In less time than it takes you to read this sentence, Michael Coscia could make more money than most Americans earn in an 8-hour day.
If you blinked, you miss it.
But if you slowed down time, sliced a second into a thousand tiny parts, and looked at a span of just 65 milliseconds — about as long as it takes a hummingbird to flap its wings once — you’d see the unmistakable evidence of a sophisticated criminal at work, the feds say.
That’s because Coscia, 53, was allegedly a “spoofer,” a high-frequency trader who used computer algorithms to rip off rivals in markets where business is conducted at the speed of light.
His scam using huge spoof orders for commodities futures contracts to goose prices on the Chicago Mercantile Exchange netted him $1.6 million in just three months, according to a federal indictment, helping fund an anonymous but comfortable lifestyle that included a waterfront New Jersey mansion.
Coscia, of Rumson, N.J., is due to find himself thrust into the public eye Monday when he becomes the first criminal defendant tried under anti-spoofing legislation included in the 2010 Dodd-Frank Act.
After only ten months as the Chairman of the House Ways and Means Committee, Congressman Paul Ryan is accepting a promotion. Yesterday, Congressman Ryan announced his candidacy for Speaker of the House, and he is all but certain to win next Thursday’s election.
While it is unclear exactly when Chairman Ryan will cede the gavel to his successor, he will have served one of the shortest terms as Ways and Means chairman in modern times. Since 1871, only two chairmen of the Ways and Means Committee have served less than a full year – Sam Gibbons and Sander Levin, both of whom were acting chairmen.
Nevertheless, during Chairman Ryan’s short term at the head of Ways and Means, he has taken part in several important developments in the world of tax policy:
At the very beginning of Chairman Ryan’s term, the House of Representativesadopted dynamic scoring – a rule that requires official budget estimates of legislation to take into account the law’s effects on the economy. Chairman Ryan played an important part in promoting this change, arguing that dynamic scoring is “reality-based.” We have argued the same case on multiple occasions. Chairman Ryan has been closely involved in efforts to continue funding the Highway Trust Fund. While he unfortunately ruled out the possibility of adjusting federal gas taxes to provide a long-term source of revenue for the fund, his efforts led to a three-month extension of highway funding. Under Chairman Ryan’s tenure, Congress renewed its focus on international tax reform. Ryan has advocated for a territorial tax system, which would end the double taxation of income earned abroad by U.S. companies. Finally, Chairman Ryan has continually pushed to make bonus depreciation permanent. Bonus depreciation allows businesses to immediately deduct half of their investment expenses, which we estimate would lead to significant economic growth.
Under Chairman Ryan’s tenure, the Ways and Means Committee was one of the most productive in the House of Representatives. In the last 10 months, the Ways and Means Committee has brought 52 bills to the House floor, tied for most with the Energy and Commerce Committee. Out of these bills, 15 were passed into law, the most out of any committee.
Many analysts expect that, if he is elected as Speaker, Chairman Ryan will continue his focus on tax policy. If so, the prospects for sound, comprehensive tax reform are bright.
By Jonathan D. Salant | NJ Advance Media for NJ.com
WASHINGTON — The U.S. House on Tuesday passed legislation designed to make annual reports and other disclosures by publicly traded companies easier to read.
The Disclosure Modernization and Simplification Act of 2015, sponsored by U.S. Rep. Scott Garrett (R-5th Dist.) passed on voice vote.
It requires the Securities and Exchange Commission to eliminate requirements for disclosures not needed by investors, and asks the SEC to study how to reduce such paperwork in the future, using technology to improve the delivery and presentation of such disclosures. In addition, annual reports could include summary pages that refer to materials provided in earlier filings.
“You just want to have clarity,” said Garrett, chairman of the House Financial Services subcommittee on capital markets and government sponsored enterprises, said on the House floor. “That’s what our bill does. It just makes it a little bit simpler.
A major scandal is erupting in the multibillion-dollar industry of fantasy sports, the online and unregulated business in which players assemble their fantasy teams with real athletes. On Monday, the two major fantasy companies were forced to release statements defending their businesses’ integrity after what amounted to allegations of insider trading, that employees were placing bets using information not generally available to the public.
