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Monday
Nov222010

Netflix Offers New Option, Increases Prices

Photo Courtesy - Netflix, Inc.(NEW YORK) -- Netflix is now offering customers the option of subscribing to an unlimited stream plan without the DVDs.

The company announced Monday that movie fans can now stream their favorite flicks by subscribing to an unlimited plan at a cost of $7.99 per month. The plan, which does not include DVD rentals, is available to customers immediately.

Customers who prefer an unlimited plan with the option of watching movies instantly and receiving DVDs by mail will have to shell out more cash for this option, as the company has increased prices for all such plans.

Netflix says the price increase comes as a result of an increase in demand for unlimited TV episodes and movies to be delivered over the Internet and by snail mail.

Copyright 2010 ABC News Radio

Monday
Nov222010

Jeweler To The Stars Arrested in Alleged $217 Million Fraud

Photo Courtesy - ABC News(NEW YORK) -- Jeweler Ralph Esmerian sold luxurious baubles to the stars, but Monday his dark gray pinstriped suit was offset by a simple pair of Peerless stainless steel bracelets, slapped onto his wrists by a federal Postal Inspector who arrested Esmerian for an alleged $217 million bankruptcy fraud.

Esmerian, a fourth-generation jeweler and the owner of the posh Fred Leighton jewelry business, allegedly borrowed $177 million from Merrill Lynch and $40 million from Acorn Capital Group, according to a complaint filed in Manhattan federal court Monday, and then "almost immediately" sold the jewelry he'd used as collateral for the loans, shipping the millions in proceeds to an offshore bank.

Esmerian, 70, used the loans to purchase Fred Leighton, a high-end line long associated with celebrities, in 2005, gilding his own family's established wholesale jewelry business. In just the past year stars sighted wearing Fred Leighton creations have included Sarah Jessica Parker, seen in Leighton jewelry at the 2010 Oscar ceremonies, as well as Jennifer Aniston, Meryl Streep, Nicole Kidman, and Tina Fey.

Though Esmerian had a reported $192 million in inventory, he soon failed to meet the obligations on the loans he'd used to purchase Leighton. By 2008, creditor Merrill Lynch had declared him in default and arranged a jewelry auction in an effort to recoup its money.

In 2008, on the eve of the scheduled Christie's auction of the collateralized jewelry, Esmerian filed an eleventh hour bankruptcy. Immediately afterwards, according to an affidavit filed with the complaint by Postal Inspector Eleanor Berry, he "repeatedly and systematically embezzled property belonging to Fred Leighton and other debtor entities."

According to the complaint, after getting the loans Esmerian began to sell off the jewelry he'd used for collateral and wired the money to Switzerland. The complaint, which also charged Esmerian with wire fraud and concealing assets, said he used the same jewelry to obtain more than one loan. Esmerian allegedly stole or double pledged at least $40 million in assets used to collateralize loans.

One piece of swag used to secure a loan, the Boucheron "Endymion Butterfly Brooch," was sold in secret for $2.45 million, federal authorities allege, with Esmerian pocketing the proceeds. When Merrill Lynch discovered what he'd done, authorities claim, Esmerian sold another set of jewels valued at $10 million for a fraction of their value in order to repurchase the brooch.

The exquisite items Esmerian allegedly embezzled from the Fred Leighton business itself and its lenders and creditors included a Lalique Art Nouveau brooch worth $1 million, the Boucheron diamond and ruby butterfly brooch, and assorted diamond, emerald, opal encrusted pendants, necklaces, rings, and earrings.

"Ralph Esmerian allegedly lied and looted to maintain his personal and financial status," said Preet Bharara, U.S. Attorney for the Southern District of New York, "by tricking his lenders, stealing from investors, and deceiving the bankruptcy court."

Postal Inspector Tom Boyle, contacted by ABC News regarding the arrest and complaint, referred all queries to the U.S. Attorney in Manhattan.

Esmerian's attorney, Patricia Pileggi, did not immediately respond to requests for comment.

Copyright 2010 ABC News Radio

Monday
Nov222010

FBI Raids Hedge Funds as Part of Insider-Trading Investigation

Image Courtesy - Federal Bureau of Investigation(NEW YORK) -- The FBI on Monday raided three hedge funds as part of an investigation into whether a number of hedge fund managers at major firms are guilty of insider-trading.

Search warrants were executed at Level Global Investors LP and Diamondback Capital Management LLC -- both located in Connecticut -- and also at Loch Capital Management LLC, in Boston. The raids involved confiscating records that investigators hope will help unravel what exactly took place.

