(NEW YORK) — Subaru is recalling more than 270,000 SUVs due to a potential fire risk, with owners urged to park their cars outside until inspected and repaired.
The recall impacts certain 2019-2022 model year Subaru Ascent vehicles, the company said.
A production-related defect involving a ground bolt may increase the risk of fire while the heater is in operation, according to Subaru.
So far, two fires have been reported, though there have been no crashes or injuries due to this issue, the National Highway Traffic Safety Administration said in a statementTuesday about the recall.
The NHTSA said the recall affects 271,694 select Subaru Ascent vehicles, which is Subaru’s largest vehicle and only three-row SUV. Subaru said an estimated .6% of potentially affected vehicles will likely require repair.
Subaru said it will contact the owners of the affected vehicles within 60 days and replace the ground bolts and other components if necessary for free.
Until an inspection and repair are completed, owners are advised to park their vehicle outside, away from garages, carports or other structures, and to avoid leaving the vehicle unattended while the engine is running.
“If an owner notices or smells smoke coming from the dash or driver’s footwell area, they should immediately stop operating the vehicle and turn the ignition switch to the ‘off’ position,” Subaru said in a statement.
Customers can find out if their car is affected here by entering the vehicle’s 17-digit vehicle identification number.
(NEW YORK) — The U.S. Securities and Exchange Commission on Tuesday charged Sam Bankman-Fried, the embattled former CEO of cryptocurrency giant FTX and trading firm Alameda Research, with defrauding investors.
“FTX’s collapse highlights the very real risks that unregistered crypto asset trading platforms can pose for investors and customers alike,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement.
Bankman-Fried was arrested Monday in the Bahamas after federal prosecutors in New York filed criminal charges contained in a sealed indictment, according to the Royal Bahamas Police Force. He is expected to appear in court in the Bahamas on Tuesday.
Here’s how the news is developing. All times Eastern.
Dec 13, 5:01 PM EST
Bankman-Fried denied bail due to flight risk
Sam Bankman-Fried’s application for bail was denied on Tuesday after a judge determined he was too much of a flight risk.
He will be remanded until Feb. 8, 2023, in the Bahamas Department of Corrections.
-ABC News’ Will Gretsky
Dec 13, 3:49 PM EST
Jean-Pierre won’t say whether Biden will return donations
White House press secretary Karine Jean-Pierre would not engage when asked specifically about FTX founder Sam Bankman-Fried’s arrest, and deferred to the Hatch Act when pressed if President Joe Biden planned to return the more than $5 million in donations that were given to his 2020 campaign.
The Hatch Act prevents federal employees, like Jean-Pierre, from engaging in political campaigning.
Jean-Pierre also wouldn’t give Biden’s opinion on the arrest and collapse of FTX. However, she was more willing to talk about what could be done to put regulations in place in the crypto sphere.
“This administration has consistently urged Congress to take action to address regulatory gaps posed by digital assets and support legislative efforts to enact crypto legislation to better protect American consumers that just last month Secretary [of the Treasury Janet] Yellen, in fact, called on Congress to ‘move quickly to fill the regulatory gaps.’ That’s a quote that she said herself and the administration has identified what those gaps look like,” Jean-Pierre told reporters. “But again, we have urged this is something for Congress to do.”
U.S. Attorney Damian Williams urged politicians to return the millions of dollars donated by Bankman-Fried at a press conference earlier Tuesday.
-ABC News’ Molly Nagle
Dec 13, 2:52 PM EST
More than $8 billion in FTX customer losses, federal official says
Sam Bankman-Fried defrauded customers and investors in FTX as well as lenders to his hedge fund, Alameda Research, and he violated campaign finance laws, federal prosecutors in New York said Tuesday as they discussed the fruits of a “complex and sprawling” investigation.
The criminal charges came one month after FTX filed a $32 billion bankruptcy and U.S. Attorney Damian Williams said the investigation was ongoing and “moving very quickly.”
Williams said he authorized charges against Bankman-Fried on Wednesday of last week. A grand jury returned an indictment Friday.
There are more than $8 billion in customer losses, said Gretchen Lowe of the Commodity Futures Trading Commission.
In addition to fraud and conspiracy, the indictment alleged Bankman-Fried violated campaign finance laws by making tens of millions of dollars in campaign donations — to both Republicans and Democrats — with stolen funds. The contributions were made in the name of Alameda Research with money taken from FTX, the indictment alleged.
Williams urged political campaigns and candidates who received donations from Bankman-Fried or Alameda to work with his office to return the money.
Bankman-Fried is fighting extradition from the Bahamas to New York to face all of these charges.
