Office’s then head of communications, in which Vennells said she had asked her “engineer/computer literate husband” to help find a “non-emotive word for computer bugs”. Her email to Davies read: “My engineer/computer literate husband sent the following reply to the question: ‘What is a non-emotive word for computer bugs, glitches, defects that happen as a matter of course?’” Her husband replied: “Exception or anomaly. You can also say conditional exception/anomaly which only manifests itself under unforeseen circumstances.” Problems with post office branches were later referred to as “branch exceptions” rather than “bugs” in a note prepared for a meeting between the Post Office and James Arbuthnot, then a Tory MP who was campaigning for wrongly convicted operators, the inquiry heard. Julian Blake, the counsel to the inquiry, put it to Crichton that there was “discussion within the business at the highest levels” about “changing the language around these bugs” so it was “less emotive language”. Crichton said she did not recall a discussion around language. “Are we to understand here that words suggested by Paula Vennells’s husband have now made their way into the terminology that’s being used by the business,” Blake asked Crichton, adding it was an “absolutely Orwellian” use of language. “That’s what it looked like,” she replied. Crichton was also asked why she had suggested that operators with criminal convictions including Seema Misra should be excluded from Second Sight’s investigation. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Misra is one of the highest-profile victims of the Post Office scandal. She was sentenced to 15 months in prison for theft and locked up on her son’s 10th birthday while eight weeks pregnant. She was placed on suicide watch after collapsing in court. Her conviction was among those overturned by the court of appeal in 2021. Crichton replied: “I was very concerned about the situation. I understood what had happened was very concerning and I did not want to reopen it [the Misra case] unless we had good reason to.” She told the inquiry: “I agree it was too shortsighted maybe.” Crichton also used her appearance before the inquiry to apologise to the post office operators and say she was “truly sorry for the suffering” caused to them and their families by the scandal. The inquiry continues.
Amazon debuts grocery delivery program for Prime members, SNAP recipients 2024-04-23 16:40:00+00:00 - Amazon on Tuesday debuted a new grocery delivery program for Prime members across the U.S., as well as a lower-cost option for people who receive Supplemental Nutrition Assistance Program (SNAP) benefits, the official name for the food-stamp program. The cost of unlimited grocery delivery from Whole Foods Market, Amazon Fresh and other local grocers and specialty retailers is $9.99 a month, for orders over $35. The new delivery service is available in more than 3,500 cities and towns across the nation, and includes features such as one-hour delivery windows, Amazon said Tuesday. Amazon said the cost for people who receive SNAP benefits is $4.99 per month. Food-stamp recipients need to have a registered Electronic Benefit Transfer (EBT) card, but don't require a Prime membership to join the food delivery program. Prime costs $139 annually, or $14.99 per month. The new service comes almost three years after Amazon ended free delivery for its Whole Foods customers, a decision that sparked some annoyance from customers at the time, the Washington Post reported. Meanwhile, rival Walmart offers unlimited grocery delivery as part of its Walmart Plus membership program, which costs $12.95 per month, along with a discounted service for food stamp recipients. Other companies, like Instacart, charge fees that can start at $3.99 per delivery. Amazon said its new grocery delivery service "pays for itself" after one delivery per month. "We have many different customers with many different needs, and we want to save them time and money every time they shop for groceries," said Tony Hoggett, senior vice president of worldwide grocery stores at Amazon, in a statement. Amazon said it is rolling out the program nationally after piloting it in three cities last year. More than 85% of trial participants deemed it a success, according to the company, citing convenience and saving money on delivery fees. Including food stamp customers in the program is part of Amazon's initiative to help provide affordable grocery services to low-income customers, the company added.
