(NEW YORK) — The founder of cryptocurrency lending platform Celsius Network was arrested Thursday on federal charges.
Alexander Mashinsky founded Celsius in 2018 and positioned it as a stable, safe alternative to traditional financial institutions that would provide investors who held crypto assets financial freedom and economic opportunity.
Instead, federal prosecutors alleged he was misrepresenting the company’s financial health before it collapsed into bankruptcy a year ago.
The Securities and Exchange Commission and the Federal Trade Commission filed companion lawsuits Thursday that said Mashinsky and Celsius “falsely promised investors a safe investment with high returns” but misled investors about the financial success of Celsius’ business and the price of Celsius’ own crypto asset security was fraudulently manipulated.
“Defendants also falsely claimed that Celsius had 1 million active users on Celsius’s platform. It did not. Celsius’s own internal data—which was regularly shared with Mashinsky — showed that the company only had approximately 500,000 users who had ever deposited crypto assets on the company’s platform and that many were no longer active users,” the SEC lawsuit said.
The alleged scheme unraveled in June 2022, leaving investors unable to withdraw billions of dollars in crypto assets from Celsius’ online platform. Celsius filed for bankruptcy a month later.
“By 2022, Celsius’ business was unsustainable, and it became clear internally that the company would fail. One employee called Celsius a ‘sinking ship,’ while another wrote that ‘there is no hope … there is no plan’ and that Celsius’s business model ‘is fundamentally broken.’ On May 21, 2022, a Celsius executive candidly acknowledged in an internal message: ‘We don’t have any profitable services,'” the lawsuit said.
According to the regulators, Celsius told the public a different story: “That [a]ll user funds are safe, and that it continue[s] to be open for business as usual.”
(LOS ANGELES) — The Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) negotiating committee has voted unanimously to recommend a strike in a move that could incapacitate Hollywood productions.
The major unions in Hollywood issued a joint statement Wednesday on their “unwavering support and solidarity” of SAG-AFTRA, including the Writers Guild of America, who have been on strike for more than two months with no sign of progress.
“Hollywood must be a place where every worker, on-screen and off, is treated according to the value their skills and talents command,” International Alliance of Theatrical Stage Employees, Teamsters, Hollywood Basic Crafts, the Directors Guild of America (DGA), the Writers Guild of America East and the Writers Guild of America West said in their statement.
The group added, “While the studios have collective worth of trillions of dollars, billions of viewers globally, and sky-high profits, this fight is not about actors against the studios, but rather about workers across all crafts and departments in the industry standing together to prevent mega-corporations from eroding the conditions we fought decades to achieve.”
The current SAG-AFTRA contract is expired at 11:59 p.m. PT Wednesday. The contract was originally going to expire on June 30 but was extended after SAG-AFTRA and the Alliance of Motion Picture and Television Producers (AMPTP) reached an agreement.
Union leaders and the AMPTP agreed on Tuesday to meet with federal mediators to possibly hammer out a deal before the current contract expires, according to SAG-AFTRA.
“We will not be distracted from negotiating in good faith to secure a fair and just deal by the expiration of our agreement,” SAG-AFTRA said in a statement. “We are committed to the negotiating process and will explore and exhaust every possible opportunity to make a deal, however, we are not confident that the employers have any intention of bargaining toward an agreement.”
Since a deal was not reached between the groups, a strike is now increasingly likely. In June, 98% of members agreed to authorize a strike if an agreement isn’t reached, SAG-AFTRA said.
“From the time negotiations began on June 7, the members of our Negotiating Committee and our staff team have spent many long days, weekends and holidays working to achieve a deal that protects you, the working actors and performers on whom this industry relies,” said SAG-AFTRA president and chief negotiator, Fran Drescher, in a statement issued early Thursday. “As you know, over the past decade, your compensation has been severely eroded by the rise of the streaming ecosystem. Furthermore, artificial intelligence poses an existential threat to creative professions, and all actors and performers deserve contract language that protects them from having their identity and talent exploited without consent and pay. Despite our team’s dedication to advocating on your behalf, the AMPTP has refused to acknowledge that enormous shifts in the industry and economy have had a detrimental impact on those who perform labor for the studios.”
