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Kit Menkin's Leasing News
www.leasingnews.org Thursday, August 8, 2002
Accurate, fair and unbiased news for the equipment Leasing Industry (
posted daily at www.leasingnews.org and sent by e-mail by subscription
with the Day in American History signature .) --------------------------------------------------------------------------------------------- Headlines--- Ruling
on recession withheld Fraud
Alert---Oakland, California
MSM Capital-It is Chapter 7
Alexa.com Ranking of Leasing Related Web Sites Top
100 Performing Community Banks--U.S. Banker Magazine
Bank of America to Buy Merrill-Lynch???
IT Recession, Depression -- Let's Call the Whole Thing Off
PSC 2nd Q Results; Closes Revolving Credit Facilities
PAYNET Launches "Next Generation" Credit Report Kozlowski's
questionable activities involved $135 million from Tyco
Red Herring lays off large part of its staff
Grand Jury Indicts ImClone's Waksal--Martha Stewart Next?
FCC issues record fine to company for sending `junk faxes'
Islamic Banking 101: A Primer--Financial Institution Consulting
C2 Capital Expands Sales Force--Todd Orlando to VP
News Briefs--plus Hawks don't worry about keeping up with Jones #####
Denotes Press Release Ruling
on recession withheld Economists:
Woes may not be over By
Bloomberg News WASHINGTON
- The private group that monitors the ups and downs of the economy says
it can't be sure the recession is over. ''Monthly
indicators continue to show small increases in economic activity,'' the
business cycle dating committee of the National Bureau of Economic Research
said on its Web site. The group noted employment gains from May-July and
a rise in personal incomes since October 2001. The recession began in
March 2001. The
committee said it will withhold official judgment until it concludes ''that
a hypothetical subsequent downturn would be a separate recession, not
a continuation of the past one.'' The
committee may have added the language to clarify prior statements that
a declaration of the recession's end isn't likely for some time. ''The
committee waits for many months after an apparent trough to make its decision,
because of data revisions and the possibility that the contraction would
resume,'' the statement said, repeating wording from earlier announcements. The
economists' group ''is in a very difficult position,'' said John Silvia,
chief economist at Wachovia Corp. in Charlotte, N.C. ''They don't want
to be in a position of saying we are in recovery and then, all of a sudden,
the first thing you get is a negative quarter,'' showing gross domestic
product shrank. The
situation may be similar to the period from 1980-1982 when there were
back- to-back recessions 12 months apart. The committee declared in July
1981 that a recession had ended in July 1980. Six months later, they said
another recession had begun the same month they had said the previous
recession was over. ________________________________________________________________ Fraud
Alert---Oakland, California Please
put out a fraud alert on a company called Oakland Digital. I received
a call yesterday from a guy representing himself as the owner of the company.
They are reportedly located at 360 Grand Avenue, Oakland, CA. The
company phone # goes to a cell phone and personal voice mail. We suspected
that the bank reference may have been fraudulent so we asked for statements.
There was no listing on Internet Yellow pages, however directory assistance
will give you the number. The address is in a residential neighborhood
of Oakland. The person who called me wanted to know if we could "move
fast" on their application as they needed to pay the vendor for a
machine that had a long lead time but the vendor had called them and,
amazingly, an order had cancelled. ( a red flag, see alerts: http://www.leasingnews.org/Conscious-Top%20Stories/alerts.htm
) I
also received a call from another leasing company who had looked at this
deal and had found some of the same information. She also got the same
story. It appears that the individuals are involved in identity theft
as she was able to locate the actual people whose SS#'s were submitted
with the application. The
two "principals" don't even know each other but they had applied
to the same company for a mortgage recently. The Oakland Police have
been notified. It appears that the perps are hitting Internet leasing
sites with an automated leasing process. Bob
Rodi, CLP President
LeaseNOW,
Inc. drlease@leasenow.com www.leasenow.com 1-800-321-LEAS
(5327)x 101 MSM
Capital—It is Chapter 7 One
of the former MSM employees who one a case got a call from his lawyer notifying
him of the BK, another actually went down to the courthouse and reviewed
the actual filing. It is a Chapter 7. What he saw was 140 creditors
(including former employees, GE Capital, Quick Traks and so on.) 100k-500k
in assets and2-5mill in debts. I
wonder what happened to all those residuals? Robert
Addison (Leasing
News was informed the issue of the $192,000 owed to salesmen in
judgments from the California State Labor Board are being taken to
the California Franchise Tax Board and charges will be levied against corporate
officers Michael Cingari and Rob Pardini. editor 0 _______________________________________________________________________ Alexa.com
