See You Later: Lululemon Executive Axed After See-Thru Yoga Pant Fiasco
Lululemon, the maker of yoga clothing, announced that its chief product executive was let go after last month’s see-through yoga pants debacle.
The Vancouver-based clothing company announced on Wednesday that Sheree Waterson, Lululemon’s chief product officer will step down on the 15th of this month after five successful years with the company.
Waterson’s removal comes quickly on the heels of the company’s considerable recall of Lululemon’s popular black yoga pants in March of this year. Waterson’s removal is directly related to the botched production of the pants; as a result of the blunder, the company was required to recall the entire line of black, stretchy yoga pants that had an unacceptable level of sheerness. The pants hit the market with a sales price between $72 and $98.
The popular yoga pants were recalled because they were unintentionally see-through. The defective pants represented nearly 18 percent of all women’s yoga pants sold in the company’s store and prompted a severe shortage of the product.
Last month, Lululemon announced that the recall would significantly disrupt the company’s operations and ultimately damage its financial results. As a result of the defective production of the popular pants, the company expects first-quarter same-store sales to rise 5 to 8 percent in the first quarter, which is a significant drop from its earlier forecasts of an 11 percent gain. In total, the production mistake is expected to cost the company around $65 to $75 million.
The company offered full refunds to individuals who purchased the pants. As a result of the botched production effort, shares of Lululemon plummeted, and the brand has not announced when the pants will be placed on shelves again.
Source: CNN
Wave of the Future: Bitcoin ATMs Coming to a City near You
Media mogul Jeff Berwick is hoping to bring Bitcoin ATMs to major metropolitan areas throughout the world within the next couple of weeks to months.
Berwick expects to put the first two Bitcoin ATMs in Cyprus and Los Angeles in the next couple of weeks and is choosing between handfuls of different retail locations in both cities. Berwick added that orders for Bitcoin ATMs are coming in by the hundreds from a variety of countries all over the world.
Bitcoin is a virtual currency that was created four years ago. Since its inception, the currency has generated a considerable amount of attention over the past few weeks. The value of the digital currency has surged in the wake of the fumbled bailout and bank-run in Cyprus and worries regarding the health of government-backed paper currencies like the dollar and euro.
A Bitcoin ATM will work like a traditional automated teller machine; however, instead of connecting to your bank account, the software Berwick and his team developed will convert cash to Bitcoins stored in your Bitcoin wallet or provide cash based on what is stored in your personal Bitcoin account.
Berwick plans to charge approximately $10,000 to ATM operators to maintain the machines; fees then will be split with said operators. Berwick expects fees to hover around 3 percent, which is slightly higher than what most Americans pay to get cash from ATM’s outside of their banking network.
Thus far, Berwick has used his personal savings to develop the machines and build out the first prototype. Berwick is currently hoping to raise between $2 and $4 million in outside investments to get more ATMs in the hands of operators.
Berwick claims that getting a Bitcoin machine up and running should not be much more difficult than setting up a traditional ATM. In most cases, ATM operators are required to purchase the machine, pour cash into it and maintain network connections to accounts and Bitcoin wallets.
The virtual currency market is rapidly expanding and ever evolving. At this time, Bitcoin users or investors can trade in their coins for cash through a number of websites such as BitInstant and Coinbase that work directly with banks to facilitate transactions. Moreover, some vendors are now accepting the coins as real currency, including the online community Reddit and the blog hosting site WordPress.
That said, the financial turmoil in Cyprus was the principal catalyst for the recent Bitcoin surge; and with seemingly no end in sight to Europe’s debt crisis, further financial problems in the Eurozone are expected. “If Cyprus happens in Spain, Italy or Ireland, more people will look to Bitcoin,” claims Berwick.
Source: AP
Fired IRS Official Denies Intentional Targeting and Lying to Congress
Ousted IRS Official Denies Intentional Targeting and Lying to Congress
A significant increase in workload, as oppose to deliberate targeting, led to foolish mistakes and acts of political discrimination in the IRS as cited by an inspector general’s report, the agency’s outgoing commissioner claimed today.
The testimony by Steven Miller, who was forced to resign as commissioner of the Internal Revenue Service earlier this week, was presented at the first congressional hearing on the controversy that has required President Obama’s administration on the defensive.
Rep. Dave Camp, the chairman of the Republican-led panel, and other GOP members sought to paint the controversy as indicative of a government gone wild, with the IRS abusing conservative organizations and other political adversaries of the administration.