A separate statement was issued early Thursday by the Alliance of Motion Picture and Television Producers following the failed negotiations.
“We are deeply disappointed that SAG-AFTRA has decided to walk away from negotiations. This is the Union’s choice, not ours. In doing so, it has dismissed our offer of historic pay and residual increases, substantially higher caps on pension and health contributions, audition protections, shortened series option periods, a groundbreaking AI proposal that protects actors’ digital likenesses, and more.,” said the AMPTP. “Rather than continuing to negotiate, SAG-AFTRA has put us on a course that will deepen the financial hardship for thousands who depend on the industry for their livelihoods. There are 160,000 members of SAG-AFTRA and over 11,000 members of the Writers Guild of America.”
The unending writers’ strike, which began in May, is costing California’s economy $30 million a day, according to Deadline.
Writers are demanding that studios pay them accordingly as shifting into streaming has changed the way shows are made and monetized.
In a pre-strike protest in front of Netflix offices on Wednesday, actors told ABC News they are trying to get by financially and contracts have not kept pace with inflation.
Their biggest concerns are streaming residuals, the impact of AI technology and making more money.
“I think most people don’t understand that most actors don’t make millions of dollars. A lot of us are struggling to eat and pay rent,” John Jared, a SAG-AFTRA member for three years, told ABC News.
(NEW YORK) — The Powerball jackpot is now an estimated $875 million for Saturday’s drawing, after no winners took home the big payday on Wednesday night.
The jackpot for Wednesday night’s drawing was $750 million — the game’s sixth-largest prize ever. The winning numbers were 23, 35, 45, 66 and 67, and the Powerball was 20.
Now, the jackpot has a cash value of $441.9 million.
The Powerball jackpot was last hit on April 19. There have been three dozen consecutive drawings without a win since someone in Ohio claimed that $252.6 million prize.
“Whether it’s your first time buying a ticket or you frequently play, if you win the jackpot remember to first, sign your ticket and reach out to your local lottery with any questions,” said Drew Svitko, Powerball product group chair and Pennsylvania Lottery executive director. “Your local lottery is the best resource for information on ticket sale cut-off times and how to claim a prize.”
The winner would have the choice between annual payments over 30 years, which increase by 5% each year, or a lump-sum payment.
The drawing on Saturday will be held just before 11 p.m. ET.
The odds of winning the jackpot are 1 in 292.2 million, according to Powerball.
The largest jackpot ever was won in November 2022, when Edwin Castro took home $2.04 billion on a single winning ticket out of California.
(LOS ANGELES) — The Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) is expected to strike at midnight PT if a deal between the union and studios isn’t agreed upon, a move that could incapacitate Hollywood productions.
The major unions in Hollywood issued a joint statement Wednesday on their “unwavering support and solidarity” of SAG-AFTRA, including the Writers Guild of America, who have been on strike for more than two months with no sign of progress.
“Hollywood must be a place where every worker, on-screen and off, is treated according to the value their skills and talents command,” International Alliance of Theatrical Stage Employees, Teamsters, Hollywood Basic Crafts, the Directors Guild of America (DGA), the Writers Guild of America East and the Writers Guild of America West said in their statement.
The group added, “While the studios have collective worth of trillions of dollars, billions of viewers globally, and sky-high profits, this fight is not about actors against the studios, but rather about workers across all crafts and departments in the industry standing together to prevent mega-corporations from eroding the conditions we fought decades to achieve.”
The current SAG-AFTRA contract is set to expire at 11:59 p.m. PT Wednesday. The contract was originally going to expire on June 30 but was extended after SAG-AFTRA and the Alliance of Motion Picture and Television Producers (AMPTP) reached an agreement.
Union leaders and the AMPTP agreed on Tuesday to meet with federal mediators to possibly hammer out a deal before the current contract expires, according to SAG-AFTRA.