Ranking of Leasing Related Web Sites 54,173
www.aba.com American Bankers Association 55,884
www.monitordaily.com Monitor Daily 125,335
www.ibaa.org Independent Community Bankers of America 129,618
www.leasingnews.org Leasing News 136,713
www.elaonline.com Equipment Leasing Association 160,825
www.nacha.org The Electronic Payments Association 261,760
www.iicl.org Institute of International Container Lessors 331,318
www.us-banker.com U.S.Banker 344,384
www.executivecaliber.ws
Executive Caliber-Jeffrey Taylor 376,441
www.cfa.com Commercial Finance Association 480,054
www.elessors.com eLessors Networking Association 481,846
www.uael.org United Association of Equipment Leasing 546,828
www.leasefoundation.org Equipment Leasing & Finance Foundation 672,902
www.nvla.org National Vehicle Leasing Association 908,412
www.pblaw.com/newsletters/bln/
Business Leasing News 1,503,750
www.leaselawyer.com Lease Lawyer 1,517,270
www.eael.org Eastern Association of Equipment Leasing 1,731,357
www.intra.net Information Technology Resellers Association 1,791,404
www.aglf.org Association of Government Leasing and Financing 1,835,021
www.clpfoundation.org CLP Foundation 1,994,892
www.nationalfunding.org The National Funding Association 2,302,496
www.mael.org Mid-America Association of Equipment Lessors 3,483,887
www.naelb.org National Association of Equipment Leasing Brokers ***
“Ranking: Previously we based our rankings on page views... all page views
made on almost all Alexa services were counted, compiled over a 3 month
period and ranked. Now, we've gotten a little smarter. Multiple page views
made by the same user are discarded (no more spoofing!) and only validated
Toolbar page turns will be used. Also, and this is totally new for us,
we are using Reach (total number of unique users) as part of our ranking
calculation. Based on this new information, we calculate a "geometric
mean" for Reach Rank and Page View Rank to determine our new Traffic
Rank. We have a more detailed explanation available for those who must
know.” ----------------------------------------------------------------------------------------------- Top
100 Performing Community Banks U.S.
Banker Magazine Whoever
said that size matters never spent time with the CEO of one of the nation’s
Top 100 Performing Community Banks. To be sure, these small publicly-traded
firms are not on the average investor’s radar screen. Still, go a few
rounds with these guys and you quickly learn that first-rate management
and company performance have been long overshadowed by the P/E multiples
of the dot-com gold rush. Warren
Buffett once said that “it’s not until the tide goes out that you see
who’s been swimming naked.” This reality check has been good for investors
and lesser known companies alike. With as much to gain as lose in the
market, community banks are beefing up their services, honing their customer
management skills and focusing on performance. In this issue, U.S. Banker
presents its annual ranking of the best of the smallest publicly traded
banks. Banks are ranked based on average return on equity over a three-year
period (1999-2001). Additionally, readers can compare how each bank has
fared over this same period in total assets, EPS (diluted) and risk-adjusted
capital ratio (These factors are not weighted and do not contribute to
the ranking.). Best
in class for 2002: #1-ranked S.Y. Bancorp in Kentucky and #2-ranked Franklin
Financial in Tennessee. What follows is the ranking and profiles of S.Y.
Bancorp’s David Brooks and Franklin Financial’s Richard Herrington. http://www.us-banker.com/usb/articles/usbjul02-3b.html ---------------------------------------------------------------------------------------------------- Bank
of America to Buy Merrill-Lynch??? You
read it here first, if it comes true. The latest rumor making the mill
rounds, Bank
of America to buy Merrill-Lynch---now it may be just their financial division---anyone
who has any information, please forward---confidentiality is
insured. ) IT
Recession, Depression -- Let's Call the Whole Thing Off By
Colin C. Haley Internetnews.com For
18 months, analysts and economists have debated the severity of the ongoing
tech slump (recession, depression, let's call the whole thing off). But
whatever it's called, software developers and equipment sellers have heard
the same maddening refrain from Corporate America: "We like your
product, we see how it could help us, but we're not buying anything right
now." Now,
new data indicates that that sentiment is changing. Spending on IT products
and services is stabilizing, and in some sectors, improving, according
to Forrester Research (Quote, Company Info). North
American firms will spend 2.3 percent more on IT in 2002 than 2001, and
82 percent of these will at least keep budgets level over the second half
of the year, the Cambridge, Mass., market researcher found. In
addition, some top-level managers are ready to loosen the purse strings.
Of the 1,001 decision makers surveyed, 55 percent said they were willing
to "spend what it takes" on IT, compared to only 36 feeling
that way at the beginning of the year. In
Forrester's January poll, company leaders had shifted their IT strategies
toward infrastructure and do-it-yourself development and integration work.
