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AT&T CEO says blackout ban shows company willing to settle DOJ fight

(Reuters) – ATT Inc’s (T.N) proposed seven-year ban on programming blackouts to distributors of some Time Warner Inc (TWX.N) content shows that the company is willing to offer concessions to close its $85.4 billion bid for the programmer, ATT’s chief executive officer said on Wednesday.

The U.S. Department of Justice last week sued ATT to block its planned acquisition of Time Warner, saying the combination could raise prices for rivals and pay-TV subscribers while hampering the development of online video.

“We’re prepared to make concessions,” ATT’s CEO, Randall Stephenson, said at an Economic Club of New York luncheon. “What we put in the filing is a concession.”

U.S. District Court Judge Richard Leon, in Washington, D.C., who is overseeing hear the case filed by the Justice Department, on Wednesday set the first pre-trial hearing for Dec. 7.

ATT and Time Warner said in a filing on Tuesday that Time Warner’s Turner unit had offered its distributors licensing terms that forbid Turner from “going dark” on any distributor for seven years after the deal closes if they were to reach an impasse in negotiations. Blackouts are considered to be a negotiating tool in carriage disputes between distributors and programmers.

Sources told Reuters earlier this month that the Justice Department had demanded significant asset sales in order to approve the deal and that it asked ATT to sell either CNN-parent Turner or ATT’s DirecTV business.

Craig Moffett, an analyst at MoffettNathanson, said in a research note on Wednesday that ATT’s offer to ban blackouts made it “reasonably likely” that the deal would be approved. He said it would be hard for the Justice Department to argue that such a commitment did not address its concern that ATT would raise the rates it charges for Time Warner content to rival pay-TV companies.

“By agreeing to forgo the option of ‘going dark,’ ATT has effectively agreed to abandon what would otherwise be their only real source of leverage in a negotiation,” Moffett wrote.

Shares of ATT closed up 3.0 percent to $36.48 on Wednesday while Time Warner shares rose 1.5 percent to $90.92.

Stephenson also said at the Economic Club lunch that ATT’s requested trial date of Feb. 20 was a “reasonable ask.” The government requested that the trial start on May 7, according to court filings.

ATT said in a separate filing with the U.S. Securities and Exchange Commission on Tuesday that it would extend the termination date of the Time Warner deal to April 22.

Additional reporting by Supantha Mukherjee in Bengaluru and Diane Bartz in Washington; Editing by Leslie Adler

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Integra announces DeLamar drilling plan

Integra Resources (CN:ITR) has outlined its 2018 exploration programme for its DeLamar gold-silver project in Idaho. The US$10 million programme includes about 20,000m of drilling to test the down-dip and onstrike extensions to the historical high-grade veins that were mined between 1889 and 1914 to produce about 700,000 ounces of gold and 50 million ounces of silver.

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Bubble trouble? Bitcoin tops $11,000, but fades after sharp rally

LONDON/NEW YORK (Reuters) – Bitcoin zoomed past $11,000 (£8,185.5) to hit a record high for the sixth day in a row on Wednesday after gaining more than $1,000 in just 12 hours, stoking concerns that a rapidly swelling bubble could be set to burst in spectacular fashion.

After soaring more than 1,000 percent since the start of the year, bitcoin rose as much as 15 percent on Wednesday, but by mid-afternoon in New York, the virtual currency was trading at $9,500, down 3.7 percent on the day on Luxembourg-based Bitstamp BTC=BTSP, one of the largest and most liquid cryptocurrency exchanges.

“As many seasoned traders know all too well, anything that rockets higher, tends to fall down faster when the time comes, and the time will come,” James Hughes, chief market analyst at FX broker AxiTrader, said.

Bitcoin topped $10,000 for the first time in early Asia trading, before surging above $11,000 less than 12 hours later to reach $11,395.

Bitcoin’s rapid ascent has led to countless warnings that it has reached bubble territory. But the warnings have had little effect, with dozens of new crypto-hedge funds entering the market and retail investors piling in.

(For a graphic on Bitcoin price rockets, click

London-based, one of the biggest global bitcoin wallet-providers, told Reuters on Wednesday that it had added a record number of new users on Tuesday, with more than 100,000 customers signing up, taking the total number to more than 19 million.

The evidence suggests that few of the users are buying bitcoin to use it as a means of exchange, but are speculating to increase their capital.