“Fraud is fraud,” FBI Assistant Director Michael Driscoll said. “It does not matter the complexity of the investment scheme.”
-ABC News’ Aaron Katersky
Dec 13, 12:22 PM EST
Bankman-Fried doesn’t waive extradition in court appearance
Sam Bankman-Fried did not waive his rights to an extradition hearing as he made his first court appearance in the Bahamas on Tuesday.
Had he waived his rights, the U.S. would have been able to extradite Bankman-Fried immediately. It’s unclear now how quickly an extradition could happen.
The court proceedings were still ongoing as of noon.
-ABC News’ Will Gretsky
Dec 13, 12:09 PM EST
‘No separateness whatsoever’ between FTX and Alameda Research, FTX CEO says
FTX CEO John Ray, who is overseeing the company’s bankruptcy proceedings, told House members on Tuesday that no separation existed between the operations of FTX and Alameda Research, a crypto hedge fund also founded by Bankman-Fried.
“There were virtually no internal controls and no separateness whatsoever,” Ray said.
Bankman-Fried faces accusations that FTX used deposits to pay Alameda Research creditors, a claim reportedly made by former Alameda Research CEO Caroline Ellison during a call in early November.
In an interview last week, Bankman-Fried told ABC News’ George Stephanopoulos that he was not aware that was true but said Alameda had a large position open on FTX that was “overcollateralized a year ago.”
Ray told House members that FTX transferred several billion dollars in customer funds to Alameda Research.
When asked by Rep. Patrick McHenry, R-N.C., if there was a distinction between FTX and Alameda Research, Ray said, “Absolutely not. There’s no distinction whatsoever.”
“The owners of the company could run free reign,” Ray added, noting that Bankman-Fried owned 90% of Alameda Research.
Dec 13, 11:38 AM EST
Bankman-Fried’s lawyer offers first comment
Sam Bankman-Fried’s lawyer, Mark S. Cohen, offered his first comments on the arrest of his client Tuesday morning.
“Mr. Bankman-Fried is reviewing the charges with his legal team and considering all of his legal options,” Cohen said in a statement.
Bankman-Fried was scheduled to make his first court appearance in the Bahamas Tuesday.
Dec 13, 11:38 AM EST
FTX CEO John Ray blasts ‘utter lack of record keeping’
John Ray, the new CEO of bankrupt crypto exchange FTX, who oversaw the dissolution of Enron, testified before House members on Tuesday that FTX lacked corporate controls to an extent he had never witnessed.
“I’ve never seen an utter lack of record keeping,” Ray said. “Absolutely no internal controls.”
Earlier this year, FTX was valued at $32 billion. Within weeks of a customer sell-off totaling billions of dollars, the company declared bankruptcy.
Company officials communicated invoice and expense reports over Slack, an internal messaging service, Ray said.
He said FTX employees used the accounting software QuickBooks, which is popular among small businesses.
“Nothing against QuickBooks — it’s a very nice tool,” Ray said. “Not for a multibillion-dollar company.”
Dec 13, 9:57 AM EST
Eight-count indictment unsealed against Bankman-Fried
The eight-count indictment from the Southern District of New York charges Sam Bankman-Fried with conspiracy and fraud.
“Bankman-Fried, along with others, engaged in a scheme to defraud customers of by misappropriating those customers’ deposits, and using those deposits to pay expenses and debts of Alameda Research,” the indictment said.
The indictment also said Bankman-Fried provided false and misleading information to lenders about the true financial condition of Alameda, his privately held crypto hedge fund.
There’s a final count of conspiracy to violate campaign finance laws through political donations that concealed the source and exceeded the permissible amount.
“In or about 2022, Samuel Bankman-Fried, the defendant, and one or more other conspirators agreed to and did make corporate contributes to candidates and committees in the Southern District of New York that were reported in the name of another person,” the indictment said.
Federal prosecutors were expected to elaborate on the charges at an afternoon news conference in Manhattan.
Dec 13, 8:51 AM EST
‘It’s serious’: Former prosecutor says public statements could hurt FTX founder
While the full criminal charges have yet to be released, the Securities and Exchange Commission released it’s complaint against Sam Bankman-Fried early Tuesday.
“It’s serious,” said Brendan Quigley, a former federal securities fraud prosecutor in New York who is now a partner at Baker Botta. “Assuming they can show promises were made to counterparties, investors or clients about where money was going to go, and that it didn’t go there, that’s a serious offense, probably wire fraud at least.”
Bankman-Fried’s public statements could come back to haunt him, including an interview with ABC News’ George Stephanopoulos.