For IT sellers, the confidence bump is encouraging, however, it by no
means represents a return to the blank check days of the late 1990s. "Executive
commitment to IT is returning, and interest in categories like IT consulting
and storage are showing more life," said Tom Pohlmann, a Forrester
senior analyst. "But vendors must know where to look." In
the services market, specialized, smaller-scale offerings will be most
coveted, while software will be carried by portals and business intelligence
applications. A
separate survey from IDC, pegs e-business as a growth area. While worldwide
IT spending was flat in 2001, and declined in the United States, e-business
spending grew more than 20 percent, the Framingham, Mass., market researcher
said. Some
examples of e-business spending include: bolstering commerce engines;
automating their supply chains; and integrating with customer service
systems. "The
dot-com crash didn't kill anything except hundreds of ill-conceived companies,"
said John Gantz, IDC's chief researcher. "It actually helped usher
in the real 'new economy'," the one where businesses, schools, and
government agencies from around the world are steadily integrating Internet
technologies into their normal business operations." Another
area of strong growth should be security, as companies invest to keep
their networks running and virus-free and sensitive business and customer
data protected, IDC said. On
Wall Street, which has been battered by crooked accounting, some technology
bellwethers are inching up. Cisco Systems (Quote, Company Info) gained
after reporting fourth quarter results that beat analysts' expectations.
The San Jose, Calif., networking giant also said it expects first quarter
sales to be flat or up slightly. Late
last month, the U.S. Department of Commerce reported that corporate America's
spending on IT equipment and services were making their first gains, modest
though they were, since late 2000. Taken
together, these indicators at least offer some hope to IT firms that the
next time they wrap up a PowerPoint presentation, the potential customer
says: "We like your product, we see how it could help us, let's make
a deal." (There
definitely is a pent-up demand, as many companies have not up-graded since
the Y2 scare right before the turn of the century, almost two years ago. Will
they up-grade next year and start the next boom cycle? Editor ) --------------------------------------------------------------------------------------- ##############
#################################### PSC,
Inc Announces Its Preliminary Second Quarter Results; Also Announces the
Closing of Revolving Credit Facilities BOSTON----HPSC,
Inc. (AMEX:HDR) reports that based on preliminary results it expects to
report net income for its second quarter ended June 30, 2002 of approximately
$1.05 million, or $0.24 diluted net income per share. Basic earnings per
share is expected to be approximately $0.26 per share. The company anticipates
net revenues to be approximately $13.8 million and net operating expenses
to be approximately $11.9 million for the three months ended June 30,
2002. On June 17, 2002, the company reported that it had discovered an
employee of its asset-based lending subsidiary, American Commercial Finance
Corporation ("ACFC"), had perpetrated a defalcation by which
approximately $5 million had been diverted from the company. As a result,
the company is restating its financial statements for the periods affected
beginning in 1996 through the first quarter of 2002. The company expects
to issue the restatements on or before August 14, 2002. The
company also announced the closing on multiple revolving credit facilities
with Foothill Capital Corporation, a subsidiary of Wells Fargo Bank, as
the managing agent for a bank group. The variable-rate lines of credit
will provide the Company with committed facilities to warehouse its new
lease and loan financing contracts as well as to provide financing support
for portions of the company's asset-based lending services provided through
ACFC. The
company expects to release final results for the second quarter of 2002
on or before August 14, 2002. The company will host a conference call
and web cast with the investment community on Wednesday August 14, 2002
at 4:00 PM Eastern Daylight Time to discuss the company's final financial
results. HPSC
Inc. (AMEX:HDR) is a leading non-bank financial services company providing
leasing and financing opportunities to the medical and dental professions
in all 50 states. Through its asset-backed lending subsidiary, ACFC, the
company provides asset-based lines of credit to manufacturing and distribution
companies throughout the United States. For more information, the company's
website can be accessed at www.hpsc.com. CONTACT:
HPSC
Inc. John
Everets, 617/720-3600 ##
################################ # # ################# PAYNET
Launches "Next Generation" Credit Report PAYNET
in Forefront of Technology for Accelerated Credit Decisioning Skokie,
IL, - One year after the launch of its database, PAYNET, Inc. announces
the unveiling of its new "Credit History Report" which greatly
extends PAYNET's lead in the depth and breadth of commercial credit data
available. The purpose of this new offering is three-fold: to provide
virtually every type of information that would be obtained in a reference
phone call, to provide greater detail than would be possible to obtain
over the phone, and to provide convenient and insightful ratios and summary
statistics. Standard "reference call" data fields now provided
include: ·
"Last Paid" and "Next Due" dates for every account
·
Days past due: now, on average (over the account's life), most past due
ever, when it occurred ·
Losses, litigation, bankruptcy and repossessions ·
Total number of times 31-60, 61-90, and 91+, for each contract ·
Exact obligor entity name, address and phone number, for each contract. Additionally,
the borrower's overall relationship with each lender is summarized, showing
that lender's primary equipment type, the borrower's high credit and current
outstandings as a percent of the high credit, as well as how much the
borrower owes each lender by delinquency category (31-60, 61-90, 91+)
and how long it has been since the borrower has been in each of those
