Facebook Scheme: Man 'Stole' $8M From Clients

A Florida investment adviser has been charged in New York in an $8m securities fraud scheme that exploited demand for shares of the social networking site Facebook.

Craig L Berkman, 71, was arrested on Tuesday at his home in Florida and detained pending a hearing set for Thursday.

He was charged with falsely claiming in December 2010 to own shares of Facebook Inc, well before the company went public last year.

In reality Berkman did not directly own shares, and prosecutors say he stole much of $8m (£5.3m) that more than 50 investors entrusted to him.

The US Securities and Exchange Commission has also announced separate civil charges.

The government said Berkman operated a private company called Ventures Trust II LLC.

Facebook went public in May with its much-hyped $104bn (£65bn) IPO.

But the company's value dropped soon after, with shares quickly falling from their debut price of $38 (£25.16).

On Tuesday the stock's value closed at $26.55 (£17.58).

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Samsung Working On New 'Smart Watch'

Tech giant Samsung is working on a new watch device with 'smart' functions, a company executive has revealed.

Lee Young Hee, executive vice president of Samsung's mobile business, said the gadget had been in production for a long time but was very much a "future" product.

He told Bloomberg News: "We are working very hard to get ready for it. We are preparing products for the future and the watch is definitely one of them."

No information on the phone's features or its release date have been given, but a source told Reuters news agency it would perform many of the functions of a smartphone.

Google's new 'smart' glasses

The development follows speculation that Apple is also busy working on a similar watch device.

It is thought Apple's product might include health-related functions such as a pedometer or heart rate monitor, alongside regular features like phone and mapping capability.

The company has yet to officially comment, however.

With technology becoming increasingly compact, wearable gadgets are expected to become more popular in future.

Google recently showed off Glass, its hands-free glasses which use voice-activation to connect to the internet, take pictures and perform other functions.

Samsung has previously launched several 'watch-phone' devices which failed to catch on. However, by tapping into its recent success with Android 'phones it could be a different story this time around.

It looks as if the two big smartphone companies are set to carry on their tit-for tat rivalry in a new sector.

Samsung overtook Apple as the world's biggest-selling smartphone maker last year but Apple still has a slightly larger market share in the US.

The American firm is expected to update the iPhone this summer, just months after its Korean rival releases its new Galaxy 4 handset.

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Unemployment Rise Announced On Budget Day

Unemployment increased between November and January to 2.52 million, up 7,000 on the previous three months.

The Office for National Statistics (ONS) said that the number of people claiming Jobseeker's Allowance last month fell by 1,500 to 1.54 million.

The highest unemployment rate was in the North East at 9.8%. The lowest areas were in the east of England and South East at 6.6%, with London's jobless rate at 8.5%.

The ONS also revealed that average earnings for those in employment increased by 1.2% in the year to January.

Unemployment has increased for the first time in a year, delivering a pre-Budget blow to the Government and Chancellor George Osborne.

The jobless jump ending a run of reductions, with the increase caused by more 18 to 24-year-olds becoming unemployed.

The total is still 152,000 lower than a year ago, while the number of people claiming jobseeker's allowance fell in February by 1,500 to 1.54 million, the fourth consecutive monthly reduction.

There were 993,000 jobless 16 to 24-year-olds in the latest quarter to January, up by 48,000 from the three months to October, but the rise among 18 to 24-year-olds was 53,000.

The number of unemployed women increased by 5,000, the latest data from the Office for National Statistics showed.

Employment Minister Mark Hoban said: "It's a credit to businesses that the private sector is employing one and a quarter million more people than when this Government took office, helping us compete in the global race.

"Today's figures show that, against a difficult economic backdrop, we're helping people to move off benefits and into work.

"There are still tough challenges ahead which is why we're working hard to give jobseekers all the help and support they need to realise their aspiration of finding a job."

Other figures revealed that public sector employment fell for the 13th consecutive quarter, by 20,000 to 5.7 million, the lowest for over a decade.

Local government employment fell by 32,000 and civil service jobs by 4,000, but the figure increased by 11,000 in central government.