“The big thing will be if SDNY can shows conflicts either between his public statements or between his current public statement and something that was said or promised to investors,” Quigley said.
Dec 13, 8:32 AM EST
Bankman-Fried built ‘house of cards’: SEC
Though cryptocurrency can seem a mystical world, the civil complaint from the Securities and Exchange Commission reads like a standard case of securities fraud, accusing Sam Bankman-Fried of building a “house of cards.”
Bankman-Fried raised $1.8 billion for FTX while “orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire,” the complaint said.
Customers sent billions of dollars to FTX believing their assets were secure but, from the start, the SEC said Bankman-Fried “improperly diverted customer assets to his privately-held crypto hedge fund, Alameda Research LLC, and then used those customer funds to make undisclosed venture investments, lavish real estate purchases, and large political donations.”
Federal prosecutors in New York said they would unseal related criminal charges later Tuesday.
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” said SEC Chair Gary Gensler.
The civil complaint seeks penalties and fines, but also to prohibit Bankman-Fried from “participating in the offer or sale of securities including crypto asset securities” in the future, a move that would complete his fall as the poster child for the emerging cryptocurrency marketplace.
Dec 13, 8:32 AM EST
Bankman-Fried refused request for Senate testimony
While Sam Bankman-Fried was set to give testimony to a House committee Tuesday, later canceled after his arrest late Monday, he continues to reject requests from the Senate for a hearing of its own.
In a joint statement Monday afternoon, prior to his arrest, the top Democrat and Republican on the Senate Banking Committee called Bankman-Fried’s refusal to appear “an unprecedented abdication of responsibility.”
“Virtually every CEO, financial regulator, and administration official for Republicans and Democrats has agreed to testify in front of both the Senate and House when called upon — that is how congressional oversight works,” Sens. Sherrod Brown, D-Ohio, and Pat Toomey, R-Pa., said in a statement. “We have offered Sam Bankman-Fried two different dates for providing testimony before the Senate Banking, Housing, and Urban Affairs Committee, and are willing to accommodate virtual testimony. He has declined in an unprecedented abdication of accountability.”
The committee will continue efforting an appearance from Bankman-Fried because he is “unwilling to accept service of a subpoena.”
Dec 13, 8:32 AM EST
What to know about former FTX CEO Sam Bankman-Fried?
Sam Bankman-Fried, the 30-year-old founder of FTX, quickly ascended to the top of the cryptocurrency sector, garnering goodwill in recent years as a philanthropist and leading proponent of industry regulation.
The cover of Fortune Magazine in August asked readers whether Bankman-Fried, known by some as “SBF,” was “the next Warren Buffett.”
After the sudden bankruptcy of FTX, however, he faced withering questions over the mismanagement of billions in customer funds.
Meanwhile, his net worth plummeted from $16 billion to $0 in less than a week, according to an estimate from Bloomberg.
(NEW YORK) — The U.S. Securities and Exchange Commission on Tuesday charged Sam Bankman-Fried, the embattled former CEO of cryptocurrency giant FTX and trading firm Alameda Research, with defrauding investors.
“FTX’s collapse highlights the very real risks that unregistered crypto asset trading platforms can pose for investors and customers alike,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement.
Bankman-Fried was arrested Monday in the Bahamas after federal prosecutors in New York filed criminal charges contained in a sealed indictment, according to the Royal Bahamas Police Force. He is expected to appear in court in the Bahamas on Tuesday.
Here’s how the news is developing. All times Eastern:
Dec 13, 8:51 AM EST
‘It’s serious’: Former prosecutor says public statements could hurt FTX founder
While the full criminal charges have yet to be released, the Securities and Exchange Commission released it’s complaint against Sam Bankman-Fried early Tuesday.
“It’s serious,” said Brendan Quigley, a former federal securities fraud prosecutor in New York who is now a partner at Baker Botta. “Assuming they can show promises were made to counterparties, investors or clients about where money was going to go, and that it didn’t go there, that’s a serious offense, probably wire fraud at least.”
Bankman-Fried’s public statements could come back to haunt him, including an interview with ABC News’ George Stephanopoulos.
“The big thing will be if SDNY can shows conflicts either between his public statements or between his current public statement and something that was said or promised to investors,” Quigley said.
Dec 13, 8:32 AM EST
Bankman-Fried built ‘house of cards’: SEC
Though cryptocurrency can seem a mystical world, the civil complaint from the Securities and Exchange Commission reads like a standard case of securities fraud, accusing Sam Bankman-Fried of building a “house of cards.”
Bankman-Fried raised $1.8 billion for FTX while “orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire,” the complaint said.
