More stories

  • in

    Binance U.S. clients have $2.2 billion ‘at significant risk’ after crypto exchange charged, SEC says

    Federal regulators say they lack sufficient assurance over the safety of $2.2 billion of U.S. customer assets nominally under the control of Binance’s U.S. subsidiary.
    SEC lawyers filed an emergency motion, and have argued that Binance’s main business and its founder Changpeng Zhao exert effective control over billions of dollars of client funds.
    The SEC is asking a federal judge to institute a temporary restraining order that would freeze those assets.

    Binance’s Co-founder & CEO Changpeng Zhao has given several interviews discussing the outlook for cryptocurrency following a turbulent couple of weeks in the market.
    NurPhoto / Contributor / Getty Images

    The $2.2 billion of U.S. customer assets held by Binance is at “significant risk” of being stolen by founder Changpeng Zhao unless a freezing order is in put place, federal regulators said in a filing Tuesday night, after the crypto regulator was charged by the Securities and Exchange Commission.
    Lawyers from the SEC filed an emergency motion earlier, citing a risk of capital flight and asking a judge to repatriate and freeze U.S. customer assets to prevent illicit transfers by Zhao or Binance entities. The SEC sued Binance and Zhao on Monday, alleging they engaged in the unregistered offer and sale of securities and commingled investor funds with their own.

    related investing news

    4 hours ago

    The latest filing described Zhao as a “foreign national who has made overt his views that he is not subject to the jurisdiction of this Court.” SEC lawyers alleged that two Binance U.S. subsidiaries — BAM Trading and BAM Management — were controlled by Zhao and had already garnered “illicit gains” of at least $420.4 million in profits and venture fundraising.
    Years of communications between the SEC and Binance, which claims no official headquarters, suggest that Binance.US couldn’t clearly indicate who controlled customer assets, according to the filing.
    “Zhao and Binance have had free reign,” the SEC alleged, over “customer assets worth billions of dollars.”
    Zhao’s attorneys say the billionaire is not subject to U.S. law, despite his control over or beneficial ownership of U.S. companies and bank accounts that sent billions of dollars to Swiss and British Virgin Islands-based holding companies, the SEC said.
    The SEC says federal law and precedent establish the court’s jurisdiction over Zhao and Binance.

    “There is no doubt that the Court has personal jurisdiction over all Defendants,” the SEC said.
    While Binance’s U.S. arm has said it maintains control over much of its technology and financial infrastructure, the SEC says Zhao’s ultimate control puts investor assets at risk unless action is taken immediately.
    “Given the history of Zhao’s and Binance’s open desire to avoid U.S. regulation and oversight, and their surreptitious control over BAM Trading and commingling of and movements of BAM Trading assets through a web of Zhao-controlled entities outside of the United States, there can be no assurance that BAM Trading employees are not influenced by Zhao or Binance today,” the filing said.
    Federal regulators are also requesting the court allow them to serve Zhao by emailing his lawyers, saying his “pattern of geographical elusiveness” makes it difficult to identify his exact residence or whereabouts. Zhao is reportedly a resident of the UAE.
    Binance did not immediately responded to a request for comment.
    WATCH: Timothy Massad: crypto risk ‘isn’t just about the token’ More

  • in

    Investors pull $790 million from crypto exchange Binance after SEC charges

    Net outflows from the crypto exchange Binance and its U.S. arm reached $791 million, crypto research firm Nansen said on Tuesday.
    The outflows spiked after Binance and its founder, Changpeng Zhao, were charged with 13 different securities violations by the SEC.
    Zhao and Binance’s two entities have strongly disputed the allegations.

    Changpeng Zhao, billionaire and chief executive officer of Binance Holdings Ltd., speaks during a session at the Web Summit in Lisbon, Portugal, on Wednesday, Nov. 2, 2022.
    Zed Jameson | Bloomberg | Getty Images

    Crypto investors pulled $791.6 million from the crypto exchange Binance in 24 hours, crypto research firm Nansen said Tuesday, after U.S. regulators unveiled 13 securities charges against the company and its founder Changpeng Zhao.
    After the collapse of allegedly fraudulent crypto exchange FTX in November 2022, investors moved their assets to a number of exchanges, but Binance won the lion’s share of those inflows. Following Monday’s Securities and Enforcement Commission charges, it appears some of those gains have been returned.

