A federal agency says a remote underwater vehicle is surveying plugged undersea oil wells and looking for natural seepage as authorities seek the source of a 10-mile oil sheen in the Gulf of Mexico off Louisiana.
The Bureau of Safety and Environmental Enforcement says it has instructed operators of pipelines in the area to survey their lines.
The sheen is about 130 miles southeast of New Orleans. Royal Dutch Shell PLC has two production platforms in the area. The company said Thursday it is confident the sheen didn’t originate from its operations instant personal loans guaranteed.
The federal agency said it directed Shell to conduct a seafloor assessment using a robot vehicle. Natural seepage is known to occur in the area.
The sheen was spotted on Wednesday.
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.
The number of Americans who bought previously occupied homes likely increased in February to the highest level in two years.
Economists forecast that sales increased to a seasonally adjusted annual rate of 4.6 million last month, according to a FactSet survey. The National Association of Realtors will report on February re-sales at 10 a.m. Eastern time Wednesday.
Home sales have risen nearly 13 percent over the past six months. While they are still below the 6 million that economists equate with a healthy economy, the gains have coincided with other good news in the housing market that suggests slow and steady improvement.
Homebuilders have grown more confident in the past six months after seeing more people express interest in buying a home. In February, they requested the most permits to build homes since October 2008.
Mortgage rates are near record lows. And the supply of homes fell in January to its lowest level in seven years.
A lower supply helps push up prices, which lures more sellers onto the market and generally improves the quality of homes for sale. Rising prices also boost sales because buyers want to invest in homes that are appreciating in value.
For the past few years, the market has been saturated for years with foreclosures. That has put downward pressure on prices and driven away buyers.
A key reason for the brighter housing outlook is the job market has strengthened no faxing payday loans. From December through February, employers added an average of 245,000 jobs a month. The unemployment rate has fallen to 8.3 percent, the lowest in three years.
Still, economists caution that the damage from the housing bust is deep and the industry is years away from fully recovering.
Fewer first-time buyers, who are critical to a housing recovery, are in the market for a home. They made up roughly one-third of sales last year. In healthy markets, the percentage is at least 40 percent.
Many can’t qualify for loans or meet higher down-payment requirements. Even those with excellent credit and stable jobs are holding off because they fear that home prices will keep falling.
Sales are measured when buyers close on homes. Some deals have been scuttled before the closing after banks declined mortgage applications, home inspectors found problems, appraisals showed a home was worth less than the bid, or a buyer lost a job.
The high rate of foreclosures has made resold homes cheaper than new ones. The median price of a new home is roughly 30 percent above the price of one that’s been occupied before _ twice the normal markup. Investors are taking advantage of the discounts.
U.S. stock futures are up ahead of another round of economic data that should shed further light on whether the recovery in the world’s largest economy is still picking up steam.
Dow Jones industrial futures rose 23 points to 13,195. The broader Standard & Poor’s 500 futures are up 2 points to 1,398. Nasdaq 100 futures are up 4 points to 2,716.
The market has rallied on upbeat U.S. economic data and easing worries about European debt, despite some concern over the rise in oil prices. On Thursday, the Standard & Poor’s 500 index closed above 1,400 for the first time since June 2008.
Later Friday, the focus will be on consumer inflation and industrial production figures as well as the closely watched University of Michigan consumer confidence survey.
Plastics manufacturer Spartech Corp. reported a $2.3 million loss in the first fiscal quarter, driven by increased freight costs, corporate expenses and spending on repairs and maintenance.
Clayton-based Spartech lost $2.3 million, or 7 cents a share, in the quarter ended Feb. 4, compared to a profit of $1.0 million, or 3 cents a share, a year earlier.
The company’s business units include custom sheet and rollstock, packaging technologies and color and specialty compounds.
Net sales increased 20 percent to $281.8 million in the first quarter, driven by sales in the automotive sector, construction, and food packaging.
Spartech executives plan to hold an investors’ conference call Thursday at 10 a.m. to discuss the quarterly results.
Australia needs to find
India banned all cotton exports on Monday, causing U.S. cotton futures to surge and igniting fears of another jump in prices for cotton goods.
India decided to immediately impose the ban because it’s worried about a possible supply crunch in the country. One reason: India’s cotton exports may have overshot government targets last year, its Directorate General of Foreign Trade said in a statement.
U.S. cotton futures jumped 4.5% — the most allowed in a single day of trading — to 92.23 cents per pound following the news.
"This India development really caught the entire cotton industry and traders off guard because it came with no warning," said Phil Flynn, senior market and commodities analyst with PFG Best.
Starbucks wristbands created these jobs
Flynn said the market reaction to India’s move reflects concerns that it could start a new rise in cotton prices that mirrors last year’s rally.
Cotton prices hit an all-time high of $2.27 a pound last March due to a global supply crunch for the commodity.
Cotton clothing manufacturers responded to that steep price jump first by raising prices for consumers and eventually using less cotton and more blended fabrics such as poly-cotton.
Flynn said cotton prices cooled off toward the end of last year and reached as low as 84.35 cents a pound.
"We’re in March again. Could we potentially have another big rally like last March? Maybe," said Flynn. "A void in the supply chain from India’s action could cause a price spike."
It would be deja vu for consumers, too.