Customers sent billions of dollars to FTX believing their assets were secure but, from the start, the SEC said Bankman-Fried “improperly diverted customer assets to his privately-held crypto hedge fund, Alameda Research LLC, and then used those customer funds to make undisclosed venture investments, lavish real estate purchases, and large political donations.”
Federal prosecutors in New York said they would unseal related criminal charges later Tuesday.
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” said SEC Chair Gary Gensler.
The civil complaint seeks penalties and fines, but also to prohibit Bankman-Fried from “participating in the offer or sale of securities including crypto asset securities” in the future, a move that would complete his fall as the poster child for the emerging cryptocurrency marketplace.
Dec 13, 8:32 AM EST
Bankman-Fried refused request for Senate testimony
While Sam Bankman-Fried was set to give testimony to a House committee Tuesday, later canceled after his arrest late Monday, he continues to reject requests from the Senate for a hearing of its own.
In a joint statement Monday afternoon, prior to his arrest, the top Democrat and Republican on the Senate Banking Committee called Bankman-Fried’s refusal to appear “an unprecedented abdication of responsibility.”
“Virtually every CEO, financial regulator, and administration official for Republicans and Democrats has agreed to testify in front of both the Senate and House when called upon — that is how congressional oversight works,” Sens. Sherrod Brown, D-Ohio, and Pat Toomey, R-Pa., said in a statement. “We have offered Sam Bankman-Fried two different dates for providing testimony before the Senate Banking, Housing, and Urban Affairs Committee, and are willing to accommodate virtual testimony. He has declined in an unprecedented abdication of accountability.”
The committee will continue efforting an appearance from Bankman-Fried because he is “unwilling to accept service of a subpoena.”
Dec 13, 8:32 AM EST
What to know about former FTX CEO Sam Bankman-Fried?
Sam Bankman-Fried, the 30-year-old founder of FTX, quickly ascended to the top of the cryptocurrency sector, garnering goodwill in recent years as a philanthropist and leading proponent of industry regulation.
The cover of Fortune Magazine in August asked readers whether Bankman-Fried, known by some as “SBF,” was “the next Warren Buffett.”
After the sudden bankruptcy of FTX, however, he faced withering questions over the mismanagement of billions in customer funds.
Meanwhile, his net worth plummeted from $16 billion to $0 in less than a week, according to an estimate from Bloomberg.
(WASHINGTON) — Consumer prices rose 7.1% in November, continuing a months-long decline from a 40-year record reached over the summer.
Economists had predicted a CPI increase of 7.2%.
Monthly inflation also fell significantly. Prices rose 0.1% in November, cooling down from a 0.4% increase in October.
The top contributor to the monthly price increase came from shelter costs, which rose 0.6% in November. Food prices also jumped over the month, rising 0.5%.
But prices fell for a host of goods, including gasoline, used cars and trucks and medical services.
The decline in inflation follows a string of aggressive rate hikes from the Federal Reserve aimed at bringing prices down to normal levels.
The inflation data arrives a day before the Fed is expected to impose another borrowing cost increase. Economists project the Fed will raise rates by 0.5% on Wednesday, a slowdown from three consecutive jumbo-sized rate hikes of 0.75% but still a significant intensification of its fight against price increases.
By raising borrowing costs, the Fed has tried to slash inflation by cooling the economy and choking off demand. The approach, however, risks tipping the U.S. into a recession and putting millions out of work.
So far, however, the labor market has proven resilient, bolstering the hopes of policymakers seeking to avert a shutdown but also raising fears of a prolonged bout of inflation driven by wage gains.
Hiring last month exceeded expectations and wages grew a blistering 5.1% compared to a year earlier, offering welcome relief for workers strained by price hikes.
But rising wages often push companies to hike prices to make up for the added costs, which can worsen inflation and make it more difficult to reverse.
Despite the robust job market, growing evidence suggests the Fed’s rate hikes have put the brakes on some economic activity.
Home sales fell for the ninth month in a row in October, the most recent month on record. Sales of existing homes, such as single-family homes and condominiums, were down about 28% from a year earlier.
Meanwhile, the personal savings rate fell to 2.3% last month, the lowest rate in nearly two decades, according to data from the Commerce Department. The failure to stash extra funds suggests that savings stockpiled during the pandemic have strained under the weight of high prices.
(NEW YORK) — United Airlines said Tuesday it planned to purchase 100 Boeing 787 Dreamliners, with options to buy an additional 100.
The airline said the order for up to 200 aircraft amounted to the “the largest widebody order by a U.S. carrier in commercial aviation history.”
United CEO Scott Kirby said in a statement that the airline had exited the COVID-19 pandemic as “the world’s leading global airline.”