“We will not be distracted from negotiating in good faith to secure a fair and just deal by the expiration of our agreement,” SAG-AFTRA said in a statement. “We are committed to the negotiating process and will explore and exhaust every possible opportunity to make a deal, however, we are not confident that the employers have any intention of bargaining toward an agreement.”
If a deal isn’t reached between the groups, then a strike is likely. In June, 98% of members agreed to authorize a strike if an agreement isn’t reached, SAG-AFTRA said.
There are 160,000 members of SAG-AFTRA and over 11,000 members of the Writers Guild of America.
The unending writers’ strike, which began in May, is costing California’s economy $30 million a day, according to Deadline.
Writers are demanding that studios pay them accordingly as shifting into streaming has changed the way shows are made and monetized.
In a pre-strike protest in front of Netflix offices on Wednesday, actors told ABC News they are trying to get by financially and contracts have not kept pace with inflation.
Their biggest concerns are streaming residuals, the impact of AI technology and making more money.
“I think most people don’t understand that most actors don’t make millions of dollars. A lot of us are struggling to eat and pay rent,” John Jared, a SAG-AFTRA member for three years, told ABC News.
(NEW YORK) — The Walt Disney Company has announced that Bob Iger will remain CEO for two additional years, extending his contract through Dec. 31, 2026.
The Walt Disney Company Board of Directors voted “unanimously” to extend Iger’s contract, seven months after he returned as CEO, the company said in a press release Wednesday.
“On my first day back, we began making important and sometimes difficult decisions to address some existing structural and efficiency issues, and despite the challenges, I believe Disney’s long-term future is incredibly bright,” Iger said in the press release.
Iger returned to Disney in November 2022 as its chief executive officer, after previously serving as CEO and chairman from 2005 to 2020. After his 2020 departure, Iger served as executive chairman and chairman of the board through 2021.
“Time and again, Bob has shown an unparalleled ability to successfully transform Disney to drive future growth and financial returns, earning him a reputation as one of the world’s best CEOs,” Mark G. Parker, chairman of The Walt Disney Company, said in the press release Wednesday.
The Walt Disney Company is the parent company of ABC News.
(SAN FRANCISCO) — The slew of closures of retail stores in San Francisco in recent months doubles as a roundup of well-known shopping brands: Whole Foods, Old Navy and Nordstrom, among others.
Nearly half of the stores in the city’s downtown shopping district have closed since 2019, the San Francisco Standard found in May.
In June, the 70-store downtown Westfield Mall said it would stop making payments on a $558 million loan, relinquishing ownership of the shopping center and leaving the fate of the complex uncertain.
Dubbed a “retail exodus,” the trend has spurred criticism focused on crime and homelessness but a more complicated set of forces is driving companies away from the city, experts and a former downtown store owner told ABC News.
A diminished sense of safety among some shoppers has deterred foot traffic downtown, they said. Additionally, they pointed to sluggish sales at some stores due in part to a longstanding shift away from brick-and-mortar retail that went into overdrive during the pandemic.
The rise of remote work — a trend even more pronounced in the Bay Area’s tech industry — also has slashed the number of office commuters, who previously drove lunchtime business and after-hours shopping downtown, experts said.
“It’s all of the above,” Wade Rose, the president of business advocacy group Advance SF, told ABC News. “These dynamics are bigger than the city.”
Crime, he added, makes up “part of the narrative. It isn’t the full narrative.”
The office of San Francisco Mayor London Breed did not immediately respond to ABC News’ request for comment.
Last month, Breed told Good Morning America that San Francisco faces difficulties but she also faulted a disproportionate focus on exits from the city.
“San Francisco is a major city and it has challenges,” Breed said. “But let’s back up a little bit. You are talking about people who are leaving the city but not the people who are staying, expanding, coming to San Francisco.”
In April, Whole Foods opted to close its flagship location in downtown San Francisco to “ensure worker safety,” the company said in a statement to ABC News at the time, noting that all of the employees would be transferred to nearby locations.