    Investors withdrew $1.65 billion worth of assets from Binance and $13 million from contested Binance’s U.S. arm on the Ethereum blockchain after the charges were unveiled. Inflows totaled only $871.8 million and $11.53 million to Binance and Binance.US, respectively.
    The SEC alleged that Binance had been engaging in the unregistered offer and sale of securities, that Zhao and his entities had improperly commingled investor funds with Binance’s funds and that the exchange subverted its own controls to allow institutional U.S. investors to use Binance’s international exchange, rather than the supposedly firewalled U.S. version.
    The Commodity Futures Trading Commission had already unveiled a similar set of charges against the crypto exchange earlier this year. The allegations of commingling and compliance failings echo the charges levelled against FTX founder Sam Bankman-Fried and his collapsed exchange.
    Zhao and Binance’s two entities have strongly disputed the allegations. More

  • in

    Stocks making the biggest premarket moves: Mobileye, Epam Systems, Thor Industries, Apple & more

    Amnon Shashua, president and chief executive officer of Mobileye Global, and Patrick Gelsinger, chief executive officer of Intel Corp., outside the Nasdaq MarketSite during the company’s IPO in New York, US, on Wednesday, Oct. 26, 2022.
    Michael Nagle | Bloomberg | Getty Images

    Check out the companies making the biggest moves in premarket trading:
    Mobileye — Shares sank 5% following a Securities and Exchange Commission filing Monday that showed an Intel subsidiary will sell 35 million Class A shares in a secondary offering. Mobileye will not receive any proceeds from the sale.

    related investing news

    35 minutes ago

    16 hours ago

    Coinbase – Shares of the crypto company sank more than 15% in premarket trading after the Securities and Exchange Commission sued Coinbase, alleging that the company was acting as an unregistered broker and exchange. The move comes shortly after the SEC filed suit against Binance on similar grounds.
    Epam Systems — The software firm fell 2.9%, a day after the company posted second-quarter earnings and revenue guidance that was below analysts expectations. It also lowered its full-year earnings and revenue guidance to below analysts’ expectations.
    Thor Industries — Shares surged nearly 10% after the RV manufacturer reported an earnings and revenue beat. The company also upped its full-year earnings guidance.
    McCormick — The stock added about 2% following a double upgrade to buy from underperform by Bank of America. The Wall Street firm cited easing volume pressures and called the stock a “growthy staple.”
    GitLab — Shares of the software development platform company surged nearly 30% in premarket trading after Gitlab reported a smaller-than-expected loss for its first quarter. GitLab reported an adjusted loss of 6 cents per share on $126.9 million in revenue. Analysts surveyed by Refinitiv were expecting a loss of 14 cents per share on $117.8 million of revenue. Revenue grew 45% year over year.

    Ferguson — Shares of the distribution company slipped 3.4% after Ferguson reported a 2% decline in net sales for its fiscal third quarter year over year. Ferguson results did top analyst expectations, with adjusted earnings of $2.20 per share on $7.14 billion of net sales. Analysts expected $2.16 in adjusted earnings per share on $7.09 billion of revenue, according to StreetAccount.
    J.M. Smucker — The food products stock gained 1% in premarket trading after J.M. Smucker released its fiscal fourth quarter results. The company reported $2.64 in adjusted earnings per share on $2.23 billion of revenue. Analysts surveyed had penciled in $2.41 in earnings per share on $9.56 billion of revenue, according to StreetAccount. J.M. Smucker’s full-year earnings guidance of $9.20 to $9.60 was on the low side of analyst estimates, however.
    Apple — The iPhone maker dipped less than 1% in premarket trading, a day after releasing its Vision Pro mixed reality headset. Wall Street analysts had mixed responses, with D.A. Davidson downgrading the stock to neutral.
    — CNBC’s Jesse Pound contributed reporting. More

  • in

    Stocks making the biggest moves midday: Palo Alto Networks, 3M, Amedisys, Target and more

    A view of the exterior of the new Dutch head office of international technology company 3M in Delft, Netherlands, November 5, 2014.
    Koen van Weel | AFP | Getty Images

