Money & Company

Tracking the market and economic trends
that shape your finances.

Category: Regulation

Real Estate | Autos | Consumer | Economy

Immigrants launch nearly half of top U.S. start-ups, study finds

Etsylabs
Immigrants are responsible for launching nearly half of the top start-ups in the country, according to a new report that makes a case for more favorable border policies toward foreign-born entrepreneurs.

Of the top 50 venture-backed companies in the U.S., 23 have at least one foreign-born founder while 37 have at least one immigrant in a major management position, according to the National Foundation for American Policy.

Natives of India, Israel, Canada, Iran and New Zealand are most likely to come to the U.S. to start companies or to take on positions such as chief executive, chief technology officer or vice president of engineering, the study found. Their businesses each employ an average of 150 people.

Examples include online handmade crafts retailer Etsy Inc. of Brooklyn, N.Y., which was launched in part by Swiss immigrant Haim Schoppik in 2005 and now has 185 workers.

“Policies that help retain talent in the United States are likely to yield both more start-up companies and the personnel needed to create more jobs and innovation in America,” according to the report.

The companies considered were ranked by research firm VentureSource and are all private, valued at less than $1 billion and had received venture capital funding within the last three years. The National Foundation report was funded by a grant from the Ewing Marion Kauffman Foundation.

The study’s findings “perhaps makes it even more imperative that the U.S. put out the ‘Welcome’ mat for these entrepreneurs who help create jobs and drive our economy,” wrote Emily Baker, a vice president of the National Venture Capital Assn. in a blog post this week.

Legislation currently in play in Congress could broaden the number of work visas given to immigrants and their families and also help retain foreign students with science, technology, engineering and math (STEM) degrees so they can launch businesses in the U.S.

RELATED:

Congress' small step toward immigration reform

Immigrant women share family recipes at cooking school start-up

-- Tiffany Hsu

Photo: Etsy Labs

Consumer Confidential: Saab's woes, Nissan recalls, bearish penalty

Saab Automobile has filed for bankruptcy
Here's your ain't-no-mountain-high-enough Monday roundup of consumer news from around the Web:

--Sayonara, Saab? Saab Automobile has filed for bankruptcy, bringing the Swedish carmaker to the brink of shutting for good after failing to find investors to rescue the 74-year-old company. Saab, which General Motors sold to Swedish Automobile in February 2010, won protection from creditors in September and has been seeking funding since then. Guy Lofalk, Saab's court-appointed administrator, applied on Dec. 7 to end the reorganization, saying the carmaker was out of money and had no realistic hope of gaining financing soon. Swedish Automobile's stock plunged as much as 76% to 5 cents. How do you say "fare thee well" in Swedish? (Los Angeles Times)

--Speaking of vehicles, heads up: Nissan is recalling some 2010 and 2011 models of its Sentra small car for a battery-related problem -- the second time in a month it has recalled the cars for a battery issue. And it's recalling its Juke small car because a bracket could break and cause the engine to stall. The latest recall involves Sentras built from May 11 through May 22, 2010, and from July 8 through Oct. 25, 2010. A zinc coating on a bolt that holds the battery cable is too thick and can reduce voltage, resulting in hard starting and damage to the engine control module. As a result, the engine could stall and be hard or impossible to restart. (USA Today)

--The bear necessities: The people who make the Build-A-Bear toy bears have agreed to pay a $600,000 penalty for failing to report a safety defect that resulted in injuries to consumers. The penalty results from the company's alleged failure to immediately report problems involving a toy bear beach chair. The Consumer Product Safety Commission said sharp edges of the chair's folding frame could pinch, lacerate and even amputate a child's fingertip. The chairs were recalled in May 2009, by which time there were at least 10 reports of injuries, which the St. Louis-based company apparently knew about but didn't report. In agreeing to the settlement, Build-A-Bear said it denies allegations about the existence of a defect or hazard, or that it violated the law. (ConsumerAffairs.com)

-- David Lazarus

Photo: Saab may be going bye-bye after filing for bankruptcy. Credit: Eric J. Shelton / Associated Press

Consumer Confidential: GOP block, Amazon discount, credit card debt

Cordpic
Here's your thick-as-a-brick Thursday roundup of consumer news from around the Web:

--As expected, Senate Republicans have blocked a vote on whether to approve President Obama's pick to run the new Consumer Financial Protection Bureau. GOP lawmakers say they have nothing against former Ohio Atty. Gen. Richard Cordray. They just don't like the agency, which is intended to keep an eye on credit card issuers, mortgage lenders and others with a track record for -- how shall we put it? -- not always acting in consumers' best interest. Republicans want to water down the agency's leadership structure, and they say they won't approve anyone to run the show until they get what they want. I'll have more on this in my Friday column.