“We have made the difficult decision to close the Trinity store for the time being,” the company said.
Old Navy, which closed its store in downtown San Francisco in May, shared a statement made by its parent company Gap at the time. Old Navy is “always evaluating its real estate portfolio to ensure a healthy fleet of stores that can provide the best possible experience for our customers,” the statement said.
“As a result, we have taken the difficult decision to close our Market Street store when the lease expires, and we are already working to identify new locations in downtown San Francisco that will better serve the needs of the business and our customers,” the statement added.
In May, when Nordstrom announced plans to close stores in downtown San Francisco, the company’s chief stores officer wrote in an email obtained by ABC station KGO in San Francisco that “the dynamics of the downtown San Francisco market have changed dramatically over the past several years, impacting customer foot traffic to our stores and our ability to operate successfully.”
Whole Foods and Nordstrom did not immediately respond to ABC News’ request for additional comment.
Overall, crime statistics suggest mixed results. As of Sunday, the most recent data available, homicides have climbed nearly 8% this year compared to the same period in 2022; and robberies have risen about 12%, San Francisco Police Department data showed. Rapes have fallen almost 24% compared to the same period last year, however, while assaults have dropped nearly 5%, according to the data.
Compared to pre-pandemic performance in 2019, homicides are up 27% over the same period through Sunday; but robberies are down almost 6%, the data showed.
Denise Forbes, who co-founded the boutique California Girl Jewelry, said she noticed a rise in homelessness near the store’s downtown San Francisco location over the years before the pandemic struck.
When the pandemic began, the problems “piled up and up,” she said. The company suffered an 80% drop in revenue in 2020, owing in part to a pandemic-related shutdown that forced a complete shift to e-commerce. In the absence of shoppers near the store, she said she saw drug use and homelessness surge.
The following year, Forbes closed the shop and reopened at a shopping center in nearby Marin County, she said. “It was such a goal to have a business in San Francisco,” she added. “Then it turned out to be such a real disappointment.”
The steep decline of foot traffic downtown during the pandemic heightened a perception of safety risk, which in turn deterred the flow of visitors needed to ease the dismay, said Rose, of Advance SF. That dynamic has persisted amid the sluggish return of in-person office workers, especially in the tech sector, he added.
“A massive reduction in foot traffic translates into a significant reduction in sales,” Rose said.
Despite high-profile retail departures, the performance of in-person sales has shown signs of improvement this year, Ted Egan, San Francisco’s chief economist, told ABC News.
Over the first three months of the year, sales tax revenue in San Francisco grew faster than it did statewide in most categories, Egan said. Casual dining receipts in San Francisco were up 23% on a non-inflation adjusted basis over that period compared to 10% statewide, he added; and the city has seen solid growth this year in some types of retail, such as electronics and appliances.
Sales at the downtown shopping neighborhood Union Square were up 7.4% on a non-inflation adjusted basis over the first three months of the year compared to the same period in 2022, he added.
Crime is “a problem” for retailers, Egan said, particularly shoplifting. Over the past four years, San Francisco “suffered a major economic shock during the pandemic and has been slow to recover,” Egan added.
Rose said he envisions a business recovery downtown focused on ensuring safety and reducing apartment rents but also on building parks and other attractions that draw fun-seeking visitors who could replace the lost commuters.
“There’s no silver bullet,” Rose said. “The issue for San Francisco is: What’s next?”
(WASHINGTON) — Consumer prices rose 3% last month compared to a year ago, marking a significant slowdown and raising hopes that a prolonged bout of heightened inflation is nearing its end.
The fresh data Wednesday morning from the Bureau of Labor Statistics arrives days after a government release indicated that hiring slowed last month but remained solid. The economy, the jobs report suggests, continued a gradual downshift in June amid a central bank effort to dial back activity and slash prices while averting a recession.
Consumer prices rose 4% in May compared to a year ago.
