On February 19, 2015, Judge Nicholas Garaufis of the U.S. District Court for the Eastern District of New York ruled that American Express violated U.S. antitrust laws with its practice of preventing merchants from encouraging customers to use some types of credit cards over others.
Last week the U.S. Food and Drug Administration (FDA) granted approval to the personal genetic testing company, 23andMe, to sell a genetic carrier test for Bloom Syndrome directly to consumers. Bloom Syndrome is a rare inherited disorder associated with short stature and an elevated risk of cancer. This marks the first FDA authorization of a direct-to-consumer genetic test and creates a path towards regulatory approval for future related genetic tests.
On February 5, 2015 electronics retailer RadioShack Corp. filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware, after reaching a deal to sell up to 2,400 of its stores to the hedge fund Standard General LP, one of the lenders and its largest shareholder.
Restaurant Brands International, the third-largest fast-food chain restaurant group in the world, posted a quarterly loss in the fourth quarter of 2014. The rather large net loss of $514.2 million, attributable to shareholders, is particularly significant because it marks the first quarterly financial data available since the formation of the group through Burger King’s purchase of Canadian coffee and doughnut chain Tim Hortons. The loss can primarily be explained by “one-time costs related to the merger.”
Puerto Rico’s recently enacted debt restructuring law was struck down. On February 6, 2015, Judge Francisco Besosa of the United States District Court in Puerto Rico ruled that the law was unconstitutional and enjoined its enforcement.
Commercial Investment Trust, a private commercial lender that focuses mainly on middle-market lending in various industries, recently announced its intent to acquire fellow bank One West. The CEO of CIT, John Thain, wants to take advantage of the synergies that will be created by marrying the commercial lending of CIT to the residential lending that dominates One West’s asset sheet. Yet investors may not be as keen on the deal given the two banks rocky experiences with the financial crisis.
For many Americans who survive from one paycheck to the next, payday loans are one of the only forms of credit available. However, while providing emergency credit is a vital service, these loans often carry shockingly high interest rates that have drawn increased scrutiny from the Consumer Financial Protection Bureau. In order to finally address these predatory lending practices, the CFPB expects to hand down its first set of federal rules regulating this 46 billion dollar industry in the coming weeks.
Last week, four companies – Sunrise Communications, Vision Express, GrandVision and Générale d’Optique – launched their shares on exchanges in the European market. Investors responded eagerly, with several offerings, such as Sunrise and GrandVision, being oversubscribed multiple times and shares moving to substantially higher levels in their debuts.
In late January, Shake Shack, the upper tier hamburger chain, went public and “broke” Wall Street: not only was the company able to sell its shares at a price of $21 per share, twice as much as the price-per-share foreseen prior to the IPO, but it also maintained its strict “anti-activism” corporate governance regime without deterring its investors.