“This order further solidifies our lead and creates new opportunities for our customers, employees and shareholders by accelerating our plan to connect more people to more places around the globe and deliver the best experience in the sky,” he said.
The order for 787 aircraft comes a few months after the Federal Aviation Administration’s August announcement that Boeing could resume Dreamliner deliveries. Boeing had been forced to halt 787 deliveries in May 2021 after manufacturing quality issues and structural issues were discovered. The FAA first raised 787 concerns in September 2020, when the agency said it was investigating manufacturing flaws.
Boeing shares rose about 2% in pre-market trading on Tuesday, with United shares trading down by about 1%.
The airline also said it had exercised an option to purchase 44 Boeing 737 MAX aircraft for delivery before 2026, along with 56 more MAX aircraft for delivery before 2028.
United said it now plans to take delivery of a total of about 700 new narrow and widebody planes by the end of 2032, “including an average of more than two every week in 2023 and more than three every week in 2024.”
The 100 widebody aircraft announced on Tuesday are expected to be delivered between 2024 and 2032, according to the airline. The planes will replace United’s fleet of 767 planes and many of its 777 aircraft. United has said it plans to retire all of its 767 aircraft by 2030.
Retiring the ageing planes will give United an environmentally friendly boost, the airline said, with per-seat carbon emissions expected to drop by about 25%.
Gerry Laderman, United’s EVP and CFO, said, “This order solves for our current widebody replacement needs in a more fuel-efficient and cost-efficient way, while also giving our customers a best-in-class experience.”
United said in October that it expected its fourth-quarter adjusted margin to top the same 2019 quarter for the first time since the pandemic began.
“Earnings recovery out of the pandemic has kept pace with, if not led, peers and messaging has been very confident,” analysts at Morgan Stanley said in a note to clients ahead of the announcement on Tuesday morning.
The number of travelers passing through U.S. airports has almost returned to pre-pandemic levels, according to daily checkpoint data from the Transportation Security Administration.
(NEW YORK) — Elon Musk elicited backlash from liberal leaders and cheers from some conservative ones in response to a viral tweet on Sunday that called for Anthony Fauci, the nation’s top expert on infectious disease, to be prosecuted.
The polarizing tweet, which garnered more than a million “likes,” arrived about six weeks after Musk told advertisers that he sought to make Twitter “a common digital town square, where a wide range of beliefs can be debated in a healthy manner.”
Musk, a longtime critic of COVID-19 lockdowns, who has voiced a series of conservative opinions since acquiring Twitter in October, tweeted: “My pronouns are Prosecute/Fauci.”
The message to Musk’s 120 million followers appeared to attack Fauci while mocking members of the LGBTQ community and allies who sometimes state their pronouns to communicate their gender identity.
Fauci, the chief medical advisor to President Joe Biden, is the director of the National Institute of Allergy and Infectious Diseases. He will step down from his current roles later this month.
Many liberal lawmakers and commentators condemned Musk’s tweet, defending Fauci and expressing support for LGBTQ people.
“I’m a big fan of Dr. Fauci and how he’s calmly guided our country through crisis,” Sen. Amy Klobuchar, D-Minn., said. “Courting vaccine deniers doesn’t seem like a smart business strategy, but the issue is this: could you just leave a good man alone in your seemingly endless quest for attention?”
Astronaut Scott Kelly, the twin brother of Sen. Mark Kelly, D-Ariz, tweeted to his 5.3 million followers: “Elon, please don’t mock and promote hate toward already marginalized and at-risk-of-violence members of the #LGBTQ+ community.”
“Furthermore, Dr Fauci is a dedicated public servant whose sole motivation was saving lives,” Kelly added.
Some far-right conservative leaders, by contrast, praised the message from Musk.
Rep. Marjorie Taylor Green, R-Ga., whom Musk reinstated on Twitter after a previous permanent ban over the spread of COVID-19 misinformation, applauded the attack on Fauci.
“I affirm your pronouns Elon,” Greene said.
Robert F. Kennedy Jr., a prominent anti-vaccine activist, celebrated Musk for “looking beyond the propaganda.”
The tweet targeting Fauci came hours after Musk shared a meme that mocked Fauci over his handling of the COVID-19 pandemic. The comments from Musk are the latest in a series of conservative Twitter posts, including an endorsement last month for Republican candidates in the midterm elections.
Since he acquired Twitter in October, Musk has made some changes long sought by conservatives. He reinstated some formerly suspended accounts such as those belonging to Republican leaders like former President Donald Trump and Greene, and he stopped enforcement of a policy prohibiting the spread of COVID-19 misinformation.