UnitedHealth paid ransom after massive Change Healthcare cyberattack 2024-04-23 15:46:00+00:00 - The Russia-based cybercriminals who attacked a UnitedHealth Group-owned company in February did not walk away from the endeavor empty-handed. "A ransom was paid as part of the company's commitment to do all it could to protect patient data from disclosure," a UnitedHealth Group spokesperson confirmed with CBS News late Monday. The spokesperson did not disclose how much the health giant paid after the cyberattack, which shut down operations at hospitals and pharmacies for more than a week. Multiple media sources have reported that UnitedHealth paid $22 million in the form of bitcoin. "We know this attack has caused concern and been disruptive for consumers and providers and we are committed to doing everything possible to help and provide support to anyone who may need it," UnitedHealth CEO Andrew Witty said in a statement Monday. UnitedHealth blamed the breach on a Russian ransomware gang known as ALPHV or BlackCat. The group itself claimed responsibility for the attack, alleging it stole more than six terabytes of data, including "sensitive" medical records, from Change Healthcare, which processes health insurance claims for patients who visited hospitals, medical centers or pharmacies. The scale of the attack — Change Healthcare processes 15 billion transactions a year, according to the American Hospital Association —meant that even patients weren't customers of UnitedHealth were potentially affected. The attack has already cost UnitedHealth Group nearly $900 million, company officials said in reporting first-quarter earnings last week. Ransomware attacks, which involve disabling a target's computer systems, have become increasingly common within the health care industry. The annual number of ransomware attacks against hospitals and other providers doubled from 2016 to 2021, according to a 2022 study published in JAMA Health Forum. The Change Healthcare incident was "straight out an attack on the U.S. health system and designed to create maximum damage," Witty told analysts during an earnings call last week. Ultimately, the cyberattack is expected to cost UnitedHealth between $1.3 billion and $1.6 billion this year, the company projected in its earnings report.
Megan Thee Stallion accused of harassment by cameraman who said he was forced to watch her have sex 2024-04-23 15:39:00+00:00 - LOS ANGELES — A former cameraman for Megan Thee Stallion who alleges that he was trapped inside a moving vehicle with the hip-hop star in a foreign country while she had sex with a woman has filed a lawsuit accusing the entertainer of harassment and a hostile work environment. Emilio Garcia said in the suit filed Tuesday in Los Angeles County Superior Court that after the alleged incident he was warned, “don’t ever discuss what you saw,” and berated, fat-shamed and treated differently by Megan. The “harassment was so severe or pervasive” that it created a “hostile, abusive work environment” that made Garcia’s “working conditions intolerable,” the suit said. Representatives for Megan Thee Stallion and her management company, Roc Nation, did not immediately respond to NBC News requests for comment. Garcia began working for Megan Thee Stallion, whose real name is Megan Pete, as a personal cameraman in 2018, quit his job in 2019 to pursue the gig with the Grammy winner full time and worked for her until June 2023, the lawsuit stated. Photographer Emilio Garcia with Megan Thee Stallion. Courtesy Emilio Garcia Garcia said in the lawsuit that he traveled with Megan to Ibiza, Spain, in June 2022 and that while in an SUV with Megan and three other women after a night out, Megan and one of the women began to have sex next to him in the moving car. “I felt uncomfortable. I was kind of frozen, and I was shocked. At kind of just be the overall audacity to do this right, right beside me,” Garcia told NBC News in an interview. The following day, the rapper asked Garcia whether he was in the car with them the night before, and when he confirmed he was, Megan told him: “Don’t ever discuss what you saw,” the suit states. Garcia’s said in his suit that during the same trip, Megan hurled fat-shaming insults at him, calling him a “fat bitch” and telling him to “spit your food out” and “you don’t need to be eating.” “To hear someone who advocates about loving your body tell me these things,” Garcia said in the interview, “I felt degraded.” When they returned from the trip, Garcia said in the lawsuit, his compensation structure was changed from a monthly flat-rate to a pay-per-task system that required him to submit invoices for each assignment. He said he was expected to provide the same services despite the pay structure change, but alleges that he was treated differently following the Ibiza trip and saw a decrease in bookings Megan hired