News Archive

Jury orders Wal-Mart to pay pharmacist $31.22 million in bias case

Wal-Mart Stores Inc (WMT.N) was ordered by a federal jury in New Hampshire to pay $31.22 million to a pharmacist who claimed she was fired because of her gender and in retaliation for complaining about safety conditions.

The Concord jury deliberated for 2-1/2 hours before ruling on Wednesday for the plaintiff, Maureen McPadden, after a five-day trial, her lawyers said.

McPadden claimed that Wal-Mart used her loss of a pharmacy key as a pretext for firing her in November 2012, when she was 47, after more than 13 years at the retailer.

McPadden said she was fired in retaliation for her raising concerns that customers at the Wal-Mart store in Seabrook, New Hampshire, where she worked were getting prescriptions filled improperly because of inadequate staff training.

McPadden also said her gender played a role, alleging that Wal-Mart later disciplined but stopped short of firing a male pharmacist in New Hampshire who also lost his pharmacy key.

According to the jury verdict form, most of the damages award stemmed from McPadden’s gender bias claims, including $15 million of punitive damages.

Bentonville, Arkansas-based Wal-Mart said it plans to ask trial Judge Steven McAuliffe to throw out the verdict or reduce the damages award.

“The facts do not support this decision,” spokesman Randy Hargrove said. “We do not tolerate discrimination of any type, and neither that nor any concerns that Ms. McPadden raised about her store’s pharmacy played a role in her dismissal.”

Lauren Irwin, a lawyer for McPadden, in a phone interview said the jury reached “a fair and just verdict.”

The case is McPadden v. Wal-Mart Stores East LP, U.S. District Court, District of New Hampshire, No. 14-00475.

(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler)

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Xerox to split in two; give Icahn three board seats: WSJ

Xerox Corp (XRX.N) will split into two companies and give activist investor Carl Icahn three seats on the board of one of the companies, the Wall Street Journal reported.

One of the companies will house Xerox’s hardware operations and the other its services business, the Journal reported on Thursday, citing people familiar with the matter.

Icahn will be given the seats on the board of the company holding Xerox’s services business, the Journal reported.

Xerox declined to comment on the report.

Icahn disclosed a 7.1 percent stake in the printer and copier maker in November and called its shares “undervalued”.

Xerox is expected to announce the split on Friday when it reports quarterly results, the Journal said.

(Reporting by Anet Josline Pinto in Bengaluru; Editing by Savio D’Souza and Kirti Pandey)

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DuPont faces 40 trials a year over cancer tied to Teflon chemical

NEW YORK Chemical maker DuPont (DD.N) will face 40 trials a year starting April 2017 involving plaintiffs who say they developed cancer from a toxic chemical used to make Teflon that leaked from one of the company’s plants in West Virginia.

The schedule laid out by U.S. District Judge Edmund Sargus in the Southern District of Ohio during a hearing Wednesday is aimed at pushing the parties closer to resolving more than 3,550 lawsuits.

The outcome could have a material impact on Chemours Co (CC.N), since liability for litigation connected with the chemical C-8 was passed on to the firm spun-off by DuPont in 2015.

The cases have been filed by individuals who say they developed one of six diseases linked to perfluorooctanoic acid, also known as PFOA or C-8, which was found in their drinking water. Their cases are consolidated before Sargus.

The initial 40 trials will be selected from between 250 and 300 lawsuits brought by individuals who say they contracted kidney or testicular cancer from C-8.

“People shouldn’t have to wait ten years for a trial,” Sargus said, according to a transcript of the hearing.

DuPont spokesman Dan Turner said the company was pleased plaintiffs would go to trial individually, rather than as a group, as plaintiffs’ lawyers had proposed. In the past, DuPont said “mega trials” would confuse jurors and be unfair to it.

A lead plaintiffs’ lawyer, Michael London, called Sargus’ plan “a good start.”

The lawsuits center on claims DuPont used C-8 at a West Virginia plant for decades despite knowing it was toxic and had been found in nearby drinking water.

While the cancer claims are moving forward to trial, DuPont has said in court filings that 90 percent of the litigation involves less deadly conditions such as high cholesterol and thyroid disease.

To help estimate the aggregate value of individual suits in mass litigation, it is common to hold a series of bellwether, or test trials. The first C-8 bellwether ended in October with a $1.6 million verdict for a plaintiff who had kidney cancer. Four other trials are scheduled for 2016.