“What’s happening right now has nothing to do with bitcoin’s functionality as a currency – this is pure mania that’s taken hold,” said Garrick Hileman, a research fellow at the University of Cambridge’s Judge Business School.

Hileman, who last week gave a lecture to the Bank of England on the risks of bitcoin and other cryptocurrencies, also flagged the risk of the whole market collapsing entirely.

“There’s always the possibility that some fundamental cryptographic flaw that we can’t solve craters the whole space, or that regulators unite and decide this represents systemic risk and actually could trigger the next financial crisis,” he said.


Created in 2008, bitcoin uses encryption and a blockchain database that enables the fast and anonymous transfer of funds outside of a conventional centralised payment system.

It has far outstripped gains seen in any traditional asset classes or currencies this year. Its rise accelerated in recent months as exchanges such as the CME Group Inc (CME.O) and the Chicago Board Options Exchange announced plans to offer futures contracts for the cryptocurrency.

On Wednesday, a source with knowledge of the matter said Nasdaq Inc (NDAQ.O) plans to launch a futures contract based on bitcoin in 2018.

Sceptics say it is a classic speculative bubble with no relation to real financial market activity or the economy – most famously JPMorgan boss Jamie Dimon, who labelled it a “fraud”.

But even Dimon and others who say bitcoin represents a bubble – now the consensus view among mainstream investors – do not deny its price rise could still have further to go.

“It’s got all the shapings of your tulip bubble chart (but) that tells you nothing about where that price line could go depending on the number of people who wish to own it,” Standard Life’s head of investment strategy, Andrew Milligan, said on Wednesday. “Who is to say it doesn’t reach $100,000?”

In some emerging markets, bitcoin had hit well over $10,000 previously.

In South Korean exchanges, too, bitcoin was already close to $11,000 or higher early this week. On Zimbabwe’s local exchange bitcoin touched a new high of $18,500 on Wednesday before retreating to $18,000.

The fact that bitcoin now provides “exit ramps” from national currencies that were becoming easier to use, Hileman said, could exacerbate any future financial crisis. Coordinated regulatory action might therefore be necessary in order to stave off an “economic calamity”, he said.

Despite its mushrooming value, however, Bank of England Deputy Governor Jon Cunliffe said on Wednesday bitcoin was not big enough to pose a risk to the global economy.

New York Federal Reserve President William Dudley said the Fed is in the early stages of considering “what it would mean” to offer digital currencies sometime in the future and whether it may be necessary as an alternative to cash.

Mike Novogratz, a former macro hedge fund manager at Fortress Investment Group, said in a Reuters Investment Summit this month that mainstream institutional investors were about six to eight months from adopting bitcoin.

Additional reporting by Marius Zaharia in Hong Kong, Vidya Ranganathan in Singapore, Helen Reid and Dhara Ranasinghe in London, and MacDonald Dzirutwe in Harare; Editing by Alison Williams and Susan Thomas

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U.S. third-quarter economic growth fastest in three years

WASHINGTON (Reuters) – The U.S. economy grew faster than initially thought in the third quarter, notching its quickest pace in three years, buoyed by robust business spending on equipment and an accumulation of inventories.

Gross domestic product expanded at a 3.3 percent annual rate last quarter also boosted by a rebound in government investment, the Commerce Department said in its second GDP estimate on Wednesday. That was the fastest pace since the third quarter of 2014 and a pickup from the second quarter’s 3.1 percent rate.

The economy was previously reported to have grown at a 3.0 percent pace in the July-September period. It was the first time since 2014 that the economy experienced growth of 3 percent or more for two straight quarters.

The growth pace, however, likely exaggerates the health of the economy as inventories, goods yet to be sold, accounted for nearly a quarter of GDP growth. Excluding inventory investment, the economy grew at a 2.5 percent rate. When measured from the income side, output also expanded at a 2.5 percent rate.

“While welcomed improvement, the sustainability of growth has been reliant on pent-up demand and stockpiling of goods after grossly depleting inventories,” said Lindsey Piegza, chief economist at Stifel Fixed Income in Chicago. Economists had expected that third-quarter GDP growth would be raised to a 3.2 percent rate. The brisk growth pace strengthens the case for the Federal Reserve to raise interest rates next month. The U.S. central bank has increased borrowing costs twice this year.

