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California Sues JPMorgan Chase Over Credit Card Cases

“California’s top law enforcement official accused JPMorgan Chase on Thursday of flooding the state’s courts with questionable lawsuits to collect overdue credit card debt.

The suit, filed in California Superior Court by the state’s attorney general, Kamala D. Harris, contends that JPMorgan, the nation’s largest bank, “committed debt collection abuses against tens of thousands of California consumers.”

For about three years, between January 2008 and April 2011, JPMorgan filed thousands of lawsuits each month to collect soured credit card debt, Ms. Harris said. On a single day, for example, JPMorgan filed 469 lawsuits, court records show.

As the bank plowed through the lawsuits, Ms. Harris said, JPMorgan took shortcuts like relying on court documents that were not reviewed for accuracy. “To maintain this breakneck pace,” according to the lawsuit, JPMorgan relied on “unlawful practices.”

The accusations outlined in the lawsuit echo problems — from questionable documents used in lawsuits to incomplete records — that plagued the foreclosure process and prompted a multibillion-dollar settlement with big banks. One hallmark of the foreclosure crisis, robosigning, in which banks worked through mountains of legal documents without reviewing them for accuracy, is at the center of Ms. Harris’s lawsuit against JPMorgan….”

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Attention Baby Boomers: The Economy Needs You to Work Past 70

“If you imagine that age 81 means shuffleboard, golf carts, and sitting on the beach, David Mintz will make you reconsider. The founder and CEO of food brand Tofutti, Mintz works 15-hour shifts, sometimes driving 500 miles a day to visit his factories. He sleeps four or five hours a night and works out every morning. “I’m working harder now than 20 years ago,” he says.

Mintz and others like him are leading a shift toward working later into life. Just 11 percent of people older than age 65 were still working in 1993, according to the Bureau of Labor Statistics. Today, that figure has reached almost 18 percent – and it’s climbing.

Most of these workers are not just putting in a few hours: A 2008 study of people age 50 and older who retired and then went back to work found that 54 percent were employed full time and 19 percent worked more than 41 hours a week.

All of this could mean good news for the larger economy. As baby boomers move into their later years, the 65-and-over population will grow from about 13 percent in 2010 to a projected 20 percent by 2030. The rising population of seniors who work will bring stronger economic growth – if companies can retool to accommodate an older workforce, say economists and experts.

But if companies fail to plan ahead, they might also see costs mount: By one estimate, health insurance premiums for workers age 65 and older cost companies almost three times as much as those age 25.

People working in their later years could help with the country’s fiscal problems, says Gary Burtless, a Brookings Institution economist who is finalizing a study on the issue. Every additional year that a person stays on the job brings more revenue to the federal treasury in income taxes. If current trends continue, working seniors will have a positive, if small, impact on federal deficits under the most plausible budget projections….”

Reinforcing the Nest Egg

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Shitcoin Exchange Hit With a $75m Lawsuit

“A lawsuit against Bitcoin’s main trading exchange Mt. Gox was filed this week regarding rights to the North American market. And no, the plaintiff is not seeking damages in Bitcoins.

CoinLab, backed by venture capitalist Peter Vessenes, said it entered into anagreement with Mt. Gox in November that gave CoinLab access to Mt. Gox’s technology – its computer servers and the “exclusive right to certain intellectual property” –  so that CoinLab could provide exchange services to North American customers as Mt. Gox’s exclusive partner in the region. Mt. Gox is based in Japan.

Transactions in the U.S. and Canada through Mt. Gox were switched to CoinLab as of March 29, according to a press release from CoinLab.

The suit alleges that Mt. Gox beached its contract with CoinLab by conducting business with North American customers and failing to provide necessary data,  according to a complaint filed by CoinLab in federal court.

CoinLab is seeking at least $75 million in damages.

“Defendants have, in email and other written exchanges, and in public statements to the press acknowledged that they have directly serviced customers in the United States and Canada since entering the Agreement. This conduct constitutes a breach of the Agreement, including the exclusivity provisions in the Agreement,” the filing states.

CoinLab’s Vessenes said in the statement: ” What tipped us into filing was our complete inability to get Mt. Gox to deliver on the few simple things left that were needed for customers to move over en-masse” …”

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Former Reuters Editor Pleads Not Guilty in Anonymous Hacking Case

“SACRAMENTO (Reuters) – Former Reuters.com Deputy Social Media Editor Matthew Keys pleaded not guilty on Tuesday to federal charges that he aided members of the Anonymous hacking collective.

