An Egyptian court has acquitted 14 policemen charged with killing protesters during last year’s popular uprising.
The verdict is the latest in what activists claim to be a pattern of acquittals for police blamed for the deaths of nearly 850 people during the 18-day revolt that toppled longtime leader Hosni Mubarak.
A Cairo court on Thursday found the policemen not guilty of shooting protesters in front of police stations on Jan. 28, 2011, one of the most violent days of the uprising.
The 14 are among nearly 200 security officers and former regime officials _ including Mubarak himself _ who face trial for the deaths of protesters during the uprising.
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Pharmacy benefits manager Express Scripts said this afternoon its first-quarter profit fell 18 percent as it worked to close its $29 billion acquisition of competitor Medco.
The north St. Louis County-based company earned $267.8 million, or 55 cents per share, down from $326.5 million, or 61 cents per share, in last year’s first quarter.
Excluding one-time items, it earned 73 cents per share. Analysts forecast earnings of 77 cents per share on $11.47 billion in revenue, according to FactSet.
Revenue climbed 9 percent to $12.13 billion. It filled 192.8 million adjusted prescriptions, up 3.6 percent from a year ago.
Express Scripts Holding Co. completed its acquisition of Medco Health Solutions on April 2. The deal made Express Scripts the largest pharmacy benefits manager by far.
Express Scripts expects the combined company to earn $3.36 to $3.66 per share in 2012, while filling 1.4 billion adjusted prescriptions.
Analysts are expecting a profit of $3.58 per share, on average.
Express Scripts said the deal should be “slightly accretive” while it integrates Medco and forecast a moderate increase in its profit after that process is finished in the first half of 2014. The company expects to create $1 billion in annual savings after it fully integrates Medco into its business.
The company said Medco’s first-quarter profit fell about 26 percent to $245.1 million, or 62 cents per share. Excluding transaction and amortization costs, it said Medco earned 79 cents per share.
Express Scripts shares rose 44 cents to $54.34 Thursday. The stock slid 60 cents to $53.74 in after-hours trading.
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The United States and Europe are urging Iran to use upcoming talks with world powers to ease international worry that it may be aiming to develop nuclear arms.
But Tehran says such concerns are based on “fake evidence” concocted to cause it political and economic harm.
Envoys for the U.S., the EU and Iran spoke Monday at a 189-nation meeting looking for ways to strengthen the Nonproliferation Treaty low interest rate personal loans.
The divide over the Islamic Republic’s nuclear activities threatens the success of both the talks and a meeting between Iran and the U.N. agency trying to probe its atomic secrets.
For Pennsylvanians with natural gas wells on their land, chances are they won’t know if a safety violation occurs on their property.
That’s because the state agency charged with regulating the wells — the Department of Environmental Protection (DEP) — does not have to notify landowners if a violation is discovered. Even if landowners inquire about safety violations, DEP records are often too technical for the average person and incomplete.
While some landowners would like more transparency around safety issues, as a group they are not pushing for stronger regulations. Landowners, who are paid royalties by the companies that drill on their property, generally want the drilling to proceed.
Violations: In February, CNNMoney spoke with four families in Lycoming County, Pa., about violations issued against natural gas wells on or near their property.
The families have a total of 26 natural gas wells among them. They’ve received royalties from the wells, ranging from the low hundreds to hundreds of thousands of dollars over the last few years.
How fracking works
Yet none said they had ever been notified by the DEP or any of the well operators that wells near their homes had been cited for what DEP’s website said were 62 safety violations over four years.
"We had no idea that there were any violations," said Dan Bower, who lives next door to his mother, Jane, and her five wells.
"We should have been contacted or something," echoed Neil Barto, another well owner.
DEP says that in cases in which violations pose risk to human health, they "certainly notify landowners."
The violations range from simple things such as improper signage to serious infractions such as subpar cementing — which according to DEP can allow gas to seep out of a well and in some cases "has the potential to cause a fire or explosion."
While the violations are posted online, the digital records are short on specifics — most importantly whether a violation poses a health risk.
A time consuming process: If landowners want to inquire about all violations on their property, DEP says they should do an in-person file review of the state regulator’s documents relating to each well.
The agency declined multiple interview requests, but assured CNNMoney that an in-person review would contain records of any communication with landowners about violations. CNNMoney conducted a file review in late March.