--Amazon is stepping up its game. The online retail heavyweight says it will give customers a 5% discount if they check out the price of something in a brick-and-mortar store and then buy it via the Net from Amazon. The trick is Amazon's Price Check app, which allows users to instantaneously check to see whether Amazon sells the same merchandise for a better price. This Saturday, app users will get that 5% discount below whatever the store's price may be. Amazon’s app is available for the iPhone and Android smartphones at no cost to the user. You can do a price check by scanning an item’s bar code or typing in a search query, or even by snapping a photo or saying the product name. Needless to say, real-world stores aren't happy about the promotion. (Time.com)

--But go a little easy on the spending. Consumers piled on $16.8 billion in credit card debt in the third quarter, up 154% from the same quarter last year, according to CardHub.com. The news comes on the heels of a report by First Data that credit card spending in the U.S. rose in the first three quarters of the year. The Great Recession may have promoted many consumers to put away their plastic for a while, but they are apparently spending again -- big time. Based on the results of its study, CardHub.com’s latest projection is that consumers will end 2011 with roughly $64 billion more in credit card debt than they began it with. Ouch. (ConsumerAffairs.com)

-- David Lazarus

Photo: President Obama wants Richard Cordray to run a new watchdog agency. Senate Republicans think otherwise. Credit: Joshua Roberts / Bloomberg

 

Consumer Confidential: Drug prices, Google Wallet, paper towels

Here's your touch-of-gray Tuesday roundup of consumer news from around the Web:

--Drug-price gouging could soon become a federal crime. Sen. Charles E. Schumer (D-N.Y.) says he's proposing a bill that that would give the Justice Department the authority to crack down on "unscrupulous drug distributors" who sell hospitals lifesaving prescription medicines in short supply at huge markups. The problem has been growing this year, as shortages have dramatically worsened for normally cheap generic injected medicines that are the lifeblood of hospitals: drugs for cancer, pain, infections, even liquid nutrition and anesthesia for surgery. The shortages are disrupting care of patients and even clinical trials of experimental drugs that must be tested against older standard treatments. (Associated Press)

--Verizon is growing pickier about what it lets on your smart phone. Verizon Wireless is blocking the new flagship phone running Google's Android software, the Samsung Galaxy Nexus, from running Google's in-store payment application, the Wallet. The smart phone is the first to run a new version of Android, and is due to be released soon by Verizon. Examinations by Wired and other publications reveal that the international version of the phone has the chip necessary to run Google Wallet. But Verizon is part of a consortium of carriers that are planning its own payment application, and the company says its waiting to provide a wallet application until it can provide "the best security and user experience." (Associated Press)

--Like most people, you've probably been up at night agonizing over which paper towel is best. Well, worry no more. Our friends at Consumer Reports have been running tests, and they've got the answers. The magazine put 23 towels through their paces, testing for absorption, scrubbing and wet strength. The top paper towel is plain Bounty, with a score of 90. (Don’t confuse it with its lower-scoring brand mate, Bounty Basic, which earned a 66.) In second place was Bounty Extra Soft with a score of 84. In third place, Target’s Up & Up Eastern version. The Western version, from a different supplier, didn't perform as well. And now you know. (ConsumerAffairs.com)

-- David Lazarus

 

Consumer Confidential: Ticketmaster refund, Lipitor probe

Ticketpic
Here's your fool-to-cry Friday roundup of consumer news from around the Web:

--If you bought a ticket through Ticketmaster between October 1999 and October of this year, you're due for some cash -- $1.50, to be precise. Because of a proposed class action settlement, Ticketmaster is being forced to credit that much per ticket order (up to 17 orders) to customers because the company profited from "processing fees" without declaring that it was doing so. According to court documents, the original claim, filed Oct. 21, 2003, also implicates UPS' delivery price for expedited delivery of tickets as deceptive. This could end up costing Ticketmaster a hefty amount of money. If, in any given year over the four-year redemption period, less than $11.25 million is redeemed by customers, Ticketmaster is going to donate the remainder to charity. (Business Insider)

--For a while, it looked like the wireless market could get more competitive as cable companies tried to launch their own service. But that's not going to happen. Comcast, Time Warner Cable and Bright House Networks are giving up on their dreams of creating their own wireless network, opting instead to resell Verizon Wireless service. The companies say they have agreed to sell their wireless licenses -- which they haven't been using -- to Verizon for $3.6 billion. The cable companies paid $2.2 billion for the spectrum in 2006, so they're getting a 64% gain on a five-year investment. For Verizon, the deal offers millions of potential new customers and maintains the status quo in the wireless space. (Associated Press)

--First drug maker Pfizer had to contend with its blockbuster drug Lipitor going generic this week. Now some lawmakers are asking the company and other health businesses to detail agreements to block prescriptions of generic versions of the cholesterol drug Lipitor and sell only the Pfizer brand-name version. Pfizer is offering discounts to companies that will reject generic prescriptions and favor Lipitor. The senators say they're concerned about longer term impacts on employers, Medicare and healthcare costs. They include Sen. Max Baucus, a Montana Democrat; Charles E. Grassley, an Iowa Republican; and Herb Kohl, the Wisconsin Democrat who is chairman of the Special Committee on Aging. (New York Times)

-- David Lazarus

Photo: Questionable fees will result in refunds for Ticketmaster customers. Credit: Paul Sakuma/AP

 

AT&T blasts FCC report on T-Mobile purchase as one-sided [Updated]

AT&T CEO Randall Stephenson
AT&T Inc. blasted the Federal Communications Commission on Thursday for a report criticizing the company's proposed $39-billion purchase of T-Mobile USA Inc., saying the agency's findings were one-sided.

In a lengthy, detailed rebuttal on the company's public policy blog, a top AT&T executive accused the FCC staff — and by implication, agency Chairman Julius Genachowski — of being predisposed to reject the deal and publicly releasing the report this week to advocate for such an outcome.

The fiery post indicates AT&T is not going to give up on acquiring T-Mobile without a fight. If the deal fails to gain regulatory approval — a long shot at this point — AT&T would owe T-Mobile a break-up package worth $4 billion.

"The report cherry-picks facts to support its views, and ignores facts that don’t," wrote Jim Cicconi, AT&T's senior executive vice president of external and legislative affairs. "Where facts were lacking, the report speculates, with no basis, and then treats its own speculations as if they were fact."

"This is clearly not the fair and objective analysis to which any party is entitled, and which we have every right to expect," he said.

AT&T's is still running advertisements in Washington touting the benefits of its purchase of T-Mobile even as the deal has slammed into major regulatory roadblocks. In August, the Justice Department filed an antitrust lawsuit to stop the deal. And last week, Genachowski signaled his opposition by moving to seek a hearing and review by an administrative law judge.

AT&T and T-Mobile's parent company, Deutsche Telekom of Germany, said last week they would request permission to withdraw their application for FCC approval so they could focus on the Justice Department suit, is set to go to trial in February. 

The FCC granted the withdrawal request on Tuesday. But at the same time, the agency took the unusual step of releasing a 157-page staff re    port that says the deal would not be in the public interest. One opponent of the transaction called the report an "evisceration" of the companies' arguments for regulatory approval.

Continue reading »

Rep. Barney Frank will not seek reelection in 2012

Rep. Barney Frank

This post has been corrected. See note at the bottom for details.

Rep. Barney Frank, one of the most influential lawmakers on financial industry issues and an outspoken critic of Wall Street, will not seek reelection next fall, ending more than three decades in Congress, a spokesman said Monday.

Frank, 71, a Massachusetts Democrat, scheduled a news conference for 1 p.m. Eastern time in Newton, Mass., to make a formal announcement and answer questions, said spokesman Harry Gural.