Dave Prentis, general secretary of the Unison union, said: "This time five years ago there were one million fewer unemployed people in the UK. The Government has failed every single one of these people - and it has failed our country.

"Every redundancy is a personal tragedy and brings with it hardship for the whole family, and the story behind each job lost in the public sector is one of libraries closing, day care centres shutting, fewer nurses on the wards or young people losing vital careers advice and help.

Employment in private companies increased by 151,000 to 24 million.

The number of people out of work for between six and 12 months increased by 5,000 to 447,000, but fell by 16,000 for those unemployed for over a year to 887,000.

There were 29.7 million people in work, up by 590,000 on a year ago.

There were 8.9 million people classed as economically inactive, including those looking after a relative or who had given up looking for a job, a fall of 118,000.

Total pay rose by 1.2% in the year to January, down by 0.1% on the previous month and less than half the rate of inflation.

Meanwhile, Bank of England governor Sir Mervyn King failed to garner more support for further economy-boosting measures earlier this month amid fears over the impact on the pound.

Minutes of the March Monetary Policy Committee (MPC) meeting showed Sir Mervyn and fellow rate-setters David Miles and Paul Fisher repeated calls for another £25bn in quantitative easing (QE) as recent economic data indicated there was a 50% chance of a triple-dip recession.

But they were outvoted as fears of an "unwarranted depreciation of sterling" prevented policymakers from firing up the printing presses on more QE.

The majority of the nine-strong MPC felt that increasing QE - currently at £375bn - could further weaken the pound as it risked being "misinterpreted as a lack of commitment to maintaining low inflation", according to the minutes.

There were also doubts over the benefits of more QE at a time when the economy needs to rebalance away from consumer spending towards investment and trade.

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South Korea: North Suspected Of Cyber Attack

An investigation is under way into the simultaneous shutdown of computer networks at several major broadcasters and banks in South Korea, with suspicion falling on North Korea.

The shutdown came days after North Korea blamed the South and the US for cyber attacks that temporarily closed websites in Pyongyang.

While the cause was not immediately clear, there has been speculation of a possible North Korean cyber attack.

Officials at the two South Korean public broadcasters KBS and MBC said that all computers at their companies blacked out - but did not cause any damage to their daily TV broadcasts.

YTN cable news channel reported that the company's internal computer network was completely paralysed.

The servers of YTN were brought down

Local TV showed workers staring at blank computer screens, and at one coffee shop employees asked for cash, saying their credit card machine was not working.

The state-run Korea Information Security Agency confirmed that computers at at least five South Korean companies were down. The agency was investigating what caused the outage.

Shinhan Bank, a lender of South Korea's fourth-largest banking group, said the bank's system, including online banking and cash machines, had stopped working.

The company was unable to conduct any transactions with customers at bank windows, including retail banking and corporate banking.

Tensions between the neighbouring countries are high following North Korea's recent nuclear test and the UN sanctions that followed.

Accusations of cyber attacks on the Korean Peninsula are not new. Seoul believes Pyongyang was behind at least two cyber attacks on its companies in 2011 and 2012.

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Cyprus Bailout Crisis: No Deal Yet With Russia

Sacrificing Trust In The Banks

Updated: 8:16am UK, Wednesday 20 March 2013

By Ed Conway, Economics Editor

I'm rather glad that the Pope managed to mention Abraham in his inaugural mass.

After all, of all the Old Testament, the tale of Abraham and Isaac is probably about the most comparable to the current imbroglio in Cyprus.

The father and guardian takes his son to the top of the mount, binds him and is on the point of sacrificing him when, at the last minute, God sends down an angel to stop him.

In an analogous way, the Cypriot government, on orders from on high (the eurogroup in this case, not God) has come to the brink of gouging an unprecedented tax out of its peoples' savings, and, at the last minute, seems to have been offered a reprieve.*

Now, if this were the Bible, the story would end there. Abraham's faith was tested, and he passed the test. Conveniently, the ancients glossed over the question of what this incident did to the father-son relationship.

However, this is not the Bible, and so we're left unpicking a relationship that has gone very wrong indeed. There is clearly a widespread sense of betrayal in Nicosia, and one can understand why.