delinquency categories with that particular lender. Finally,
a variety of summary analytics are provided that are indicators of leverage
and rapid expansion, such as total outstandings as a percent of overall
high credit, total outstandings per employee, scheduled loan and lease
payments as a percent of the borrower's revenues and the percent of all
the borrower's payments that were 31-60, 61-90 or 91+. Pat
Shannon, Vice President of Risk Management for Volvo Commercial Finance,
commented that "this new report has much more detailed information
than a reference call or traditional credit bureau trade-line summary
provides. As a result, an applicant's credit risk is much more quickly
and clearly apparent." Thomas Butler, PAYNET CEO, and former President
& COO of Discover Card noted that "the new Credit History Report
was developed by credit professionals from the industry working together
with our member-customers with the objective of creating the kind of 'must
have' definitive credit report that until now really only existed for
consumer lending." Like
other PAYNET products the new report is available via the internet or
a direct CPU-CPU hook-up on an "auto-pull" basis, automatically
generating a report for every application. Combining PAYNET's extensive
database, the expanded detail in the new report and an auto-pull connection
will certainly help lenders already doing automated approvals, but will
also, for the first time, make automated approval possible in industries
like transportation and construction, where comparable credit history
is required to make a decision. Butler concluded "PAYNET continues
to help lenders make quicker, smarter decisions, based on detailed and
unbiased data, and at a lower overall cost." About
PAYNET: PAYNET,
Inc. manages the "Payment Information Network" for the commercial
equipment finance industry, an industry that represents more than $550
billion in assets. With the exclusive endorsement of the Equipment Leasing
Association (ELA) this network produces the nation's largest online database
of current and historical lease and loan payment information used for
credit decision purposes. The Payment Information Network currently has
over 30 Members including eight of the ten largest leasing companies,
representing a majority of the net assets in the industry. PAYNET uses
its proprietary technology and the power of shared data to increase profitability,
to improve operational efficiency, and to reduce credit losses for commercial
finance companies. Founded in 1999, PAYNET Inc. is headquartered in suburban
Chicago. For more information, visit the PAYNET Web site at www.paynetonline.com Bill
Phelan, PAYNET, Inc.
847-965-9800 ext. 12 #############
####################################################### Kozlowski's
questionable activities involved $135 million from Tyco ASSOCIATED
PRESS EXETER,
N.H. – Former Tyco International Ltd. chief executive Dennis Kozlowski
indulged his lavish tastes – including a $6,000 shower curtain – with
millions in company money and much of it was not reported to shareholders,
a published report said. In
all, it appears that more than $135 million in Tyco funds went to benefit
Kozlowski, largely in forgiven loans and company payments for real estate,
charitable donations and personal expenses, The Wall Street Journal reported
Wednesday. Kozlowski
resigned in June, a day before being indicted on charges that he evaded
New York sales taxes on pricey works of art. Kozlowski has pleaded innocent.
Tyco
spokesman Walter Montgomery said Tyco's board "was not aware of expenditures
that would have required disclosure at the time they were made. When the
directors became aware, they took immediate action." Tyco
and the Securities and Exchange Commission have launched broad investigations
of financial transactions at the company. A source has told The Associated
Press the company is looking at transactions involving all of its senior
executives. On
Wednesday, the New Hampshire Secretary of State's Office said it issued
a subpoena to Tyco on Aug. 1 seeking unspecified documents and information
related to its own investigation of the company. "While
it is inappropriate for me to comment regarding the specifics of our investigation,
we will continue to examine, in a thorough and deliberative manner, all
aspects and allegations regarding the conduct of the corporation and its
officials," Mark Connolly, director of securities regulation for
the agency, said in a statement. Connolly
did not immediately return a call seeking further comment. Kozlowski,
55, is the only one who faces criminal charges. More
than $11 million of Tyco's cash paid for antiques, art and other furnishings
in Kozlowski's New York apartment, including a $6,000 gold-and-burgundy,
floral-patterned shower curtain, the Journal said. The decorating bill
came on top of the $18 million Tyco paid for the Fifth Avenue duplex,
which Tyco considered a corporate apartment. Last
summer, Tyco picked up half the tab for a $2.1 million trip to the Italian
island of Sardinia, the paper said. The central event was a 40th birthday
party for Kozlowski's wife, Karen, with a performance by singer Jimmy
Buffett. The
Journal said Kozlowski also paid for a new home in Boca Raton, Fla., in
1998 with a $19 million, no-interest loan from Tyco. Two
years ago, Tyco quietly forgave the loan as part of a "special bonus"
program, people familiar with the company said. To
cover Kozlowski's income taxes on the forgiven loan, the sources said,
the company kicked in an extra $13 million. The Journal said none of the
deals was disclosed to Tyco shareholders. Montgomery
said Tyco's board didn't learn about the program until the internal investigation,
which began in June. He also said none of the disclosures were material
to Tyco's finances. A
person speaking on Kozlowski's behalf, who was not identified by the Journal,
disputed any suggestion that Kozlowski misspent Tyco funds for personal
benefit or that he knew of any forgiven loans. The person said Kozlowski
entrusted his financial interactions with Tyco, including loans, to company
employees, and assumes they were accounted for accurately. The
person said Tyco is holding all of Kozlowski's personal financial records
and that he is unable to recall details of many transactions without them.
