For many Americans who survive from one paycheck to the next, payday loans are one of the only forms of credit available. However, while providing emergency credit is a vital service, these loans often carry shockingly high interest rates that have drawn increased scrutiny from the Consumer Financial Protection Bureau. In order to finally address these predatory lending practices, the CFPB expects to hand down its first set of federal rules regulating this 46 billion dollar industry in the coming weeks.
2015 Starts Strong in Europe with Four Major I.P.O.s
Last week, four companies – Sunrise Communications, Vision Express, GrandVision and Générale d’Optique – launched their shares on exchanges in the European market. Investors responded eagerly, with several offerings, such as Sunrise and GrandVision, being oversubscribed multiple times and shares moving to substantially higher levels in their debuts.
Four Accused of Insider Trading in Silicon Valley Settle Case
The Securities and Exchange Commission has accused Christian B. Keller, an in-house financial specialist, and three others of running of an insider-trading scheme that turned out nearly $750,000 in illegal profits.
Shake Shack’s IPO: Eating the Burger and Keeping it Whole
In late January, Shake Shack, the upper tier hamburger chain, went public and “broke” Wall Street: not only was the company able to sell its shares at a price of $21 per share, twice as much as the price-per-share foreseen prior to the IPO, but it also maintained its strict “anti-activism” corporate governance regime without deterring its investors.
Staples Proposes Merger with Office Depot: Merging the 3 Largest Office Supply Retailers
In an effort to compete with giants like Wal-Mart and Amazon, Staples announced its plan to purchase Office Depot in a $6.3 billion dollar deal. Staples is currently the world’s largest office supply chain store, posting annual revenues of $23.1 billion in 2013 [read performance summary here]. Office Depot posted revenues of $11.24 billion in the same year. Together, Staples and Office Depot control more than 70 percent of the office supply market.
Justice Department Investigating Moody’s
After reaching a $1.38 billion settlement with Standard & Poor’s Ratings Services (S&P) for issuing favorable grades on mortgage deals leading to the 2008 economic crisis, the U.S. Department of Justice is now setting its sights on Moody’s.
Zoetis Appoints New Board Member from Activist Investor Ackman’s Hedge Fund Firm
On February 4, 2015, Zoetis (ZTS), an animal healthcare company, announced the appointment of William F. Doyle, through the hedge fund firm Pershing Square Capital Management LP, as its new board member, expanding its board to ten members. Doyle is a former McKinsey & Co. consultant and former Johnson & Johnson executive. He also attended Harvard Business School with Pershing Square’s founder and CEO, William Ackman. Pershing Square is expected to add a second member to Zoetis’ board in the near future.
Regulators Turn to Subprime Auto Lending
The Federal Trade Commission (FTC) announced on January 30 that it reached a settlement with two companies engaged in subprime auto lending. The two car title lenders – First American Title Lending and Finance Select – were alleged to have misled borrowers in their advertisements by failing to disclose the actual terms and costs of loans.
HSBC Struggling to Overhaul its Anti Money-Laundering System
Despite spending hundreds of millions of dollars to overhaul its anti-money-laundering system, the message to HSBC from U.S. officials is clear: it’s still not enough.
Amazon’s Tax Scheme in Luxembourg
Amazon, a Seattle-based company, negotiated and struck a deal with Luxembourg in 2003 that effectively granted the company exemption from all tax payments in the entirety of Europe. The deal, still in force, limits Amazon’s tax liabilities only to Luxembourg.