Fed Chair Janet Yellen told lawmakers on Wednesday “the economic expansion is increasingly broad based across sectors,” and that she expected that “the economy will continue to expand.”

Prices for U.S. Treasuries fell on the data and Yellen’s remarks. The dollar was little changed against a basket of currencies, while stocks were mixed.

The economic recovery since the 2007-2009 recession is now in its eighth year and showing little signs of fatigue. The economy is being powered by a tightening labor market, which has largely maintained a strong performance that started during former President Barack Obama’s first term.

Economists see a modest boost to growth from efforts by President Donald Trump and his fellow Republicans in Congress to push through a broad package of tax cuts, including slashing the corporate income tax rate to 20 percent from 35 percent.

Trump wants lower taxes to lift annual GDP growth to 3 percent on a sustained basis. The fiscal stimulus would, however, come when the economy is at full employment.

“Corporate and personal income tax cuts will have minimal impact on growth over the longer run,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh. “In 2019 and beyond growth will settle in to its long-run average of 2 percent to 2.25 percent.”


The government said after-tax corporate profits surged at a 5.8 percent rate last quarter after rising at only a 0.1 percent pace in the second quarter. Undistributed profits jumped at a 13.9 percent rate after declining for two straight quarters, suggesting that companies were anticipating deep tax cuts.

Businesses accumulated inventories at a $39.0 billion pace in the third quarter, instead of the previously reported $35.8 billion rate. As a result, inventory investment contributed 0.8 percentage point to third-quarter GDP growth, up from the previously reported 0.73 percentage point.

That suggests inventories could be a drag on growth in the fourth quarter. Data on Tuesday showed a drop in wholesale and retail inventories in October, leading economists to slash their fourth-quarter GDP growth estimates by as much as five-tenths of a percentage point to as low as a 2.3 percent rate.

The Fed on Wednesday in its Beige Book report of anecdotal information on business activity collected from contacts nationwide described economic activity as having “continued to increase at a modest to moderate pace in October and mid-November.”

Growth in consumer spending, which accounts for more than two-thirds of the U.S. economy, was revised down to a 2.3 percent rate in the third quarter from the previously reported 2.4 percent pace. Consumer spending increased at a robust 3.3 percent rate in the second quarter.

The deceleration in consumer spending likely reflects the impact of Hurricanes Harvey and Irma, which struck Texas and Florida during the third quarter. Spending is also being constrained by sluggish wage growth, which is forcing households to dip into their savings to fund purchases.

The government cut its estimate for the increase in second-quarter wages and salaries by $26.5 billion. The saving rate decreased to 3.3 percent in the third quarter from 3.7 percent in the April-June period.

Economists say savings cannot drive consumer spending indefinitely. But they also believe that income growth is being understated, pointing to a 4.1 percent unemployment rate as well as strong business investment.

Growth in business investment in equipment was raised to a 10.4 percent pace, the fastest in three years, from the previously reported 8.6 percent rate. Businesses also increased spending on software.

But investment in nonresidential structures fell at a 6.8 percent pace in the third quarter, the biggest drop since the fourth quarter of 2015, instead of the previously estimated 5.2 percent rate. That is largely because of a slowdown in spending on mining exploration, wells and shafts.

Growth in government spending was raised to a 0.4 percent rate. Government outlays were previously reported to have declined at a 0.1 percent pace in the third quarter. Government spending had contracted for two consecutive quarters.

Reporting by Lucia Mutikani; Editing by Andrea Ricci

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U.S. expands leniency for companies that disclose foreign bribery

WASHINGTON (Reuters) – The U.S. Justice Department will extend greater leniency to companies that voluntarily alert authorities when they learn employees have paid bribes to foreign officials, Deputy Attorney General Rod Rosenstein said on Wednesday.

The new guidelines will allow most companies to avoid prosecution altogether if they fully disclose foreign bribery, cooperate in the investigation and take steps to avoid future misconduct, Rosenstein said at a Maryland legal conference.

This will prompt greater corporate cooperation with authorities, he said. “We want corporate officers and board members to better understand the costs and benefits of cooperation.”

The changes come at a time when U.S. Attorney General Jeff Sessions has asked prosecutors to take a tougher line against criminals, particularly in drug cases.

