Trustee in Madoff Case Cashing In
A recent article posted by The New York Times pointed out that Irving Picard, the court-appointed trustee that is seeking to recover funds for the victims of the Madoff Ponzi scheme, is making around $850 an hour. Thought of initially as a modern-day Robin Hood, advocating for those poor individuals who were taken advantage of, Picard has obtained nearly $554 million in legal and other fees.
Thus far, Picard has reached settlement deals worth nearly $9 billion, but the Madoff victims have only seen $330 million of that money because many of the settlement deals have been challenged in court. As far as Picard’s fees, the good news is that the fees do not come out of the Madoff victims’ settlement. Rather, the fees are paid from the SIPC fund, which was created to provide protection for investors against losses when a broker-dealer fails.
U.S. Job Growth Takes Steep Fall
Financial markets were rocked Friday, as data pointed to a sharp decline in job growth during May. Approximately 69,000 jobs were added in May, the lowest total in a year. In addition, the jobless rate rose for the first time since summer 2011, to 8.2%. If this isn’t enough to depress you, there are also growing fears about European and Asian economies, which is the likely cause of significant falls in stocks Friday morning.
The U.S. economy has followed a fairly steady trend over the last three years—gain momentum during the winter months and lose steam in the spring and summer. Some economists point to the warmer than usual winter prompting businesses to hire earlier than normal, which boosted job numbers early in the year. Also, many believe the concerns about Europe are shaking consumer and business confidence.
U.S. Auto Makers Flourish
On a more positive note, the U.S. auto industry is reporting significant sales gains in May. Chrysler Group LLC reported gains of 30%, Ford Motor Co. reports a 13% gain, and General Motors Co. increased sales by 11%. Across the spectrum, U.S. auto sales are expected to rise 31% from a year earlier, and nearly 18% from the prior month.
Entrepreneurial and Small Business News
Dwolla: An Innovative Payment Service for Small Businesses
In this week’s News Roundup, we wanted to give a shout out to Dwolla, a company whose aim is to provide a platform for businesses and individuals to pay electronically without being charged enormous fees. Here’s a great article about how Dwolla has saved entrepreneurs money! We use Dwolla in our business, and we appreciate their approach to minimizing fees.
Marina Biotech Announces a Shut-down
The Bothell-based company, Marina Biotech Inc., which was developing RNAi-based cancer therapies, announced that it will be laying off 90% of its employees and will cease its day-to-day operations. The company is seeking to raise sufficient capital to keep the company up and running. Without the necessary capital, the company said it will further reduce its staff or cease operations entirely.