Democrats on the committee also expressed disdain at the political targeting of conservative groups’ tax-exempt status; however, they noted that the top IRS official responsible for conducting affairs was appointed by Republican President George W. Bush.
The Democrats on the committee also noted that the inspector general’s report expressed that there was no evidence of any political influence from outside the Internal Revenue Service.
Miller apologized for what he described as “horrible customer service,” he also rejected any accusation that it amounted to bringing politics into the Internal Revenue Service’s work and responsibilities.
According to reports, the Internal Revenue Service developed and followed a defective policy to determine whether the applicants for tax-exempt status were engaged in legitimate political activities. If so, the organizations being reviewed would be disqualified from receiving tax-exempt status.
The controversy started in early 2010 and continued for more than 18 months. The report ultimately declared that the IRS used inappropriate criteria to identify the Tea Party and other conservative groups as non-exempt. The report stated that the agency found these organizations as speculative bodies for receiving tax-emptions based upon their names or political positions as oppose to indications of potential political intervention.
According to the report, IRS officials failed to consult anyone beyond the agency regarding the development of additional screening criteria. President Barack Obama called the findings “outrageous” and forced Miller’s resignation, which is set to take place in early June.
Source: whitehouse.gov
Pump the Brakes: Hiring Slows Severely in March
Hiring in the United States slowed drastically in the month of March as the economy added only 88,000 jobs, the lowest monthly gain since June of last year.
Economists were expecting an increase of approximately 190,000 jobs when the United States Labor Department issued their jobs report today.
Experts expected the jobless rate to hover around the 7.7 percent level, but the drop in unemployment is not good news. Although the unemployment rate dropped to 7.6 percent, the amount of Americans leaving the labor market is on a steady rise; nearly 500,000 Americans dropped out of the labor market.
That said, the report left many economists feeling somewhat optimistic; although the news is poor and surprising, many industry professionals expect hiring to continue at a steady pace for the remainder of the year.
“Payrolls and hiring decisions are very volatile from month to month,” claimed Jim O’Sullivan, chief economist at High Frequency Economics, who believes monthly job figures will average approximately 175,000 for the rest of 2013. “I am not going to panic over one 88,000 report,” added O’Sullivan.
Looking at the first quarter of 2013, companies expanded payrolls by an average of 168,000 a month, which is roughly in line with past two years. This statistic reflects one of the few bright spots in Friday’s report: hiring figures in January and February were revised upward by roughly 60,000 jobs.
Economists and industry professionals earlier in the week forecasted employers to add 2.24 million jobs throughout 2013, and that 2.4 million jobs will be added in 2014. The same individuals expect the unemployment rate to dip to 7.4 percent by the end of 2013 and to improve to 6.7 percent by the end of 2014. These estimates are close to the 6.5 percent level that the Federal Reserve has announced it wishes to see before raising interest rates.
In March, hiring was concentrated in only a few industries; growth was slowed by the retail sector, which lost nearly 25,000 jobs, and at the United States Postal Service, which cut 12,000 positions. The decline in retail was particularly alarming, because the sector had average an increase in roughly 32,000 jobs per month over the past 6 months.
The construction industry was one of the bright spots on the report; the construction sector added over 18,000 jobs last month.
Overall, the private sector struggled as it added only 95,000 jobs, while the public sector slashed over 7,000 positions. The poor jobs data ended a week of disappointing labor news; a report released Thursday revealed that initial unemployment claims rose 28,000 for the last week in March. Stocks declined sharply on Friday in response to the jobs report.
Source: AP
SEC Charges Father and Son Conducted Cherry-Picking Scheme at Investment Company
The Securities and Exchange Commission charged a father and son and their Chicago-based investment advisory business with defrauding clients via a cherry-picking scheme that reaped them approximately $2 million in illegal profits, which they used to purchase vehicles, vacations, and luxury homes.
The United States Securities and Exchange Commission alleges that Charles Dushek and his son Charles Dushek Jr. placed several million dollars in securities trades without identifying in advance whether they were executing trades for themselves or their clients. The father and son delayed allocating trades to cherry pick winning trades for their personal accounts and drop losing trades on the accounts of clients at Capital Management Associates.