Kozlowski's
lawyer, Stephen Kaufman, did not immediately return a call for comment
Wednesday. Tyco
hired former Motorola Inc. president Edward D. Breen to replace Kozlowski
as chief executive last month. Shortly
afterward, chief financial officer Mark Swartz announced his resignation
from that post as well as the company's board. Breen
added an outsider to the company's board and has hired two experts to
focus on improving Tyco's corporate governance. Expert
observers have said at least three current board members have potential
conflicts of interest serious enough to raise questions about the objectivity
of an internal investigation into Tyco's finances. Tyco,
a huge conglomerate with 277,000 employees, is based in Bermuda but run
from Exeter. It has been hammered by accounting questions and the investigations
stemming from Kozlowski's indictment. Its
stock price has dropped about 80 percent since January. Shares of Tyco
closed at $12.21, down 55 cents, or 4.3 percent, in trading Wednesday
on the New York Stock Exchange. On
the Net: Tyco:
www.tyco.com Red
Herring lays off large part of its staff Dan
Fost, San Francisco Chronicle Staff Writer Red
Herring Communications, the San Francisco publisher of what was once one
of the hottest business technology magazines on the market, laid off at
least 28 percent of its workforce Tuesday. Although
Red Herring's chief executive, Chris Dobbrow, wouldn't disclose an exact
number, noting that not all laid off employees had been told yet, he said
the company's staff level would drop from 70 people to fewer than 50 people. "It's
an extremely soft marketplace out there," he said. "I have to
look at how we organize our business and how we run our business based
on current market conditions, not based on an optimistic view that it's
going to come back in six months." Among
those laid off was Dean Takahashi, a former Wall Street Journal reporter
who was one of the magazine's marquee writers. "We're hitting the
street" looking for work, Takahashi said. Two
years ago, Red Herring employed 350 people. Since then, some of its competitors
have vanished entirely. The Industry Standard folded, and Business 2.0
merged into eCompany now. While
the Herring has survived, it is positively anemic. According to Publishers
Information Bureau, Red Herring's ad pages and ad revenue for January
through June of this year are down 74 percent. Ad revenue was $30 million
in the first six months of last year but dropped to $7.8 million in the
same period this year. And last year's numbers were already down. Dobbrow
said that the magazine's circulation remains 325,000 and that it will
continue to publish monthly. But in other respects, he said, "We're
going to be back to the strapping upstart publication that we were in
1995-1996. . . . It affects good people who've done great work for this
publication, but it will put us in position to break even and move to
profitability." E-mail
Dan Fost at dfost@sfchronicle.com. ------------------------------------------------------------------------------------------------------------ Grand
Jury Indicts ImClone's Waksal
(Martha Stewart Next?) By
Tom Hays Associated
Press Writer NEW
YORK –– A federal grand jury has indicted ImClone Systems Inc. founder
and former chief executive Samuel Waksal in an insider trading scandal
that has tarnished Martha Stewart and her home fashion empire. The
indictment, filed in federal court in Manhattan, brings new charges of
obstruction of justice and bank fraud against Waksal in addition to previous
securities fraud and perjury charges. Prosecutors
had sought to negotiate a plea deal with Waksal before a Friday deadline
to indict him. A deal likely would have required him to reveal, in exchange
for leniency, whether he provided insider trading tips to family and friends,
including Stewart. The
bank fraud count – which carries a maximum sentence of 30 years in prison
– alleges Waksal defrauded Bank of America between April 1999 and January
by securing $44 million in loans with ImClone stock he no longer owned. The
obstruction count accuses the defendant of ordering the destruction of
ImClone computer files containing phone messages and of records of his
offshore accounts at banks in Switzerland and the Netherlands. Prosecutors
say the files and records could have revealed the identities of his insider
trading partners and where he may have hidden illicit gains. The
indictment also accuses Waksal of plotting with his family to lie to investigators
about their conversations before the Dec. 27 sell-off and their reasons
for it. In
June, Waksal – a friend of Stewart's – was arrested on insider trading
charges for allegedly tipping off members of his family to sell ImClone
shares. Waksal's lawyers and prosecutors had been trying to negotiate
a plea deal before a deadline to indict him. "This
is a painful chapter in Dr. Waksal's life, but he continues to believe
in ImClone and Erbitux as holding out real hope for millions of cancer
patients," Waksal attorney Mark Pomerantz said in a statement. "Like
all Americans, he is presumed to be innocent, and he will respond to these
charges as required." Prosecutors
accused Waksal of secretly advising his daughter, Aliza, and father, Jack,
to sell on Dec. 27 after learning that his biotech company's effort to
win approval for Erbitux had been rejected by the Food and Drug Administration.