him to do. Photographer Emilio Garcia with Megan Thee Stallion. Courtesy Emilio Garcia Garcia began to consider quitting the job because of Megan’s “possessiveness combined with a lack of appropriate pay for the amount of time asked of him” and a lack of bookings, the suit states. Garcia remained on the schedule for a June 2023 job, but the night before, Roc Nation notified him that “his services would no longer be required” by Megan, according to the lawsuit. While working for Megan, Garcia “endured a barrage of relentless sexual and fat-shaming comments plunging him into profound emotional distress,” the suit said. “What I learned throughout the years is that, especially coming from an from an office environment, is you know, there’s no HR department in the entertainment business,” Garcia told NBC News in an interview. “So if you don’t know that you’re being done wrong, you don’t really know how to advocate for yourself until you start asking maybe you start asking your peers who have representation, they have agents, they have management, they have attorney. So I just really just want to encourage people to advocate for themselves.” The alleged behavior caused Garcia to face a loss in earnings and other employment benefits, as well as physical injuries, physical sickness and emotional distress, according to the lawsuit. The suit states that while working for the entertainer, he was without basic insurance coverage and therefore could not get the care he needed. Now, he “grapples with mounting anxiety, depression, and physical distress stemming from the toxic work environment,” according to the suit. Emilio Garcia with Megan Thee Stallion. Courtesy Emilio Garcia “Megan just needs to pay our client what he’s due, own up to her behavior and quit this sort of sexual harassment and fat shaming conduct,” Ron Zambrano, an attorney for Garcia, said in a statement to NBC News. “Emilio should never have been put in a position of having to be in the vehicle with her while she had sex with another woman. ‘Inappropriate’ is putting it lightly. Exposing this behavior to employees is definitely illegal.” Garcia’s lawsuit also outlines alleged employment and wage violations that center on his classification as an independent contractor. The lawsuit alleges that Megan prohibited him from working for anyone else and was denied overtime pay and breaks. His misclassification as an independent contractor “left him without basic insurance coverage, depriving him of essential health care,” the suit said. Garcia told NBC News in an interview that he is seeking more than six figures. The suit seeks unpaid wages, as well as interest on the unpaid wages, unpaid overtime wages and other employee benefits at the legal rate. He is also seeking statutory penalties and wage penalties pursuant to California labor laws, punitive damages according to proof and costs he incurred, including attorneys’ fees. Diana Dasrath reported from Los Angeles and Rebecca Cohen reported from New York.
Tesla’s Profit Fell 55%, Adding to Concerns About Its Strategy 2024-04-23 15:31:54+00:00 - Tesla reported on Tuesday that it made significantly less money in the first three months of the year because of its tepid car sales, reinforcing concern among investors that the company led by Elon Musk is losing ground in the market for electric vehicles. Profit fell 55 percent, to $1.1 billion, from the first quarter of 2023, the company said. And revenue fell 9 percent, to $21.3 billion. A slump in earnings was seen as inevitable after Tesla said this month that sales in the first quarter fell 8.5 percent from a year earlier, and after the company announced plans to lay off more than 10 percent of its employees worldwide, or about 14,000 people. The job cuts, including more than 2,000 workers at the company’s factory in Fremont, Calif., were interpreted as a sign that Tesla was struggling to bring costs in line with sinking revenue. A year ago, in the first quarter of 2023, Tesla said it made $2.5 billion and had one of the best profit margins in the industry. But the company has been forced to cut prices, including in a new round last week, lowering the amount it makes on each car it sells. For a while, that strategy seemed to help bolster the company’s sales but Tesla now appears to be struggling to attract buyers even with lower prices.
