States sue SEC over brokerage rules
Seven states and the District of Columbia have sued the Securities and Exchange Commission, saying the regulatory agency is putting investors in jeopardy by relaxing rules designed to ensure that securities brokers keep the interests of their customers ahead of their own.
The lawsuit filed Monday in federal court in New York City asked a judge to order the agency to scrap a new rule that weakens protections for consumers because it violates the intent of Congress and was approved in an arbitrary and unlawful manner.
The SEC could not be reached for comment.
The states said they are harmed because bad investment advice leaves consumers with less money to spend and that therefore they collect less in taxes.
New York Attorney General Letitia James said the SEC was failing to protect investors, favoring “Wall Street over Main Street.”
James said the SEC was failing to adopt the investor-protections passed by Congress in 2010 when it used the Dodd-Frank financial overhaul law to tighten regulatory loopholes revealed by the 2008 financial crisis. “The SEC is now promulgating a rule that fails to address the confusion felt by consumers and fails to remedy the conflicting advice that motivated Congress to act in the first place,” she said in a statement.
Other state plaintiffs include California, Connecticut, Delaware, Maine, New Mexico and Oregon.
— Associated Press
Uber cuts staff as struggles continue
Uber Technologies is dismissing 435 employees, the second major staff cut this summer, as the company faces mounting losses and a declining stock price.
The eliminated jobs are in the product and engineering divisions, representing about 8 percent of those groups. Uber said it was firing about 400 marketing employees, about a third of that department, in July.
Four months after Uber went public, the stock is trading about 25 percent below the initial public offering price. Last month, the ride-hailing company reported its largest-ever quarterly loss of $5.24 billion. This week, California lawmakers are expected to vote on a labor bill that could dramatically alter the gig economy and foist new costs onto Uber.
Uber instituted a hiring freeze of technical employees in the United States and Canada last month. A spokesman now says the freeze is over following the staff cuts. The news was first reported Tuesday by TechCrunch.
“We are not doing this for Wall Street,” Dara Khosrowshahi, Uber’s chief executive, wrote Tuesday in an email to staff. “We are doing this for Uber. It’s critical we get our edge back and continually push ourselves to do better.”
— Bloomberg News
A U.S. appeals court on Tuesday barred PennEast Pipeline from using a federal law to seize properties controlled by the state of New Jersey to build a proposed $1 billion natural gas pipeline. The U.S. Court of Appeals for the 3rd Circuit said in its decision that the U.S. Natural Gas Act does not allow companies to condemn state-controlled land in federal court because states enjoy sovereign immunity from such actions under the U.S. Constitution.
JPMorgan Chase lowered its outlook for 2019 net interest income by about $500 million on Tuesday, following similar moves by rival big banks Wells Fargo and Citigroup. That is a lower forecast for full-year net interest income than the bank gave in mid-July, and it shows that banks with large pools of customer deposits are struggling to make as much money amid lower interest rates.
China will allow the import of soymeal livestock feed from Argentina for the first time under a deal announced by Buenos Aires on Tuesday, an agreement that will link the world's top exporter of the feed with the top global consumer. The U.S.-China trade war has strengthened Argentina's hand, prompting China to expand its soymeal import options.
8:30 a.m.: Labor Department releases the Producer Price Index for August.
10 a.m.: Commerce Department releases wholesale trade inventories for July.
— From news services