"The FBI is executing court authorized search warrants in an ongoing investigation," said FBI spokesman Richard Kolko. "This matter is sealed and we have no additional comment."

According to the Wall Street Journal, both Connecticut hedge funds are run by former managers of Steven Cohen's SAC Capital Advisors. Loch is managed by brothers Timothy and Todd McSweeney, both of whom are known acquaintances of Steven Fortuna, the latter of whom pleaded guilty to insider-trading with Galleon.

Copyright 2010 ABC News Radio

Monday
Nov222010

Better Business Bureau To Investigate its Own Los Angeles Chapter

Photo Courtesy -BBB.org(LOS ANGELES) -- The Better Business Bureau says it will "launch an immediate investigation" into its biggest local chapter, the Los Angeles-area BBB, after an ABC News report revealed that the chapter sold memberships to non-existent businesses that immediately received A grades.

The L.A. BBB and its CEO, William Mitchell, have been blasted by critics over what they allege is a "pay for play" scheme in which A plus ratings are only given to business that pay an accreditation fee while F grades are routinely given to business that don't want to join. The probe could have repercussions for the rest of the nation's BBB chapters, however, since the L.A. chapter developed the controversial grading system that is now under fire nationally.

Steve Cox, CEO of the national Council of Better Business Bureaus, announced the probe of the L.A. BBB in a posting on the BBB web site Saturday. The Los Angeles probe was added to a previously announced list of actions the BBB said it planned to take in the wake of an ABC News investigation into its grading system, including no longer automatically awarding higher grades to businesses that pay for accreditation and conducting an "independent third party" review of its accrediting process.

"We are moving ahead with implementing changes right away," said Cox in a statement accompanying his post. "Some are immediate, others will take longer to complete. All will support our commitment to help consumers easily and quickly find trustworthy businesses."

The Los Angeles-area Better Business Bureau is by far the largest of the 108 BBB chapters in the U.S. and brings in the most revenue from membership fees. According to its 2009 tax filing, the L.A. BBB raked in over $6.2 million in accreditation fees in 2008 and paid longtime CEO Mitchell an annual salary of $409,490. Mitchell devised the letter grade system to replace the previous "satisfactory/unsatisfactory" BBB rating, and has been using it in Southern California for the past five years. His system was adopted nationwide by the Better Business Bureau in January 2009. In a deposition for a lawsuit in which the L.A. BBB was sued over its grading system, Mitchell testified that his office employed over 30 sales representatives who earned a 45 percent commission for selling first year memberships to business owners.

However, the letter grade system has led to considerable friction in the L.A. business community, with some claiming the BBB was in the business of selling grades for cash. As reported by 20/20, a group of Los Angeles business owners, determined to prove that the accreditation system was a sham, paid $425 apiece to buy BBB memberships for a number of fictitious firms, including one for a non-existent company called Hamas, named after the Middle East terror group. The bogus company listed L.A. BBB CEO Bill Mitchell as its president and gave a non-existent address for its headquarters. The L.A. BBB awarded a membership and an A minus rating to a non-existent sushi restaurant in Santa Ana, California, and an A plus to a bogus firm named after Stormfront, a white supremacist group.

Copyright 2010 ABC News Radio

Monday
Nov222010

News Corp. Developing Daily Newspaper for iPad

Photo Courtesy - WILLIAM WEST/AFP/Getty Images(NEW YORK) -- Rupert Murdoch's News Corporation is reportedly developing The Daily, a newspaper designed specifically for Apple's iPad tablet computer.

It will be mostly original content and published every morning, like a regular newspaper.

The Daily will have a small weekly fee, and is scheduled to begin publishing early next year.

Copyright 2010 ABC News Radio

Monday
Nov222010

'Patriotic Millionaires' Call for Bush-Era Tax Cuts to Expire

Photo Courtesy - FiscalStrength [dot] com(WASHINGTON) -- Forty-five people have signed a letter to President Obama asking him to allow the Bush-era tax cuts to expire at the end of this year.  The president gets many letters like that.  But what was unusual about this petition was who signed it -- including the Grammy Award-nominated DJ MOBY, as well as Jerry Cohen of Ben-and-Jerry's-Ice-Cream fame.

All the signatories happen to be millionaires, who stand to lose financially if they get their way.

"The Patriotic Millionaires for Fiscal Strength" wrote a 155-word letter saying they hope their taxes will increase beginning in January.  Its text is posted at FiscalStrength.com.  It says:

"For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you allow tax cuts on incomes over $1,000,000 to expire at the end of this year as scheduled.  We make this request as loyal citizens who now or in the past earned an income of $1,000,000 per year or more."