The statements were released after an employee at DraftKings, one of the two major companies, admitted last week to inadvertently releasing data before the start of the third week of N.F.L. games. The employee, a midlevel content manager, won $350,000 at a rival site, FanDuel, that same week.
“It is absolutely akin to insider trading,” said Daniel Wallach, a sports and gambling lawyer at Becker & Poliakoff in Fort Lauderdale, Fla. “It gives that person a distinct edge in a contest.”
The episode has raised questions about who at daily fantasy companies has access to valuable data, such as which players a majority of the money is being bet on; how it is protected; and whether the industry can — or wants — to police itself.
“How does the SEC expect average Americans to take the time to make thoughtful financial investments when the average annual report from public companies is a whopping 42,000 words long? Later today, the House will take up my bill to make SEC filings simpler and more useful for average Main Street investors. This will make it easier for everyone to reach their financial goals.” Rep. Scott Garrett
Sep 30, 2015
the staff of the Ridgewood blog
WASHINGTON, D.C. – Rep. Scott Garrett (NJ-05), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, today voted for a number of bills before the Financial Services Committee to preserve the ability of American families to access credit and invest for their future:
“Around dinner tables throughout the country, middle and lower income American families discuss their retirement savings as they plan for the future. Unfortunately, many provisions of Dodd-Frank and proposed rules by the Obama Administration are putting more government, more red tape, and more bureaucracy between these people and their financial goals. Today our committee passed a number of bills—many with bipartisan support—to ensure that everyone can access credit, get good financial advice, and invest for retirement.”
The House Financial Services Committee passed the following bills today:
H.R. 414, the “Burdensome Data Collection Relief Act”
H.R. 957, the “Bureau of Consumer Financial Protection-Inspector General Reform Act of 2015”
H.R. 1090, the “Retail Investor Protection Act”
H.R. 1266, the “Financial Product Safety Commission Act of 2015”
H.R. 2769, the “Risk-Based Capital Study Act of 2015”
House lawmakers pepper Cordray over dealer reserve
Wednesday, Sep. 30, 2015, 11:59 AM UPDATED 11:28 AM
By Nick Zulovich
Editor
WASHINGTON, D.C. –
Two of U.S. House membesr who are two of staunchest defenders of dealers and how the indirect auto financing model currently operates — one that still includes dealer reserve — peppered the director of the Consumer Financial Protection Bureau who made his semiannual appearance before the Financial Services Committee on Tuesday.
Like many of his fellow lawmakers, Rep. Scott Garrett referenced a series of recent reports from American Banker recapping internal memos and other documents about the CFPB’s use of disparate impact to generate a “tipping point” enforcement action that might discontinue the practice of dealer participation altogether.
The New Jersey lawmaker then directly asked CFPB director Richard Cordray, “Are you working to eliminate dealer reserves?”
Cordray replied with, “We have been working to try to address a practice that we believe is discriminatory, discretionary markups.”
He added that the CFPB is out “not necessarily to eliminate,” dealer participation. “We had an enforcement action (Monday) in which it would limit dealer reserve, not eliminate it. And we think that might be a fair way to try to address the issue,” Cordray went on to say.
What Cordray referenced was the CFPB enforcement action against Fifth Third Bank, which included a mandate to cap dealer markup at either 1.25 percent or 1 percent depending on the length of the vehicle installment contract.
During a back-and-forth exchange between Garrett and Cordray that had each individual interrupt each other multiple times, the House lawmaker insisted he was asking these questions because “dealers are on the front lines of making these loans.”
Cordray replied with how the Dodd-Frank Act was written that created the CFPB four years ago.
“We have authority in the statute. It doesn’t exempt the auto industry. It exempts auto dealers. It doesn’t exempt auto lenders. We have a responsibility to address auto lenders. We understand we are exempted from addressing auto dealers,” Cordray said.