Even if, as is the current plan, small savers with less than 20,000 euros in their accounts are let off the deposit tax, this episode will leave a lasting scar in place.

After all, the Government had spent the past few years insisting to savers that any deposits below 100,000 euros would be safe, protected by its deposit insurance scheme.

That it could subsequently play fast and loose with the bank accounts is unlikely to be forgotten.

Even if the Government were to stop short of a deposit tax, it's hard to see why savers wouldn't simply withdraw all their cash in droves when the banks reopen (whenever that is) – even if it's simply to put it underneath a mattress at home.

This episode has fatally undermined the element of trust in the banking system – something which is fundamental to the way capitalist economy functions in its current form.

Whether this triggers chaos elsewhere is difficult to predict. Markets have become more unsteady as the situation in Cyprus has deteriorated, but we haven't yet seen any kind of depositor panic elsewhere, for instance in Portugal and Spain.

However, the story in Cyprus is far from over. Anger is mounting, the parliamentary system is creaking under the weight of the demands coming over from Brussels, and the threats from Frankfurt to cut off emergency funding to the banks if the country doesn't co-operate haven't made them any more willing.

Short of a papal intervention, it's hard to imagine how to get a happy ending out of this story.

*Yes I know there are some inconsistencies. For instance, it's debatable whether the eurocrats have ditched the plan or whether it's simply being rejected by the government, the latter of which would be akin to Isaac breaking free of his bindings and escaping.

Plus, Isaac had not borrowed himself so far into penury that he was facing bankruptcy. Nor had he become a go-between for Russian tax avoiders but let's leave that aside for the time being.

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Christine Lagarde: IMF Chief's Flat Raided

French police have searched the flat of IMF chief Christine Lagarde in relation to a probe into a supporter of Nicolas Sarkozy.

Ms Lagarde's lawyer said her Paris apartment was examined as part of an investigation into her handling of a 2008 compensation payment to a businessman supporter of the French ex-president.

Police are investigating claims that Ms Lagarde, when finance minister under Mr Sarkozy, acted illegally in approving the 285m euro (£250m) arbitration payout to Bernard Tapie.

Ms Lagarde in 2007 ordered a panel of judges to arbitrate in a dispute between Mr Tapie and the bank Credit Lyonnais, which led to the disgraced tycoon being awarded the payout.

She denies any wrongdoing.

"This search will help uncover the truth, which will contribute to exonerating my client from any criminal wrongdoing," Ms Lagarde's lawyer, Yves Repiquet, told Reuters.

It was conducted a day after France's budget minister resigned after being targeted in a tax fraud inquiry.

Socialist President Francois Hollande came to power last May vowing to crack down on the cozy relationships between politicians and businessmen he said were rife under Mr Sarkozy.

Ms Lagarde was in Frankfurt and not in her Paris flat at the time of the search, a spokesman for the IMF chief said. She arrived in the city on Tuesday for the Frankfurt Finance Summit.

In the last few days, she has been involved in the discussions over the bailout for Cyprus, amid the country's impending bankruptcy.

She joined the finance ministers of the 17 Eurozone countries in weekend discussions that put together a rescue plan for the beleagured island that involved a raid on savings.

She told Time Magazine that the Cyprus crisis risked spreading to other countries.

Yesterday, the rescue plan put together by the Eurogroup and the IMF was rejected by Cypriot MPs, forcing the search for an alternative solution.

The International Monetary Fund refused to comment  on the raid on Wednesday.

"As we have said before, it would not be appropriate to comment on a case that has been and is currently before the French judiciary," said IMF spokesman Gerry Rice in a statement made shortly after the raid.

"Prior to its selection of the Managing Director, however, the IMF's Executive Board discussed this issue and expressed its confidence that Madame Lagarde would be able to effectively carry out her duties as Managing Director," Mr Rice said.

Lagarde, previously France's finance minister, was chosen to lead the global crisis lender in 2011 after her predecessor, ex-French politician Dominique Strauss-Kahn, was forced to resign after being arrested in New York in a scandal involving sex with a hotel chambermaid.