Charles Schwab Fortifies its Uptrend on EPS Beat 2024-04-23 14:15:00+00:00 - Key Points Schwab is the second largest retail brokerage firm in the country, growing to a record $9.12 trillion in client assets and 35.3 million accounts in the first quarter of 2024. Schwab's Q1 2024 revenues tumbled 7.3% YoY but sequentially grew 6% QoQ. Schwab shares fended off a gap down and rallied to new 52-week highs despite the 3.8% drop in the S&P 500. 5 stocks we like better than Charles Schwab Retail financial services giant The Charles Schwab Co. NYSE: SCHW reported its first-quarter 2024 earnings in the wake of the market sell-off. Despite initially gapping down on the results, shares managed to stage a rally back up towards 52-week highs at $73.88. The financial services sector leader continued to see positive deposit inflows as net interest margin expanded 13 bps QoQ up to 2.02% thanks to greater margin balance utilization and outstanding balance supplementation funding decline. The company competes with retail brokerages like Bank of America Co. NYSE: BAC, owned by Merrill Lynch, and Morgan Stanley NYSE: MS, owned by E-Trade and Robinhood Markets Inc. NASDAQ: HOOD. Get Charles Schwab alerts: Sign Up Banking Broker Charles Schwab started as a discount broker that competed solely on providing fixed discounted commissions on stock trades versus the conventional percentage-based commissions that full-service brokers charged. Schwab helped reshape the stock trading commission landscape. As the years went by, Schwab expanded into wealth management, research, electronic trading and banking services. Schwab was the pioneer in discount brokers and was influential in pivoting to zero-commission stock trades to fend off fintech disruptor Robinhood from taking more market share of the retail market. Banking services have grown to become a larger portion of its profits as one of the largest net interest margin income gainers. While interest income took a dip, the company still expects it to expand in 2024. Daily Ascending Triangle SCHW's daily candlestick chart illustrates an ascending triangle pattern. The ascending trendline formed at $59.43 on Jan. 17, 2024. Pullbacks formed higher lows as shares rose to the flat-top upper trendline at $72.97. As SCHW trades closer to the apex point, shares will either break out through the upper trendline or break down through the lower ascending trendline. The daily relative strength index is attempting to coil back up through the 65-band. Pullback support levels are at $69.47, $66.13, $60.92 and $55.87. Top-line Miss but bottom-line beat Charles Schwab Today SCHW Charles Schwab $75.23 +0.97 (+1.31%) 52-Week Range $45.65 ▼ $75.37 Dividend Yield 1.33% P/E Ratio 31.48 Price Target $74.47 Add to Watchlist Schwab reported Q1 2024 EPS of 74 cents, beating analyst estimates by a penny. Revenues slipped 7.3% YoY to $4.74 billion but still beat consensus estimates of $4.71 billion. Net income totaled $1.4 billion or 68 cents per diluted share. The company took a $140 million restructuring charge. Total client assets reached a record $9.12 trillion. Active brokerage accounts rose 3% YoY to 35.3 million. Trading volume and margin balances grew 15% and 9%, respectively. Average revenue per trade fell 5% to $2.25, while total expenses fell 2%. Inflows Were Still Impressive Schwab saw $96 billion in core new assets. Its wealth solutions segment had $14 billion in net inflows, up 60% YoY, led by its premier fee-based Schwab Wealth Advisory. Pre-tax profit margins expanded by 500 bps. Organic earnings and a smaller balance sheet helped boost its capital position. The tier 1 Leverage ratio was 8.8%, and the Adjusted Tier 1 Leverage ratio was greater than 5%. While total net revenues declined YoY, strong client engagements drove sequential revenues up 6%. Upbeat CEO Comments Schwab CEO Walt Bettinger provided his outlook during its Spring Business Update call. The company continues integrating the Ameritrade acquisition and enhancing its digital platforms. Bettinger noted that inflation remained at moderate levels, although down substantially from the year-ago levels. The company experienced strong organic growth in the quarter. Net new assets rose just shy of $100 billion, with March alone generating $45 billion, up 6% YoY. Buoyant Markets Led to Rising Customer Activity Markets eased their expectation of interest rates cut but still remained buoyant as trading became more active, resulting in daily trading volume rising 15% QoQ and customer margin balances rising 9%. Total client interactions rose 17%. More actively led to more customers seeking help through its investment advisory solutions, driving revenues up 70% QoQ. Ameritrade Integration Completes in May The falling attrition rate of the Ameritrade acquisition was a key factor. The company plans to convert the last 10% of Ameritrade client accounts in May, which is mostly comprised of active traders and power users of the Think or Swim platform. Bettinger concluded, “In my opinion, the combination of the best