Aliza's stock sale made her $2.5 million. Samuel Waksal had tried to sell
his shares but brokerage firms refused to process the order. Investigators
also targeted Stewart, CEO of Martha Stewart Living Omnimedia Inc., after
learning that she disposed of nearly 4,000 shares on Dec. 27, grossing
approximately $230,000. Stewart and Aliza Waksal share the same Merrill
Lynch broker, Peter Bacanovic. Congressional investigators probing the
ImClone insider scandal are exploring whether Bacanovic could have tipped
off Stewart. Stewart
maintains she simply had an order to sell her stock when it went below
$60. But doubt has been cast on that assertion because she and Bacanovic
differ on when the order was placed. Meanwhile,
shares of Martha Stewart Living Omnimedia Inc. slumped Wednesday following
reports that Congress is widening its probe into Martha Stewart's sale
of ImClone stock in December. Shares fell 8.2 percent, or 67 cents a share,
to close at $7.50 on the New York Stock Exchange. The stock has taken
a beating since news broke in early June that the decorating maven's name
was linked to the ImClone insider trading scandal. On
Tuesday, the U.S. House Energy and Commerce Committee, which is investigating
the ImClone trading scandal, said it requested additional documents from
Stewart – including e-mails and records from her business manager. In
a letter to Stewart's lawyer, the committee chairman, Rep. Billy Tauzin,
R-La., and Rep. James D. Greenwood, R-Pa., chairman of the subcommittee
on oversight and investigations, requested an interview with Stewart to
clear up discrepancies between her account of the sale and that of her
broker and his assistant. Bacanovic's
assistant, Douglas Faneuil, originally said there was such an order but
has since changed his story. The
New York Times and Wall Street Journal reported this week that Faneuil
told investigators that Bacanovic ordered him to call Stewart to advise
her to sell her shares because Waksal and members of his family were dumping
their shares. FCC
issues record fine to company for sending `junk faxes' By
Danny Freedman, Associated Press WASHINGTON
(AP) The Federal Communications Commission issued a record fine of nearly
$5.4 million Wednesday against a company for sending ''junk faxes'' to
businesses and consumers. The
fine against Aliso Viejo, Calif.-based Fax.com is the largest ever by
the commission for violations of the Telephone Consumer Protection Act.
The law protects against unsolicited faxes, telemarketing calls and prerecorded
messages, among other things. ''Fax.com
appears to have founded its business on the practice of sending unsolicited
faxes in flagrant violation'' of the law, Kathleen Q. Abernathy, an FCC
commissioner, said in statement. ''Despite repeated warnings from the
commission and numerous consumer complaints, the company appears to have
made no effort to mend its ways.'' The
fine is also the FCC's first against a company known as a ''fax broadcaster.''
According to the FCC, Fax.com sent advertisements and other messages on
behalf of more than 100 businesses for a fee, sparking 489 violations.
The
FCC said it believes Fax.com ''engaged in a pattern of deception to conceal
its involvement in sending the prohibited faxes, and that the company
has not been forthcoming in its dealings with the agency.'' A
lawyer for Fax.com, Mary Ann Wymore, said the company feels the rules
on unsolicited advertising are an unconstitutional restriction of its
freedom of speech. ''We
are extremely disappointed in what the FCC did today,'' she said. ''We
just found out about it today, so we need to take a look at it, but I
feel confident that we're going to challenge it.'' The
company has 30 days to either pay the fine or file a response with the
FCC. The fine calls for the company to pay the maximum penalty of $11,000
per violation. The
FCC is also issuing citations to more than 100 businesses that used Fax.com,
warning that they too could be liable to pay the maximum fine if they
continue to send unsolicited faxes. On
the Net: Federal
Communications Commission: http://www.fcc.gov/ ________________________________________________________________________ ISLAMIC
BANKING 101: A PRIMER FINANCIAL
INSTITUTIONS CONSULTING, INC. 475
Fifth Avenue, 19th Floor New
York, NY 10017 212-252-6700 www.ficinc.com ===================================================== Typically,
within the U.S., Islamic banking practices are at best unknown and
at worst misunderstood. And, unfortunately, since September 11th, a banking
approach based in fair-mindedness and equity for all has been caught in
the tidal wave of our concern over terrorism. In
the past year, however, FIC has begun to conduct projects in countries
in which
Islamic banking practices are becoming increasingly common, most recently
in Bangladesh, and we have been exposed to some of the players in this
arena. Even
in the U.S., however, banks like HSBC are developing approaches that follow
Islamic strictures, including an interest-free charge card and a home-financing
product. And, unbeknownst to them, many venture capitalists and
leasing companies, with their focus on risk sharing, are already following
Islamic requirements. This
newsletter can barely scratch the surface of the intricacies of Islamic banking
and can only hint at the complexities of the philosophy that underpins
this approach. Nonetheless, we thought a brief overview would provide
value to readers and, we hope, encourage them to read further on this
topic. Note: There are now 1.2 billion Muslims worldwide, and the U.S. is
home to seven million Muslim Americans, an increasing number of whom want to
follow Islamic practices. Islamic
financing follows Islamic Sharia, or law, that forbids receiving interest
on money lent. Islamic finance depends on a bank and its customer generating
profits together. Some
Islamic Banking fundamentals: ISLAMIC
FINANCIAL INSTITUTIONS ARE GROWING. There are more than 200 Islamic banks,
mutual funds, insurers, mortgage companies, and other types of financial
institutions. ITS
ORIGIN GOES BACK TO MOHAMMED. Apparently, in the Middle Ages loan-sharking
was rampant and failure to repay a loan could result in slavery.
