Financial Mines

News and notes from the business reporters for the Connecticut Media Group.
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Archive for August, 2011

Cash-strapped state government offers funding for biz recovery

Wednesday, August 31, 2011 by:Rob Varnon
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Info from the Guv released today, Wednesday.
Governor Malloy Announces Business Assistance Program for Companies Affected by Hurricane Irene
(HARTFORD, CT) – Governor Dannel P. Malloy and Department of Economic and Community Development (DECD) Commissioner Catherine Smith today announced a comprehensive business assistance program to help companies negatively impacted by Hurricane Irene.
“This storm had a tremendous impact on residents and businesses alike.  As we move forward in our recovery efforts, I want to ensure that businesses that were affected get the financial and technical help they need in a timely fashion,” said the Governor.  “Providing this type of assistance will ensure Connecticut companies get back to business, which in turn will help the state’s economy stay on track in the wake of this devastating storm.”
Businesses sustaining damage will be eligible for assistance, including bridge financing and loans covering uninsured losses, through DECD.  Highlights include:
·         Loans of up to $200,000 to companies for storm-related damage, including property, machinery and equipment, and working capital;

·         Loan guarantees of up to $200,000 will be provided to banks and other lenders to spur local lending to businesses impacted by the storm;

·         Grants will be available to businesses for assistance in disaster recovery, such as temporary help and training; and

·         Technical assistance, linking businesses to a wide array of state and federal resources.

Agricultural businesses are eligible for funding.
A team of DECD workers has been assembled to work with companies at business resource centers around the state.  They will assist in indentifying financial and technical resources, as well as serve as business advocates with utility assistance, insurance companies, and federal agencies. A list of the centers is on the DECD Web site.

Information for all services can be accessed through www.DECD.org or by calling 860-270-8215.

Tax man says you can pay late after Irene

Monday, August 29, 2011 by:Rob Varnon
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Businesses impacted by the storm get a break from state tax collector from Aug. 31 deadline.

Here’s the release from the Department of Revenue Services.

The Department of Revenue Services said businesses in counties subject to federal or state declarations of emergency or disaster  will receive an extension to Sept. 7  to file their monthly sales and use tax, business use tax, room occupancy tax, admission and dues tax, alcoholic beverage tax, and tourism surcharge as well weekly income tax withholding. Taxpayers mandated to pay by electronic funds transfer are reminded that they must initiate payment by 4 p.m. on the business day prior to the due date. Electronic returns must be filed and paper returns must be post-marked by midnight, September 7, 2011, to be considered timely.

Commissioner Kevin Sullivan said, “Governor Malloy did a great job making sure the state was prepared for the severe weather, flooding and power outages.  Still, areas of the state were hit hard and widespread power outages are likely to continue for sometime despite the best efforts of Northeast Utilities and Connecticut Light & Power to repair the damage. It is also likely that some taxpayers and tax preparers will have to recreate damaged or lost tax records. I hope this extension of time provides the relief our taxpayers in Connecticut and in other states similarly affected by this hurricane and tropical storm deserve at this difficult time.”

If business taxpayers impacted by Irene receive a late filing notice from DRS for the August 31 filing deadline, they should call the department’s Taxpayer Services line at (860) 297-5962 to explain the situation.

For information about various tax matters, visit the DRS website at www.ct.gov/DRS. Customer service callers should dial (800) 382-9463 (within Connecticut, but outside the Greater Hartford area) or (860) 297-5962 (from anywhere).

Unemployment assistance remains available after Irene

Monday, August 29, 2011 by:Rob Varnon
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The State Labor Department said Monday that those who had difficulty filing for unemployment benefits this weekend, when the storm Irene hit, can file later in the week.

The Department said those claiming benefits for the week ending Aug. 27 have until Friday, Sept. 2 to file.

While the department had to close its main office due to a loss of power Monday, it said the Unemployment Insurance Call Centers remain open and all CTWorks Offices, except the Danielson location have power and are open.

