Month: April 2018

The Justice Department has opened an antitrust investigation into whether AT&T, Verizon and a standards-setting group worked together to stop consumers from easily switching wireless carriers.   The companies confirmed the inquiry in separate statements late Friday in response to a report in The New York Times.    The U.S. government is looking into whether AT&T, Verizon and telecommunications standards organization GSMA worked together to suppress a technology that lets people remotely switch wireless companies without having to insert a new SIM card into their phones.    The Times, citing six anonymous people familiar with the inquiry, reported that the investigation was opened after at least one device maker and one other wireless company filed complaints. Verizon, AT&T respond  Verizon, which is based in New York, derided the accusations on the issue as “much ado about nothing” in its statement. It framed its efforts as part of attempt to “provide a better experience for the consumer.”    Dallas-based AT&T also depicted its activity as part of a push to improve wireless service for consumers and said it had already responded to the government’s request for information. The company said it “will continue to work proactively within GSMA, including with those who might disagree with the proposed standards, to move this issue forward.”   GMSA and the Justice Department declined to comment. Merger trial   News of the probe emerge during a trial of the Justice Department’s case seeking to block AT&T’s proposed $85 billion merger with Time Warner over antitrust …

Russian companies hit by U.S. sanctions, including aluminum giant Rusal, have asked for 100 billion rubles ($1.6 billion) in liquidity support from the government, Finance Minister Anton Siluanov was quoted by the Interfax news agency as saying Friday. The United States on April 6 imposed sanctions against several Russian entities and individuals, including Rusal and its major shareholder, Oleg Deripaska, to punish Moscow for its suspected meddling in the 2016 U.S. election and other alleged “malign activity.” Rusal, the world’s second-biggest aluminum producer, has been particularly hard hit as the sanctions have caused concern among some customers, suppliers and creditors that they could be blacklisted, too, through association with the company. “Temporary nationalization” is an option for some sanctions-hit companies, but not Rusal, Siluanov was quoted as saying. He did not name the companies he was referring to. A Kremlin spokesman had said Thursday that temporary nationalization was an option for helping Rusal. According to another news agency, RIA, Rusal has requested only government support with liquidity and with demand for aluminum so far, Siluanov said. RIA quoted the minister as saying the government was not considering state purchases of aluminum for now. …

American banking giant Wells Fargo has agreed to pay federal regulators $1 billion to settle charges that it failed to identify and avert problems related to its mortgage and auto lending operations. The bank has admitted it sold unwanted or unnecessary automobile insurance to hundreds of thousands of its auto loan customers. Wells Fargo, the largest mortgage lender in the U.S., has also admitted to forcing thousands of customers to pay unnecessary fees in order to lock in interest rates on their home mortgages. The bank will pay $500 million to the Consumer Financial Protection Bureau and another $500 million to the Treasury Department’s Office of the Comptroller, the largest fines ever imposed by either agency. None of the money will go directly to the victims, although the bank has agreed to offer restitution. This is the latest chapter in broad and long-running scandals that have brought the bank under intense federal scrutiny. Wells Fargo was also rocked by a widely-reported scandal during which the bank admitted employees activated as many as 3.5 million bank and credit card accounts without customer authorization. Citing “widespread abuses,” the Federal Reserve, the central banking system of the U.S., took an historical action earlier this year by ordering that Wells Fargo could not grow beyond $1.95 trillion in assets. The Federal Reserve also required the bank to replace several board members. …

U.S. news reports say Wells Fargo will be fined as much as $1 billion for illegally selling customers car insurance policies they did not want or need, and for charging unnecessary fees in connection with mortgages. This would be the largest fine ever imposed by federal bank regulators and the Consumer Financial Protection Bureau. The fine is part of a settlement regulators negotiated with the bank. Wells Fargo and federal officials have not commented on the reports. The San Francisco-based lender admitted selling the unwanted insurance policies to hundreds of thousands of car loan customers. In many cases, the borrowers could not afford both the insurance and car payments and their cars were repossessed. Many U.S. banks have enjoyed looser federal regulations under President Donald Trump’s pro-business administration. But Trump denied reports that Wells Fargo would not be punished, tweeting in December that fines and penalties against the bank would, if anything, be substantially increased. “I will cut regs but make penalties severe when caught cheating,” he wrote. Wells Fargo previously paid a $185 million fine for opening bank and credit card accounts in its customers’ names without telling them. …

The biggest danger from the U.S.-China trade dispute is the threat to global confidence and investment, International Monetary Fund Managing Director Christine Lagarde said on Thursday. The IMF chief said the tariffs threatened by the world’s two largest economies would have a modest direct impact on the global economy but could produce uncertainty that choked off investment, one of the key drivers of rising global growth. “The actual impact on growth is not very substantial, when you measure in terms of GDP,” Lagarde said of the tariffs, adding that the “erosion of confidence” would be worse. “When investors do not know under what terms they will be trading, when they don’t know how to organize their supply chain, they are reluctant to invest,” she told a news conference in Washington where world financial leaders gathered for the start of the IMF and World Bank spring meetings. In its World Economic Outlook released on Tuesday, the IMF cited 2016 research showing that tariffs or other barriers leading to a 10 percent increase in import prices in all countries would lower global output by about 1.75 percent after five years and by close to 2 percent in the long term. In Beijing, China’s Foreign Ministry warned that the Trump administration’s tariff threats and other measures to try to force trade concessions from Beijing was a “miscalculated step” and would have little effect on Chinese industries. In the latest escalations in the trade row, Washington said this week that it had banned U.S. …