Keys, 26, on Monday said he was fired by Thomson Reuters , the parent company of Reuters News.

Keys was indicted in March by a federal grand jury in Sacramento on three criminal counts, alleging he entered an Internet chatroom used by members of the hacking collective Anonymous and helped hackers gain access to the computer system of Tribune Co. in December 2010. A story on the Tribune’s Los Angeles Times website was altered by one of those hackers, the indictment said.

The alleged events occurred before he joined Reuters in 2012, the indictment indicated….”

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Trustee Sues Corzine Over MF Global Collapse

“The trustee overseeing MF Global Holdings Ltd.’s bankruptcy sued former Chief Executive Jon S. Corzine and two other executives for their role in the brokerage’s collapse.

Trustee Louis J. Freeh on Monday filed a lawsuit in bankruptcy court against Mr. Corzine, the former governor of New Jersey, and former Chief Operating Officer Bradley I. Abelow and former Chief Financial Officer Henri J. Steenkamp….”

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Samurai Abe Vows to Protect Disputed Islands With China, Will Use Force if Necessary

“Japanese Prime Minister Shinzo Abe vowed to use force if necessary to defend islands also claimed by China as tensions rose over visits by his fellow lawmakers to a Tokyo shrine seen inAsia as a symbol of wartime aggression.

China and Japan each issued formal protests today over the presence of each other’s vessels in waters around the islands, which lie in an area rich in resources including fish and oil. Abe today told a parliamentary committee that the government would not allow any Chinese boats to land on them….”

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Haute Art Gallery Raided for Gambling and Money Laundering

“Outside the rarefied world of art dealers and collectors, where discretion is often prized nearly as much as the art itself, the Nahmad family does not attract the same recognition as some of their fellow billionaires.

But for those who trade in multimillion-dollar paintings, they have long been a major presence at the premier auctions held every spring and fall at Sotheby’s and Christie’s, where they often descend, wives and children included, and have been known to argue loudly with one another, even while others around them engaged in more genteel bidding.

Despite sneers from some of their more staid peers who have accused them of unfairly negotiating special terms with auction houses, they are among the most powerful, wealthy and colorful members of the elite global club of fine art dealers.

“They have sold more works of art than anybody alive,” Christopher Burge, the former chairman of Christie’s New York, once said.

But on Tuesday, the family’s New York flagship gallery, the Helly Nahmad Gallery, at the opulent Carlyle Hotel in Manhattan, was filled with agents from the Federal Bureau of Investigation conducting a raid. An indictment unsealed on Tuesday charged its owner, Hillel Nahmad, 34, with playing a leading role in a far-flung gambling and money-laundering operation that stretched from Kiev and Moscow to Los Angeles and New York.

The case features a wide cast of characters, including a man described as a Russian gangster accused of trying to rig Winter Olympic skating competitions in Salt Lake City and a woman who once organized high-stakes poker games for some of Hollywood’s most famous faces.

In all, 34 people were charged on Tuesday with playing a part in what federal prosecutors described as two separate but interconnected criminal groups — one operating overseas and the other in the United States. Together, they are accused of laundering more than $100 million in gambling money….”

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Port Workers Reject a 7% Pay Raise and Take Strike into a Third week in Hong Kong

“Hundreds of port workers at Li Ka- shing’s Hong Kong terminals surrounded his Cheung Kong Center headquarters in the city’s business district after rejecting pay rise aimed at ending a three-week strike.

Contract workers of Li’s Hongkong International Terminals Ltd. were offered a 7 percent raise in pay by their employers, the company said in an e-mail, compared with the workers’ demand for a 23 percent increase. Hong Kong government’s mediators have helped narrow the differences between employers and workers, Labour Secretary Matthew Cheung told reporters today….”

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Criminal Charges Filed Against KPMG Partner, Insider Information Revealed on 5 Clients

“Federal prosecutors in Los Angeles filed criminal charges Thursday against a former KPMG LLP partner who has admitted to passing on inside information about his clients.