    Check out the companies making headlines in midday trading.
    Palo Alto Networks — The cybersecurity stock jumped more than 4% after S&P Dow Jones Indices announced Friday postmarket it will replace Dish Network in the S&P 500, effective June 20. Dish Network dipped about 1%.

    related investing news

    3 hours ago

    10 hours ago

    3M — The industrial manufacturer’s shares slid 3% after the judge in the company’s multidistrict litigation over so-called forever chemicals agreed to delay the first trial three weeks so parties can finalize a settlement of claims with municipal water providers, Bloomberg reported Monday.
    Coinbase — Shares of the crypto exchange and services company tumbled 10% after the U.S. Securities and Exchange Commission sued crypto exchange Binance on Monday, alleging Binance and its co-founder Changpeng Zhao commingled billions of dollars of investor funds with their own and violated securities laws.
    EPAM Systems — Shares of the software engineering firm tumbled 18% after it cut guidance amid further deterioration in near-term demand. Q2 earnings per share guidance of between $2.33 and $2.40 was slightly below the FactSet estimate of $2.43. It also lowered full-year earnings estimates and revenue estimates for both the second quarter and full year to below analysts’ estimates.
    Amedisys — The health care company’s shares rallied 14% after it received an unsolicited buyout offer from Optum, a unit of UnitedHealth, to acquire Amedisys for $100 a share in cash. Shares in Option Care Health, which has a competing agreed upon offer to buy Amedisys, surged 7%.
    ImmunoGen — The biotechnology company’s shares gained 5% after it announced results from ovarian cancer treatment Elahere showing a roughly 35% reduction in the risk of disease progression or death compared to chemotherapy.

    C.H. Robinson Worldwide — The transport company lost about 5% following a report from trade publication FreightWaves that it has selected Ford’s David Bozeman as its next CEO. Bozeman is currently vice president of the customer services division and enthusiast brands at Ford.
    Equitrans Midstream Corporation — The natural gas provider added 4.5% in midday trading following a double upgrade from Morgan Stanley to overweight earlier in the day. The bank cited potential growth for the stock on the heels of language included in the Fiscal Responsibility Act, which is the debt ceiling bill, that would allow for the completion of the Mountain Valley Pipeline.
    Ford Motor Co. — Shares of the automaker rose nearly 2% after Citi upgraded Ford to buy from neutral. Rising demand for cars in the U.S. broadly is one reason for optimism about Ford, according to Citi.
    Spotify — Spotify added 3% after the music streaming company said it’s laying off 200 employees, mainly within its podcast division, or about 2% of its in-person workforce.
    Target — The big-box retailer’s stock fell more than 2% after KeyBanc downgraded the retailer to sector weight from overweight, warning the resumption of student loan repayments could squeeze Target’s margins.
    Dollar General — Shares fell 2.7% after Morgan Stanley downgraded the discount retailer’s stock to equal weight from overweight Sunday. The firm said Dollar General was not showing as much resiliency as expected. Last week, Dollar General reported a miss on quarterly earnings and cut its guidance, citing a “challenging” economic environment.
    Apple — Shares of the iPhone maker rose more than 1% to hit an all-time high as it kicked off its annual Worldwide Developers Conference in Cupertino, California. Apple is widely expected to reveal its long-awaited virtual and augmented reality headset, “Reality Pro.”
     — CNBC’s Yun Li, Alex Harring, Jesse Pound, Samantha Subin and Brian Evans contributed reporting. More

  • in

    Use this 401(k) investing strategy to calm your market jitters

    “Dollar-cost averaging” is a strategy that entails investing a sum of money in small chunks over time.
    Workers who participate in a 401(k) plan do this by investing a portion of every paycheck.
    Dollar-cost averaging can help tame emotions and lead investors to make better decisions.

    Jackyenjoyphotography | Moment | Getty Images

    Steady contributions make investing ‘more palatable’

    Among the primary benefits of dollar-cost averaging: It strips the emotion out of investing.
    “Doing a little bit over time will average out the good days and bad days [in the market] and make it a more palatable experience for you,” said Sean Deviney, a certified financial planner based in Fort Lauderdale, Florida.