Islamic finance reflects a sense of social justice, based on risk sharing
and fair dealing. The Koran bans giving or receiving interest. Chapter
2, verse 278: "O you who believe! Have fear of Allah and give up what
remains of what is due to you of usury." ISLAMIC
BANKING AS A MOVEMENT STARTED IN THE 1970s. The Islamic Development Bank
began in 1973 as what FORTUNE terms "an interest-free version of
the World
Bank." The first retail Islamic bank began in Dubai in 1975. ISLAMIC
BANKS LOOK LIKE OTHER BANKS. As in the west, these banks operate with
teller lines and ATM machines. Tradition dictates, however, that there be
a separate section for women. INTEREST
DOES NOT EXIST. "Reba" or interest is prohibited, but profit
is allowed.
Money that is being "saved" goes into a mudarabah account. These funds
do not receive a fixed interest, but rather are commingled with other accounts
to be invested in ventures such as construction and real estate projects. IT
IS ACCEPTABLE TO BUY STOCKS. They represent real assets, and, as we all know
today, provide an opportunity to share risks. And, managers have designed
funds that avoid what might be viewed as sinful businesses. CURRENCY
HEDGING: NO. It is prohibited on the basis of gharar, a principle that
disallows profiting from another's uncertainty. CASE
EXAMPLE: AUTO FINANCING. As reported in FORTUNE, individuals obtain cars
through a project known as murabaha. An individual chooses a car, for example,
costing the equivalent of $9,500; he agrees to buy the car from his bank
for about $10,300; the bank then buys the car from the dealer, and the individual
"buys" it from the bank in 36 monthly installments. The two transactions
are executed almost simultaneously with the bank taking possession
for a short period of time in order to follow Islamic practices. Of
course, to a Western mind, the markup paid by the individual looks like interest
and in fact, that markup is at a rate that mirrors the interest rate.
Still, late fees go to charity and in FORTUNE's words, "The bank cannot
penalize a borrower who is genuinely broke." CASE
EXAMPLE: HOME BUYING. Many Muslims simply try to buy homes with cash, after
years of saving, thus, avoiding interest. One recent innovation involves
a rent to own scheme whereby the "rental" price paid changes
with market
conditions; again, no fixed interest but rather payments are tied to risk.
To quote an HSBC banker, " We purchase the house on the customer's behalf,
place a mark-up on it, and then resell it to the customer." Freddie
Mac estimates that between 1.5 and 2.5 million households are interested
in Islamically acceptable home financing: "Our expectation is to do
between $3 billion and $5 billion in the next three to four years." CASE
EXAMPLE: BUSINESS FINANCING. As discussed in COMMUNITY INVESTMENTS MAGAZINE,
"Lease-to-own arrangements" ("ijara") are common for
business equipment
and can work quite well for Muslim business owners. More difficult is
providing working capital, since this likely requires the provider of
the capital
to take at least a limited equity position in the business." By the way,
ijara financing cannot be used to obtain an asset that results in the production
of a forbidden good, such as alcohol. SUMMARY:
Islamic finance represents a non-Western worldview. But, from the Western
bankers perspective, this is a growing market segment and one in which
interest, but not profit is prohibited. It will make strong business sense
for banks located in markets with significant number of potential Islamic
banking customers to develop an offering targeted at this group. Otherwise,
they risk losing market share to banks like HSBC and Citibank that
appreciate the potential of this segment. ====================================================== FIC
NOW OFFERS A ONE-DAY SEMINAR/BRAINSTORMING SESSION ON STRATEGIES OF BUSINESS
BANKING. This workshop, specifically tailored to address your bank's
needs, focuses on the issues and topics of critical importance to small
business bankers, including: customer's needs and desires, customer profitability
and retention, segmentation, cross-sell, deposit gathering, and
priorities for success. For more information, click on the link below or
e-mail mharvey@ficinc.com http://www.ficinc.com/Workshop/biz_banking_workshop.htm ===================================================== NOW
AVAILABLE FOR ONLY $500: 2001 SMALL BUSINESS STATE OF THE MARKET REPORT
- a comprehensive study of the small business market and its use of financial
services products and providers. By joining the perspective of over
400 small business owners with FIC's extensive knowledge of the small business
market and financial services industry, the report looks at market size,
use of products, product providers, credit cards, credit, primary providers,
delivery channels, online banking, and segmentation. For more information
or to purchase, e-mail: mharvey@ficinc.com. ===================================================== ABOUT
FINANCIAL INSTITUTIONS CONSULTING FIC
is a strategy consulting firm addressing issues related to growth and profitability
for financial services clients. We emphasize practical, bottom-line
results based on quantitative and qualitative research and an in-depth
understanding of industry dynamics. For
more information about our consulting services or if you have questions or
comments, please e-mail: info@ficinc.com; type "info" in the
subject line. ----------------------------------------------------------------------------------------------------
####
################################################## C2
CAPITAL CORPORATION EXPANDS SALES FORCE, APPOINTS
NEW VICE PRESIDENT OF SALES TO LEAD GROWING TEAM LOS
ANGELES, -C2
CAPITAL CORPORATION, an equipment leasing company, begins implementing
its expansion plans by promoting its top account executive, Todd Orlando,
to the Vice President of Sales position to lead and grow one of the strongest
sales team in the industry. The company also added two associates in
the sales department and four associates in the syndication department.
