Cyber-Attack on U.S. Law Firms Nets Big Illicit Gains for Chinese Hackers; Alexa Gave Amazon a Very Fiscal-Merry Christmas; Fred’s Whips Out the Poison

All hacked up…

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Some of New York’s finest, most prestigious law firms fell victim to a few Chinese hackers when they hacked into the firms’ computer systems and stole valuable information regarding mergers and acquisitions. That information was then used for insider trading which netted the cyber-attackers over $4 million in illegal profits. The attacks happened between April of 2014 – 2015 when the hackers installed malware on the computer networks of the law firms and then downloaded the information from email accounts. U.S. Attorney for the Southern District of New York, Preet Bharara said, “This case of cyber meets securities fraud should serve as a wake-up call for law firms around the world: you are and will be targets of cyber hacking, because you have information valuable to would-be criminals.” The 13 count indictment details how the suspects purchased shares from certain companies involved in mergers and acquisitions and then sold those shares for a massive profit once those mergers and acquisitions were announced.  In the meantime, the SEC has filed its own parallel civil suit against the alleged perps and has asked to have their assets frozen lest they try and cash out on their ill-gotten gains.

It’s all about Alexa…

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The results are in. Well, some of them, anyway. In this case, Amazon is claiming to be the big merry winner (cue the surprised facial expressions) of the retail game we call Christmas – and Hanukah too, of course. Amazon said it shipped more than one billion items through Prime and fulfillment services and, apparently, four of Amazon’s very own devices were the biggest sellers on the e-commerce giant’s site. Go figure. Those top sellers include the Echo Dot Smart Speaker, Amazon’s Fire TV Stick Media Streamer, the Fire Tablet and the regular (plain-old?) standard Echo Speaker.  Just don’t bother asking Amazon for specific sales figures. The company has a nasty habit of not divulging such useful information. Incidentally, the Fire Tablet and Fire TV Stick were also hot sellers last year. With the exception of the Amazon Echo Smart Speakers, the other three cost $5o or less and at those prices it’s easy to see why consumers scooped them up. In fact, sales for Echo devices were nine times higher than they were last year. All the devices, by the way, come with the Alexa voice assistant and Amazon saw a record number of orders for devices that come with Alexa. Only problem was those Echo speakers went too fast. Amazon sold out of them by the middle of December.

Going for the poison…

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Last week Fred’s was on top of the world, after agreeing to buy 865 RiteAid stores for $1 billion. The deal was a win-win. RiteAid needed to dump those stores in order to get regulatory approval to merge with Walgreens Boots Alliance. By purchasing those 865 stores, Fred’s basically doubled its size overnight, going from a market cap $450 million to $1.3 billion. It also experienced a massive stock increase and effectively became the third largest drugstore chain in the U.S. as well as the new darling of the retail pharmacy industry.  But then came activist investor Alden Global, which apparently picked up a 25% stake in Fred’s when no one was paying attention. When the Fred’s board noticed the unusual activity going on with its shares, it unanimously approved a nifty little tactic affectionately dubbed a “poison pill.” A poison pill is simply a shareholder rights plan that kicks into place in the event of a hostile takeover. The targeted company tries to make shares look less valuable and attractive, i.e. “poisonous” to a potential acquirer.  If control is taken, at least shareholders will then be compensated accordingly with a “poison pill” in place.  Fred’s poison pill is meant to take effect when an individual or a group scoops up 10% or more of the company shares. Alden thinks Fred’s shares are undervalued and see their acquisition as a great investment opportunity. Although, Fred’s did deny they threw together the poison pill plan because of a potential takeover bid.

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Why Is This Coin Different From All Other Coins, It Was the Cover-Up, Stupid and Literacy Literally Pays Off

All is not certain in bitcoin EXCEPT taxes…

Image courtesy of lamnee/FreeDigitalPhotos.net

Image courtesy of lamnee/FreeDigitalPhotos.net

Bitcoin, the hottest most talked about virtual currency since..well, ever, has been officially deemed NOT a currency. According to the taxman, bitcoins are property, for tax purposes anyway, and will be treated as such. Instead, the IRS defines crypto-currency as “convertible currency” which probably sounds a lot cooler than it actually is. Got a virtual stash of coins? You could – if you really wanted to – exchange them for US dollars and you wouldn’t have to worry about them being taxed as a foreign currency gain or loss. If you trade the coins, expect a capital gains tax. If your paycheck is being paid with bitcoins (I guess that’s a thing now), that information needs to be reported on your W-2.  And if your accountant is not bitcoin savvy, then get a new accountant.

In the grand Ponzi scheme of things…

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Image courtesy of sdmania/FreeDigitalPhotos.net

It comes as no great surprise that Bernie Madoff did not single-handedly pull off one of the biggest Ponzi schemes in history. Yesterday five of his former employees were finally convicted of a very very very long list of offenses, including conspiracy to commit fraud. US Attorney Preet Bharara said “These defendants each played an important role in carrying out the charade, propping it up and concealing it from regulators, auditors, taxing authorities, lenders and investors.” Now it’s up to a judge to determine their prison sentences which could last decades. Something tells me they wont be missed.

It pay$ to read…

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Image courtesy of adamr/FreeDigitalPhotos.net

There was a reason why you were always encouraged to READ READ READ and today that mantra might literally pay off for you – but only if you are a regular e-book subscriber. Turns out a court ruled that publishers were a tad bit greedy by inflating prices and taking advantage of avid e-readers like you. So to make it up to you, or rather reimburse you, you can expect a credit. Are you one of the lucky recipients of the $166 million settlement? Check your account and details of the settlement at www.sagsettlements.com.