Saturday, February 20, 2016

Globe Breakfast Mu$ic

I don't even want to hear it anymore.

"Chelsea produce distributor sentenced to 15 months for insurance fraud" by Katheleen Conti Globe Staff  February 19, 2016

The president of a wholesale distribution company that operates out of the New England Produce Center in Chelsea was sentenced Thursday in federal court to 15 months in prison followed by three years of supervised release for filing fraudulent insurance claims.

John S. “Yanni” Alphas, 56, of Weston, was also ordered to pay $160,876 in restitution, as well as a $60,000 fine. Alphas, president of The Alphas Company, pleaded guilty in August 2014 to one count of wire fraud.

For four and a half years between 2007 and 2011, Alphas submitted at least 10 bogus insurance claims seeking reimbursement for lost, stolen, or damaged produce, including disposal expenses, shipping fees, and the cost of replacement stock, according to the US attorney’s office.

An FBI investigation found that despite sustaining about $19,000 in legitimate losses, Alphas sought insurance payments that exceeded those losses by about $450,000. His insurers paid him approximately $178,000.

US District Court Judge Douglas P. Woodlock tacked on three additional months to Alphas’s prison sentence based on a separate incident where Alphas, during the course of sentencing proceedings, falsely claimed in a US Department of Agriculture license application that he was never convicted of a felony in federal court.

The case was prosecuted by the Economic Crimes Unit out of the office of US Attorney Carmen M. Ortiz....

So when does she go after the State Street swindlers and their ilk?


In this case, the fraud didn't turn out to be very productive, huh? 

And all the Wall Street looters got to keep their ill-gotten dough.

Seeing as I feel like splitting up I suppose some songs of heartbreak are appropriate:

"AIG says it will spin off several businesses" by Liz Moyer New York Times  January 26, 2016

The insurance giant American International Group on Tuesday announced a series of changes designed to streamline its sprawling operations, but it stopped short of acceding to demands that it break up.

The company said it would spin off 19.9 percent of United Guaranty, its mortgage guaranty business; sell its financial advisory business; and create nine distinct operating units in its commercial and consumer divisions. The moves are intended to shore up financial performance and give AIG the flexibility to separate or sell businesses down the road.

While the company is not ruling out more radical changes, “now is not the time to be shortsighted and simply react to the demands of those who challenge us,” AIG’s president and chief executive, Peter Hancock, said in a memorandum to employees on Tuesday.

“The creation of more nimble stand-alone business units that can grow within AIG or be spun out or sold allows us to do what is in our shareholders’ best interests,” Hancock said in a statement announcing the changes.

The company will start an initial public offering for United Guaranty by midyear with the eventual goal of full separation. It is selling AIG Advisory Group, with 5,200 independent advisers and 800 employees, for an undisclosed amount to Lightyear Capital and the Canadian pension investment manager PSP Investments.

In addition, it is moving some underperforming older assets into a new legacy business to be run by Charlie Shamieh, who leads the life, health, and disability insurance business.

AIG also announced a $25 billion stock buyback and dividend plan for shareholders over two years and the addition of $3.6 billion before taxes to its loss reserves.

All part of the false economy and illusion based on inflated stock prices, which are then trumpeted by the same pre$$.

The plan might not be enough to satisfy the demands of increasingly impatient shareholders.

The announcement comes three months after the activist investor Carl C. Icahn made public his campaign to split AIG into three separate companies and shake off the designation that it is too big to fail.

Related: Icahn, who is Jewish, is 'a corporate raider, asset stripper, and union buster'

You see where those connections lead?

Icahn has since publicized two more letters to AIG and says large shareholders, including the hedge fund manager John Paulson, agree with splitting it into three.

RelatedPaulson’s Palace

Shares of AIG fell 1.7 percent in trading Monday and are down about 8 percent since the day before Icahn publicized his first letter to the company in late October.

More than seven years ago, the sprawling company had to be rescued by the federal government with billions of dollars of crisis-era bailout funds. Since then, the insurer has resisted calls to break itself apart, though it has tried to slim down, including the sale of Asian life insurance units and its aircraft leasing business.

Investors, including Icahn and Paulson, complained that AIG’s management was taking too long and needed to make more radical changes. The critics say AIG’s vast array of businesses have a lower value held together in one company than they would apart.

Icahn said the company could unlock this value for shareholders by spinning off its life insurance and mortgage insurance operations. That would allow AIG to focus on its property and casualty insurance business, through which it sells products to corporations around the globe.

It's called cutting your losses, and there seems to be no place for the rest of us in this future world.

AIG has 65,000 employees in businesses spread across corporate and personal insurance products. Through the third quarter, it had operating revenue of $43.4 billion, some 41 percent of which came from its commercial property and casualty division.

The mortgage guaranty business, by contrast, contributed just 2 percent of operating revenue last year through September, according to a November investor presentation. Life insurance and personal insurance contributed 31 percent.