Income tax calculator available at DRS

Wednesday, August 24, 2011 by:Rob Varnon
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People who want to see if they’re withholding enough money to cover their state income taxes can now access an income tax calculator at the State Department of Revenue Services’ website, www.ct.gov/drs. Select “Individuals” from the left hand side.

That’s the bulk of the announcement DRS made Wednesday, but here’s what was sent out, complete with quotes about the importance of information.

The Connecticut Department of Revenue Services (DRS) today announced the early release of the agency’s annual electronic Income Tax Calculator. DRS Commissioner Kevin B. Sullivan said the free calculation program is another tool residents can use to determine the impact of the new state income tax changes.

Commissioner Sullivan said, “While the department has released information describing the new state income tax and withholding changes, the main question taxpayers want answered is, “How will this affect me?’ The early release of the annual income tax calculator will let taxpayers know how much they can expect to owe in 2011 Connecticut Income Tax without having to calculate it themselves.”

Commissioner Sullivan said the program asks Taxpayers to enter their filing status and expected Connecticut Adjusted Gross Income. The program then takes the user to a page that show both the tax due for the amount entered, and each of the steps used to calculate the tax.

“Information is the most important tool we can give taxpayers to help them comply with state law,” Commissioner Sullivan said. ‘Using the income tax calculator will give taxpayers a better understanding of how the tax is being calculated and how much they will owe. Then, if they need to, taxpayers can use this information to adjust their withholding or make an estimated income tax payment.”

The 2011 Income Tax Calculator can be found on the DRS website by selecting Individuals from the options on the left-hand side of the page.

Find information about various tax matters on the DRS website at www.ct.gov/DRS. Customer service callers should dial (800) 382-9463 (within Connecticut, but outside the Greater Hartford area) or (860) 297-5962 (from anywhere).

Higher One to buy back $40M in shares

Tuesday, August 23, 2011 by:Rob Varnon
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New Haven-based Higher One announced Tuesday morning in an SEC filing it’s joining other companies looking to their own stocks for value.

The company, which provides student bill paying services and options at colleges across the country, said the repurchase program will run through Sept. 7, 2012. The company said there is no guarantee it will spend the total money,but executives say purchases will be made as opportunities present themselves.

Shares in Higher One shot up 36 cents to $16.37 a share at the open on the New York Stock Exchange. They backed off shortly after the open.

Connecticut shed 300 jobs in July

Thursday, August 18, 2011 by:Rob Varnon
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The state Labor Department reported Thursday the state lost 300 jobs and the unemployment rate remained at 9.1 percent.

A European banking crisis and recession fear trip up market

Thursday, August 18, 2011 by:Rob Varnon
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Stocks got planted Thursday as panic took hold over investors worried the world edged closer to recession because of continued problems in the European banking system.

Carolyn Frzop, first vice president of Janney Montgomery Scott, said investors are concerned European’s are about to have their “Lehman Brothers moment,” as key banks struggle over debt issues related to government bonds.

Shares plunged at the opening and like the Cubs kept losing into the afternoon. The Dow was down finished down mroe than 415 points, the Nasdaq was off 130 and the S&P had shed 53. Gold surged to a record.

Paul Schatz, president of investment advisory Heritage Capital, said Thursday’s big drop was the global recession being priced into stocks.”
He added the market was spooked on news that Federal Reserve officials were meeting with the U.S. executives of European banks.
The Wall Street Journal reported this morning that the Fed is concerned European banks will use their U.S. divisions like piggy banks to refinance debt in Europe. The banks on the other side of the Atlantic are having trouble attracting new money as investors worry that some banks’ stakes in the most debt-ridden European countries are too high.

Meanwhile, Amit Khandwala, co-chief investment officer of Milford-based Wright Investors’ Service, said disappointing news from the Philly Fed and the CPI kept shares in the negative.

The Federal Reserve Bank of Philadelphia reported Thursday its factory index had fallen to negative 30, which indicates the sector is contracting. Meanwhile, the Bureau of Labor Statistics reported  Consumer Prices in the nation jumped 3.6 percent in July despite a weak employment market.