While DuPont was the named defendant, Chemours said it would cover DuPont’s liability for the first verdict. Chemours agreed to take on some of DuPont’s legal liabilities when it was spun off from the company to house its performance chemicals segment.

Chemours has said an unfavorable outcome from the lawsuits could have a “material adverse effect” on its finances.

Chemours stock was little changed Thursday at $3.12 on the New York Stock Exchange. The stock has fallen 80 percent since it was spun off.

(Additional reporting by Tom Hals; Editing by Andrew Hay)

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Federal Reserve releases scenarios for 2016 bank stress tests

WASHINGTON Large financial firms will have to show how they would survive a “severely adverse scenario”, including a global recession where U.S. unemployment shoots up to 10 percent and short-term U.S. Treasuries pay negative yields, in this year’s bank stress tests, the Federal Reserve said on Thursday.

In the annual testing of stability, the Fed, the U.S. central bank, presents three scenarios for firms such as Bank of America (BAC.N) and Goldman Sachs (GS.N) to show how they would hypothetically withstand various economic and financial shocks.

The Fed posted 2016’s test instructions after big banks announced their year-end financial positions, which are the starting points for how the banks would look after the stress scenarios. This year the Fed shifted the annual testing cycle to align it with the calendar year that banks generally use for their financial reports.

“In adjusting the scenarios for our yearly stress testing program, we strive to assess the resilience of the nation’s largest banks in a variety of potential adverse environments,” said Fed Governor Daniel Tarullo in a statement.

“It is important that the tests not be too predictable from year to year.”

The testing, part of the 2010 Dodd-Frank Wall Street reform law, is intended to push banks to shore up their finances and help avoid another meltdown on the scale of the 2007-09 financial crisis.

Last year, all 31 banks tested passed, but those with large trading books came out weak. This year’s review encompasses 33 firms. BancWest Corporation and TD Group U.S. Holdings have been added to this year’s testing.

Among changes noted by the Fed from past test instructions, banks will describe how they would change their capital plans under a stress scenario, rather than assume they would go ahead with their original plans to pay dividends and buy back stock.

Under the severely adverse scenario, firms would also have to show how they would fare with a heightened period of corporate financial stress.

The “adverse scenario” in this year’s test is defined as a moderate recession accompanied by mild deflation in the United States and weakening economic activity in some other countries. The “baseline scenario” follows average projections from surveys of economic forecasters.

Each scenario includes 28 variables such as gross domestic product, along with a narrative describing the general economic conditions in the scenarios and an explanation of how the scenarios have changed from the previous year.

(Editing by James Dalgleish)

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NYSE calls for coordination among exchanges to ease volatility

NEW YORK The New York Stock Exchange on Thursday recommended reforms to the U.S. equities market which it said could improve stability and prevent a repeat of the wild price swings seen on Aug. 24 during a near-unprecedented bout of volatility.

The measures included a call for all U.S. stock exchanges to modify and coordinate their policies on trading halts when securities prices move violently in a short time.

Such halts were first introduced after the 2010 flash crash when around $1 trillion in paper value was temporarily wiped from U.S. stock markets within minutes.

Many investors said the rules failed their first big test on Aug. 24, when panic over the health of the Chinese economy hammered U.S. stock futures prior to the market open, and then triggered a record intraday drop in the Dow Jones industrial average .DJI.

During the volatility on Aug. 24 there were 1,278 halts compared to 39 on a typical day, NYSE, which is owned by Intercontinental Exchange Inc (ICE.N), said in its report. (

Exchange-traded funds that track equities were hit especially hard, and most of the halts happened in the first hour of trading. The sporadic and rapid-fire halts led to confusion among some investors as to what was trading and questions whether they got prices worse than they should have.

NYSE said longer trading halts could be used to allow buy or sell imbalances to clear before the stocks reopen to prevent successive halts.

Another of its suggestions was that when a security is halted, all eligible trading interest be sent to the exchange where it is listed, creating a bigger pool of liquidity that allows for more accurate pricing.

Unlike other exchanges, which are nearly fully automated, NYSE uses people on its trading floor to open its stocks, a process it says gives it greater stability because the traders can intervene in ways that algorithms cannot.

But rivals say NYSE’s use of humans rather than computers caused undue delays in opening some stocks and ETFs after they were halted, intensifying ETF pricing issues.

NYSE said it has already instituted changes on its own exchange to prevent further issues, but that it was now time for the industry to act together on market-wide reforms.