“Congress drew the statute. I didn’t draw it. I have to live with it. It exempts auto dealers, but gives us responsibility over auto lenders. I’m not sure that makes a lot of sense, but we’re trying our best to observe the lines that Congress drew,” he continued.
“It’s a funny provision in the statute. I’m not sure it’s very logical,” Cordray added.
Before Garrett’s time for questioning expired, Cordray also told the lawmaker that vehicle financing is “made by the auto lender. The auto lender controls the auto lending program.”
And with institutions such as Fifth Third Bank as well as American Honda Finance now restricted on how much dealer markup is allowed, Garrett also questioned whether the CFPB understands the implications on dealerships and their ability to generate revenue by these enforcement actions.
“What I would say is this,” Cordray said, “As we do our work … it does effect auto dealers. I would agree with you on that. That’s why the provision is not very logical.”
Finally, Garrett tried to get Cordray to acknowledge the CFPB’s actions are increasing the consumer costs of making a vehicle purchase based on a wide array of studies from the American Financial Services Association, the National Automobile Dealers Association and other organizations.
Hadley Malcolm, USA TODAY4:31 p.m. EDT September 28, 2015
Whole Foods (WFM) is cutting 1,500 jobs over the next two months, or about 1.6% of its workforce, as it focuses on its strategy to lower prices for customers, the grocery chain said Monday.
Shares ended down 1.1% for the day.
The cuts come after Whole Foods added more than 9,000 jobs in the past year. The company said it expects “a significant percentage” of employees being let go to find other jobs among Whole Foods’ open positions, including those available due to more than 100 new stores that are set to open. Whole Foods has about 91,000 employees and 431 stores across the U.S., U.K., and Canada.
“We believe this is an important step to evolve Whole Foods Market in a rapidly changing marketplace,” co-CEO Walter Robb said in a statement. The company also said that the job cuts will let it focus more on upgrading technology.
Whole Foods would not say which specific positions will be cut.
Whole Foods is up against increasing competition in the organic grocery space it once dominated as more mainstream and affordable grocery chains have started selling organic brands. Its reputation has also taken several hits in recent months.
Executives apologized to customers in July for pricing discrepancies that may have been found in the chain’s New York City-area stores. Robb and co-CEO John Mackey admitted to making “some mistakes” after a local investigation alleged Whole Foods was systematically overcharging for certain pre-packaged goods. The two deny that accusation though and said that any mislabeling was “unintentional.”
Fed Chair Yellen had a health scare during a speech, but she’s feeling fine now
Fed Chairwoman Janet Yellen gave a scare Thursday while giving a speech on monetary policy and inflation at the University of Massachusetts at Amherst.
Near the end of her prepared remarks, Yellen appeared to be experiencing some physical discomfort. She paused several times to cough before saying she would stop.
“[I]f the economy surprises us, our judgments about appropriate monetary policy will change,” she said. “Let me stop there. Thank you.”
She gathered her notes, gave several smiles, and stuck around to be presented with a gift before she made her way offstage.
Several news outlets reported that she proceeded to receive medical attention, but now she seems to be in the clear.
Garrett Introduces Bill to Hold FSOC Accountable to the American People
Sep 18, 2015
the staff of the Ridgewood blog
WASHINGTON, D.C. – Rep. Scott Garrett (NJ-05), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, today introduced H.R. 3557, the Financial Stability Oversight Council (FSOC) Transparency and Accountability Act, to bring much-needed transparency and accountability to the FSOC.
“The Financial Stability Oversight Council (FSOC) is one of the most notorious examples of the kind of secretive and unaccountable government bodies that could only be a creation of Washington, D.C. The Dodd-Frank Act vested the FSOC with the authority to designate nonbank financial institutions as “too big to fail,” essentially giving them unprecedented authority over an entire sector of the U.S. economy without adequate checks and balances.
“The Council continues to hold closed-door meetings, refuses to publish substantive transcripts, and stonewalls requests from the people’s representatives when we need more information about its operations. No agency should be allowed to operate above the law in this way, and my bill will shed some much-needed light on this shadowy government body.”