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Budget 2013: The Key Points You Need To Know

George Osborne's Budget lasted 54 minutes and contained a raft of measures as well as data about the state of the economy. Here is a handy guide.

ECONOMY

:: The independent Office for Budget Responsibility predicts Britain will avoid a second quarter of negative growth and slipping into a triple-dip recession.

:: OBR forecasts put growth for this year at 0.6%, down a massive 50% on its previous forecast of 1.2%.

:: Growth forecasts for the coming years are now: 2014 - 1.8%, 2015 - 2.3%, 2016 - 2.7% and 2017 - 2.8%.

:: The deficit has been cut by a third from 11.2% of GDP in 2009/10 to 7.4% this year. It is forecast to drop to 2.2% by 2017/18.

:: Borrowing forecast to hit £114bn this year instead of £108bn, then £108bn in 2014, £97bn in 2014/15, then £87bn, £61bn and £42bn in the following years.

:: Proportion of national income spent by the state has fallen to 43.6%.

:: Public sector net debt is due to be 75.9% of GDP this year, then 79.2%, 82.6%, 85.1%, 85.6% in following years falling to 84.8% in 2017/18.

:: The Bank of England's Monetary Policy Committee keeps 2% inflation target but has its remit overhauled.

CUTS AND SPENDING

:: Whitehall departmental budgets cut by 1% after £11bn underspend this year.

:: Bigger savings of £11.5bn sought in the spending review for 2015/16, up from £10bn.

:: Public sector pay cap of 1% extended by a year in 2015/16. Military will receive full recommended increase and be exempt from changes to profession pay.

:: New limit on "annually managed expenditure", which includes welfare budget, debt interest and payments to the EU.

:: Deal on the European budget secured by David Cameron saved Britain £3.5bn.

:: Infrastructure plans given and annual £3bn boost from 2015/16 - a total of £15bn over the next decade.

:: Plans to take forward two major carbon capture and storage projects.

:: "Generous" new tax regime to promote early investment in shale gas and tax incentives for the manufacture of ultra low emission vehicles.

TAX AND WELFARE

:: Corporation tax cut another 1% to 20% in April 2015 and small company and main rates of corporation tax merged at 20p.

:: Corporation tax cut paid by rise in bank levy rate to 0.142% next year.

:: Help for employees with more generous shareholder status, Capital Gains Tax relief for sales of business to workers and doubling tax free loans for commuter season tickets to £10,000.

:: Large new package of measures targeting tax avoidance and evasion to bring in £3bn in unpaid taxes.

:: New Employment Allowance from April 2014 taking off first £2,000 from employer National Insurance bills. Means around 450,000 small businesses will pay no employer NI at all.

:: Rise in personal allowance brought forward to 2014, meaning no income tax will be paid on the first £10,000 of earnings.

:: Extension to the Capital Gains Tax holiday.

:: Tax-free child care vouchers worth £1,200 per child and increased support for families with children on universal credit.

HOUSING

:: New Help-to-Buy scheme for people struggling to build up a deposit to buy a house, worth £130bn in loans.

:: Includes £3.5bn for shared equity loans and Government interest-free loan worth 20% of the value of a new build house.

PENSIONS AND SOCIAL CARE

:: Flat rate pension of £144-a-week brought forward to 2016.

:: Cap on social care introduced in 2017 and set at £72,000. Threshold for means-testing of help raised from £23,000 to £118,000.

:: Help for Equitable Life Policy holders extended to those who bought with-profits annuities before 1992, with payments of £5,000 and extra £5,000 for those on lowest incomes.

FUEL AND BEER

:: Planned rise in fuel duty this autumn is cancelled.

:: Planned 3p rise in beer duty tax scrapped and replaced by a 1p cut on a pint of beer.

:: Beer duty escalator axed. Planned rises for other alcohol duties is retained. 

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Budget: Labour Attacks Evening Standard Leak

The Evening Standard prompts call for an investigation by publishing Budget details before the Chancellor stood up in the Commons.