Musk also revamped Twitter’s subscription service, Twitter Blue, allowing users to access verification if they pay a monthly fee of $8. The service was suspended after it gave rise to a flood of fake accounts impersonating public figures and brands but has since been reinstated.
A slew of major companies, including General Motors and Pfizer, have announced a pause of advertising on Twitter. Some of the companies have said they need time to evaluate their advertising presence on Twitter as the company pursues a new direction.
Musk, who said he overpaid for the platform at the purchasing price of $44 billion, faces pressure to boost the company’s revenue. Last month, he said that the company is losing $4 million each day.
On the same day as the tweet targeting Fauci, Musk endured an extended chorus of loud boos after being brought on stage at a comedy performance by Dave Chappelle at the Chase Arena in San Francisco.
A video posted on Twitter shows crowd members booing Musk while he stands on stage alongside Chappelle.
“Ladies and gentlemen, make some noise for the richest man in the world,” Chappelle told the audience.
After the boos, Musk told Chappelle: “You weren’t expecting this, were you?”
(HAMPTON, Va.) — Incoming freshmen at Virginia’s Hampton University will be the recipients of a large-scale school donation through the digital investing platform Stackwell Capital aimed at decreasing what research has shown is a yawning racial wealth gap.
According to Federal Reserve data, white households hold on average eight times more wealth than Black households, with that figure more than doubling for millennials and members of Gen Z.
Stackwell Capital — with that discrepancy in mind, its leaders and the university says — will be helping to provide each of the roughly 860 students in the class of 2026 at Hampton, a historically Black university, with a funded investment account coupled with a free financial literacy course available for all students and their families.
The first-year students will be able to start signing up for their accounts on Dec. 19 and, once they sign up using their Hampton accounts, at least $25 seeded with funds from a donation from the school will be loaded on within a few days.
“The biggest contributing factor to a person’s ability to build wealth is in fact time,” Stackwell’s co-founder and CEO Trevor Rozier-Byrd told ABC News. “That’s why we’re starting with freshmen in college because if they start now, the impacts for them, their families and generations to come will be massive.”
Rozier-Byrd, an asset management professional, said he believes the racial wealth gap is the greatest modern social justice issue. He said he is bringing his years of experience in financial markets to communities that have historically had the most acute racial income gaps.
Therefore, he said, some of Stackwell’s latest initiatives include providing investment education to Black communities across the Washington metropolitan region — where white households hold 81 times more wealth than Black households, according to the DC Fiscal Policy Institute — in part by teaming with professional basketball organizations like the Washington Wizards.
Last month, Stackwell also partnered with billionaire Robert Smith’s Student Freedom Initiative and Prudential Financial on a national investment program for historically Black colleges and universities (HBCUs) and minority-serving institutions.
“Developing relationships with HBCUs is important for us,” Rozier-Byrd said, as is “promoting the sense of confidence and empowerment to believe that this is something that they [HBCU students] can do and something that they can be successful with the right tools and support around them.”
Hampton freshman Joshua Elias Hoover, 18, said he started investing when he was 13. Hoover told ABC News he was excited for the Stackwell program because he and his peers won’t have to stress quite as much over budgetary concerns.
“I’m so happy we’re doing it because a lot of students need this,” said Hoover, a journalism major and minister in training from Louisiana. “It’s going to save us a lot of worry when we want to get some DoorDash or something like that and we’re scared because we’re trying to spend our own money that we’ve built over time. But with this set in stone, we have money we can actually budget and think thoroughly and analyze the importance of saving,” he added.
Hampton University President Darrell K. Williams is an alum and former “Mister Freshman.” He said he regrets not investing when he was his students’ ages but calls Monday’s announcement a chance for the Hampton Pirates to “get ahead of the game.”
“Start now,” he told ABC News. “The earlier you start, the smaller amounts of money you need to invest to achieve phenomenal results over time — don’t wait like I did, until two or three years after I graduated from college.”
Rozier-Byrd learned from his experiences too, and is paying it forward.
“Part of the way that I was able to pay back my [law school] student loans was by investing in the market,” he said. “There are a myriad of ways in which they [students] can address the financial challenges of college affordability and their ability to go to school, get a great education and pursue the careers that are aligned with their interests and their dreams.”
Williams lauded Stackwell’s involvement, saying it is elevating the student experience at Hampton — an HBCU widely considered among the “Black Ivy League” — not only for the investment accounts but also for the financial wellness of alums and their families.
