UPDATE 1-SEC charges ex-SemGroup CEO, says misled investors
* Kivisto to give up $1.3 mln, no admission of wrongdoingOct 18 (Reuters) - A co-founder of SemGroup LP agreed to
give up more than $1.3 million to settle U.S. Securities and
Exchange Commission charges he misled investors about liquidity
risks they faced from his energy trading, which led to the
energy company’s 2008 bankruptcy.Thomas Kivisto, who was also SemGroup’s chief executive,
agreed to pay a $225,000 fine and forfeit his right to more
than $1.1 million of limited partnership units in a SemGroup
subsidiary. He did not admit wrongdoing in agreeing to settle.In a lawsuit filed in the federal court in SemGroup’s
hometown of Tulsa, Oklahoma, the SEC said Kivisto failed to
warn investors in the SemGroup Energy Partners LP (SGLP) unit
that his trading was draining liquidity, and jeopardizing
SemGroup’s ability to meet its obligations to that unit, which
owned oil and gas assets.Once the 14th-largest privately held U.S. company, SemGroup
filed for bankruptcy protection on July 22, 2008, after lenders
canceled a credit facility, and it incurred $3.2 billion of
losses on energy futures and derivatives trades. The SEC said
that as SemGroup’s troubles became known, the price of SLGP
units sank 64 percent over two days prior to the bankruptcy.”Investors have a right to know the risks that could
imperil their investment,” SEC enforcement chief Robert Khuzami
said in a statement. “Kivisto should have known that the SGLP
filings he signed did not warn investors about the risks
created by his energy trading. Investors were blindsided when
those risks came to fruition.”Paul Bessette, a lawyer for Kivisto, did not immediately
return a call seeking comment.SemGroup emerged from Chapter 11 protection as SemGroup
Corp , which is now publicly traded.The case is SEC v. Kivisto, U.S. District Court, Northern
District of Oklahoma, No. 11-00641.
JBS breaks pact on cattle buying - prosecutor
Oct 18 (Reuters) - Brazil’s JBS, the world’s biggest beef
producer, has violated an accord in which it had agreed not to
buy cattle from irregular ranches, Brazil’s public prosecutors
office said late on Monday.The accord, signed by JBS in May 2010, said that the
company would stop buying animals from farms with environmental
irregularities, properties located on indigenous land and farms
that had kept workers in slave-like conditions.But JBS bought 3,476 head of cattle from May
2010 through May 2011 from 32 farms that fell into these
categories in the center-western state of Mato Grosso, the
prosecutor said in a statement.”The prosecutors office ascertained that, despite JBS’s
having agreed to review its commercial relations, it continued
to buy animals (from these properties),” the office said.The prosecutor gave JBS two weeks to announce the steps it
would take to bring its purchases in line with the accord.In a statement, JBS denied that it had bought cattle “in
violation with the current legislation” and said it is
examining its past purchases to check the prosecutors’
allegation.
Great mooseum! Ill be back!
Blog Guy, I need some of your famous travel advice. I love visiting the childhood homes of great people, to see where they got their start.
I’ve been to Mark Twain’s home in Hannibal, Missouri, the house where Louisa May Alcott grew up in Concord, Massachusetts, Reverend Martin Luther King’s birth home, in Atlanta…
Say no more, this is your lucky day. Two words for you: Arnold Schwarzenegger.
Um, I think I’m going to need a few more words than that.
Oh. They’ve just opened a museum dedicated to Arnold’s life, in the house where he was born, in Austria. He was there in person for the opening.
He’s not exactly Louisa May Alcott.
No, but he has been in movies and I think he was the governor of one of those western states.
The walls of his boyhood home are covered with Schwarzenegger movie posters, which must have been what gave young Arnold the inspiration for his career.
There’s also lots of strudel. I gather Arnold’s earliest physical exercise was pointing at pastry. We have that in common.
I don’t know, Blog Guy. What else do they have there?
There are life-size wax figures of Arnold, and I believe there are some of his former housekeeper and the son he fathered with her 13 years ago.
You’re just making up that last part, right?
It’s only a guess, but stranger things have happened.
Not in our lifetime, Blog Guy.
Schwarzenegger museum slideshow
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Top: Austrian actor, former champion bodybuilder and former California governor Arnold Schwarzenegger points at a ‘Terminator’ film poster, as he chats with Austrian Chancellor Werner Faymann, during a tour of his former home in Thal October 7. 2011. /Andy Wenzel
Right: Schwarzenegger looks at apple strudel in his former home.