The process required a visit to the regional DEP office, which had to be scheduled weeks in advance.
But even then, the details discovered were largely in legal and technical language.
In approximately 1,000 pages of documents for the 26 permitted wells, there was only one record of any communication DEP had with a landowner about a violation.
A letter was sent to indicate that a spill of fluid used for drilling on Jane Bower’s property had been cleaned up, but the recipient’s name was redacted.
Both Jane and Dan say they never received such a letter, even though DEP fined Chief Oil and Gas, the operator of the well at the time, $2,100 for the five barrel spill. There were no details of this spill on the DEP website.
The file review revealed there was also a spill of 294 gallons of ‘frac fluid’ at the same Bower well. The fluid is what is used in hydraulic fracturing, a process where water, sand and a small amount of chemicals, are injected into shale deep underground to fracture the rock and release gas.
There was no mention of this spill in DEP’s online records, and the paper records did not clearly indicate whether the ground water was tested after the spill.
It is not clear from the physical records whether these spills, or any other violations reviewed, ever posed a threat to human health.
Obama tightens oil and gas drilling regulations
The well operator at the time, Chief, said it did not.
But David Yoxtheimer, a hydrogeologist at Penn State’s Marcellus Center for Outreach and Research, said there’s not enough information to say for certain.
He said that if the Bower spills had gotten into surface or ground water then they "could have a water quality impact of low to moderate severity," but that such a risk would depend on site-specific factors not available in the files.
Landowner apathy: Despite the violations, it’s not clear that the landowners are doing all in their power to check for violations on their property.
Neither the Bowers nor the Bartos have a computer to check for violations, and neither plans on changing that.
"I sure as hell am not gonna buy one to check DEP," Neil Barto said.
All four families continue to support the drilling and note it has been a boon to the local economy. The Bartos, who have six wells on their property, say they have made about $150,000 in royalties off of the wells on their property in the last three years.
Plus, increased regulation is not a priority for them. That’s a fairly common viewpoint among landowners.
"In our experience, landowner groups have been focused on advancing expanded drilling to maximize royalty payment opportunities, and have generally been opposed to increased regulation," said Kate Sinding at the Natural Resources Defense Council.
And that, says the NRDC, could be delaying further regulation for the industry, or taking pressure off regulators to report violations more clearly.
"Advocacy for those kinds of protections would undoubtedly carry more weight were they to come from landowners themselves, as opposed to the environmental community," Sinding said.
– with additional reporting by CNN’s Poppy Harlow
Spain’s central bank says the country is now in a technical recession as the economy contracted 0.4 percent in the first quarter of the year.
The drop, published in a Bank of Spain report Monday, follows a 0.3 percent quarterly decline in the fourth quarter. A technical recession is commonly defined as two consecutive quarters of economic contraction.
The Bank of Spain figure comes as no surprise, however. The government has said the economy is shrinking and forecasts it will contract 1.7 percent this year.
The Coca-Cola Co. said Tuesday that its net income rose 8 percent in the first quarter as it hiked prices and sold more of its beverages around the world.
Although volume growth came from all regions, the world’s largest drink maker said increases were far greater in emerging markets. In the Eurasia and Africa region, for example, volume grew 9 percent, compared with a 2 percent increase in North America.
The company also had strong growth beyond its soda as consumers increasingly have become concerned about drinking and eating healthy. Global volume for bottled water grew 15 percent in the quarter, while energy drinks volume rose 25 percent. That surpassed the volume gains in the company’s namesake Coca-Cola soda, which increased 4 percent.
Even the slight bump in volume in North America was driven largely by the company’s Powerade energy drinks, Dasani bottled water and zero-calorie vitaminwater.
Despite the competition and market saturation at home, CEO Muhtar Kent said: “We believe North America is a growth market for our business.”
Total revenue was $11.14 billion for the three months ended March 30, up 6 percent from $10.52 billion a year ago, in large part because of higher prices in areas like North America. Analysts expected revenue of $10.82 billion for the latest quarter.
Coke said it earned $2.05 billion, or 89 cents per share, a penny per share above what analysts polled by FactSet had expected. In the year-ago period, it had net income of $1.9 billion, or 82 cents per share.
The company also said that the cost-cutting program it began in the quarter is on track. When completed, the measures are expected to save up to $650 million annually by 2015.