“What we really hope is that one day, through this financial literacy program, some of our graduates will go out and become among the wealthiest people in America,” Williams said. “They will sow those financial seeds and the other legacy seeds back into the students who will be at Hampton 20 years from now. So this is not just about today. We understand how this will transform Hampton University, the communities that all of these students will go back to and eventually the world.”
A free, 10-hour virtual financial literacy course from the Society for Financial Education and Professional Development is already available at Hampton that the university is placing “phenomenal emphasis” on, Williams said.
Rozier-Byrd said Stackwell adds to that instruction.
“We believe that this can be a powerful tool to helping people meet their long-term financial goals and objectives, and we want to make sure that we’re continuing to invest in the future advancement of students on Hampton’s campus,” he said.
(LOS ANGELES) — Like many industries, graduate student workers at colleges and universities around the country are demanding better pay and living conditions from their employers as inflation and high costs, especially rent, drive them to the breaking point.
Graduate student workers throughout the industry are saying their pay is unlivable, failing to meet or catch up with inflation and soaring costs.
Leading into the pandemic, workers in academia, including graduate students and student researchers, felt their pay and benefits from colleges and universities did not match the cost of living, Rachael Kuintzle, a PhD candidate at CalTech University and co-founder of the Graduate Student Action Network, told ABC News.
This is an issue that was exacerbated by skyrocketing inflation and housing costs that have taken a “quantum leap,” Nelson Lichtenstein, the director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara, told ABC News.
The most common salary for student workers at the University of California is $24,000 per year, according to Neal Sweeny. Sweeny is the president of UAW 5810, a union representing over 11,000 Postdoctoral Scholars and Academic Researchers at the University of California and Lawrence Berkeley National Laboratory.
Sweeny said pay was a crisis even before inflation hit. The majority of student workers pay more than 30% of their salary toward rent. He said universities are not addressing this mismatch between pay and costs with enough urgency.
Graduate student workers, especially those living in metropolitan cities, are heavily impacted by inflation, with rents even outpacing inflation, Kuintzle said.
There is also less assurance that graduate students will be able to find tenure-track faculty positions or research positions upon completion of their degree. Pay is not as good as it used to be and there are not that many jobs available, Kuintzle said.
This is also echoed from labor experts who work in academia.
With institutions tight on money, jobs for graduate students have diminished, there are less positions available and universities have been reducing the number of regular tenure-track faculty, Lichtenstein said.
A few years ago, Lichtenstein’s department recognized that there was a big problem with getting jobs for graduate students decided they would cut back on the number of graduate students they admit.
“Well, the Dean came in and said, ‘You can’t do that we need the grad students to staff these big courses.’ Even though the chances of getting good jobs had diminished, nevertheless, we had to keep recruiting grad students, and then they came in to teach these classes,” Lichtenstein said.
Another labor expert agreed that graduate students’ incomes are not a livable wage, facing debt and a world worse off than their parents’. This is what is pushing so many workers toward unions, Kate Bronfenbrenner, a professor at the Cornell University School of Industrial and Labor Relations, told ABC News.
Organizing in higher education is new and universities are not used to bargaining with graduate students and they are not adapting to students’ costs of living, Bronfenbrenner said.
Withth Graduate students and student workers doing the majority of teaching and research at universities, but their pay is not reflecting that Bronfenbrenner said.
Bronfenbrenner also said universities are reacting to labor organizing that way any traditional private sector anti-union corporation does, by “playing hardball.”
The conditions are leaving many wondering why they put up with these working conditions.
“Folks are asking the question ‘why should we tolerate this, not only the wages but the treatment that we endure, the work-life-balance and the abuse that many students endure to get their PhDs. It’s not worth it anymore,” Kuintzle said.
Social media has played a role in the recent surge in worker organization, even evident in unionization of Starbucks workers, experts told ABC News.
Young people are very good at organizing online and employers can no longer keep their wages a secret. Workers across industries are sharing sessions form their successes at other schools more easily using social media, Bronfenbrenner said.
Kuintzle founded the Graduate Student Action Network, a group of graduate students and workers at colleges and universities around the country that was formed in the fallout of Roe v. Wade being overturned by the U.S. Supreme Court in June that ended federal protections for abortion rights in the U.S.
Since then, the group has grown to include graduate students from over 60 universities across 34 states and it has become a forum where they discuss common issues, labor organizing and compare what pay and benefits their universities provide. The transfer of information has allowed students able to make changes at their schools give advice to others, according to Kuintzle.
There is also a surge in graduate student and academic workers organizing, with students willing to take more risks, Kuintzle said.
Kuintzle said graduate students at several schools are working to unionize or recently voted to unionize.
Lichtenstein said one solution could be for universities to get more funding from the government, something he sees as doable in the U.S.