The millionaires say they were not surreptitiously funded by a labor party but that they organized of their own volition, with coordination by the political strategy group the Agenda Project.

"This is not an orchestrated campaign," said Erica Payne, founder of the Agenda Project.  Payne said a few of the signatories with whom she's familiar contacted her and asked for her help in coordinating the millionaires.  Payne said the White House, California Rep. Nancy Pelosi and Nevada Sen. Harry Reid, among other elected officials, began receiving the letter last Monday and are "aware" of the petition.

Senate Democrats announced Friday that they will introduce a bill next month that will extend tax breaks for many individuals and businesses.  If those tax cuts extend to the middle class, Payne, who said the millionaires' campaign is advocating for the economic health of the entire country, said that would be "one win under the belt."

Notwithstanding the advice of the celebrity armchair economists, critics claim the expiration of the Bush tax cuts will target small businesses -- considered to be the engine of the stalled American economy.

Copyright 2010 ABC News Radio

Monday
Nov222010

Fewer Americans Plan to Visit Stores on Black Friday Weekend

Photo Courtesy - Getty Images(NEW YORK) -- Many retailers are already offering so-called Black Friday deals, and that may be one of the reasons a new survey shows fewer Americans than usual will be hitting the stores on Black Friday weekend this year.

A survey by Consumer Reports shows some 102 million Americans intend to go to the mall on Black Friday -- that's the Friday after Thanksgiving -- or on the three days following.  But that figure is roughly 16 million fewer than last year.

Additional findings from the Consumer Reports telephone survey of 1,015 U.S. adults:

-- 24 percent of shoppers plan to go to the mall on Black Friday.
-- 42 percent of shoppers plan to scoop up video games on Black Friday, making it the single biggest  item people plan to buy.
-- Just over 54 percent of women and 71 percent of men report they have not yet started shopping.
-- Four percent of Americans claim they have already finished their holiday shopping.

Copyright 2010 ABC News Radio

Sunday
Nov212010

Ireland Seeks 100 Billion Euro Bailout

Image Courtesy - Getty Images(NEW YORK) -- Wall Street will be watching to see whether Ireland is successful in turning around its economy.  The nation has asked the European Union for as much as 100 billion euros -- the equivalent of nearly $137 billion in American money -- to bail it out of its fiscal emergency.

Ireland's economy is much smaller but its problems may be even more complicated than those of the U.S., at least in one area.  Because it is in the so-called "euro-zone," it has no currency of its own and cannot recapitalize its banks with new money as the U.S. did.

Economist Peter Morici at the University of Maryland said Sunday that if Ireland gets a bailout, it could give the U.S. stock market a lift by removing uncertainty.  Morici says the issue of sovereign debt is a problematic one for markets all over the world.  Morici says Spain and Portugal are the next trouble spots to watch.

Copyright 2010 ABC News Radio

Sunday
Nov212010

Two Florida Shoppers Get Head Start on Black Friday Rush

Photo Courtesy - WFTS Tampa, Fla.(ST. PETERSBURG, Fla.) -- Two Florida shoppers are way ahead of the Black Friday pandemonium.

In fact, it’s been that way since Wednesday, when Lorie Davenport and Tina Thain began their stakeout in front of a St. Petersburg Best Buy store more than a week before doors open Friday at 5 a.m.

"I really didn't think about the days," Thain told ABC News Tampa affiliate WFTS. "We really didn't think about it because we just wanted to be first."

And it’s already paid off. Best Buy this week awarded each couple an Apple iPad for their prime spot in line.

"We didn't think about that in the beginning," Davenport said. "Now it's really sinking in that we really are the first people in line. It's kind of exciting."

Copyright 2010 ABC News Radio

Saturday
Nov202010

Report: Feds Set for Multiple Insider Trading Indictments

Photo Courtesy - Getty Images(NEW YORK) -- The federal government is reportedly set to wind up a three-year insider trading investigation that could shake the investment world to its roots.

The Wall Street Journal on Saturday previewed what could be multiple charges against consultants, investment bankers, hedge fund and mutual fund traders who allegedly engaged in insider trading rings, reaping tens of millions of dollars.  Some charges could be leveled by the end of the year.

Experts are quoted as saying if the investigation is as large in scope as it appears, it could have the biggest impact of any probe of its kind in history.  It could reveal whether non-public information is routinely passed along by consultants for so-called expert networks, providing an investment edge to hedge fund managers and mutual fund traders.

Charges could be both federal and civil in nature.  The Journal says sources confirm a federal grand jury in New York has heard evidence in the matter but it is not clear what, if any, charges may follow.

Copyright 2010 ABC News Radio







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