The guidelines expand a pilot program, launched in 2016 by the Obama administration, to encourage more companies to come forward when they discover foreign bribery, in exchange for lighter penalties. The U.S. Foreign Corrupt Practices Act makes it a crime for companies to bribe overseas officials to win business.

While the previous program allowed for no prosecution, the new rules offer the “presumption” that charges will be dropped if companies come forward and fully cooperate.

Rosenstein said that because corporate crimes are ultimately committed by people, not firms, companies should not be prosecuted by the same standard. “It makes sense to treat corporations differently than individuals,” he said.

In cases when the misconduct is so severe that the Justice Department cannot drop charges, the guidelines will still allow companies that come forward to get a 50 percent reduction of the lowest level of penalty.

But the requirements that companies must meet for prosecutors to drop charges will be “rigorous” and give authorities more ammunition to pursue individual executives involved in the crimes, senior Justice Department officials told reporters on a conference call on Tuesday.

“I don’t think it’s accurate at all to portray or understand this policy as giving a pass to corporate crime,” a U.S. Justice Department official said.

Reporting by Joel Schectman; Edited by Susan Thomas and Richard Chang

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Uber lawyer says ex-CEO, board members told of letter kept from Waymo lawsuit

SAN FRANCISCO (Reuters) – Uber Technologies Inc’s former chief executive and some board members knew of a letter a U.S. judge has said was withheld from a high-stakes lawsuit, an attorney for the company testified on Wednesday.

But Uber’s lawyer said she did not disclose the letter to other attorneys defending the company in the trade secrets lawsuit by Alphabet Inc’s (GOOGL.O) self-driving car unit Waymo.

U.S. District Judge William Alsup called that decision “inexplicable.” The letter alleges Uber trained employees to steal trade secrets and hide their activities.

“On the surface it looks like you covered this up,” he told Uber in court.

Alphabet’s Waymo has accused Uber of stealing confidential information about its self-driving car designs, the highest-stakes legal challenge on a list of litigation that Uber’s new CEO Dara Khosrowshahi inherited when he joined the company in August.

Uber’s autonomous car program has been hobbled by the case and it faces hefty claims from Alphabet. U.S. prosecutors also are investigating the matter, raising the possibility of criminal charges.

Uber has denied that it used Waymo trade secrets in its autonomous vehicle program.

At the hearing in San Francisco federal court, Uber in-house attorney Angela Padilla testified she did not disclose the letter with the allegations to Uber attorneys and an outside law firm that were defining Uber in the Waymo lawsuit.

Alsup, who is overseeing the case, raised the question of a cover-up as he also did at a hearing on Tuesday.

“There was no effort to cover this up,” Padilla responded, adding that she takes “full responsibility” for not circulating the letter more widely.

The hearing was still ongoing on Wednesday.

Former Uber security analyst Richard Jacobs testified in court this week that his lawyer sent a 37-page letter to Padilla describing an organization within Uber called marketplace analytics that he said exists for the purpose of acquiring trade secrets, code base and competitive intelligence.

Jacobs’ attorney sent the U.S. Department of Justice a similar letter making the same claims.

In his testimony Jacobs described an elaborate intelligence operation inside Uber to deliberately research competitors and gather data about them, and use technology to avoid a paper trail.

Alsup delayed the trial, which had been scheduled for next week, to give Waymo more time to investigate the allegations.

In court on Wednesday, Padilla said Uber viewed the Jacobs letter as a tactic by a disgruntled former employee to secure money from the company.

However, Uber eventually settled the matter by paying Jacobs $4.5 million, including a consulting contract, and a further $3 million to his lawyer.

“That is a lot of money,” Alsup said. “And people don’t pay that kind of money for BS. And you certainly don’t hire them as consultants if you think everything they’ve got to contribute is BS.”

Reporting by Dan Levine, editing by Peter Henderson and Meredith Mazzilli

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Fed should continue to raise rates slowly, Williams says

PHOENIX (Reuters) – With falling U.S. unemployment expected to put upward pressure on inflation, the Federal Reserve should keep raising interest rates gradually, San Francisco Federal Reserve President John Williams said on Wednesday.

“As long as the data continue to show steady growth and we see the uptick in inflation that we’re expecting, my own view is that we should continue to raise interest rates slowly over the coming year,” Williams said in remarks prepared for delivery to an economics forecast luncheon.