    Emotion can be a toxic force for investors. For example, the fear of losing money can trigger harmful behavior such as trying to time the market, akin to guessing the best time to buy and sell.

    Unfortunately, those efforts “often backfire,” according to Finra.
    People often sell out of fear when stocks decline in value, and then miss out on potential gains when stocks rebound, the regulator said. For example, the S&P 500 stock index lost almost 20% last year, its worst showing since 2008. Investors who sold out have missed a roughly 12% gain so far in 2023.
    Conversely, people might rush in when stocks surge — and buy right before stocks are about to drop.

    There are all sorts of reasons to be nervous these days, like the ongoing war in Ukraine and a potential recession on the horizon.
    “There’s always going to be a reason not to invest,” said Deviney, director at Provenance Wealth Advisors. “If you’re always looking at a reason not to invest, you’re missing out on long-term wealth accumulation. Dollar-cost averaging makes that a little bit easier.”
    The strategy can also help minimize regret. Investing smaller sums of money in chunks makes it easier to stomach a poorly timed investment, according to Charles Schwab.

    When a lump sum investment makes sense

    However, dollar-cost averaging isn’t always the best move, or necessarily right for everyone.
    Investors who can withstand the urge to sell during ugly times may get higher long-term returns by investing with a lump sum instead of spreading that sum out in pieces, according to Finra. This assumes the investor is holding that sum as cash, which generally yields lower returns than stocks over time.
    Dollar-cost averaging may also mean more fees for investors if they incur a cost for each transaction, Finra said. More

  • in

    Jamie Dimon, America’s top banker, has ‘no plans’ to run for office

    JPMorgan Chase CEO Jamie Dimon has “no plans” to run for office, according to a statement from the bank Monday.
    Last week, hedge fund manager Bill Ackman tweeted that Dimon should run for president in the upcoming 2024 election.
    Dimon has occasionally fed speculation of a future in politics, saying in 2018 that he could take on then-President Donald Trump in a race.

    JPMorgan Chase CEO Jamie Dimon talks to reporters as he leaves the U.S. Capitol after an unannounced meeting with U.S. Senate Majority Leader Schumer that was reportedly about the possibility of the U.S. defaulting on its debt, outside the U.S. Capitol in Washington, U.S., May 17, 2023. 
    Evelyn Hockstein | Reuters

    JPMorgan Chase CEO Jamie Dimon has “no plans” to run for office, according to a statement from the bank Monday.
    Speculation about Dimon’s possible future in politics flares up from time to time. The CEO is respected in business circles for his stewardship of JPMorgan, building it into the biggest and most profitable U.S. bank.

    Last week, hedge fund manager Bill Ackman tweeted that Dimon should run for president in the upcoming 2024 elections. That came after Dimon said in a recent interview that he would like to one day serve his country “in one capacity or another.”
    “As he has said in the past, Jamie has no plans to run for office,” the bank said in its statement Monday.  “He is very happy in his current role.”
    Still, Dimon, who took over at JPMorgan in 2005, has himself occasionally fed the speculation. In off-the-cuff remarks in a 2018 investor meeting, Dimon said that he could take on then-President Donald Trump in a race. He quickly said he regretted the comments.
    In recent years, Dimon has pushed his institution in new directions, attempting to tackle some of the country’s intractable issues including health care, economic disparity and urban blight.
    But his long tenure has sparked questions about succession planning at the New York-based bank.

    Last month, at the firm’s annual investor day, an analyst asked Dimon how many more years he expected to serve as CEO. The question came after Morgan Stanley CEO James Gorman announced an orderly succession process expected to unfold within the year.
    Dimon didn’t directly answer the question.
    “I can’t do this forever, I know that,” he said. “But my intensity is the same. I think when I don’t have that kind of intensity, I should leave.” More

  • in

    Stocks making the biggest moves premarket: Palo Alto Networks, Apple, Target & more

    Traders on the floor of the NYSE, June 1, 2023.
    Source: NYSE

    Check out the companies making headlines in premarket trading.
    Apple — The tech giant’s shares rose about 1% ahead of Apple’s Worldwide Developers Conference, which kicks off Monday at in Cupertino, California. Apple is widely expected to announce a “Reality Pro” headset that incorporates virtual reality.