Left: A visitor takes touches a life size figure inside the house where Schwarzenegger was born.
Bottom right: A statue of Schwarzenegger in front of the house. -Peter Bader
More stuff from Oddly Enough
WL Ross & Co cuts fund-raising target-WSJ
U.S. billionaire Wilbur Ross founded the private-equity
firm which he sold to Invesco in 2006. WL Ross & Co
could not be reached immediately for comment.WSJ said that Wilbur Ross declined to comment on fund
raising efforts.
Obama administration pulls part of healthcare law
U.S. health officials said on Friday that after 19 months of analysis, they could not come up with a model for the so-called CLASS Act that keeps it voluntary and budget-neutral.”We do not have a path to move forward,” Kathy Greenlee, assistant secretary of aging from the Health and Human Services department and administrator of the program, said in a call with reporters.”Everything we do to make the program more (financially) sound moves us away from the law, and increases the legal risk of the program.”The Community Living Assistance Services and Supports (CLASS) program was designed to give the disabled and elderly cash to receive care at home instead of usually more expensive institutional care.Under the law, workers would have begun enrolling in the program after October of 2012, after the HHS set the program’s benefits. The program was to have been voluntary, with participants required to pay into it for at least five years before qualifying for benefits.The Congressional Budget Office had estimated the program would reduce the federal deficit by $70 billion in the program’s first decade.However, the CBO also said the program would start to lose money after the first decade or two, once benefit payments exceeded income from premiums.Republicans, many of whom are eager to repeal Obama’s healthcare reform, have criticized the CLASS Act as a way to trump up the cost savings of the Affordable Care Act.”The CLASS Act was a budget gimmick that might enhance the numbers on a Washington bureaucrat’s spreadsheet but was destined to fail in the real world,” said Senate Republican Leader Mitch McConnell.”However, it is worth remembering that the CLASS Act is only one of the unwise, unsustainable components of an unwise, unsustainable law.”Greenlee said the Affordable Care Act will continue to reduce the deficit by $127 billion between 2012 and 2021, even without the CLASS Act. However, the decision to suspend the program would probably reduce the president’s 2013 baseline budget.Dozens of states have sued to challenge the healthcare law, particularly its requirement that all Americans have health insurance. The Supreme Court is expected to rule on the legal challenge sometime before June 2012.NOT ADDING UPIn September, Republicans in Congress posted emails that showed government actuaries were already questioning CLASS, even before the program became part of the Affordable Care Act.The Republican Policy Committee also posted a September email from Bob Yee, an HHS actuary who said he was hired to run the program, saying he was leaving his position and the CLASS office would be closing.HHS Secretary Kathleen Sebelius in February acknowledged the agency was struggling to make the program self-sustainable in the long run.On Friday, Greenlee said the law specifically allowed the program to be suspended if the HHS could not prove it was financially sound for 75 years.”Because of the tremendous uncertainty that surrounded the program from its inception, it had this provision that the (HHS) Secretary had to satisfy solvency, and we could not proceed otherwise,” she said.Some Democrats on Friday urged the HHS to not be so quick in giving up on the program.Congressman Frank Pallone, a Democrat from New Jersey who co-authored the program along with the late Senator Edward Kennedy, said seniors and the disabled who need home care would only have Medicaid to fall back on if the program were repealed.”If the program needs improving, then let’s find the way to do it,” he said in a statement.”While we are fighting so hard against Republican attempts to cut Medicaid … abandoning the CLASS Act is the wrong decision. Soon enough, those in need will have nowhere to go for long term care.”According to the AARP, a nonprofit group that represents those over 50 years of age, 70 percent of people age 65 and over will need long-term care services at some point in their lifetime, and Medicare, the federal insurance program for the elderly and disabled, does not cover such care.
Drop in Fed custody holdings reflects FX interventions
A sharp recent drop in the Fed’s holdings of U.S. Treasuries for foreign central banks probably reflects the effort by many developing economies to stem rapid declines in their currencies, not some frightening move by the likes of China out of U.S. bonds. That’s the argument put forth by Marc Chandler at Brown Brothers Harriman, who notes the pullback of recent weeks appears to have been the most dramatic since the Asian financial crisis of the late 1990s.
His reasoning makes sense: a September spike in the U.S. dollar was accompanied by steep plunges in the exchange rates of many emerging economies. Still, Chandler remains puzzled as to why the selling accelerated to a hefty $21 billion even as the dollar reversed course in the last week:
This is the seventh consecutive weekly decline and over this period, custody holdings have fallen an average of about $12-$12.5 billion a week, making this past week was quite large relative to trend. It likely reflects foreign central banks selling of Treasuries to intervene to support their currencies rather than a dumping of Treasuries to diversify reserves or as a protest to such low interest rates.