The Fed is widely expected to raise rates when policymakers meet next month and Williams has said he supports continued, gradual rate hikes as long as the economy stays on its current path. Fed Chair Janet Yellen signaled her expectation for further rate hikes ahead in testimony earlier Wednesday.

Williams, who will have a vote on monetary policy next year when Governor Jerome Powell is expected to take over from Yellen as Fed chair, said he expects the U.S. economy to grow about 2.5 percent this year and slower after that. Unemployment, now at 4.1 percent, should continue to fall next year and bottom out at about 3.75 percent, he said.

Though inflation has remained well under the Fed’s 2-percent goal, puzzling some Fed officials including Yellen because inflation usually strengthens as the economy gains speed, Williams said the weakness is easily explained.

Slow-growing healthcare costs and falling prices in other sectors like mobile phone plan pricing that are not very sensitive to economic cycles have been offsetting price increases in other sectors, researchers at the San Francisco Fed said in a paper published this week.

To boot, Williams said Wednesday, it often takes 12 months for inflation to pick up after the economy shifts to higher gear.

“The next time you see a headline about stubbornly low inflation, you can smile to yourself, knowing that the mystery isn’t all that mysterious after all,” he said. “With the economy doing so well this year and based on the historical pattern, I expect to see a rise in inflation in 2018.”

Reporting by Ann SaphirEditing by Chizu Nomiyama

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AT&T CEO sticks to guns on Time Warner deal

(Reuters) – ATT Inc (T.N) remains determined to pursue its case against the government to push through its purchase of Time Warner Inc (TWX.N), Chief Executive Randall Stephenson said on Wednesday.

“We see absolutely nothing in this case that is anti-competitive,” Stephenson said.

ATT and Time Warner on Tuesday argued that their proposed $85.4 billion merger was “pro-competitive” and “pro-consumer”, as they sought to refute U.S. Justice Department allegations that the deal breaks antitrust law.

Reporting by Anjali Athavaley in New York and Supantha Mukherjee in Bengaluru; editing by Patrick Graham

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Lawsuit questions conduct of Madoff victims’ lawyer

NEW YORK (Reuters) – A new lawsuit accuses a lawyer representing hundreds of victims defrauded by Bernard Madoff of cheating her own clients through overbilling, discouraging settlements and having conflicts of interest.

The proposed class-action complaint was filed on Wednesday against Becker Poliakoff LLP and Chaitman LLP over the alleged conduct of Helen Chaitman, who has been perhaps the most visible lawyer representing victims of Madoff since his December 2008 arrest. Madoff, 79, is serving a 150-year prison term.

“We have no comment,” Chaitman said in an email on behalf of her namesake firm. Becker Poliakoff, her former employer, did not immediately respond to requests for comment.

The complaint was filed in the U.S. District Court in Manhattan by trustees of the Florence Shulman Pourover Trust, a defendant in a 2010 lawsuit by Irving Picard, a court-appointed trustee liquidating Bernard L. Madoff Investment Securities LLC.

Picard, who has recovered roughly $12.8 billion for former Madoff customers, sought to recover $1.62 million of “fictitious profits” from the Shulman trust and other defendants that he said were derived improperly from Madoff’s fraud.

In Wednesday’s complaint, the Shulman trustees said Chaitman’s “self-promotion as a savior for other Madoff victims paid off” with a large base of clients.

But they said this left Chaitman with an “irreconcilable” conflict because she represents three groups of plaintiffs with competing interests: “net winners” who withdrew more money from Madoff than they put in, “net losers” who lost money, and “early investors” whose alleged profits predated the fraud.

The Shulman trustees also said Chaitman misled net winners by saying Picard would never settle for less than all he sought, enabling her to bill for “unnecessary” and “often unproductive” work, and did not specify on invoices what work she did.

Both law firms “billed and were paid for needless and quixotic legal work, ostensibly for the benefit of FSPT and members of the proposed class, but which in reality only benefited defendants in the form of increased fees,” the complaint said.

Dylan Ruga, a lawyer for the Shulman trustees, was not immediately available for comment.

The lawsuit seeks unspecified damages on behalf of people represented by and who paid legal fees to the law firms in connection with the Madoff litigation.

The case is Shulman et al v. Becker Poliakoff LLP et al, U.S. District Court, Southern District of New York, No. 17-09330.

Reporting by Jonathan Stempel in New York; Editing by Phil Berlowitz

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