According to the complaint filed in Chicago, the scheme took place from 2008 to 2012. During this period, the Dusheks finalized in excess of 13,500 trades totaling more than $350 million. The Dusheks often waited to distribute the trades for at least one day, which was ample time to evaluate the success of the transaction. The father and son kept most of the winning trades and placed the losses on their clients. During the time of trading, the Dusheks did not keep written documentation of whether they were trading personal funds or client funds.
The incredible success the father and son procured reflects the breadth of their illegal activities. For 17 consecutive quarters, the two reaped positive returns while their clients suffered negative returns–one of their personal accounts increased by a ludicrous 25,000 percent from 2008 to 2011 while the majority of his clients’ accounts decreased sharply in value.
The illegal profits garnered from their personal accounts were the only source of consistent income for the pair.
The complaint charges the father and son with fraud and seeks judgments that would require the pair to return all illegal gains with interest and penalties.
Source: SEV.gov
Shodan: The most Diabolical Search Engine on the Internet
“When Internet users do not find their inquiries on Google, they think no one can find them; this is simply not true.”
This is according to John Matherly, the creator of Shodan, which is widely regarded as the scariest search engine on the Internet.
Dissimilar to Google, which crawls the Web searching for websites, Shodan navigates the Internet’s back channels. Shodan is in essence a “dark” Google, looking for the printers, webcams, serves, routers and all the other things that is connected to and makes up the broader Internet.
Shodan operates 24 hours a day, seven days a week to perpetually collect information on roughly 500 connected devices and services each month.
Users and industry professionals claim Shodan offers stunning search results even from the basic of inquiries. Seemingly countless security cameras, home automation devices, traffic lights and heating systems are connected to Internet and easy to locate through a Shodan search.
Shodan searches can find control systems for water parks, gas stations, and even a hotel wine cooler. Cyber security researchers were even able to locate command and control systems for nuclear power plants and particle accelerating cyclotrons by accessing Shodan.
What is truly impressive about Shodan’s ability to locate all of these things, and the characteristic that makes Shodan so scary is that many of the aforementioned devices have legitimate security systems built into them.
“You can access a scary amount of the Internet with a default passcode,” said HD Moore, the chief security officer of Rapid 7, which operates a private version of a database similar to Shodan for personal research purposes.
A basic search for “default password” reveals countless serves, printers and system control devices that utilize “admin” as their user name and “1234” as their password. Several other connected systems require no credentials at all; for these systems all you would need is a Web browser that is connected to them.
In a speech at last year’s Defcon cyber security conference, independent security penetration tester Dan Tentler revealed how he used Shodan to locate control systems for evaporative coolers, garage doors, and pressurized water heaters.
Tentler located a car wash that be turned on and off and a hockey rink that could be defrosted with the click of a button. A city’s entire traffic control system was found to be connected to the Internet, allowing a hacker to put it into “test mode” with a single command entry. Tentler also located a control system for a hydroelectric plant in France with turbines generating over 3 megawatts each.
“A hacker or evil person could really do some serious damage with this information and control,” Tentler said in a severe understatement.
Source: CNN
Apple Facing the Heat: Tech Giant Questioned over Tax Havens
Apple executives defended the tech giant’s tax strategy on Capitol hill today, claiming that the corporation pays one of the highest effective tax rates of any major company in the United States.
A Senate panel called the hearing to investigate what committee leader’s claims was the company’s strategy of shifting income to an Irish subsidiary to avoid paying American taxes. Apple executives claim the money resided with its international operations, including those in Ireland, and not to avoid taxes because of the growth of the company’s sales overseas.
Apple CEO Tim Cook said the tech company paid an effective tax rate of nearly 31 percent on profits it made on sales within the United States. Mr. Cook said the company paid over $6 billion in U.S. corporate taxes for the fiscal year of 2012 and expects to pay an even greater some this year.
“I am often asked if Apple still regards itself as an American company,” Cook said. “My answer will always be an emphatic yes. We are more than proud to be an American company, and equally proud of our contributions to the economy of the United States.
Cook claimed that Apple has never considered moving its headquarters outside of the United States. “It is beyond my imagination, and I have a pretty crazy imagination,” Cook said.
Carl Levin, chairman of the U.S. Senate’s Permanent Subcommittee on Investigations and John McCain both started the hearing with strong remarks of Apple’s practice of shifting income to foreign nations to avoid paying American taxes.
Levin called Apple’s practice an utter “sham,” while McCain said that the company’s claim that its use of the Irish subsidiary did not diminish its U.S. taxes is “completely false.”