The front page was published on Twitter

The front page, photocopies of which were being scrutinised by the Opposition front bench as the speech began, detailed several aspects of the Budget relating to duty changes, tax and macroeconomic figures.

Labour leader Ed Miliband said George Osborne "almost need not have bothered coming" to the Commons "because the whole Budget, including the market-sensitive fiscal forecasts, were in the Standard".

"To be fair to the Chancellor of the Exchequer, I'm sure he didn't intend the whole of the Budget to be in the Standard before he rose to his feet," he said as he responded to Mr Osborne's speech.

Details of the Budget were handed to journalists ahead of the speech but the content was not to be published until after the Chancellor had addressed MPs.

Evening Standard editor Sarah Sands apologised, saying she was "devastated" that the paper had broken the embargo.

"An investigation is immediately under way into how this front page was made public and the individual who tweeted the page has been suspended while this takes place," she said in a statement.

"We have immediately reviewed our procedures. We are devastated that an embargo was breached and offer our heartfelt apologies."

The newspaper's political editor, Joe Murphy, also issued an apology during the Chancellor's speech.

He tweeted: "I wish to apologise for a very serious mistake by the Evening Standard earlier which resulted in our front page being tweeted.

"We are so sorry to the House of Commons, to the Speaker and to the Chancellor for what happened. We shall be apologising to them."

Shadow Chancellor Ed Balls told Sky News: "The idea the Treasury was giving maket-sensitive information about the borrowing numbers to the Evening Standard before the Chancellor has said it to the Commons, that is very unusual ... that is a big, big mistake."

When questioned about whether similar briefings had been given under a Labour Government, he said: "What Governments do is they shape the agenda. We have seen lots of leaks in the last few days but to give out the fiscal numbers, market-senstiive in advance, I've never heard of that before." 

In 1947, Labour Chancellor Hugh Dalton was forced to quit when the Budget was leaked before it was delivered in the chamber.

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Barclays Hands Bosses £40m Share Windfall

By Mark Kleinman, City Editor

Barclays today handed nine top executives a massive share windfall worth more than £40m less than nine months after the bank was fined £290m for its role in the Libor-fixing scandal.

Figures released on Wednesday afternoon showed that Barclays' controversial investment banking chief, Rich Ricci, accounted for almost half of the giant payout, landing shares worth more than £17m.

The share awards will stoke the ongoing row over bankers' pay and are likely to put pressure on Barclays' board, led by the City grandee Sir David Walker, who arrived last autumn with a pledge to overhaul the bank's culture and reputation for lavish pay deals.

Sky News revealed plans for the share awards earlier on Wednesday, the details of which provoked accusations that Barclays was attempting to bury the news on a day when the City was distracted by George Osborne's Budget statement.

The share awards relate to allocations made in previous years as part of deferred long-term incentive plans, and cover the executives on Barclays' board and its top-level management committee.

A Barclays spokesman defended the payouts, saying they were the legacy of previous pay policies.

Rich Ricci has been awarded more than £17m in shares

"The share releases detailed in this announcement include deferred shares awarded from previous years' annual performance bonuses and, in some cases, vesting of historical Long Term Incentive Plans where the agreed performance conditions for vesting have been met.

"As was stated in the 2012 Annual Report published on 8 March, Barclays has revised its remuneration policy and all future incentive awards, short and long-term, will be based on the new principles that have been set out."

The award to Mr Ricci is particularly contentious because he waived a much smaller annual bonus on the day that Barclays settled with UK and US regulators last June over its traders' manipulation of the interbank borrowing rate, Libor.

Mr Jenkins' payout, worth about £5.5m, is also controversial because he has promised to show greater pay restraint.

His share awards do not appear to have been dented by the fact that Barclays has set aside billions of pounds to compensate customers who were mis-sold payment protection insurance and interest rate swaps.

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Budget: 2013 Growth Forecast Is Cut In Half

George Osborne has unveiled tax breaks for beer drinkers, drivers and first time buyers as he admitted the economy is still struggling.

The Chancellor's Budget contained a string of moves designed to ease the cost-of-living, including a 1p cut in the price of beer and the cancellation of a planned fuel duty hike.