Management said Tuesday it would aim to cut $1.6 billion in expenses by the end of 2017 by making better use of office space and technology, minimizing the use of external consultants, and winding down or selling lower-profit businesses.

Last year, AIG cut 20 percent of its senior management positions, froze its pension plan, and said it intended to make further reductions in management numbers this year.

The pressure has intensified since AIG management set the date for presenting its strategic vision for the future of the company. Last week, Icahn publicized a letter he wrote to AIG’s board of directors saying that he would not be satisfied if those plans focused merely on incremental cost-cutting.

AIG has been designated a systemically important financial institution, or SIFI, by federal regulators. Another insurance company in that category, MetLife Inc., announced plans earlier this month to separate its life insurance operations in the United States. That move was largely intended to get rid of the SIFI designation for the US life operations so it could more adequately compete with rival firms. And General Electric is selling off GE Capital to shed that label as well. 

Oh, that hit a $our note!

Analysts have sounded cautious about the potential for major changes.

Josh Stirling, an analyst with Sanford C. Bernstein & Co., said the loss of shareholder support was driven by AIG’s failure to make progress increasing the margins in the property and casualty business. To win back shareholder support, the company would have to set forth plans to divest approximately one-quarter to one-third of its assets during the next couple of years, he said.

If management falls short of making the types of changes shareholders have been pressing, “it’ll be hard for investors to evaluate whether it’s because the company is making excuses for a lack of vision, or whether, given the hand they’ve been dealt, it’s just the best anyone can do,” Stirling said.


"MetLife seeks to split operations; Chief executive says US rules are now too restrictive" by Katherine Chiglinsky Bloomberg News  January 12, 2016

NEW YORK— MetLife Inc., the largest US life insurer, plans to separate much of its domestic retail business as chief executive Steve Kandarian works to shrink the company amid tighter government oversight. The stock rallied in extended trading.

The insurer is considering a possible sale, spinoff, or public offering of the separated operation, New York-based MetLife said Tuesday in a statement. The new company would have about $240 billion of assets and accounts for approximately 20 percent of MetLife’s operating earnings, according to the statement.

MetLife joins General Electric Co.’s finance unit in seeking to simplify operations after being designated by a US panel as a non-bank systemically important financial institution, a tag that can lead to stricter limits on the balance sheet. Kandarian has sought to reverse that designation in court.

The retail business, as part of such a designation, faces “higher capital requirements that could put it at a significant competitive disadvantage,” Kandarian said in the statement. “Even though we are appealing our SIFI designation in court and do not believe any part of MetLife is systemic, this risk of increased capital requirements contributed to our decision to pursue the separation.”

MetLife rallied 8 percent to $45.35 on the announcement, which was after the close of regular trading. The company had dropped 13 percent this year through Tuesday’s close after slumping 11 percent in 2015.

MetLife would retain units providing workplace benefits and property-casualty coverage along with the corporate benefit funding division that offers pension and retirement products. Kandarian’s company will also keep operations in Asia, Latin America, Europe, the Middle East and Africa.

The retail unit slated for separation is a provider of variable annuities, where results can be tied to fluctuations in stock markets and interest rates. The new company would also include life insurance entities.

Breaking off the retail unit would leave MetLife “with a regulated set of businesses, but less heavily regulated than retail products,” David Havens, a debt analyst at Imperial Capital, said in a note. “It should also leave MET with a large international portfolio that has good long-term growth prospects.”

The insurer said executive vice president Eric Steigerwalt will lead the new company.


Run that by me again:

"Xerox said to be splitting into two" by Molly Schuetz Bloomberg News  January 29, 2016

NEW YORK — Xerox Corp. will announce Friday that it’s splitting itself into two companies, essentially unwinding its largest-ever acquisition, The Wall Street Journal reported, citing unnamed people familiar with the matter.

Famous as the brand behind the copier machine, now-struggling Xerox will divide itself into one company for hardware operations and another for its services business, according to the Journal. Xerox will announce the move when it reports earnings on Friday, the newspaper said.

Carl Icahn will get three seats on the services company’s board, the newspaper reported.

This guy is everywhere, a real mover-and-shaker.

A spokesman for Norwalk, Conn.-based Xerox had no comment on the report. Icahn did not immediately respond to requests for comment.

In November, Icahn said he had taken a 7.13 percent stake in Xerox, in the belief the shares were undervalued. At the time, he said he intended to speak with executives and the board to improve operational performance and pursue strategic alternatives. Xerox said earlier that it was conducting a broad-based review of structural options for the company’s business portfolio and capital allocation.

With a split, Xerox would basically unravel its purchase of Affiliated Computer Services Inc., which it bought in 2010 for $6.2 billion.

Xerox shares fell 1.7 percent Thursday in extended trading in New York to $9.07. They have fallen 13 percent so far this year, compared with a 7.4 percent drop in the Standard & Poor’s 500 index.


Also see: Staples Merger Jammed

Nothing like shit being served on a croissant, 'eh?