of Ameritrade with the best of Schwab sets the bar for anyone serving retail investors and independent investment advisers alike. Our combination of platform, service, dedicated relationships, investment advisory for retail clients and expertise serving independent investment advisers is a powerful combination for driving future growth.” Ameritrade analyst ratings and price targets are at MarketBeat. Before you consider Charles Schwab, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Charles Schwab wasn't on the list. While Charles Schwab currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Lockheed Martin Stock Aims for a Fresh All-Time High 2024-04-23 13:59:00+00:00 - Key Points Lockheed Martin had a solid quarter supported by strength in all segments. The healthy balance sheet supports robust capital returns, including dividends and share-reducing buybacks. The company reaffirmed guidance, which may be overly cautious in light of geopolitical conflict and defense spending. 5 stocks we like better than Lockheed Martin Lockheed Martin's NYSE: LMT stock price has trended higher for years, supported by robust defense spending and, more recently, conflict in Ukraine and the Middle East. The takeaway from the Q1 2024 earnings report is that business is good, very good, and that guidance is cautious. The Q1 outperformance may be a one-off; it may not persist through the year’s end, but it indeed suggests otherwise. Internal metrics show strength in the two segments whose products are most disposable: Rotary & Mission Systems and Missiles & Fire Control. Helicopters aren’t intended to be disposable, but missiles, drones, and logistics systems are. Because there is no foreseeable end to the conflicts driving need, investors should expect to see Lockheed Martin exceed guidance, if not increase it, as the year progresses. Other reasons to suspect outperformance include the latest US aid package to Ukraine and Israel, worth $95 billion if passed. Get Lockheed Martin alerts: Sign Up Lockheed Martin has a Strong Quarter. All Segments Outperform Lockheed Martin Today LMT Lockheed Martin $460.08 -1.25 (-0.27%) 52-Week Range $393.77 ▼ $483.53 Dividend Yield 2.74% P/E Ratio 16.70 Price Target $486.78 Add to Watchlist Lockheed Martin had a solid quarter with strength in all segments. The company produced revenue of $17.19 billion, a gain of 13.8% over last year. The top line includes the impact of an extra a13th week but still outpaced the consensus by 750 basis points. Missiles & Fire Control was the strongest segment, at 25%, followed by a 16.5% increase in Rotary & Missions Systems, a 10.5% increase in Space, and a 9.2% increase in Aeronautics. The company highlighted Space's strength, pointing out its importance in advancing security solutions. Margin contracted compared to last year but due to investment in production capability and R&D of advanced products. Regardless, the net income of $1.5 billion and FCF of $1.3 billion are roughly flat compared to last year, allowing the company to maintain its healthy balance sheet while repurchasing shares and paying dividends. The news is that adjusted earnings of $6.33 beat Marketbeat’s reported consensus by $.47 or 800 basis points, which aligns with the idea that guidance is cautious. Lockheed Martin reaffirmed its guidance for 2024. The company expects revenue and earnings in a range that aligns with the analysts' consensus but only about 2.5% revenue growth compared to the solid double-digit produced in Q1. The backlog also aligns with the idea that the guidance is cautious. The backlog grew by 10% to $159.4 billion, or enough to sustain operations at Q1 levels for more than two years. Lockheed Martin Capital Returns are On-Target Lockheed Martin Dividend Payments Dividend Yield 2.74% Annual Dividend $12.60 Dividend Increase Track Record 21 Years Annualized 3-Year Dividend Growth 7.43% Dividend Payout Ratio 45.74% Recent Dividend Payment Mar. 29 See Full Details Lockheed Martin carries debt and leaned into this quarter, issuing enough for $2 billion in net proceeds, but it is not a red flag. The debt is to help sustain growth. Balance sheet highlights include a build in the cash position despite dividends, share repurchases, and CAPEX spending. Highlights also include a build of current and total assets. The leverage ratio remains low at 2.9X shareholder equity. The dividend is healthy and reliable. The 2.75% distribution yield is about 44% of the earnings outlook, and payments are increasing. The company has increased for twenty-one consecutive years and is on track for #22 this summer. Share repurchases are robust and reduced the diluted count by an average of 5.5% at the end of Q1. The