Scott London, the partner in charge of audits of Herbalife Ltd. HLF +4.11% andSkechers USA Inc. SKX +1.57% until he was fired from KPMG on Friday, also was hit with civil securities-fraud charges by the Securities and Exchange Commission. The development is the latest in a scandal that led to the accounting firm resigning as auditor of the two companies.

Mr. London was charged with one count of conspiracy to commit securities fraud through insider trading, according to the criminal complaint. He faces up to five years in prison and a $250,000 fine. The complaint said the trades generated a profit of more than $1 million for his friend, Bryan Shaw.

The complaint also says Mr. London tipped off Mr. Shaw about five KPMG clients, more than was previously known.

In exchange, according to the criminal complaint, Mr. London received bags containing $100 bills wrapped in $10,000 bundles, concert tickets, and a Rolex watch.

According to the SEC’s civil complaint, Mr. London was the lead partner on several KPMG audits, including Herbalife and Skechers, and he was the firm’s account executive for Deckers Outdoor Corp. DECK +1.28% In those roles, Mr. London was able to obtain material, nonpublic information about these companies prior to their earnings announcements or release of financial results.

Mr. Shaw, who lives in Lake Sherwood, Calif., is accused of trading at least a dozen times on the inside information he received from Mr. London. He allegedly grossed profits of more than $714,000 from trading based on confidential financial data about Herbalife, Skechers, and Deckers, the complaint says.

The SEC alleges that Mr. London also gained access to inside information about impending mergers involving two former KPMG clients—RSC Holdings and Pacific Capital Bancorp. Mr. London allegedly tipped Mr. Shaw with the confidential details….”

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KPMG Resigns for $HLF and $SKX After News Breaks on Insider Trading Leaks

KPMG LLP resigned as the auditor for two companies and fired the partner overseeing its Los Angeles audit practice amid allegations the person leaked confidential client information to a third party who used it to make stock trades.

The partner was Scott London, who was the lead auditor for Skechers U.S.A. Inc. (SKX), according to David Weinberg, the shoemaker’s chief financial officer. Herbalife Ltd. (HLF) and Skechers said in statements that KPMG told them it’s withdrawing as their auditor. The Securities and Exchange Commission is investigating the partner’s actions, according to a person with direct knowledge of the situation….”

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$MSFT and Other Companies Push EU Regulators to Investigate $GOOG for Antitrust Issues

“BRUSSELS (AP) — A group of companies led by Microsoft have called on European authorities to launch an antitrust investigation into Google and its hold over mobile internet usage on smartphones.

The “FairSearch” initiative of 17 companies — which includes Microsoft, Nokia, and Oracle —claims Google is acting unfairly by giving away its Android operating system to mobile device companies on the condition that the U.S. online giant’s own software applications like YouTube and Google Mapsare installed and prominently displayed.

“Google is using its Android mobile operating system as a Trojan horse to deceive partners, monopolize the mobile marketplace, and control consumer data,” said Thomas Vinje, the group’s Brussels-based lawyer.

Android operating systems have the largest share of the smartphone market worldwide, followed by Apple’s iOS platform with systems from Blackberry, Microsoft and others far behind.

“Google’s predatory distribution of Android at below-cost makes it difficult for other providers of operating systems to recoup investments in competing with Google’s dominant mobile platform,” FairSearch said in a statement.

The European Commission, the 27-nation bloc’s executive arm and antitrust authority, is not obliged to take any action other than reply to the group’s complaint.

Google Inc. did not address the complaint’s charges in detail. “We continue to work cooperatively with the European Commission,” said Google spokesman Al Verney.

The U.S. company is already under investigation by Brussels for practices related to its dominance of online search and advertising markets….”

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EU to Investigate $MA for Antitrust Concerns

“BRUSSELS (Reuters) – EU regulators are investigating whether MasterCard’s card fees for non-European cardholders and business practices locking in merchants to its cards violate EU antitrust rules, as they stepped up their fight against barriers to cross-border trade.

The fresh investigation by the European Commission came six years after it banned the world’s second-largest credit and debit card network from charging cross-border card fees in Europe….”

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Slovenia’s Bond Yields Rise on Default Expectations

“Slovenia’s creditworthiness is deteriorating at the fastest pace in the world after Cyprus as investors speculate a banking crisis will force it to follow the island nation and become the sixth euro country to need aid.