Yet the difficulty with this hypothesis is that during the week through Wed, most emerging market currencies have generally risen against the dollar. This generalization holds true for East Asia which is suspected to use the Fed’s custodial services. For some of the run the dollar was appreciating in general, so private sector dollar buying offset the official selling, but now — over past week — it would seem like the central banks and the private sector have been on the same side selling dollars.
Swedish buyout fund EQT raises 4.75 bln euros
Strong demand enabled the fund to reach its funding target
in less than nine months, the group said on Friday.EQT planned to continue to make investments in the health
care sector, which is increasingly being funded by private money
in northern Europe as governments cut costs.In July, the fund purchased Swedish firm Atos
Medical, which makes artificial voice boxes for people who have
had throat operations and other prosthetic tools and had 2010
sales of 64 million euros.The Wallenberg family fund Investor AB [INVEb.ST] remains
the biggest investor in EQT with a maximum commitment of up to
450 million euros, a spokesman for the fund said.Even though financing markets for leveraged buyouts have
faltered in Europe, EQT said Scandinavian banks would likely be
willing to lend for buyouts.”In the Nordic countries, financing is available with
roughly around 50 percent leverage for investments between
1.0-1.5 billion euros,” EQT spokesman Johan Hähnel said.
($1 = 0.730 euro)
World’s annual child mortality rate falling: U.N.
Overall, 12,000 fewer children under age 5 die each day than a decade ago, the groups said in their annual report on child mortality.Even in sub-Saharan Africa, where the burden of child mortality is greatest, the rate of improvement has more than doubled in the past decade, a sign that even the poorest regions can make progress, said Anthony Lake, executive director of the United Nations Children’s Fund or UNICEF.Despite the improvement, more than 21,000 children die every day from preventable causes, he said in a statement.”Focusing greater investment on the most disadvantaged communities will help us save more children’s lives, more quickly and more cost effectively,” Lake said.Between 1990 and 2010, the annual number of deaths in children under five fell to 57 per 1,000 births in 2010, from 88 deaths per 1,000 live births in 1990.Even so, improvements in child mortality rates will not be enough to meet the United Nation’s goal set in 2000 of reducing child mortality by two-thirds by 2015, and the groups say more money is needed.”This is proof that investing in children’s health is money well spent, and a sign that we need to accelerate that investment through the coming years,” Dr. Margaret Chan, director general of the World Health Organization, said in a statement.She said many factors are contributing to reductions in child mortality, including better access to healthcare for newborns, prevention and treatment of childhood diseases, access to vaccines, clean water and better nutrition.”There is more attention being paid to what ensures health globally,” Ian Pett, chief of Health Systems and Strategic Planning at UNICEF, said in a telephone interview.For example, he said the government of Sierra Leone in April lifted all fees for child and maternal health, prompting a big improvement in child mortality rates.”Many other countries are trying to do the same thing,” Pett said.Sierra Leone ranked among the top five countries seeing improvements in child mortality in the past decade, along with Niger, Malawi, Liberia and Timor-Leste.About half of all deaths of children under 5 in the world took place in just five countries in 2010: India, Nigeria, Democratic Republic of Congo, Pakistan and China.Babies are particularly vulnerable. According to the report, more than 40 percent of deaths in children under age 5 occur within the first month of life and more than 70 percent occur in the first year of life.Deaths among children under age 5 increasingly are concentrated in sub-Saharan Africa and southern Asia, with 82 percent of child deaths occurring in these regions in 2010, compared with 69 percent in 1990.In sub-Saharan Africa, one in eight children and in southern Asia one in 15 children die before reaching age five. That compares with 1 in 143 children dying before age 5 in developed countries.
UPDATE 1-Stage Stores to launch new off-price chain
The company will open its first Steele’s store in November
in Beeville in Texas, and Bastrop and Minden in Louisiana.”Steele’s is a perfect complement to our successful small
town department store business model and expands our small town
customer reach,” Chief Executive Andy Hall said in a statement.”Our research indicates that there is significant growth
potential in the under-served small market off-price niche. We
believe the Steele’s customer will not overlap with those in our
department store model as Steele’s is targeting a lower
household income consumer,” he added.Stage Stores shares closed at $15.30 on Tuesday on the New
York Stock Exchange.