Frank, who in 1987 became the first member of Congress to voluntarily announce he was gay, was a major force behind the sweeping overhaul of financial regulations enacted last year when he served as chairman of the House Financial Services Committee. The law, the Dodd Frank Wall Street Reform and Consumer Protection Act, is named after him and former Senate Banking Committee Chairman Chris Dodd (D-Conn.)

Dodd did not seek reelection in 2010 and now heads the Motion Picture Assn. of America. Frank survived one of his toughest campaigns in 2010 amid huge Republican gains in Congress. With the GOP taking control of the House after that election, Frank was forced to give up chairmanship of the Financial Services Committee, which he headed from 2007 through 2010.

After his last reelection fight, Frank vowed to stay on in Congress to protect the financial reform legislation from Republican attacks.

[For the record, 10:48 a.m., Nov. 28: An earlier version of this post said Rep. Barney Frank was the first openly gay member of Congress. He was the first member of Congress to voluntary announce he was gay, in 1987. Former Rep. Gerry Studds (D-Mass.) was the first openly gay member of Congress. His homosexuality was revealed in 1983 after a scandal over an earlier relationship with a congressional page.]

RELATED:

Barney Frank blames Newt Gingrich for today's hyper-partisan political climate

Marijuana bill officially introduced to Congress by Ron Paul, Barney Frank

Financial regulatory overhaul faces new criticism on first birthday

-- Jim Puzzanghera in Washington

Photo: Rep. Barney Frank (D-Mass.). Credit: Associated Press

Consumer Confidential: Bank Transfer Day, hoodia settlement

Bankpic
Here's your fight-the-power Friday roundup of consumer news from around the Web:

--Have any plans for Saturday? How about sticking it to your bank? Nov. 5 is Bank Transfer Day, organized by Kristen Christian, an art-gallery owner in California who is using Facebook to invite people to shift their funds from for-profit banking institutions to not-for-profit credit unions. As of Thursday, nearly 36,000 Facebook users "like" the concept while more than 73,000 indicated they will be taking matters into their own hands. An estimated 650,000 consumers have joined credit unions nationwide since Sept. 29, according to a statement from the Credit Union National Assn., a credit-union advocacy group. That’s the day Bank of America announced its now-aborted $5 debit-card fee.

--If you've been thinking about taking hoodia to help lose weight, don't bother. The Federal Trade Commission says it's settled a case against two companies which hyped weight-loss products based on hoodia, a substance derived from the Hoodia gordonii cactus of southern Africa. The FTC complaint alleged executives at Nutraceuticals International and Stella Labs falsely marketed hoodia products as effective weight-loss and appetite-suppression supplements, even though there was no scientific evidence of such benefits. David Romero, a principal at both companies, was assessed a $22.5-million fine for his role in the marketing claims. Romeo forfeited to the FTC a Vermont vacation home and $635,000 in business loans as part of his settlement. A $4-million judgment was also assessed against Deborah Vickey, a marketing executive at Nutraceuticals International.

-- David Lazarus

Photo: Frustrated consumers are being encouraged to switch banks on Nov. 5. Credit: Ted S. Warren / Associated Press

 

Obama wants faster commercialization of research breakthroughs

IRobot CEO Colin Angle
President Obama on Friday directed federal research labs to move quicker to commercialize their breakthroughs in hopes of creating more private-sector jobs.

The move was one of two steps designed to spur business hiring. The Obama administration also said it would create an online site called BusinessUSA to help connect companies with federal services to help export goods and services to other countries.

The White House cited three companies that received federal research grants -- wireless chip maker Qualcomm Inc., antivirus software firm Symantec Corp. and robot manufacturer iRobot Corp. -- as examples of commercial successes helped along by the government.

Obama directed all federal agencies with research facilities to streamline and accelerate the processes they use to issue small-business research and development grants and collaborations with universities and private companies. The administration also will give agencies more flexibility to partner with private industry, such as through regional innovation clusters.

BusinessUSA will be a "centralized, one-stop online platform" to help businesses get information on various federal programs without wasting time wading through the bureaucracy. The site will be created within 90 days, the White House said.