Credit-default swaps insuring Slovenian debt for five years soared as much as 66 percent to a six-month high of 414 basis points on March 28 from 250 on March 15, the last trading day before Cyprus announced plans for its rescue. It’s now up 34 percent at 336 basis points, compared with a 45 percent increase for Cyprus and 18 percent for Portugal in the period.

Slovenia’s two-week old government is struggling to prop up banks hit by recession and saddled with bad loans worth about a fifth of the country’s economic output. Cyprus, which accounts for 0.2 percent of the euro region’s economy, was forced to inflict unprecedented losses on uninsured depositors and senior bondholders as part of the 10 billion euro ($13 billion) rescue of its financial system.

“Since the Cyprus resolution, Slovenia has been in the spotlight,” said Bas van Geffen, an analyst at Rabobank International in Utrecht, Netherlands. “The country’s smallness is now clearly a drawback in the post-Cyprus era, which has fueled speculation that the country might be the next Cyprus.”

Credit-default swaps on Slovenia, which accounts for 0.4 percent of the euro economy, have surpassed those for Spain, Italy and Croatia. The latter was approved to be the 28th member of the European Union last week.

  • Portugal Swaps…”

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Cyprus Shock Turns to Anger and Perhaps Rioting to Come

“For a few days, the rest of the world looked on awaiting the riots and social unrest in Cyprus that we have become accustomed to from their fellow unter-sufferers Greece and Spain; but it never came. However, as Reuters reports, the public shock (and numbness) over the tough terms of the so-called bailout is now turning to anger as million of Euros remain locked inside the country’s banks. The people are “disappointed and angry,” that the politicians are out of touch, and, “the big guys, who had the information, managed to take their money abroad.” No one has answers for them, “I wrote to the central bank and they came back saying that it was not their competence, so whose competence is it?” as frustration boils over, “absolutely nothing adds up.” But perhaps the saddest truth is that the Cypriots are resigned to years of hardship, “I am going to find myself on the street with no future, only debts. But we will fight to the end. We have nothing left to lose.” It seems when a people has nothing to lose that anything is possible…

Via Reuters….”

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Uncle Sam Hands Out $80 in Unemployment Benefits to Seven Figure Earning Households

“The U.S. government paid almost $80 million in unemployment benefits during the worst of the economic downturn to households that made more than $1 million, including a record $29.9 million in 2010, tax records show.

Almost 3,200 households — about 20 percent of them from New York — that reported adjusted gross income of more than $1 million received jobless-insurance payments averaging $12,600 in 2010, the latest year for which figures are available, according to IRS data compiled by Bloomberg. Those payments outpaced the total incomes for about 25 million U.S. households.

The $80 million represents less than 0.01 percent of this year’s $845 billion projected deficit. Yet the unemployment aid to millionaire households underscores the lack of means-testing in some federal aid programs as the Labor Department reports new jobless figures today. The aid also is a reminder of the difficulty of reining in spending.

“So many people are taking advantage of government support that they probably feel like, why shouldn’t they take advantage of it, too?” said George Walper Jr., president of the Spectrem Group, a Chicago-based market-research and consulting firm that tracks the number of households worth more than $1 million.

Lawmakers have repeatedly tried to end or limit benefits to high-income households. A January report by the Congressional Research Service found at least five such efforts.

The House of Representatives passed legislation in December 2011 as part of a jobs bill that would have taxed unemployment benefits at 100 percent for single filers with adjusted gross incomes exceeding $1 million or married filers reporting $2 million in income. The provision wasn’t included in the bill signed by President Barack Obama.

Identifying Takers…”

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Banks Lobby Against Basel Rules Stating Credit Liquidity Risks Will Soar

“Banks are lobbying against international plans to tighten rules on securitization claiming they will tie up capital and starve the economy of credit.

Credit Suisse Group AG (CSGN)BNP Paribas SA (BNP) and Deutsche Bank AG are among lenders that have written to the Basel Committee on Banking Supervision in Switzerland to voice concern about reforms to be implemented from 2014. In a securitization, banks re-package assets, usually loans, and sell them in slices to outside investors.

Regulators are overhauling the rules after the widespread use of the technique in the U.S. mortgage market contributed to the financial crisis by spreading risk from lenders to the so- called shadow banking sector. The firms say the plans, which will force banks to hold more capital against any tranche they keep, would make transactions prohibitively expensive.