Technical Outlook for LMT Stock Bullish with a Chance of New Highs LMT stock is trending higher and moving upwards following the Q1 release. The action is light but aligns with the trend and may lead to higher prices over the next few weeks and months. However, there are signs of resistance near $467, so gains may be capped. If the market can not exceed that level soon, it could keep moving sideways until it reaches the long-term uptrend later this year. If the market can sustain upward movement now, the next target for critical resistance is near $475 and then $500. Before you consider Lockheed Martin, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Lockheed Martin wasn't on the list. While Lockheed Martin currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Beyond the Halving: The Future of Bitcoin Mining Stocks 2024-04-23 13:50:00+00:00 - Key Points The Bitcoin halving event significantly impacts miner profitability, requiring strategic adjustments to maintain competitiveness. Leading mining companies are embracing innovation and diversification to navigate the post-halving era. Emerging contenders in the mining industry are demonstrating promising growth potential and strategic vision. 5 stocks we like better than Bitdeer Technologies Group Bitcoin (BTC) is the pioneering cryptocurrency that has revolutionized the fintech sector since its inception in 2009. Underpinning this digital currency is a decentralized ledger known as the blockchain, which records all transactions and ensures the system's integrity. The process of validating and adding these transactions to the blockchain is called Bitcoin mining. Miners employ powerful computers that compete to solve complex mathematical problems. The first to solve the problem adds a new block to the blockchain and earns a reward in Bitcoin. Get BTDR alerts: Sign Up The Halving and Mining Economics A crucial aspect of Bitcoin's design is the halving event, which occurs approximately every four years. During a halving, miners' reward for successfully mining a block is reduced by half. This mechanism controls the issuance of new Bitcoin, ensuring its scarcity and preventing inflation. The most recent halving occurred on April 20, 2024, decreasing the mining reward to 3.125 Bitcoin. The halving presents a significant challenge for Bitcoin miners, as the reduction in block rewards directly impacts their revenue. To remain profitable, miners must improve efficiency, reduce operational costs, and adopt advanced mining technologies. Mining Leaders in the Post-Halving Era As the Bitcoin halving reshapes the mining landscape, several companies have emerged as leaders, demonstrating resilience and adaptability in the face of this event. These industry titans have strategically positioned themselves to survive and thrive in the post-halving environment. Let’s take a look at a few of the leaders and their post-halving strategy: Bitdeer Technologies Group Bitdeer Technologies Group Today BTDR Bitdeer Technologies Group $6.71 +0.06 (+0.90%) 52-Week Range $2.77 ▼ $14.65 Price Target $13.64 Add to Watchlist Bitdeer Technologies Group NASDAQ: BTDR has successfully expanded its mining capacity and revenue streams, establishing a global footprint and pursuing vertical integration to enhance its competitive advantage. A key milestone in Bitdeer Technologies's journey is the recent development and testing of its first proprietary Bitcoin mining chip, a significant step towards reducing reliance on third-party suppliers and optimizing operational efficiency. This strategic initiative aligns with the company's focus on controlling its supply chain and mitigating potential disruptions, particularly in the recent Bitcoin halving event. Bitdeer Technologies's financial performance reflects its successful growth strategy. In 2023, Bitdeer Technologies Group earnings reported a 10.6% year-over-year increase in revenue, reaching $368.6 million. This growth is attributed to the expansion of its self-mining operations and the appreciation of Bitcoin prices. The company also recorded an adjusted EBITDA of $100.3 million, demonstrating its ability to generate strong cash flow. Bitdeer Technologies is well-positioned to navigate the post-halving landscape. The company's strategic focus on vertical integration, global expansion and technological innovation provides a solid foundation for sustained growth and profitability. Bitdeer Technologies plans to leverage its proprietary mining chip to enhance its mining efficiency further and reduce operational costs. Additionally, the company is actively exploring opportunities to expand its mining operations in regions with access to low-cost renewable energy