    related investing news

    an hour ago

    Palo Alto Networks — The stock jumped nearly 5% after S&P Dow Jones Indices announced Friday evening that the cybersecurity company will replace Dish Network in the S&P 500, effective June 20. Dish Network’s stock fell 4% in premarket.
    Valley National Bancorp — The regional bank climbed more than 4% after JPMorgan upgraded the stock to overweight from neutral. The Wall Street firm said the concern around Valley National’s commercial real estate appears “overblown” as Manhattan offices represents less than 1% of its loans.
    Target — KeyBanc downgraded the retailer to sector weight from overweight, warning that the resumption of student loan repayments could squeeze Target’s margins. Shares of Target were down less than 1% in premarket trading.
    Dollar General — Shares fell 0.8%. Morgan Stanley downgraded the discount retailer’s stock to equal weight from overweight on Sunday, citing its “thesis-shifting quarter.” When reporting quarterly financials last week, the company said a challenging economic environment prompted on a miss on earnings and a cut to full-year guidance.
    Estee Lauder — The luxury cosmetic maker dipped about 1% after Oppenheimer downgraded the stock to perform from outperform and removed its $250 price target. The firm said Estee Lauder will struggle to meet these “aggressive” Street expectations.
    — CNBC’s Alex Harring and Jesse Pound contributed reporting. More

  • in

    Italy is a bargain for vacationing Americans. Not so much for Italians

    The good life made famous by Fellini is increasingly out of reach for ordinary Italians. 
    Life has gotten difficult enough that many young Italians are continuing to leave Italy in search of opportunities elsewhere. 

    Woman and child outdoors. Mother and daughter going to rest on beach. Rimini, Italy.
    Alex_ugalek | Istock | Getty Images

    RIMINI, Italy — The seaside town of Rimini is the Jersey Shore of Italy: From here to the port town of Ancona in the southeast, there are more than 40 miles of sandy beaches. 
    It was made famous by native son Federico Fellini, who grow up in the town and featured it in several of his movies, including “Amarcord.”

    The region, Emilia-Romagna, is synonymous with Italy’s greatest export: La Dolce Vita, the good life of wine, food, good-looking people and fast cars. 
    You can see la dolce vita the minute you hit the beach: the obvious first thing is the beach bars, hundreds of them, where thousands — wearing as little as possible — wash down oceans of Aperol spritzes, Negronis and Italian white wine for 5 euros ($5.35) a glass. 
    Then there’s the food, which has made this region one of the foodie capitals of Europe. 
    People flock to the cities of Parma, Modena, Bologna, Ravenna and Rimini to eat the Parma ham (prosciutto), the cheese (Parmesan, of course) and the pasta in endless varieties, but particularly tagliatelle, tortellini and lasagna, all made by hand. 
    It’s also the industrial heart of Italy, where Ferraris, Maseratis and Lamborghinis are made. 

    The Jersey Shore, but not 
    Unlike Americans, Italians do not just plunk down their beach bag and dive in the ocean. 
    The Italians have constructed small cities on their beaches, and there is a protocol. 
    Here, you rent a beach chair and umbrella from the cabana boys. The chairs and umbrellas are arranged in neat rows, nearly three dozen of them, all numbered, that stretch all the way to the Adriatic Sea nearly a quarter mile from the street. 

    “long rows of beach umbrellas in Cattolica, Emilia Romagnaother beach images from Italy:”
    Anzeletti | E+ | Getty Images