A £130bn mortgage guarantee scheme will help people without big deposits buy homes, with interest-free loans worth 20% of the value of a new build property also available.

And in what he called a Budget for "the aspiration nation", Mr Osborne said the income tax threshold will rise to £10,000 in 2014, a year earlier than planned.

The Chancellor also gave small businesses a boost by unveiling a new employment allowance which will save employers £2,000 on their National Insurance bills.

But he was forced to admit that the recovery was taking far longer than expected as he confirmed growth forecasts for this year have been cut in half to just 0.6%.

Ed Miliband called George Osborne a "downgraded Chancellor"

The independent Office for Budget Responsibility does expect Britain to avoid a triple-dip recession but public borrowing will be higher because of the floundering recovery.

It is now forecast to hit £114bn this year instead of £108bn before eventually falling to £42bn in 2017/18.

Driving home the problems facing Britain, figures released hours before the Budget showed the first rise in unemployment for a year - up 7,000 to 2.52m.

But despite growing calls to change course from his austerity regime, Mr Osborne insisted there could be no turning back.

"It is taking longer than anyone hoped but we must hold to the right track," he said.

Labour leader Ed Miliband claimed: "All he offers is more of the same - higher borrowing and lower growth - a more of the same Budget from a downgraded Chancellor.

"He is the wrong man in the wrong place at the worst possible time for the country."

The Chancellor leaving Number 11 Downing Street with his Budget

But Mr Osborne declared: "This is a Budget that doesn't duck our nation's problems. It confronts them head on. It is a Budget for an aspiration nation. It is a Budget for a Britain that wants to be prosperous, solvent and free."

He fleshed out plans for a further £2.5bn in Whitehall cuts over the next two years to fund capital spending projects.

And he confirmed plans to help working parents with tax-free childcare support and to introduce a flat rate pension by 2016.

The Capital Gains Tax holiday will also be extended and corporation tax cut further by 1% to 20% in April 2015.

But there will be anger at the extension of the 1% public sector pay cap to 2015/16, which came as civil servants staged a 24-hour strike.

There will also be further cuts in the spending review for 2015/16, up from £10bn to £11.5bn.

And the Chancellor announced that the Bank of England's remit was being overhauled but that it will keep its inflation target of 2%.

The House of Commons was extremely rowdy as Mr Osborne delivered one of the most important speeches of his career.

Shadow chancellor Ed Balls was singled out by the deputy speaker for barracking from Labour's front bench.

The Office for Budget Responsibility (OBR) now predicts growth of 2.3% for 2015, 2.7% in 2016 and 2.8% in 2017.

A Twitpic shows George Osborne at work

This means the Chancellor is now set to borrow £55.7bn more over the next five years than he was planning as little ago as in December.

Figures do show that the deficit has fallen from 11.2% of GDP in 2009/10 to 7.4% this year and is set to continue dropping until it reaches 2.2% in 2017/18.

But the OBR confirms Mr Osborne will miss his target for total public sector debt to start falling as a percentage of national income by 2015/16.

It now forecasts this will rise to a peak of 85.6% of GDP or a staggering £1.58tn in 2016/17 - an increase of 6.4% on its previous figures.

There was consternation as the speech began when the London Evening Standard newspaper posted its front page, complete with full details of the Budget, on Twitter.

The paper suspended the person behind the tweet and launched an investigation as it issued a fulsome apology for breaking the embargo.

Editor Sarah Sands said: "We have immediately reviewed our procedures. We are devastated that an embargo was breached and offer our heartfelt apologies."

John Longworth, director general of the British Chambers of Commerce, criticised Mr Osborne for not going far enough to support business and boost growth.

"We are at an unprecedented moment in economic history, and the Government should be doing everything in its power to get the economy moving", he said.

But Simon Walker, director general of the Institute of Directors, said: "We applaud this Budget. The Chancellor has stuck to his guns and held his nerve - which is exactly what we wanted to see.

"Deficit reduction is not an optional policy, it is an absolute necessity, and he is right to reject the siren calls to abandon it."

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