Garrett’s legislation would:
Subject the FSOC to the Government in the Sunshine Act
Subject the FSOC to the Federal Advisory Committee Act
At all FSOC meetings, allow for the participation of all members of the Commissions and Boards represented
Require that any vote taken by the principal of a Commission or Board represented must first be taken by that Commission or Board and the principal must then in turn vote that same decision at the Council
Allow for Members of Congress on the Congressional oversight committees of FSOC to be able to attend all FSOC meetings
A previous version of the legislation passed the House Financial Services Committee in June, 2014.
Ridgewood NJ, Rep. Scott Garrett (NJ-05), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, issued the following statement as the Federal Open Market Committee (FOMC) begins their September meeting:
“As the ridiculous amount of attention on this week’s FOMC meeting proves, the performance of our economy and the financial markets is increasingly dependent on a group of unelected bureaucrats at the Federal Reserve. Chair Yellen and her predecessors claim that the Fed’s monetary policy decisions are based upon objective criteria, yet traders, lenders, economists, and other market participants anxiously wait to probe and dissect every word in the FOMC statement.
“There is a problem when more Americans are looking to a secret Fed meeting for economic indicators than the actual financial markets. We need to scale back the undue influence that the Federal Reserve and other central bankers have on our economy by following what has worked in the past: a rules-based monetary policy that fosters greater certainty and leads to longer periods of sustained economic growth.”
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A growing number of investors believe that US stocks are overvalued, creating the risk of a significant bear market, according to research by Yale University market scholar Robert Shiller.
The Nobel economics laureate told the Financial Times that his valuation confidence indices, based on investor surveys, showed greater fear that the market was overvalued than at any time since the peak of the dotcom bubble in 2000.
“It looks to me a bit like a bubble again with essentially a tripling of stock prices since 2009 in just six years and at the same time people losing confidence in the valuation of the market,” he said.
However, he made clear that it remained impossible to time any fall in the market, and cast doubt on whether stocks would drop should the Federal Reserve raise rates later this week.
Global debt levels are dangerously high and central banks cannot keep the game going indefinitely, warns the high priest of orthodoxy
By Ambrose Evans-Pritchard
8:30AM BST 14 Sep 2015
Debt ratios have reached extreme levels across all major regions of the global economy, leaving the financial system acutely vulnerable to monetary tightening by the US Federal Reserve, the world’s top financial watchdog has warned.
The Bank for International Settlements said the wild market ructions of recent weeks and capital outflows from China are warning signs that the massive build-up in credit is coming back to haunt, compounded by worries that policymakers may be struggling to control events.
“We are not seeing isolated tremors, but the release of pressure that has gradually accumulated over the years along major fault lines,” said Claudio Borio, the bank’s chief economist.
The Swiss-based BIS said total debt ratios are now significantly higher than they were at the peak of the last credit cycle in 2007, just before the onset of global financial crisis.
WASHINGTON, D.C. – Rep. Scott Garrett (NJ-05), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, delivered the following opening remarks at a Joint Oversight & Investigations/Capital Markets Subcommittee hearing entitled “Preserving Retirement Security and Investment Choices for All Americans”:
Congressman Scott Garrett’s opening remarks as prepared for delivery:
Every day, millions of Americans look to a broker dealer or investment adviser for guidance on what to do with their hard-earned savings and to help them achieve a secure and prosperous retirement
Once a privilege enjoyed only by the super-wealthy, personalized investment advice and access to the financial markets is now something that can be enjoyed by Americans of all income levels
The 2008 financial crisis and the current market turmoil have highlighted the importance of such advice, as numerous studies show that investors who work with a financial professional receive better and more consistent returns on their investments, while those who invest on their own often times make the mistake of “buying high and selling low”
In fact, the Department of Labor estimated in 2011 that people who invest without the benefit professional advice make errors that can cost them $114 billion every year
That makes it all the more curious that this same Department of Labor is now marching forward with a regulation that will upend the ability of Americans to receive such guidance and which threatens the retirement security of the most vulnerable within our society
When President Obama announced the rulemaking earlier this year, a release from the White House stated that the rule “…is taking a step to crack down on those…Wall Street brokers…who don’t put the best interest of working and middle class families first.”