“The imposition of rules that serve to materially increase the capital requirements of securitizations could have the unintended consequence of creating disincentives for banks to be active in the securitization markets,” Rudolf Bless, Credit Suisse’s deputy chief financial officer, and Brian Chin, head of securitized products, wrote in a letter to the Basel group published this month. That could undermine “credit supply and overall liquidity of the global economy,” they wrote.

June Meeting

In recent months, banks have begun to look again at securitizations as a way of meeting the higher capital targets – – without cutting lending or raising fresh equity….”

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Companies Keep Running a Gauntlet of Pitfalls in China

“Recent troubles in China for Apple Inc. AAPL -1.13% and Volkswagen AGVOW3.XE -0.03% represent a growing risk for global companies, as their dependence on the booming Chinese economy leaves them exposed to Beijing’s shifting winds.

In some cases, foreign companies are coming under withering attacks from state-run media. In others, they are running afoul of Chinese regulators or government policies, such as an anticorruption campaign that limits ostentatious gifts.

On Monday, Apple apologized for its Chinese customer-service policies and said it would revamp them following more than two weeks of criticism from government-run media. It isn’t clear whether the spotlight will hurt Apple in what has become the tech giant’s No. 2 market after the U.S.

Late last month, Volkswagen said it would recall 380,000 vehicles following a television broadcast that said some of its cars suffered from maintenance issues. Analysts said the move could cost the auto maker up to $618 million. Fast-good giants Yum Brands Inc. YUM +0.12% andMcDonald’s Corp. MCD +1.32% took sales hits after state media accused them late last year of failing to quickly address problems with chicken suppliers…..”

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Jeffery Skilling of Enron May Get an Early Leave from the Clink

“Former Enron CEO Jeffrey Skilling, who is serving a 24-year prison term for his role in the energy giant’s epic collapse, could get out of prison early under an agreement being discussed by his attorneys and the Justice Department, CNBC has learned.

Skilling, who was convicted in 2006 of conspiracy, fraud and insider trading, has served just over six years. It is not clear how much his sentence would be shortened under the deal.

A federal appeals panel ruled in 2009 that the original sentence imposed by U.S. District Judge Sim Lake was too harsh, but a re-sentencing for the 59-year-old Skilling has repeatedly been delayed, first as the appeals process played out, and then as the negotiations for a deal progressed.

Those talks had been a closely guarded secret, but Thursday the Justice Department quietly issued a notice to victims required under federal law:

“The Department of Justice is considering entering into a sentencing agreement with the defendant in this matter,” the notice reads. “Such a sentencing agreement could restrict the parties and the Court from recommending, arguing for, or imposing certain sentences or conditions of confinement. It could also restrict the parties from challenging certain issues on appeal, including the sentence ultimately imposed by the Court at a future sentencing hearing.”

Judge Lake, who imposed the original sentence, would have the final say in the sentence. The posting of the notice, however, suggests the parties have some indication he will go along. Lake held a private conference call with attorneys for both sides last month….”

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Bondholder Lawsuit in Libor Case Dismissed on Lack of Evidence

“Banks including Bank of America Corp.Barclays Plc (BARC) and JPMorgan Chase & Co. (JPM) won dismissal of antitrust lawsuits by plaintiffs claiming they were harmed by the rigging of the London interbank offered rate.

In more than two dozen interrelated cases before U.S. District Judge Naomi Reice Buchwald inNew York, the banks were alleged to have conspired to depress Libor by understating their borrowing costs, thereby lowering their interest expenses on products tied to the rates.

While potential damages were estimated to be in the billions of dollars, the judge ruled the cases must be dismissed because of the inability of litigants that included brokerage Charles Schwab Corp. (SCHW), pension funds and other bondholders to show they were harmed. Buchwald, whose March 29 ruling allowed some commodities-manipulations claims to proceed to a trial, said that, while private plaintiffs must show actual harm, her ruling didn’t impede governments from pursuing antitrust claims tied to attempts to manipulate Libor.

“We recognize that it might be unexpected that we are dismissing a substantial portion of plaintiffs’ claims, given that several of the defendants here have already paid penalties to government regulatory agencies reaching into the billions of dollars,” Buchwald wrote. “There are many requirements that private plaintiffs must satisfy but which government agencies need not.”

Key Metric…”

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