The latest reading indicates a notable cooldown in June but still exceeds the Federal Reserve’s inflation target of 2%.
The data released on Wednesday exceeded the expectations of economists surveyed by Bloomberg, who expected inflation to have fallen to 3.1% in June.
Inflation rose a modest 0.2% on a monthly basis, accelerating from a 0.1% increase in May.
Despite the encouraging report, core inflation — which strips out volatile food and energy prices — rose 4.8%.
Food prices, meanwhile, continued to accelerate faster than overall inflation, rising 5.7% in June compared to a year ago.
The price of flour rose about 12% in June compared to a year ago, roughly quadruple of the overall inflation rate; while the price of bakery products rose 9.5% over that period and the price of cookies rose nearly 9%.
Egg prices, which surged last year after a severe avian flu outbreak, fell nearly 8% in June compared to a year prior. Prices for milk, seafood and bacon also fell over that period.
The Fed is set to meet in roughly two weeks as it considers whether to escalate its fight against inflation with an additional rate hike.
Last month, the Fed paused an aggressive series of interest rate hikes, ending a string of 10 consecutive rate increases that stretched back 15 months.
However, nearly all members of the decision-making committee believe the central bank will need to impose at least one additional rate hike this year, Fed Chair Jerome Powell said immediately after the announcement of a pause.
In remarks late last month, Powell voiced an optimistic message about the U.S. economy and downplayed the threat of a recession.
“The U.S. economy has actually been quite resilient,” Powell said in Sentra, Portugal, at a conference organized by the European Central Bank.
While acknowledging that a recession is “certainly possible,” he said such an outcome is “not the most likely case.”
“The economy is resilient and still growing, albeit at a modest pace,” he added.
A major upward revision showed last Thursday that the U.S. economy grew significantly more at the outset of this year than an initial measurement indicated, according to the Commerce Department.
Gross domestic product increased at a 2% annualized rate for a three-month period ending in March — a sizable jump from the previous estimate of 1.3%.
A jobs report on Friday, meanwhile, showed that U.S. employers hired 209,000 workers in June, which marked robust performance, albeit a slowdown from the previous month.
Wage growth, assessed by workers’ average hourly earnings, remained unchanged at 4.4% compared to the same month a year prior. As part of its inflation fight, the Fed closely watches the pace of wage growth, since in theory employers raise prices to keep up with higher pay.
“The labor market is really pulling the economy,” Powell said late last month, before the release of hiring data for June. “It’s a very strong labor market.”
“In my view, the least unlikely case is that we do find a way to better balance without a severe downturn,” he added.
(WASHINGTON) — Inflation data to be released on Wednesday will show whether the U.S. economy extended a monthslong cooldown of price increases in June, offering further relief for consumers and welcome news for the Federal Reserve as it weighs an additional interest rate hike.
The fresh data arrives days after a government release indicated that hiring slowed last month but remained solid. The economy, the jobs report suggests, continued a gradual downshift in June amid a central bank effort to dial back activity and slash prices while averting a recession.
Consumer prices rose 4% in May compared to a year ago, dropping more than expected and bolstering hopes that inflation will return to normal levels. The latest reading, however, is still double the Federal Reserve’s inflation target of 2%.
Economists surveyed by Bloomberg expect inflation to have fallen considerably in June to 3.1%, which would mark the lowest reading since March 2021.
The Fed is set to meet in roughly two weeks as it considers whether to escalate its fight against inflation with an additional rate hike.
Last month, the Fed paused an aggressive series of interest rate hikes, ending a string of 10 consecutive rate increases that stretched back 15 months.
However, nearly all members of the decision-making committee believe the central bank will need to impose at least one additional rate hike this year, Fed Chair Jerome Powell said immediately after the announcement of a pause.
In remarks late last month, Powell voiced an optimistic message about the U.S. economy and downplayed the threat of a recession.
“The U.S. economy has actually been quite resilient,” Powell said in Sentra, Portugal, at a conference organized by the European Central Bank.