Mr.
Orlando was officially named Vice President of Sales at C2 Capital Corp.
on July 29. In his new role, Mr. Orlando will manage the day-to-day operations
of the sales department with a focus on growing revenue for the company.
With roots in the banking industry, Mr. Orlando has a diverse background
with experience in management and the entertainment industry. Evident
of the growing sales force, Mr. Orlando is actively looking to hire more
salespeople for the Los Angeles office as well as the Newport Beach office. "We
are very excited about the potential and the possibilities Todd brings
to the table," said David Itzikman, President and CEO of C2 Capital
Corporation. "To find someone with his skill set and experience
is a gift, but to find him within our own sales force is a testament to
the quality of people who have contributed to the success of C2." Mr.
Itzikman and the senior management team at C2 Capital have been working
together in the leasing industry since 1993. C2 Capital experienced success
and growth in the past months notably in a time when the leasing industry
was stagnant. "The
industry has gone through a shakeout and only the strong are left standing,"
added Mr. Itzikman. "There is a pool of talent out there waiting
for the next boom and we are in a position to attract, hire, and retain
the best of the best." C2
Capital has also entered into key alliances to establish the best syndication
department in the industry. The strategic partnerships give C2 Capital
the resources to service a larger volume of transactions, allowing the
sales staff to pursue the best vendor opportunities. Through the alliances,
C2 offers an even broader range of services, including: SBA loans; debt
and equity; working-capital loans; A/R financing; asset-based loans; and
real estate financing. Details of the alliances will be disclosed in
a future release. About
C2 Capital Corporation C2
Capital Corp., is an equipment-lease financing provider based in Los Angeles,
Calif., with affiliate offices in Newport Beach, Calif., Burlingame, Calif.,
Dallas, TX, and Denver, Co. C2 Capital was founded in 2000 and maintains
great relationships with the best funding sources in the industry. With
a wide array of existing and growing product lines, C2 Capital is fast
becoming one of the best companies in the leasing industry. For more
information about C2 Capital Corp., visit our website at www.c2capital.com
or call (888) 348-6200. ------------------------------------------------------------------------------------- News
Briefs--- O'Neill
in South America: worries of spreading economic malaise BUENOS
AIRES, Argentina (AP) Treasury Secretary Paul O'Neill urged Argentina
on Wednesday to adopt a sound recovery strategy, but his encouraging words
on a South American swing did little to ease fears the region's economic
malaise could spread. ---- Martha
Stewart Living Omnimedia Inc.'s shares slump after reports of probe into
ImClone sale widen NEW
YORK (AP) Shares of Martha Stewart Living Omnimedia Inc. slumped Wednesday
following reports that Congress is widening the probe into Martha Stewart's
sale of ImClone stock in December. --- New
York Times and Wall Street Journal reported this week that Faneuil told
investigators that Bacanovic ordered him to call Stewart to advise her
to sell her shares because Waksal and members of his family were dumping
their shares. Phone
records obtained by a congressional committee conducting its own investigation
show no such call, a spokesman for the panel said. However, there is a
record of Bacanovic's calling Stewart that afternoon, shortly after which
she sold her shares. ---
Ex-Executives
Say Sham Deal Helped Enron Enron
struck a sham energy deal with Merrill Lynch that let Enron book a $60
million profit in late December 1999, according to former Enron executives. -- Ford
Heir Says America's Love for the Car Has Lost Its Zip William
Clay Ford Jr. said Wednesday that a credibility gap on environmental issues
had eroded America's love for cars. --
Hawks
don't worry about keeping up with Jones Les
Carpenter---Seattle Times CHENEY
— Once again the Seahawks practiced without their best player. They barely
know where he is and what he is up to. His teammates don't speak to him.
Even his own position coach hasn't talked to him since before minicamps,
which began in March. The summer plugs along |