"Cotton clothing prices have been coming down since last year as supply caught up with demand. But that could change now," he said.
Some experts say Boeing
The battle of the bulge has been a big, fat failure for U.S. drugmakers. But that hasn’t stopped them from trying.
For nearly a century, scientists have struggled to make a diet pill that helps people lose weight without side effects that range from embarrassing digestive issues to dangerous heart problems.
But this week, federal health advisers endorsed the weight loss pill Qnexa even though the FDA previously rejected it over concerns that it can cause heart palpitations and birth defects if taken by pregnant women.
The vote of confidence raises hopes that the U.S. could approve its first anti-obesity drug in more than a decade. It also highlights how challenging it is to create a pill that fights fat in a variety of people without negative side effects.
“Having a drug for obesity would be like telling me you had a drug for the fever,” said Dr. Mitchell Roslin, chief of bariatric surgery at Northern Westchester Hospital in New York. “There can be millions of different reasons why someone is obese; it’s really a symptom of various underlying mechanisms.”
An effective and safe diet pill would be an easy sale in the U.S.: With more than 75 million obese adults, the nation’s obesity rate is nearing 35 percent. But the biggest problem in creating a weight-loss drug is that there’s no safe way to turn off one of the human body’s most fundamental directives.
For millions of years, humans have been programmed to consume calories and store them as energy, or fat. It’s this biological mechanism that makes it almost impossible to quickly lose weight by not eating. Cutting down on food instead sends stronger signals to the body to store more calories.
“Throughout most of human history calories were scarce and hard to get, so we have numerous natural defenses against starvation,” said Dr. David Katz of Yale University’s Prevention Research Center. “We have no defenses against overeating because we never needed them before.”
The drug industry has been on a nearly 100-year search for a drug that can help the body shed pounds. They’ve mostly failed to come up with an effective one and many of their experiments have proven fatal to patients:
_ Early attempts focused on speeding up metabolism to burn more calories. In the 1930s, doctors prescribed an industrial chemical called dinitrophenol, which accelerated metabolism, but also caused fever, swelling and deadly toxicity in some patients. The 1938 law establishing the Food and Drug Administration was a response to untested drugs like dinitrophenol.
_ In the `50s and `60s, amphetamines became a popular because they boost metabolism and suppress appetite. But the pills proved to be highly addictive, and doctors discovered they increase blood pressure and heart rate. The amphetamine phentermine remains approved for short-term weight loss, usually less than 12 weeks, though it is seldom prescribed because of the potential for addiction.
_ Perhaps the worst diet pill safety debacle came in the 1990s and involved the combination of phentermine and another weight loss drug marketed by Wyeth called fenfluramine. The combination of the two pills, dubbed fen-phen, was never approved by the FDA but more than 18 million prescriptions were written for it by the mid-90s.
But after studies in 1997 suggested that up to a third of patients taking fen-phen experienced heart valve damage, Wyeth was forced to recall two versions of fenfluramine and eventually paid more than $13 billion to settle tens of thousands of personal injury lawsuits.
_ In the last decade, drugmakers have moved toward other weight loss concoctions. Currently, the only drug approved for long-term weight loss in the U.S. is orlistat, which is sold as the prescription drug Xenical and over the counter as alli. The drug works by blocking the absorption of fat.
When launched in 2007, alli received a high-profile marketing push from drugmaker GlaxoSmithKline, complete with TV ads and a celebrity endorsement by country singer Wynonna Judd. But it never took off due to unpleasant side effects, including loose bowel movements. Educational pamphlets for alli even recommend people start the program when they have a few days off work, or bring an extra pair of pants to the office.
_ Most drugmakers now are focusing on medications that block brain signals associated with food craving and appetite. Vivus’ Qnexa is one of a trio of drugs seeking FDA approval. The diet pill, which was initially rejected due to the risks of heart palpitations and other safety issues, is a combination of two older drugs.
It uses amphetamine phentermine, which suppresses appetite. The other drug is topiramate, an anticonvulsant sold by Johnson & Johnson as Topamax. Topiramate is believed to make patients feel more satiated, though it’s unclear exactly how. J&J initially studied Topamax alone as a weight loss treatment but concluded the psychiatric side effects, such as memory loss and difficulty concentrating, were too significant.
Still, on Wednesday, a panel of FDA doctors and other advisers voted 20-2 in favor of approving Vivus’ Qnexa pill, which the drugmaker has resubmitted to the FDA for a second review.
The group touted the drug’s benefits, which include weight loss of nearly 10 percent for most patients taking the drug over a year _ the highest reduction reported with any recent diet pill. But panelists stressed that the drugmaker must be required to conduct a large, follow-up study of the pill’s effects on the heart.
The FDA is expected to issue its decision on Qnexa by mid-April.
“The potential benefits of this medication seem to trump the side effects,” said FDA panel member Dr. Kenneth Burman of the Washington Hospital Center in Washington DC. “But in truth, only time will tell.”
Tammy Wade of McCalla, Ala., is confident that the diet pill works. She lost nearly 40 pounds, dropping down to 167 while in a two-year Qnexa study.
“I never lost that much weight on any of the programs I’ve tried,” said Wade, who’s done everything from Weight Watchers to work out with a personal trainer.
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