Recent probes by the U.S. Attorneys’ offices in New York and Florida could cast doubt into the legality of daily fantasy sports sites. The office in New York subpoenaed DraftKings asking for information regarding the premature release of inside information by an employee who won $350,000 playing on a rival site, FanDual, that same week. Another issue is the recent push of several states to classify these sites’ activities as gambling. Nevada, Washington, and Louisiana, among others, have already barred users from playing fantasy sports for money. Further, banks and credit card companies who provide methods of online payment typically find it too risky to operate on gambling sites. The U.S. Department of Justice and the FBI have also taken interest in the legality of the business models of companies like DraftKings.
By: Nathan Simpson
Recently, Credit Suisse Group AG tentatively settled a probe into its failure to fully disclose to its clients how it operated its dark pools. Credit Suisse will pay over $30 million to settle with the New York Attorney General and over $50 million to the Securities and Exchange Commission. The settlement would lead to the largest fine ever levied against an operator of a private trading venue. Despite the multiple investigations into dark pools over the last year-and-a-half, law enforcers and regulators have struggled to bring cases against banks unfairly running dark pools because of the “complicated and opaque nature” of the dark pools industry.
By: Stephen Haltom
The fantasy sports industry is planning to create an outside control board to ensure high ethical standards within the industry. This comes after reports of the FBI’s investigation to determine whether the fantasy sports business model violates federal law. A former Obama administration official and lawyer, Seth Harris, will lead the control board. According to Mr. Harris, the board will “develop a set of industry standards” and “ask all of the companies that are engaged in cash games to establish controls, processes, and leadership that will ensure compliance with those standards.” The board also plans to conduct audits and deal with company misconduct.
By: Anderson Brown
Under the Affordable Care Act, health insurers have seen a drastic rise in individual and Medicaid insurance plans, expanding the industry’s total U.S. revenue from $641 billion in 2013 to $743 billion in 2014. However, much of the growth has been unprofitable, and a number of health insurance startups have been forced to shutdown. In 2014, health insurers lost $2.5 billion in the individual market, and some are expecting continued losses in 2015. Many of the larger firms that have survived are modifying the pricing and design of their insurance plans, which will likely result in increased rates for consumers.
By: Anderson Brown
Recently in a U.S. District Court in Boston, a former executive of Wireless Zone, James Dunham, was sentenced to five months in prison for selling confidential industry information to an analyst whose 2013 report to investors on sales of BlackBerry Ltd’s newest smartphone caused the company’s stock price to drop. Dunham was paid $2000 per month to secretly provide wireless industry information to an analyst of a Boston-based financial firm. According to prosecutors, Dunham gave the analyst “real time” insight into what happened at the franchiser’s stores, which the analyst sent to investors in research reports. The U.S. Attorney who prosecuted the case, Carmen Ortiz, said, “We will not hesitate to prosecute individuals who buy and sell confidential corporate information, regardless of whether there is a provable link to insider trading.”
By: Stephen Haltom
After re-establishing relations with Cuba in July, the U.S. has now eased restrictions on business and travel with Cuba. New rules went into effect on September 21 that allow U.S. businesses to open locations in Cuba, hire Cuban nationals as employees, and “import Cuban mobile applications to the U.S.” Accordingly, restrictions on telecommunications and internet-based services were also eased to facilitate communications between U.S. businesses and their Cuban locations. In regard to travel, “authorized travelers” are now permitted to have Cuban bank accounts and may be accompanied by close relatives when traveling for authorized purposes. However, traveling to Cuba for tourism is still prohibited by statute.
By: Austin Emmons
The University of Michigan’s index of consumer sentiment for September has fallen 6.7 percent from the August reading. The consumer sentiment index measures consumer confidence in the strength of the economy, and it could not avoid sinking to 85.7 following the August reading of 91.9. A decline this large has not occurred since 2012. Even so, the index rests higher than that of September 2014, which yielded a consumer sentiment index of 84.6. The release of the September index preceded the long-anticipated policy meeting of the Federal Reserve, in which the fate of short-term interest rates was determined.
By: Marie Wicks