While acknowledging that a recession is “certainly possible,” he said such an outcome is “not the most likely case.”
“The economy is resilient and still growing, albeit at a modest pace,” he added.
A major upward revision showed last Thursday that the U.S. economy grew significantly more at the outset of this year than an initial measurement indicated, according to the Commerce Department.
Gross domestic product increased at a 2% annualized rate for a three-month period ending in March — a sizable jump from the previous estimate of 1.3%.
A jobs report on Friday, meanwhile, showed that U.S. employers hired 209,000 workers in June, which marked robust performance, albeit a slowdown from the previous month.
Wage growth, assessed by workers’ average hourly earnings, remained unchanged at 4.4% compared to the same month a year prior. As part of its inflation fight, the Fed closely watches the pace of wage growth, since in theory employers raise prices to keep up with higher pay.
“The labor market is really pulling the economy,” Powell said late last month, before the release of hiring data for June. “It’s a very strong labor market.”
“In my view, the least unlikely case is that we do find a way to better balance without a severe downturn,” he added.
(NEW YORK) — Bank of America was ordered to pay more than $100 million to customers for double-charging accounts with insufficient funds, denying reward payments to credit card holders and using personal data to open accounts without a client’s knowledge, the Consumer Financial Protection Bureau said on Tuesday.
The second-largest U.S. bank harmed hundreds of thousands of customers over a period of several years and across multiple products, the federal agency said.
In addition to the customer payment, the bank must pay $150 million in penalties, the agency added.
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” Rohit Chopra, director of the CFPB, said in a statement.
“These practices are illegal and undermine customer trust,” Chopra added. “The CFPB will be putting an end to these practices across the banking system.”
Under company policy, the bank imposed a $35 fee when a client purchase was denied due to insufficient funds, the CFPB said. However, the bank went further, charging the fee multiple times based on a single faulty transaction, the agency added.
Carried out over multiple years, this practice known as double-dipping generated “substantial additional revenue” for the company, CFPB said.
In a statement to ABC News, Bank of America said it no longer charges the fee for insufficient funds.
“We voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of 2022,” a bank spokesperson said. “As a result of these industry leading changes, revenue from these fees has dropped more than 90 percent.”
In another alleged practice, Bank of America offered cash and points for customers who signed up for a credit card in an effort to compete with rival banks, the CFPB said. In turn, the company illegally withheld the bonuses from “tens of thousands of customers,” the agency added.
Bank of America, the agency said, also illegally applied for credit cards and bank accounts using customer information without their consent.
For more than a decade, the bank used customer information, such as credit reports, to complete applications under customers’ names, the agency noted.
In 2014, the CFPB ordered Bank of America to pay $727 million in redress to its victims for illegal credit card practices.
The company also paid a combined $235 million in fines last year for illegal garnishment and failed disbursement of state unemployment benefits during the COVID-19 pandemic, the agency said.
The bank, the agency said, serves 68 million individual and small-business clients and holds $1.9 trillion in domestic deposits.
Bank of America shares inched upward less than a quarter of a percentage-point in early morning trading.
(NEW YORK) — The Powerball jackpot for Wednesday’s drawing rose to $725 million after no one won on Monday.
A single winner would take home an estimated $366.2 million cash option before taxes — the ninth-largest Powerball jackpot on record.
There was no big winner on Monday, but the lucky numbers for anyone checking to see if they won a smaller prize were 2, 24, 34, 53 and 58, with 13 as the Powerball. There was a $2 million winner in Iowa and a $1 million winner in California.
The April 19 drawing was the last time the Powerball was won, with an Ohio ticket taking a grand prize worth $252.6 million. The following 34 drawings didn’t have any winners, the lottery said.
A single ticket won a $2.04 billion jackpot in November 2022, marking the largest-ever jackpot in the Powerball’s history.
Meanwhile, the Mega Millions also continues to grow. The jackpot in that game is now $480 million with a lump sum payout of about $240.7 million, before taxes. The next Mega Millions drawing is Tuesday night.