Coke is looking to trim costs wherever possible to offset rising commodity prices, which continue to eat into profits for food and drink makers industry-wide. Coke said its cost of goods rose 10 percent in the quarter.
Kent noted that Coke’s global marketing campaign for the summer Olympics in London is set to strengthen its brands by “tapping into emotional passion points like sports and music.”
Shares of Coca-Cola rose $1.04, or 1.4 percent, to $73.48 in premarket trading.
Iranian and European officials expressed confidence in the results of Saturday’s negotiations on Tehran’s disputed nuclear program as it was announced that the two sides will meet again in Baghdad on May 23.
The very fact that there will be another round adds to a growing sense among diplomats that the two sides were making notable progress in talks that have grown increasingly tense as the West has tightened sanctions on Iran and Israel has threatened a pre-emptive military strike on the Islamic republic.
But the challenges in the next round could be far more significant. That’s when the six powers will likely seek further commitments from Tehran to reduce concerns that it could use its uranium enrichment program to make the fissile core of nuclear missiles.
EU foreign policy chief Catherine Ashton called Saturday’s talks in Istanbul constructive and said future talks will be guided by the “principle of a step-by-step approach and reciprocity.”
That indicates the international community is ready to reward Iran if it moves to alleviate fears that it intends to weaponize its nuclear program _ rewards that could include delaying or easing some sanctions.
Iran’s chief negotiator, Saeed Jalili said his team “saw a positive approach (from the other side) and we consider it a step forward.”
Iran insists its nuclear program is peaceful, and Ashton said Saturday that Tehran has a right to such a peaceful program. At the same time, she added, the Nuclear Nonproliferation Treaty must be the “key basis” for future talks.
Iran asserts that it has not violated the treaty, and that it has a right under that agreement to enrich uranium for peaceful purposes. Asked about the making the treat the basis of the talks, Jalili said, “We expect that we should enjoy our rights in parallel with our obligations.”
Iran is under four sets of U.N. sanctions for refusing to stop uranium enrichment _ which can be used both to make reactor fuel and the fissile core of nuclear warheads _ and the international community continues to demand that Tehran stop the activity.
But the last set of nuclear talks broke up without result more than 14 months ago after the Iranian team had refused to even discuss enrichment.
The six countries negotiating with Iran _ the U.S., Russia, China, Britain, France and Germany _ came to Saturday’s meeting with modest expectations.
Diplomats said before the meeting began that even general Iranian readiness to accept the need to discuss its enrichment program would be considered enough of a success to warrant a follow-up round.
Earlier Saturday, one of the diplomats, who like the others demanded anonymity because he was sharing confidential information, said the Iranians appeared to be moving toward that readiness, engaging in discussion about the peaceful use of nuclear energy and the nonproliferation treaty.
He said the Iran’s team had mentioned Iranian Supreme Leader Ayatollah Ali Khamenei’s “fatwa,” or edict, prohibiting nuclear weapons for Iran, in the course of the plenary discussions.
NEW YORK, N.Y.
While the experts would have you believe that identity theft is a growing problem, the chance of losing money to this type of consumer fraud is actually fairly small. But while the dollar amount of losses and number of people it affects may not be big, if it does happen to you it can be a mess to untangle.
Identity theft is a broad term that includes things ranging from a credit or debit card being compromised to a more severe problem like real estate title fraud, when a thief mortgages your property and disappears with the money. The Canadian Anti-Fraud Centre says about 18,500 Canadians were victims of identity theft in 2010, the latest year complete figures are available for. They lost a collective $9.4 million, or about $510 a person. In many cases banks and other lenders absorbed the losses when their customers were victimized.
The Royal Canadian Mounted Police, Ontario Provincial Police and Competition Bureau Canada jointly manage the CAFC. The agency says that the most likely targets of identity theft are between 50 and 59 and the victims are often duped into giving the information that leads to the fraud. One common scam is through phone calls and emails that claim you
Here’s an unsettling fact for anyone thinking of ever buying shares in a newly public company: Even if its executives know their internal accounting systems are a wreck, they aren’t required to disclose this until after the company goes public.