sources, aligning its growth strategy with sustainability goals. Cipher Mining Inc. Cipher Mining Today CIFR Cipher Mining $4.81 +0.25 (+5.48%) 52-Week Range $1.76 ▼ $5.75 Price Target $5.25 Add to Watchlist Cipher Mining Inc. NASDAQ: CIFR has distinguished itself within the Bitcoin mining industry through its unwavering commitment to operational excellence. This has resulted in impressive financial performance and a strong position for navigating the post-halving landscape. The company has consistently delivered record revenues and net profits, demonstrating its ability to manage costs and optimize mining operations effectively. Cipher Mining's strategic focus on efficiency is evident in its data center operations. The company operates its facilities at full capacity, maximizing utilization and minimizing downtime. Furthermore, Cipher Mining is actively expanding its hash rate and infrastructure, strategically investing in new data centers and mining equipment to enhance its competitive edge. Cipher Mining's financial performance showcases its commitment to profitability and operational efficiency. In the fourth quarter of 2023, the company achieved record-breaking results, reporting GAAP earnings of $10.6 million and non-GAAP earnings of $27.8 million. These figures highlight Cipher Mining's ability to generate substantial profits despite the challenges posed by the recent Bitcoin halving. Furthermore, the company's full-year 2023 revenues reached $126.8 million, demonstrating its strong growth trajectory. Cipher Mining's robust financial health is further evidenced by its cash and cash equivalents, which stood at $86.1 million as of December 31, 2023. These metrics underscore the company's ability to invest in future growth initiatives and navigate the evolving Bitcoin mining landscape. Hut 8 Mining Corp. Hut 8 Today HUT Hut 8 $9.63 +0.41 (+4.45%) 52-Week Range $6.18 ▼ $22.75 Price Target $12.33 Add to Watchlist Hut 8 Mining Corp. NASDAQ: HUT has undergone a transformative journey, solidifying its position as a leading Bitcoin mining entity through strategic mergers and a commitment to diversification. The recent merger with US Bitcoin Corp. marked a pivotal moment, creating a vertically integrated mining operator with a robust balance sheet and a multifaceted business model. This strategic move has enhanced Hut 8 Mining's resilience and unlocked significant growth potential in the evolving post-halving landscape. Recognizing the importance of diversification, Hut 8 Mining is actively exploring additional revenue streams beyond self-mining. The company is expanding its hosting services, providing infrastructure and support to other miners and venturing into the high-performance computing sector. This strategic diversification mitigates risks associated with Bitcoin price volatility and positions Hut 8 Mining to capitalize on emerging opportunities within the broader technology sector. Hut 8 Mining's financial performance reflects the positive impact of its strategic initiatives. In the six months ended December 31, 2023, the company reported revenue of $60.6 million, a substantial increase compared to the previous period. This growth is attributed to the expansion of its self-mining operations and the contribution from its diversified business segments. Notably, Hut 8 Mining holds a significant Bitcoin reserve, with 9,195 Bitcoin on its balance sheet as of December 31, 2023, representing a substantial asset and a testament to its long-term commitment to the Bitcoin ecosystem. Emerging Contenders in the Mining Arena While established companies lead the charge in the Bitcoin mining industry, several emerging contenders are making their mark and attracting investor attention. These companies demonstrate promising growth potential and innovative strategies, positioning themselves as potential future leaders in the evolving mining landscape. These up-and-coming players are actively expanding their operations, investing in cutting-edge technologies and pursuing strategic initiatives to enhance their competitive edge. As the Bitcoin mining industry continues to evolve, these emerging contenders are poised to shape its future significantly. Bitfarms Ltd. Bitfarms Today BITF Bitfarms $2.11 +0.06 (+2.93%) 52-Week Range $0.92 ▼ $3.91 Price Target $4.25 Add to Watchlist Bitfarms Ltd. NASDAQ: BITF has garnered recognition as an emerging contender in the Bitcoin mining industry, driven by its ambitious growth strategy and commitment to expanding its operational footprint. The company has strategically positioned itself for significant growth after the halving event. This is due to their emphasis on increasing their hash rate and constructing