(Reporting by John McCrank; Editing by James Dalgleish)

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Facebook ‘likes’ push Wall Street higher

Wall Street climbed on Thursday as a blockbuster quarterly report from Facebook drove tech shares higher and a bounce in oil prices propped up the beleaguered energy sector.

Facebook (FB.O) surged 15.5 percent in its biggest one-day leap since 2013 after the digital advertising behemoth smashed expectations with a 52-percent jump in fourth-quarter revenue.

Helped also by a 4.28-percent gain in Alphabet (GOOGL.O), the SP tech sector surged 1.48 percent.

The SP energy sector .SPNY rallied 3.15 percent, buoyed by a rise of almost 3 percent in oil prices due to speculation that Saudi Arabia and other OPEC countries would cut output to boost prices.

Optimism sparked by earnings from Facebook and a handful of other companies, as well as the bounce in oil prices, was behind most of the day’s improved sentiment, investors said.

But they also warned the gains could be short-lived and that a steep selloff this year caused by weak oil and worries about China’s economy may not be exhausted. The SP remains down 7 percent for 2016.

“You had marquee names with pretty good earnings,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “I’d love to say we’re onward and upward from here but I don’t think things work that way.”

The Dow Jones transport average .DJT, which Carlson said was a good indicator of the economy’s health, fell 0.8 percent.

Others remained cautious after comments by the U.S. Federal Reserve’s Open Market Committee on Wednesday did not more strongly signal it could scale back the pace of future interest rate hikes in the wake of recent turmoil in global markets.

“The FOMC’s statement was less dovish than anticipated and very likely may have marked a top in the recent rebound we have seen,” warned Mohannad Aama, Managing Director, Beam Capital Management LLC in New York.

The Nasdaq biotech .NBI index lost 3.5 percent and was on track for its biggest monthly fall in 16 years.

Abbott Labs (ABT.N) was the biggest drag on the healthcare sector, with a 9.3-percent drop.

The Dow Jones industrial average .DJI gained 0.79 percent to end at 16,069.64 points while the SP 500 .SPX added 0.55 percent to 1,893.36. The Nasdaq Composite .IXIC rose 0.86 percent to 4,506.68.

After the bell, Microsoft (MSFT.O) jumped 4.5 percent after its quarterly results beat expectations thanks to aggressive cost cutting. But Amazon (AMZN.O) slumped 11 percent after its quarterly report let down investors. Ahead of the report, it had risen 8.9 percent.

During the session, PayPal (PYPL.O) surged 8.39 percent and Under Armour (UA.N) jumped 22.59 percent. Revenue at both companies beat estimates.

Among the losers, eBay (EBAY.O) sank 12.45 percent after it forecast weaker-than-expected quarterly revenue and profit.

Advancing issues outnumbered decliners on the NYSE by 2,054 to 1,032. On the Nasdaq, 1,470 issues rose and 1,312 fell.

The SP 500 index showed eight new 52-week highs and 24 new lows, while the Nasdaq recorded 13 new highs and 166 new lows.

About 8.8 billion shares changed hands on U.S. exchanges, above the 8.6 billion daily average for the past 20 trading days, according to Thomson Reuters data.

(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Nick Zieminski)

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Facebook shares jump 15.5 percent after strong results

Facebook Inc (FB.O) shares surged 15.5 percent on Thursday, their biggest percentage increase since July 2013, after the social networking service posted quarterly results that blew away expectations on every key measure.

Facebook shares closed at $109.11, putting its market capitalization at about $308.6 billion. That would make it the fourth most valuable technology company, overtaking Inc (AMZN.O), which was valued at about $296 billion ahead of its results on Thursday.

Facebook’s strong quarter contrasted with a disappointing performance by Apple Inc (AAPL.O), which is worth about $519 billion, making it the most valuable U.S. company.

“FB has built a remarkable ad platform that enables marketers of all stripes to serve targeted ads to nearly every consumer on the planet,” Jefferies analysts wrote.

Facebook said it had 1.59 billion monthly active users as of Dec. 31, about one in every four people in the world.

Mobile ad revenue accounted for 80 percent of total ad revenue in the quarter compared with 69 percent a year earlier.

“FB saw nothing that indicated macro weakness, and we think results bode well for other online ad names like Alphabet (GOOGL.O),” Jefferies analysts added.

At least 22 brokerages raised price targets on Facebook’s stock.

Google-owner Alphabet, valued at $500 billion and closing in on Apple, will report results on Monday.