Russian aluminum giant Rusal is stockpiling large quantities of aluminum at one of its plants in Siberia because U.S. sanctions imposed this month have prevented it from selling the metal to customers, five sources close to the company said. With the firm’s own storage space filling up with unsold aluminum, Rusal executives in Sayanogorsk, in southern Siberia, have had to rent out additional space to accommodate the surplus stock, one of the sources told Reuters. “Aluminum sales have broken down. And now the surplus aluminum is being warehoused in production areas of the factory itself,” said someone who works on the grounds of one of Rusal’s two plants in Sayanogorsk. Several people connected to Rusal said that Oleg Deripaska, the company’s main shareholder who along with the company was included on a U.S. sanctions blacklist, visited Sayanogorsk this week for a closed-door meeting with staff. Asked if the firm was stockpiling aluminum in Sayanogorsk, a Rusal spokeswoman declined to comment. Rusal and Deripaska were included on a U.S. sanctions blacklist this month, scaring off many of its customers, suppliers and creditors who fear they too could be hit by sanctions through association with the company. A number of traders and customers of Rusal’s aluminum have stopped buying the firm’s products, citing the sanctions risk, and Rusal has stopped shipping some of its products for export, according to a logistics firm and a railway operator that used to carry much of its aluminum. While shipments have stalled, Rusal cannot readily reduce …

Russia demanded compensation from the U.S. for its worldwide tariffs on foreign aluminum and steel Thursday, becoming the third influential member of the World Trade Organization to do so. China, the European Union and India have also objected, arguing the tariffs are a “safeguard” measure to protect U.S. domestic products from imports, which require compensation for major exporting countries. The Trump administration has rejected that argument and says the tariffs are for national security reasons and are therefore allowed under international law. The U.S. has agreed to negotiate with China and has informed the EU and India it is willing to discuss any other issue, while maintaining their compensation claims are unwarranted. It is unclear what Moscow’s demand means in practice because it did not challenge the tariffs through a WTO appeals mechanism through which the organization’s 164 members can negotiate solutions to trade disputes. China is the only country that has pursued that course and India has asked to be present at negotiations with the U.S. on the issue. U.S. allies Australia, Canada, the EU, Mexico and South Korea have received temporary exemptions from the tariffs, pending negotiations with the U.S.   …

Global diamond giant De Beers is rolling out an app to help small-scale, artisanal diamond miners in Sierra Leone certify that gems they pry from the soil are legal, the Anglo American unit said on Thursday. The initiative is the latest attempt by the industry to clean up its image and expunge the scourge of “blood diamonds” blamed for financing conflict, chaos and criminality in poor African countries, such as Sierra Leone and Liberia. More widely, small-scale mining is often tainted by alleged links to insurgents or child labor, casting a cloud over supply chains for commodities such as cobalt, which is produced mainly in the conflict-prone Democratic Republic of Congo, and gold. Called Gemfair, the De Beers’ pilot app project is a partnership with Diamond Development Initiative (DDI), an NGO, and will target several small-scale mine sites in Sierra Leone in a meeting of high technology and pre-industrial mining methods. Miners enrolled in the project must be licensed, adhere to certain environmental standards, work sites that are free of violence and meet other requirements. The app is on a tablet and has a software application that shows the GPS location where the diamonds have been extracted, allowing for a record of the production process. The software can work online or offline in remote areas. The miners are also provided with digital scales to weigh their diamonds and a tamper-proof bag where they can be deposited and then passed safely through the supply chain. “The app we developed to address …

As India battled an inexplicable currency shortage across many parts of the country, the government has quickly moved to assure the nation that it is fixing the shortfall. Hundreds of people this week have been encountering “Out of Cash” signs at automated teller machines which have run dry in some of the country’s largest states like Karnataka, Telangana, Andhra Pradesh and Bihar. The Central Bank has said that printing of currency notes has been ramped up, supplies are being augmented to the worst-hit areas and there is enough cash in its vaults. It said ATM’s are emptying faster than usual as people withdraw extra cash at the start of the Indian financial year, which began on April 1. But days after the shortages began to be reported, there are no clear answers as to what has caused the problem. There is usually a spurt in demand for bills at this time of the year when Indians celebrate religious festivals and prepare for the harvest season, but this has never caused currency shortages in the past. Without elaborating, Finance Minister Arun Jaitley attributed it to ‘sudden and unusual increase’ in some areas. In a statement earlier this week he said that there is more than adequate currency in circulation and available with banks. “There is no reason to believe for anyone to have any fear or any apprehension. Please be completely assured that our banking is totally, totally safe,” said S.C. Garg, a top official in the Department of Economic Affairs. Despite the assurances, the …

A bitterly divided House panel Wednesday approved new work and job training requirements for food stamps as part of a five-year renewal of federal farm and nutrition policy. The GOP-run Agriculture Committee approved the measure strictly along party lines after a contentious, five-hour hearing in which Democrats blasted the legislation, charging it would toss up to 2 million people off food stamps and warning that it will never pass Congress. The hard-fought food stamp provisions would tighten existing work requirements and expand funding for state training programs, though not by enough to cover everybody subject to the new work and training requirements. Agriculture panel chair Michael Conaway said the provisions would offer food stamp beneficiaries “the hope of a job and a skill and a better future for themselves and their families.” Food stamps At issue is the Supplemental Nutrition Assistance Program, or SNAP, which provides food aid for more than 40 million people, with benefits averaging about $450 a month for a family of four. The food stamp cuts are part of a “workforce development” agenda promised by GOP leaders such as Speaker Paul Ryan, R-Wis., though other elements of the agenda have been slow to develop. “The timing is just perfect, given the fact that we have more than 5 million jobs that are open and available,” said Rep. Glenn Thompson, R-Pa., who said the GOP provisions would cement “a pathway to opportunity” for the poor and “give them better access to skills-based education.” But Democrats said the …