Thursday, June 4, 2009
Microsoft Threatens To Move Jobs Overseas
Microsoft chief executive Steven Ballmer said Microsoft would move some employees offshore if Congress enacts President Obama's plans to impose higher taxes on U.S. companies' foreign profits. "It makes U.S. jobs more expensive," Ballmer said. "We're better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S."
U.S. tax rules now let companies defer paying corporate rates as high as 35 percent on most types of foreign profits as long as that money remains invested overseas. Last month Obama proposed outlawing or restricting about $190 billion in tax breaks for offshore companies over the next decade. Such business groups as the National Foreign Trade Council, the U.S. Chamber of Commerce and the Business Roundtable have denounced the proposed overhaul.
Ballmer is one of several software company executives resisting the tax proposals in meetings with White House officials.
-- Bloomberg NewsREGULATORS
Guidance Urged For New SEC Rules
Actions taken by the Securities and Exchange Commission at the height of the market turmoil last year appear to have reduced abusive short-selling, but the agency should provide clearer guidance to the brokerage industry for applying the rules, congressional auditors concluded in a report.
The report by the Government Accountability Office, the investigative arm of Congress, found that without "timely and clear" guidance, the SEC cannot ensure that the rules are consistently applied and unintended consequences are avoided.
Short-sellers bet against a stock. The practice, which is legal and widely used on Wall Street, involves borrowing shares, selling them, and then buying them back when the stock falls and returning them to the lender. The short-seller pockets the difference in price.
The SEC in September adopted emergency measures to curtail an abusive form of short-selling. The GAO report comes as the SEC is considering several new approaches to reining in rushes of regular short-selling that also can cause dramatic plunges in stock prices.
Separately, SEC Chairman Mary L. Schapiro announced the establishment of a new advisory committee to gather views from parties outside the traditional power corridors of Wall Street and Washington. SEC Commissioner Luis A. Aguilar will be the "primary sponsor" of the new Investor Advisory Committee, which will advise the agency on regulatory issues, financial disclosure, trading strategies and fees.
-- Associated PressEDUCATION
Sallie Mae Expects Loan Losses to Rise
Sallie Mae chief executive Albert Lord said he expects loan charge-offs at the student lending company to peak in 2009 and remain high next year. Charge-offs are loans written off as not being repaid. Like other lenders, Sallie Mae has seen an increase in loan losses as the economy has worsened and as more consumers are unable to repay debt. Lord noted that most of the loan losses came from a group of non-traditional loans that were originated between 2003 and 2007.
-- Associated Press
Guilty Plea In Tax Fraud Case
Former BDO Seidman vice chairman Charles Bee pleaded guilty to federal charges that he helped clients evade more than $200 million in taxes through illegal tax shelters.
Bee's plea in Manhattan federal court follows that of two other BDO Seidman officials. Bee, 63, agreed to forfeit $20 million and he faces a maximum of 15 years in prison on three fraud counts, prosecutors said.
Acting U.S. Attorney Lev Dassin in New York said Bee was a leader in the firm's "Tax Solutions Group" from 1998 to 2000, selling tax shelters to wealthy clients. Working with the law firm Jenkens & Gilchrist, the group sold illegal shelters, Dassin said.
-- Bloomberg News