    And it is the Adriatic that everyone comes for. It separates the Italian peninsula from Croatia and Albania 100 miles to the east. Like the Atlantic, the Adriatic lacks the clear blue water of the Mediterranean, but what it lacks in color it makes up for in temperature (already 67 degrees), calmness and accessibility (Bologna is less than an hour away). 
    With so much money, so much sun, so much water, and so much food and wine, you’d think life would be an endless party, but the Italians do not seem very happy these days, and with good reason. 
    A bargain for Americans, but not for Italians 
    Italy is heavily reliant on tourism. More than 2 million Italians are employed in the tourist industry, about 8% of total employment. 
    The good news: The tourist business is booming. 
    Business has been “crazy good,” one taxi driver in Bologna told me: “Since Covid, it has not stopped. Not even in winter. Tourists keep coming.” 
    A gondolier in Venice, an hour to the north, told me that all 433 gondoliers in Venice were working full time, even through the winter. 
    “The business of the gondoliers has been very good in the last year,” he told me, even as he charged 120 euros (about $130) for a 45-minute gondola ride in the narrow, watery canals behind St. Mark’s Square. 
    That ocean of tourists is greatly helped by the presence of Americans. While Europeans, particularly French and Germans, make up the largest group of foreign visitors, Americans do something their European brethren don’t: They tip really well. 
    “We love Americans,” one waiter in Modena said to me after I left him a 10% tip for exceptional service. 
    For Americans, Europe in general but the smaller cities of Italy in particular are a great value. At one point last year the dollar was on a par with the euro. Even today, with one euro roughly $1.07, the Continent’s still a relative bargain. 
    Prices will be higher in the summer high season, but right now you can get a good hotel room within walking distance of the beach in Rimini for 100-200 euros ($107-$214).  At the famous Grand Hotel Rimini, built in 1908 and the site of several Fellini movies, you can mingle at the famous pool or the hotel’s private beach for $200-$400 a night, depending on the day of the week. 
    On the beach, at the Il Circolino restaurant, you can get a pasta course (tagliatelle al ragu —it’s amazing) for 12 euros ($13) and main dishes like chicken or seafood like polpo (octopus) for 15 to 22 euros ($16-$24).  
    These are the high-end places. 
    It’s a bargain for Americans but, for most Italians, even those prices are out of reach. 
    “Business is good on Thursday, Friday and Saturday, but so much depends on tourists,” the manager of one restaurant told me. 
    The problem, he said, is that the good life made famous by Fellini is increasingly out of reach for ordinary Italians. 

    It’s all about the taxes

    “The average Italian here makes about 20,000 euros a year [$21,400],” he told me. He’s likely talking about those working in the service industry. An average salary in Italy in 2021 was about 29,000 euros (about $31,000), according to OECD statistics. That’s still below the European Union average of about 33,000 euros. 

    Viewapart | Istock | Getty Images

    But his face really soured when he started talking about the issue that unites every Italian: taxes. 
    They are high. Very high. Italians pay three taxes: national income tax (including a 9.2% social security contribution), regional taxes and municipal taxes. The income tax rate is progressive: The top rate for the income tax is 43% — higher than the European average of 38%. 
    “If an Italian pays all of their taxes they could pay over half their income to the government,” the manager said as he clasped his hands together and rocked them back and forth, Italian for “I can’t believe we’re paying this much.” 
    No wonder so many salaries are paid under the table. Italy has a famous black market economy. 
    What’s left to live on is the problem. Rents in Rimini are 550-650 euros (about $590-$700) a month for a tiny one-bedroom apartment. That is about 40% of the take-home pay for one of the manager’s employees. 
    It’s little wonder that 62% of young Italians (25-29) still live with their parents. 
    Smaller wonder still that even a 12-euro plate of pasta can feel a bit extravagant. 
    No surprise, too, that the manager said the business increasingly relies on wealthier Germans, Brits and Americans. 
    “For Americans, Italy is wonderful, but for an Italian to visit America, it’s impossible,” he said. 
    Italians are leaving in search of opportunities 
    High taxes. Low average incomes. High inflation (8% a year). 
    Life has gotten difficult enough that many young Italians are continuing to leave Italy in search of opportunities elsewhere. 
    Five million Italians are now living overseas. 
    Another major motivation: lack of job growth. 
    I had lunch with one family, a woman and her two children, in Padua, a university city about an hour northwest of Rimini. Both children, ages 24 and 31, live at home with their mother. 
    The oldest has been working in Denmark for the past few years, for a software company. He has been visiting his family, but was going back to Denmark that week. His sister, who worked for a year in the U.S., is getting her degree in architecture in Venice, but admits she may want to go abroad to finish her studies. 
    “I think it would be better to go abroad, to get more experience, and maybe better job offers,” she told me. 
    The bottom line: Italy’s greatest export, la dolce vita, is still alive and well. The sun, the wine, the food, the fantastic people, are all still here. 
    It’s just getting a little more difficult for the locals to partake in that great export. More