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What the Club is watching Wednesday — Disney's big China win, an iPhone warning, oil slips

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Stocks fell Wednesday morning as investors looked ahead to Federal Reserve minutes.

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General Electric Sets Healthcare Division Spin-Off Plans

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General Electric Sets Healthcare Division Spin-Off Plans

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U.S. House panel gets access to Trump’s tax returns after long legal battle By Reuters

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© Reuters. FILE PHOTO: Former U.S. President Donald Trump gestures as he announces that he will once again run for U.S. president in the 2024 U.S. presidential election during an event at his Mar-a-Lago estate in Palm Beach, Florida, U.S. November 15, 2022. REUTERS/

By Moira Warburton and Ismail Shakil

WASHINGTON (Reuters) – A U.S. House of Representatives committee has obtained access to Donald Trump’s tax returns, following a years-long court fight with the Republican former president who has accused the Democratic-led panel of being politically motivated.

“Treasury has complied with last week’s court decision,” a Treasury Department spokesperson said in an emailed statement late on Wednesday. The spokesperson declined to say whether the committee had yet accessed the documents. The development was reported earlier by CNN.

The Ways and Means Committee obtained the tax returns following a Supreme Court decision clearing their release. It has been seeking the returns spanning 2015 through 2020, which it says it needs to establish whether the Internal Revenue Service is properly auditing presidential returns and whether new legislation is needed.

The panel will have little time to do its work, with Republicans poised to take the House majority in January.

Trump, who on Nov. 15 began his third consecutive run for the presidency, fought the committee tooth and nail to avoid releasing them.

He was the first president in four decades not to release his tax returns as he sought to keep secret the details of his wealth and the activities of his real estate company, the Trump Organization. It had long been customary, though not required, for major party presidential candidates to release their returns.

Trump, who served as president from 2017 to 2021, reported heavy losses from his business enterprises over several years to offset hundreds of millions of dollars in income, according to news media reporting and trial testimony about his finances. That allowed him to pay very little in taxes.

A major question hanging over the committee’s work is what will happen to the returns when Republicans take control of the House from the Democrats. The committee first requested Trump’s returns in 2019.

Democrats on the Senate Finance Committee, the counterpart to the Ways and Means Committee, were considering their options on any action relating to Trump’s tax returns, according to an aide who spoke on condition of anonymity. Democrats held their Senate majority in November’s midterm elections.

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Former FTX CEO Sam Bankman-Fried claims he committed no fraud

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Striking a contrite tone, former FTX CEO Sam Bankman-Fried said he “didn’t do a good job” at upholding his responsibilities to regulators, customers, and investors in a hotly anticipated conversation with CNBC’s Andrew Ross Sorkin at the Dealbook Summit.

Bankman-Fried’s FTX imploded in mid-November after Coindesk reported irregularities in the company’s balance sheets. The company filed for Chapter 11 bankruptcy protection in Delaware on Nov. 11.

“I didn’t ever try to commit fraud on anyone,” Bankman-Fried said. “I saw it as a thriving business and I was shocked by what happened this month.”

“I’ve had a bad month,” Bankman-Fried added later.

“We completely failed on risk,” Bankman-Fried continued. “That feels pretty embarrassing, in retrospect.”

Tom Williams | CQ-Roll Call, Inc. | Getty Images

Bankman-Fried appeared by video feed from the Bahamas, Sorkin said. “I’ve been in the Bahamas for the last year,” Bankman-Fried said when asked about why he remained in the island nation.

Sorkin asked Bankman-Fried what motivated his acquisitions in the crypto industry, given the size of Alameda’s borrowing from companies Bankman-Fried intended to acquire.

Bankman-Fried claimed that he believed that by the middle of 2022, Alameda had repaid all lines of credit to various borrowing desks. But Alameda still owes BlockFi over $670 million, according to court filings.

“What are your lawyers telling you right now? Are they suggesting it’s a good idea for you to be speaking?” Sorkin asked the former billionaire.

“No, they’re very much not.”

I really knew there was a problem on November 6th: Sam Bankman-Fried

“The time that I really knew there was a problem was November 6,” Bankman-Fried said, after Alameda’s sizable FTT position was exposed by Coindesk. “When we looked at that, there was a potential serious problem.”

“Alameda had taken a huge hit” by that point. “We were seeing a run on the bank start,” Bankman-Fried said.

“I was nervous [when] the Alameda balance sheet” was exposed by Coindesk, Bankman-Fried said, but expected the damage was going to be limited to Alameda, not an “existential” crisis for FTX.

Sorkin asked Bankman-Fried why FTX and Bankman-Fried even had access to customer money.

“I wasn’t running Alameda, I didn’t know exactly what was going on, I didn’t know the size of their position,” Bankman-Fried said. “A lot of these are things I’ve learned over the last month [in the days leading up to bankruptcy.]”

New leadership at FTX said that Bankman-Fried exercised significant control over the entire empire.

Sorkin pressed Bankman-Fried on Alameda’s gambling on questionable cryptocurrencies, reading a letter out from an investor who lost his life savings of $2 million.

“The U.S. platform is fully solvent and funded,” Bankman-Fried claimed. “I believe withdrawals could be opened up today and be made whole.”

“Can I ask you about the drugs?” Sorkin said. “It’s funny hearing this. I have half a glass of alcohol a year,” Bankman-Fried responded.

I'm not focusing on criminal liability, what matters are the stakeholders who got hurt: Sam Bankman-Fried

The FTX founder repudiated claims of wild partying and off-label drug use, saying that FTX functions consisted of “board games,” or “dinner parties.”

Bankman-Fried claimed he was unaware of the Alameda exposure. In 2019, he said, 40% of FTX’s volume was from Alameda. By 2022, Bankman-Fried claimed, that number was down to 2%, which led him to believe that FTX’s exposure was lessened.

Sorkin continued to press Bankman-Fried on the lending of customer assets. Bankman-Fried demurred.

“In 2018, FTX didn’t have bank accounts,” Bankman-Fried said as justification for why users were asked to wire funds to an account in Alameda’s name instead of directly to FTX.

Bankman-Fried has engaged with the media only sporadically. “F*** regulators,” he told a Vox reporter in a Twitter message.

“I f***** up,” he wrote in another Tweet.

FTX was once hailed as the poster child of responsible crypto. Regulators and lawmakers looked to Bankman-Fried as the future of crypto regulation, a reputation that Bankman-Fried cultivated through appearances before Congress and deepened through generous political contributions.

My political donations were mostly for pandemic protection, says Sam Bankman-Fried

Bankman-Fried was already known as one of the largest donors to Democratic candidates. He claimed in a recent interview that he gave equally generously to Republican causes, through so-called “dark pool” contributions.

Reporters, Bankman-Fried said, “freak the f*** out if you donate to Republicans.”

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