It is a lesson that Groupon Inc. shareholders have learned the hard way. Groupon shares fell 17 percent on Monday, after the online coupon company said late last week that it had identified a “material weakness” in its internal controls over financial reporting, as of Dec. 31. The Chicago-based company also revised its fourth-quarter results to show lower revenue and a larger loss, after finding errors in its accounting for customer refunds. At $14.54, the stock now sells for 44 percent less than it did after the first day of trading.
Given that Groupon went public only last November, the latest news raises the question: Didn’t Groupon know before its initial public offering that its controls were weak? A company spokesman, Paul Taaffe, declined to comment. Let’s assume for the moment, though, that its executives did know. Even then, they wouldn’t have had to tell investors beforehand.
That’s because there is no requirement to disclose a control weakness in a company’s IPO prospectus. Groupon would have had no obligation to disclose the problem until it filed its first quarterly or annual report as a public company — which is what it did. Sandbagging IPO investors in this manner is perfectly legal, it turns out.
Sox Hole
The reason lies with a gaping hole in the Sarbanes-Oxley Act, which Congress passed in 2002 in response to the accounting scandals at Enron Corp. and WorldCom Inc. That statute had two main sections related to companies’ internal controls, which are the systems and processes that companies are supposed to have in place to ensure the information they report is accurate. Those provisions apply only to companies that are public already, not ones that have registered for IPOs.
One section, called 302, requires public companies’ top executives to evaluate each quarter whether their disclosure controls and procedures are effective. The other section, known as 404, is better known. It requires public companies in their annual reports to include assessments by management and outside auditors about the effectiveness of their internal controls over financial reporting. Congress left it to the Securities and Exchange Commission to write the rules implementing those provisions.
Here’s where it gets tricky. Groupon reported the weakness in its financial-reporting controls through a Section 302 disclosure, not a Section 404 report. In other words, the problem was serious enough that it amounted to a shortcoming in the company’s overall disclosure controls.
Groupon won’t have to comply with Section 404’s requirements until its second annual report, due next year, under an exemption the SEC passed in 2006 for newly public companies. Likewise, Groupon’s auditor, Ernst & Young LLP, to date has expressed no opinion on the company’s internal controls in its audit reports instant payday loan.
Groupon’s IPO prospectus cautioned that future disclosures about control weaknesses were possible. It also said the company had only “recently filled a number of positions in our senior management and finance and accounting staff.” However, the prospectus made no representation about whether Groupon’s controls were effective at the time. None was required.
An SEC spokeswoman, Judith Burns, confirmed: “There is no requirement to disclose a material weakness in the prospectus.”
She was speaking broadly, not about any specific company.
Perfect Call
Give credit where it’s due: Two writers who made the perfect call on Groupon are Anthony Catanach, an accounting professor at Villanova University, and Edward Ketz, an accounting professor at Pennsylvania State University.
“It is absolutely ludicrous to think that Groupon is anywhere close to having an effective set of internal controls over financial reporting, having done 17 acquisitions in a little over a year,” the pair wrote in an Aug. 24 article on their blog, Grumpy Old Accountants. “When a company expands to 45 countries, grows merchants from 212 to 78,466, and expands its employee base from 37 to 9,625 in only two years, there is little doubt that internal controls are not working somewhere.”
Even before going public, Groupon restated its financial reports in September to correct errors in the way it reported revenue, which slashed 2010 sales to $312.9 million from $713.4 million. That alone should have flagged to investors that Groupon’s controls were lacking. Nonetheless, the stock market this week acted like it was surprised.
The debacle at Groupon understandably has drawn comparisons with the new securities legislation that President Barack Obama is scheduled to sign into law. The act lets newly public companies go five years without providing internal-control reports by outside auditors, as long as annual revenue is less than $1 billion. (Groupon reported 2011 revenue of $1.6 billion.)
The change comes after the Dodd-Frank Act in 2010 permanently exempted companies with less than $75 million of freely tradable shares from meeting this requirement — which means most U.S. public companies.
The new law will reduce disclosure obligations in many other ways. Pre-IPO correspondence between companies and the SEC’s staff initially would be stamped secret, for example. The act is a lurch in the opposite direction of what is needed.
Let’s not fool ourselves, though. The existing protections for IPO investors were feeble before the new law. That Groupon could stay mum for so long about any control weaknesses it had, legally, is merely the latest evidence.
There is only one solution for investors who aren’t insiders: Don’t ever buy stock in a company that just went public.
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