But in looking down our panel of witnesses today and in reading through some of the 2,300 comment letters received by the DOL, it’s pretty clear that the biggest impact of this rule is going to be felt far from Wall Street – and millions of middle or lower income households may ultimately have no place to go for advice
Moreover, the SEC continues to contemplate implementation of a uniform fiduciary standard under Section 913 of the Dodd-Frank, a rulemaking that remains unsupported by empirical data and which could directly conflict with a DOL rule
So it’s clear that the time for Congress to act is now – and I want to commend Mrs. Wagner of Missouri for her continued leadership on this issue and for again putting forth a thoughtful piece of bipartisan legislation that will help preserve access to financial advice for Americans of all income levels
I thank our witnesses again and look forward to the discussion today
So the New York Times asked me to write a “Room for Debate piece based on this prompt: “Can companies excel without making workers miserable?”
It is a theme that had never occurred to me. As I point out in my mini-essay, companies are very profitable and workers overall aren’t miserable. So is this speculative or something? Or does it reflect a certain world view about what brings humans deep satisfaction?
As my boss Arthur Brooks has written, “In other words, the secret to happiness through work is earned success. It is deeply satisfying to apply our skills and create value in our lives and in the lives of others. No wonder Americans who feel successful in the workplace are twice as likely to say that they’re happy overall. This means economic opportunity is critical. That’s what enables us to find the job that suits our skills and advance through hard work. Opportunity is the gateway to a key source of human happiness.”
Fellow RFD essayist Guy Kawasaki argued something similar: “The bottom line is that if you want to be happy at your job, find one that is psychologically rewarding with adequate compensation — in short, one that enables, encourages and even requires good work. But good work is hard. And when you want to have fun, go to Disneyland.”
So it’s important to have an economy that creates jobs, gives people necessary work skills, makes sure work pays, and requires work for welfare. Others disagree and propose a guaranteed basic income with no conditions. Here is an interesting counter by Andrew McAfee, coauthor with Erik Brynjolfsson of The Second Machine Age, a book whose predictions about technological change and automation have been cited by guaranteed income proponents:
Puerto Rico unveils fiscal reform plan, braces for cuts
SEPTEMBER 9, 2015, 8:54 PM LAST UPDATED: WEDNESDAY, SEPTEMBER 9, 2015, 8:55 PM
BY DANICA COTO
ASSOCIATED PRESS
SAN JUAN, Puerto Rico (AP) — Puerto Rico is bracing for widespread spending cuts after the government released a long-awaited fiscal reform plan on Wednesday that would reduce much of the island’s $72 billion public debt and calls for restructuring the remainder at the expense of bondholders.
The five-year plan proposes that the government cut subsidies to municipalities and the University of Puerto Rico, offer early retirement and reorganize or merge state agencies. It also calls on the government to extend until 2021 legislation that would freeze new hires, salary increases and collective bargaining agreements.
Gov. Alejandro Garcia Padilla acknowledged in a televised address that Puerto Ricans already have had to endure new taxes, an increase in utility bills and layoffs during a nearly decade-long economic stagnation.
“Our island faces an unprecedented fiscal and economic crisis,” he said. “We have asked our people for many sacrifices.”
During a background briefing late Tuesday, members of the group that worked on the plan said Puerto Rico’s Government Development Bank would run out of money by the end of this year if action is not taken and warned that the government would face a liquidity crunch next year if the plan is not implemented.
The U.S. Treasury said it was reviewing the plan and noted that Puerto Rico still needs an orderly process to address its liabilities.
“The situation remains urgent and requires the immediate attention of Congress,” the agency said. “Under the status quo, without a tested legal regime in place, a resolution of Puerto Rico’s financial obligations would likely be chaotic, protracted, and costly both for Puerto Rico and more broadly for the United States.”