RELATED:

White House hopes Obama's latest slogan catches on

Obama administration announces desert 'solar energy zones'

Obama has been 'relentlessly focused' on jobs, Geithner says

-- Jim Puzzanghera in Washington

Photo: Colin Angle, chief executive of iRobot Corp., holds the Roomba 780 vacuum cleaner robot at a news conference in Tokyo in September. Credit: Bloomberg.

Consumer Confidential: Toy firm fined; Hertz goes it alone

Here's your throat-clearing Thursday roundup of consumer news from around the Web:

-- Federal regulators aren't kidding around when it comes to toy safety. The Consumer Product Safety Commission slapped a $1.3-million fine on a toy company that sold popular arts-and-crafts beads that were linked to a dangerous drug and sickened about a dozen children. The civil penalty marks the third largest toy-related fine issued by the agency. The Aqua Dots toy beads were imported by Spin Master in 2007 and recalled after tests showed they were coated with a chemical that, when ingested, can metabolize into the so-called "date-rape" drug gamma hydroxybutyrate (GHB). The compound can induce unconsciousness, seizures, drowsiness, coma and death.

-- Rental-car companies sure play hard to get. Hertz Global Holdings says it's withdrawing its offer for Dollar Thrifty, but is still interested in buying the rival rental car company. Hertz cited Dollar Thrifty Automotive Group's plan to buy back stock and current market conditions. This year, Hertz offered to buy Dollar Thrifty for $57.60 in cash and 0.8546 shares of Hertz stock for each Dollar Thrifty share. That was a sweetening of a previous offer made by the company last year and rejected by Dollar Thrifty shareholders. But Dollar Thrifty advised its shareholders against accepting Hertz's sweetened offer.

-- David Lazarus

 

Consumer Confidential: Costco fees, Taco Bell, Four Loko

Costcopic Here's your way-we-were Wednesday roundup of consumer news from around the Web:

-- Are you a Costco member? If so, get ready for higher fees. Costco is increasing annual membership fees by 10% for 22 million members, beginning Nov. 1. The largest U.S. warehouse club operator hasn't raised its main fees since 2006. Now that some higher costs, such as cotton, food and gas, have subsided, it may have seemed like more of an appropriate time for the increase, analysts say. Costco's fee hike follows a similar move by competitor BJ's Wholesale Club. BJ's raised its membership fee by $5 to $50 in January. Costco's U.S. and Canadian household and business memberships will cost $55 a year, up from $50 for most of those memberships. Costco's Executive members, who receive rewards such as an annual rebate check to use in the store based on what they spend, will now pay $110, up from $100.

-- A new day is coming for Taco Bell. Fast-food restaurant operator Yum Brands is predicting a turnaround at the chain next year with the planned launch of new products meant to reinvigorate the slumping brand. The company is pinning hopes for a sales rebound on a pipeline of new products that Taco Bell plans to start introducing late in the first quarter of next year. The aim is nothing less than "reinventing the taco." Taco Bell accounts for about 60% of Yum's slumping U.S. profit, but the chain is struggling to overcome publicity from a lawsuit earlier this year that claimed the filling in its tacos and burritos didn't contain enough beef to be called beef. The suit was later dropped, but the company has blamed it for the sales decline.

-- It's a new day as well for Four Loko, the high-alcohol, fruit-flavored beverage that's drawn criticism from state and federal officials for contributing to drunkenness among young people. The marketers of Four Loko have agreed to relabel and repackage the drink to resolve Federal Trade Commission charges of deceptive advertising. The agency alleges that Phusion Projects and its principals falsely claimed that a 23.5-ounce can of Four Loko contains alcohol equivalent to one or two regular 12-ounce beers, and that a consumer could drink one can safely in its entirety on a single occasion. In fact, according to the FTC, one can of Four Loko contains as much alcohol as four to five 12-ounce cans of regular beer and is not safe to drink on a single occasion.

-- David Lazarus

Photo: It'll soon cost more to be a Costco member. Credit: Deborah Booker

 

Connect

Recommended on Facebook


Advertisement

In Case You Missed It...

Video




Categories


Archives