The median stock price target of the analysts tracked by Reuters was $138 on Thursday, suggesting that Facebook could add $123 billion in market value over the next 12 months.

Piper Jaffray was the most bullish, raising its target to $170 from $155.

“We believe Facebook is well positioned to increase its share of digital ad spend as well as to help grow the overall category given its reach and effectiveness for advertisers,” Goldman Sachs analysts said in a client note.

Facebook’s photo-sharing service Instagram, in particular, is poised to become a material contributor to revenue in 2016, the analysts said.

(Reporting by Sayantani Ghosh in Bengaluru; Additional reporting by Tenzin Pema; Editing by Saumyadeb Chakrabarty, Ted Kerr and David Gregorio)

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Viacom’s Redstone to undergo mental exam on Friday

LOS ANGELES Viacom Inc Executive Chairman Sumner Redstone will undergo an examination on Friday by a doctor hired by an ex-girlfriend in a lawsuit that challenges his mental competency, a spokesman for the former girlfriend said.

Dr. Stephen Read, a geriatric psychiatrist retained by former girlfriend Manuela Herzer, will examine Redstone at his California home at 11:30 a.m. PST on Friday, the spokesman said.

Investors are closely following the lawsuit by Herzer, who alleges that Redstone was mentally incompetent when he removed her as his designated healthcare agent last October in favor of Viacom Chief Executive Officer Philippe Dauman.

Read, in a declaration filed in November on behalf of Herzer, said he believed Redstone lacked the mental capacity to make that change. He cited testimony from Herzer and other witnesses but he had not examined Redstone in person.

Redstone’s primary physician, Dr. Richard Gold, told the court Redstone was fully aware of what he was doing at the time.

Attorneys for Redstone argue that Herzer has filed the suit for financial gain. They said the billionaire also had revoked a part of his estate plan that left Herzer a “significant sum of money.”

Read may interview Redstone for up to an hour, Los Angeles Superior Court Judge David Cowan ruled last week. The executive’s nurses and speech therapists may be present, but not Herzer’s lawyers, Cowan said.

Redstone controls about 80 percent of the voting shares in Viacom and CBS Corp through a holding company.

(Reporting by Lisa Richwine; Editing by David Gregorio)

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Fix stock market rules before admitting IEX: Nasdaq CEO

NEW YORK Regulators should overhaul decade-old rules that govern the U.S. stock market before allowing upstart venue IEX Group to become a fully-fledged exchange, Bob Greifeld, head of Nasdaq Inc (NDAQ.O), said on Thursday.

IEX, a market operator featured in Michael Lewis’s book, “Flash Boys: A Wall Street Revolt,” is currently a private trading venue. It applied in September with the U.S. Securities and Exchange Commission to become a public exchange.

The move prompted Nasdaq, along with other exchanges and automated trading firms, to complain to the SEC about IEX’s operating model. They said it runs afoul of a sweeping set of rules governing exchanges the SEC adopted in 2005 called Regulation National Market System (Reg NMS).

The SEC has also received hundreds of letters in support of IEX, which features a “speed bump” that slows down orders by 350 millionths-of-a-second. IEX says the pause lets it update fast-changing prices before the speediest traders can act on stale data and effectively queue-jump.

Opponents say it detracts from market quality.

Nasdaq told the SEC in 2012 it planned to add a speed bump to one of its exchanges, but the regulator said the feature would not comply with Reg NMS, Greifeld said.

Before making a decision on IEX, the SEC should complete a comprehensive review of Reg NMS and ensure the rules can be applied evenly, he said.

“If you want to have this kind of innovation happen in the marketplace – and we are not opposed to it – we are just saying first change the set of rules for everybody and not on a one-off basis,” he said in an interview.

Nasdaq’s approach differed from IEX’s in that it wanted to slow only a subset of traders, but the goal was the same: protecting investors from opportunistic traders, said IEX’s Chief Strategy Officer, Ronan Ryan.

“As it relates to the NMS, holding up IEX until long-running disputes about market structure are settled is a good way to stifle competition, not a great way to achieve meaningful reform,” he said.

Reg NMS states that stock trades should occur on whatever market has the best price at a given time. It has been credited with spurring greater automation, competition and lower costs. It has also been criticized for putting too much emphasis on the speed of trading and intensifying market complexity.

IEX launched in October 2013 calling itself a more simple marketplace. It is now the third-largest alternative trading system.

(Reporting by John McCrank; Editing by Andrew Hay)

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