new mining facilities in carefully chosen locations. Bitfarms' aggressive expansion plans are evident in its pursuit of tripling its hash rate, a measure of its computational power and a key determinant of mining success. The company invests in new mining equipment and infrastructure to achieve this ambitious goal. Furthermore, Bitfarms is strategically expanding its mining facilities in Paraguay and Quebec, capitalizing on regions with access to low-cost renewable energy sources. This focus on sustainable energy solutions aligns with the growing emphasis on environmental responsibility within the Bitcoin mining industry. A significant factor contributing to Bitfarms' growth potential is its recent achievement of debt-free status, which was announced in Bitfarm’s earnings report. By eliminating its debt obligations, the company has enhanced its financial flexibility, enabling it to allocate resources toward its expansion initiatives and navigate potential market fluctuations with greater resilience. Bitfarms' financial performance demonstrates the effectiveness of its growth strategy. In the fourth quarter of 2023, the company mined 1,236 Bitcoin, contributing to its total production of 4,928 Bitcoin for the year. Bitfarms' gross mining margin improved to 52%, reflecting its ability to manage costs and optimize mining operations. The company's strong financial position and ambitious expansion plans have earned it a place among the emerging contenders in the Bitcoin mining industry. HIVE Digital Technologies Ltd. HIVE Digital Technologies Today HIVE HIVE Digital Technologies $3.05 +0.11 (+3.74%) 52-Week Range $2.54 ▼ $6.84 Price Target $5.17 Add to Watchlist HIVE Digital Technologies Ltd. NASDAQ: HIVE has embarked on a transformative journey, strategically shifting its focus beyond Bitcoin mining to encompass the burgeoning field of high-performance computing (HPC). This strategic pivot diversifies HIVE's revenue streams and positions the company at the forefront of technological advancement, capitalizing on emerging trends and solidifying its position as a contender in the evolving digital landscape. HIVE has significantly invested in expanding its HPC infrastructure, recognizing the growing demand for computational power driven by advancements in artificial intelligence, machine learning and big data analytics. The company is leveraging its existing data centers and expertise in managing complex computing systems to provide HPC solutions to a wide range of industries. This strategic move aligns with HIVE's vision of becoming a leading provider of diversified digital infrastructure services. In parallel with its HPC expansion, HIVE remains committed to optimizing its Bitcoin mining operations. The company is actively upgrading its mining equipment to enhance efficiency and reduce energy consumption, which are crucial factors for maintaining profitability in the post-halving environment. HIVE's strategic approach to mining involves a combination of ASIC-based mining for Bitcoin and GPU-based mining for other cryptocurrencies, which are then converted into Bitcoin. This diversified mining strategy allows HIVE to adapt to market fluctuations and optimize its mining rewards. HIVE's financial performance reflects its commitment to growth and diversification. The company's revenue from digital currency mining remains strong, while its HPC segment demonstrates promising growth potential. In the three months ended December 31, 2023, HIVE's HPC business contributed $1.1 million in revenue, a significant increase compared to the prior period. The company's strategic investments in HPC infrastructure and its growing client base indicate the potential for this segment to contribute substantially to HIVE's overall revenue. The Future of Digital Gold Extraction The Bitcoin mining industry is poised for continued growth and evolution. As Bitcoin's adoption increases and its value appreciates, efficient and sustainable mining operations will likely thrive. Technological advancements will play a crucial role in shaping the industry's future, driving further improvements in efficiency and reducing environmental impact. The Bitcoin halving is a significant event that presents both challenges and opportunities for miners. Companies that prioritize efficiency, innovation and sustainability are well-positioned to navigate the post-halving landscape and contribute to the long-term success of the Bitcoin network. Before you consider Bitdeer Technologies Group, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Bitdeer Technologies Group wasn't on the list. While Bitdeer Technologies Group currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here