“American corporations cannot continue to avoid paying their share in taxes,” said McCain. “Our armed forces units cannot afford it, and our economy cannot endure it. Moreover, the American people will not tolerate it.”
McCain asked Cook, “Can you see that there is a perception of an unfair advantage with what you do?”
In response, Cook said “honestly, I do not see it as being unfair; I am not an unfair person, and that is not who we are as a company.”
Cook claims that his company strongly supports corporate tax reform and that he was happy to testify at the hearing if it would advance the change of said reform being passed.
Source: Internal Revenue Service
Jay-Z’s Latest Venture: The World of Sports
Rap star and businessman Shawn “Jay-Z” Carter, officially became a sports agent last week, kicking off his latest venture with a superstar client—New York Yankees second baseman Robinson Cano.
Roc Nation, the entertainment business created by Jay-Z in 2008 is launching Roc Nation Sports, a management company that will team-up with Creative Artists, to represent the star baseball player and other top athletes.
Cano, who previously was represented by Scott Boras, is due to be a free agent at the of this year’s major league season, which will allow the star infielder to sign with any team in the majors. Cano is expected to be the most coveted player of this year’s free agent class, and his expected nine-figure contract means a massive payday for not only Cano himself, but also for his new agency.
Roc Nation has revolved around the music industry, managing songwriters, artists, engineers and producers; however, it is also in the business of music touring, merchandising, publishing and managing its own label, Roc-A-Fella-Records.
Jay-Z was named one of Fortune’s 50 business people of the year in 2012; the rap star turned entrepreneur recently sold his clothing line Rocawear, to Iconix for roughly $205 million.
The creation of the sports management company is not Jay-Z’s first foray into athletics; he is the current minority owner of the Brooklyn Nets.
“As a result of my love for sports, the creation of the sports management company was a natural progression to form a company where we can help premiere athletes in the same way we have been helping artists in the music industry,” said Jay-Z.
The signing with jay-Z marks an unusual setback for Cano’s former mega-agent, Scott Boras.
Boras has a reputation for being one of the most aggressive sports agents in professional athletics. This aggression often earns him and his client’s top dollar for their services.
Source: AP
Not So Sunny: SEC Charges City of South Miami with Fraud
The Securities and Exchange Commission today charged South Miami with defrauding bond investors regarding the tax-exempt financing eligibility of a mixed-use paring and retail structure being constructed in its downtown commercial area.
The SEC investigation found that the city of approximately 11,000 residents located in Miami-Dade County borrowed roughly $12 million in two pooled, conduit bond offerings through the state’s Municipal Loan Council. The city’s participation in these offerings enabled it to borrow funds at generous tax-exempt rates. The city claimed that the project was eligible for tax-exempt financing in several documents for the second offering that were trusted upon by bound counsel in generating its tax opinion.
However, the city failed to disclose that it had jeopardized the tax-exempt status of the bond offerings by illegally loaning proceeds from the first offering to a private contractor and restructuring a lease agreement before the second offering.
The city of South Miami agreed to settle the charges and keep an independent third-party consultant to oversee its procedures, policies, and internal controls for municipal bond disclosures.
“The city’s fraudulent conduct put bondholders in considerable danger of incurring substantial additional costs associated with their investments,” said Elaine Greenberg, the Chief of the SEC’s Enforcement Division of Municipal Securities and Public Pensions Unit.
According to the agency’s order, the city of South Miami sought financing to construct a public parking garage. The project ultimately become a mixed-use public parking and retail structure that was intended to be developed by a for-profit developer—South Miami was responsible for all construction costs save for the retail aspect of the structure. The city retained control over the maintenance and operation of the garage portion and all revenues generated from parking. The developer’s limited role was pivotal to the city procuring the benefits of tax-exempt financing. Under IRS rules and regulations, the project was allowed to be financed on a tax-exempt basis only if the for-profit developer used it on a limited basis.
According to the agency’s order, the city approved financing for the construction of the tax-exempt portion of the building and moved ahead with its bond pool offering. However, the bond counsel identified a tax issue with the mixed-public retail aspect of the project, and during subsequent conference calls, bound counsel informed the city that no funds from the offering could be utilized to finance the retail aspect of the structure.
The SEC found that city finance directors were unaware of these discussions or how the lease contact affected the bond’s tax status.
Source: sec.gov