This adds more fear to the market given recent reports that consumer borrowing increased, which now might be taken as a sign for economic weakness. Increased consumer borrowing can indicate families are confident in the economy and are willing to take on more debt, but given the current job situation and rising costs, it might also mean families have had to turn to credit to pay bills.

John Gerlach, an associate professor of Economics and Finance at Sacred Heart University, said Thursday’s sell off felt different than last week, becuase “last weak it was fear, this was a panic.”

But Gerlach and others pointed out all the activity and fear on Thursday doesn’t mean the recession is here and Friday is a new day.

SEC turns to $nitches: New TV series surely coming

Friday, August 12, 2011 by:Rob Varnon
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Friday finally saw a door opened for a TV series on SEC investigators, as the Wall Street watchdog can now pay snitches, just like so many cops on prime-time dramas have done.

It was one of the missing ingredients for a show: a nervous or hipster snitch who walks that good/bad guy line.

I imagine it could be a Law & Order spinoff, or a show patterned after Starsky & Hutch, Kojak or even T.J. Hooker.

At least that’s what I imagine is one possible outcome of this announcement from the SEC as it looks for help in busting financial crime.

Here’s the release and information for people who actually want to stop fraud on the street:

SEC’s New Whistleblower Program Takes Effect Today

New Webpage Launched to Help People Report Violations, Apply for Awards

FOR IMMEDIATE RELEASE
2011-167

Washington, D.C., Aug. 12, 2011 — With its new whistleblower program officially becoming effective today, the Securities and Exchange Commission today launched a new webpage for people to report a violation of the federal securities laws and apply for a financial award.

The Dodd-Frank Wall Street Reform and Consumer Protection Act provided the SEC with the authority to pay financial rewards to whistleblowers who provide new and timely information about any securities law violation. Among other things, to be eligible, the whistleblower’s information must lead to a successful SEC enforcement action with more than $1 million in monetary sanctions.

The SEC’s new webpage at www.sec.gov/whistleblower includes information on eligibility requirements, directions on how to submit a tip or complaint, instructions on how to apply for an award, and answers to frequently asked questions.

“Early and quick law enforcement action is the key to preventing securities fraud and avoiding investor losses, and the whistleblower program gives us the tools to help achieve that goal,” said Robert Khuzami, Director of the SEC’s Division of Enforcement.

Sean McKessy, Chief of the SEC’s Office of the Whistleblower, added, “Securities fraud is not a victimless crime. That’s why why it is so important for people to step forward when they witness an ongoing securities fraud or learn about one that has taken place or is about to occur. Our new whistleblower award program makes it easier for people to take that step.”

The SEC’s new whistleblower program strengthens the SEC’s ability to protect investors in several ways:

  • Better Tips: Over the past several months, the SEC has seen an increase in the quality of tips that it has been receiving from individuals since Congress created the program.
  • Timely Tips: Potential whistleblowers are incentivized to come forward sooner rather than later with “timely” information not yet known to the SEC.
  • Maximizes Outside Resources: With fewer than 4,000 employees to regulate more than 35,000 entities, the SEC cannot be everywhere at all times. With a robust whistleblower program, the SEC is more likely to find and deter wrongdoing at firms it may not have otherwise uncovered
  • New Protections Against Retaliation: Employees who come forward are provided with new tools to protect themselves against employers who retaliate.
  • Bolsters Internal Compliance: The new rules provide significant incentives for employees to report any wrongdoing to their company’s internal compliance department before coming to the SEC. Therefore, companies that would prefer their employees report internally first are incentivized to a have credible, effective compliance program in place.

The SEC adopted final rules on May 25 to implement the Dodd-Frank whistleblower program. Individuals wishing to be considered for an award under the Whistleblower Program are required to submit an online questionnaire or the newly approved Form-TCR.

Prior to the enactment of the Dodd-Frank Act, the SEC only had authority to reward whistleblowers in insider trading cases.

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