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Fined

That’ll Be $1.2 Billion, Please

Seth Wenig/AP

The hedge fund SAC Capital has agreed to pay an eye-popping fine to settle insider-trading charges—just the latest scalp for a tough new regime of Wall Street sheriffs.

It’s getting more expensive to be rich. Taxes on the wealthy went up on January 1, 2013. The price of the highest-end condos in New York is rising. Tuition at elite private schools is soaring. And, so, too, is the cost of settling thorny investment-related regulatory and legal matters—which, for many in the corporate and financial world, is a cost of doing business.The latest billionaire to pay a hefty fine to get the government off his back is Steven A.

GOTCHA

SAC Capital Pleads Guilty

Louis Lanzano/AP

To insider trading.

For the first time in nearly thirty years, a Wall Street firm has admitted guilt for securities fraud. SAC Capital, the uber-successful hedge fund run by billionaire Steven A. Cohen, on Monday pled guilty to insider trading—and will cough up a record $1.2 billion penalty. As part of the deal, SAC will no longer manage money for investors outside the company, which essentially leaves it with just Cohen’s substantial fortune. The case against Cohen, a high-flying consumer of pricey art, was many years in the making and has many on Wall Street worried that the success will encourage authorities to go after other major corporations. It’s the first plea of its kind since the 1980s, when junk bond investor Michael Milken at Drexel Burham Lambert paid about $1 billion (adjusted for inflation) in fines. 

Read it at the New York Times

OOPS

Memo Warned Admin. on Health Care

Mandel Ngan/AFP/Getty

Three years ago.

Health-care adviser David Cutler warned in a May 2010 memo to Larry Summers that the White House did not have the “relevant members of the administration understand the president’s vision or have the capability to carry it out.” In particular, Cutler stressed his concerns that the people working to carry out the reform had little experience in the complicated world of startups—and the technology itself would pose a problem. Cutler also warned about the myriad difficulties in implementing the new regulations and policy objectives. Since launching a month ago, HealthCare.gov, the website where consumers can purchase insurance, is still the target of public and political ire.

Read it at CBS News

Excerpt

Randi Zuckerberg’s Reinvention

Bloomberg/AP

An excerpt from Randi Zuckerberg’s new book, ‘Dot Complicated,’ describes how she went from Mark Zuckerberg’s ‘ridiculous sister’ to the brains behind Facebook’s marketing strategy.

In the early days of Facebook, Mark Zuckerberg’s older sister moved from New York City to Menlo Park help grow the start-up. She spent years finding her role in the company amid a community of coders and the long shadow of her sibling.  In this chapter, excerpted from her upcoming book Dot Complicated (HarperOne, Nov. 5), she describes trading a capella antics for team-building leadership.And so I came to California and to Facebook.I officially joined on September 1, 2005.

Your Mission

New Media Moguls, Listen Up!

Andrew Harrer/Bloomberg, via Getty

The eBay and Amazon founders’ media investments are tremendous news for America’s vulnerable, who are typically ignored by traditional media. But the new ventures must take risks.

Perhaps the biggest news story in American journalism so far this year is the huge infusion of cash it has received, more than half a billion dollars, from American tech leaders. Founders of eBay, Amazon, and Facebook are among a growing group of tech entrepreneurs who want to build a bright new future for American media, and they are putting their minds—and their checkbooks—to the challenge. Pierre Omidyar’s $250 million investment in a new digital media company came on the heels of Jeff Bezos’s purchase of The Washington Post for a similar amount.

LONGREADS

Business Longreads for the Week of November 2, 2013

From the disappointment in the Obama technology failures to investor Dan Loeb’s secrets, The Daily Beast brings you best in business journalism from the past week.

How the iPod President Crashed: Obama’s Broken Technology Promise Ezra Klein – Bloomberg BusinessweekWith overwhelming support of millenials and technologically archaic opponents in 2008 and 2012, President Barack Obama and his team have long been considered tech-savvy Democrats. That tech know-how was supposed to extend from campaigns into modernizing the federal government and increasing its effectiveness. However, as the recent Obamacare rollout debacle showed, those predictions may have been overly sanguine.

Austerity

Walmart’s Food Stamps Trouble

Spencer Platt/Getty

The retail giant is as dependent on SNAP benefits as the poorest Americans. Why new cuts will be a double whammy for Bentonville—and anyone with a mutual fund.

Walmart is about to teach everybody a lesson in how austerity can affect the consumer economy—and quick.Food-stamp benefits are being cut starting today by about $5 billion this year, or about 5 percent. The number of people enrolled in the Supplemental Nutrition Assistance Program has exploded in the last several years, in part because the recession made a lot of Americans poorer, and hence eligible for the food stamps, and in part because the Obama administration expanded eligibility for the program in 2010.

Creative

Web Summit’s 15 Hottest Apps

Getty

Global techies flocked to Dublin to present their crazy digital inventions. Meet the newest ways to find a parking spot, make your kids do their chores, and upload beehive data.

On Wednesday and Thursday this week, the global tech world was in Dublin for the hottest tech trade fair of the moment, the Web Summit. Now in its fourth year, the Summit was closed out by a “fireside chat” between Paypal founder Elon Musk and Irish premier Enda Kenny, with a record total of 10,000 attendees from around the globe.Wednesday night in Dublin was kinda messy, in a free bar-meets-nerd way. Think Mardi Gras for geeks with flashing neon sunglasses and nite-glow cocktails.

Chin Up

America is Not the Next Greece

Jin Lee/AP

The deficit shrunk dramatically in September—and that’s a piece of good news in otherwise bleak times.

It’s still the Golden Age of Deficit Reduction. Thanks to the government shutdown, the final tally for the government’s operations in September—the last month of the 2013 fiscal year—was delayed for three weeks. But on Wednesday, the Treasury Department finally its Monthly Statement for September (PDF). It confirmed the continuation of a trend. The national debt — the obligations we’ve accumulated over the past 200 years—is continuing to rise, and stands at about $17 trillion.

EGO BOOST

The World’s Most Powerful People

Ramin Talaie/Getty

Forbes releases 2013 list.

Ouch. Russian President Vladimir Putin has been named the world’s most powerful person, knocking President Obama down to number two on the annual list. Forbes cited Putin’s expanding control over Russia as well as his significant influence over international relations. Also of note, Pope Francis continues to make waves, as his widespread popularity lands him at the number four spot. Three other Americans landed in the top ten, including Bill Gates (No. 6), Federal Reserve Chairman Ben Bernanke (No. 7), and Wal-Mart CEO Michael Duke (No. 10).

Read it at Forbes

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Shame on You, Walmart!

With an Ohio Walmart hosting a holiday food drive for its own workers, The Daily Beast's Michael Tomasky criticizes the notoriously stingy company for not paying them more.

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