This is also an issue that is disproportionately impacting workers from low-income backgrounds or those who do not have a spouse or family members supporting them financially.
Bronfenbrenner warned that the cost of universities not adequately responding will be the quality of education at universities going down. This will also hit women, working class and low income workers the most.
Kuintzle warned that this could be an even bigger issue moving forward if universities and colleges are unable to meet the needs and demands of their workers. Many are even leaving academia all together to work in their industries.
“There are Caltech students who are actively seeking to transfer schools because, among our peer institutions, Caltech has the lowest stipend by far. And I know that is definitely going to start playing a larger role in what programs students are accepting offers at,” Kuintzle said.
(WASHINGTON) — Former FTX CEO Sam Bankman-Fried will appear before Congress to testify on the collapse of the giant, $32-billion cryptocurrency exchange.
The House Financial Services Committee said Bankman-Fried will testify on Tuesday, Dec. 13 in a hearing titled “Investigating the Collapse of FTX, Part 1.”
John Ray, FTX’s new CEO guiding the company through bankruptcy proceedings, will also testify.
Bankman-Fried, in a series of tweets, said he’s “willing to testify” after initially resisting the committee’s request.
“I still do not have access to much of my data — professional or personal. So there is a limit to what I will be able to say, and I won’t be as helpful as I’d like,” Bankman-Fried wrote. “But as the committee still thinks it would be useful, I am willing to testify on the 13th.”
Bankman-Fried said he will try to “shed light” on issues surrounding FTX’s U.S. solvency, what he thinks led to the crash and his “own failings.”
“I had thought of myself as a model CEO, who wouldn’t become lazy or disconnected,” Bankman-Fried tweeted. “Which made it that much more destructive when I did. I’m sorry. Hopefully people can learn from the difference between who I was and who I could have been.”
Committee chairwoman Maxine Waters, D-Calif., amid Bankman-Fried’s initial resistance to appear before the committee, tweeted to him: “As you know, the collapse of FTX has harmed over one million people. Your testimony would not only be meaningful to Members of Congress, but is also critical to the American people.”
Lawmakers from both sides of the aisle have said they want to hear from Bankman-Fried after the downfall of his two companies — FTX and the hedge fund Alameda Research — and the mismanagement of customer funds.
Rep. Patrick McHenry, R-N.C., who will chair the committee in the next Congress, said it’s “essential that we hold bad actors accountable so responsible players can harness technology to build a more inclusive financial system.”
Democrat Sherrod Brown, the chair of the Senate Banking Committee, has requested that Bankman-Fried appear on Dec. 14 to address “significant unanswered questions” about how clients were treated during the companies’ collapse.
It’s unclear if Bankman-Fried will appear before the committee. Brown, in cooperation with Republican ranking member Sen. Pat Toomey, said they will issue a subpoena to compel him to appear on Dec. 14 if he didn’t voluntarily participate.
Brown told Bankman-Fried, “you must answer for the failure of both entities that was caused, at least in part, by the clear misuse of client funds and wiped out billions of dollars owed to over a million creditors.”
Democratic Sens. Elizabeth Warren and Sheldon Whitehouse have called for a criminal investigation from the Department of Justice into Bankman-Fried over “the disturbing allegations of fraud and illicit behavior.”
Bankman-Fried, in an interview with ABC News’ George Stephanopoulos, denied that he knew “that there was any improper use of customer funds.”
“I should have been on top of this, and I feel really, really bad and regretful that I wasn’t. A lot of people got hurt. And that’s on me,” he said.
-ABC News’ Allison Pecorin and Lauren Peller contributed to this report.
(NEW YORK) — The trustee for the liquidation of Bernie Madoff’s defunct and fraudulent investment firm announced on Friday a new distribution of recovered funds to swindled customers.
This is the 14th distribution to victims of Madoff’s Ponzi scheme and brings the total amount restored to more than $14 billion.
The trustee has been pursuing stolen customer funds since Madoff pleaded guilty in 2009 and signaled there would be additional recoveries in 2023.
“We are proud to continue our quest to recover additional funds and return them to defrauded claimants,” the trustee, Irving Picard, said in a statement.
When combined with the prior distributions, the fourteenth distribution will equal about 70% of each customer’s allowed claim amount, unless that claim has been fully satisfied. The aggregate amount distributed to eligible customers will total more than $14.36 billion. This recovery far exceeds any prior restitution effort related to Ponzi schemes both in terms of dollars and percentage of stolen funds recovered.
Madoff died of natural causes in April 2021 while being housed at the Federal Medical Center in Butner, North Carolina. He was 82.
