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Aug 25, 2016

DealBook Morning News - August 25, 2016: Fed Protesters, the Mylan Furor, Trans-Atlantic Tax Tussles

The New York Times

Thursday, August 25, 2016

By Amie Tsang
What a difference a couple of years of weak economic growth have made.
When it first appeared at the annual Federal Reserve conference in 2014, the “Fed Up” campaign was just an amusing diversion. Now, it has a place at the table.
The group, which wants the Fed to extend its economic stimulus program, will meet with the policy-making committee at the Jackson Hole conference, which opens today.
Fed officials had applauded the protesters on their educational efforts but had not really engaged with their economic arguments. Now, they will hear from people struggling to make ends meet.
Whether “Fed Up” manages to persuade the Fed to change its decisions is still up for debate. They could, however, have more success pushing for diversity on the policy-making committee, which includes no black or Hispanic members.
“Having a diverse set of policy makers — including African-Americans and Hispanics — will influence the Fed’s decision-making,” Andrew Levin, an economist at Dartmouth College, noted. “And it should. The public should have confidence that the public is well represented at the F.O.M.C. table.”
Mylan Controversy Rages
As if the furor over Mylan raising the price of its EpiPen wasn’t enough, it turns out it was utilizing a common tactic in the industry.
Drug companies often raise their prices sharply before a generic competitor reaches the market to milk the profits while they can. Insurers and pharmaceutical benefit managers tolerate this because they know lower prices are on the way.
In this case, Mylan had settled a lawsuit in 2012 agreeing to allow a generic competitor to its EpiPen — which injects a drug to save people from life-threatening allergy attacks — into the market. The company had already been lifting the price of the EpiPen, but after the settlement it pushed even harder.
Mylan has refused to comment on why it has repeatedly increased the price.
Anger directed toward the company, however, has continued to bubble. Hillary Clinton piled in on Wednesday to say the price increase was “outrageous.”
But the target for the anger has made things a little awkward for at least one Democrat: Senator Joe Manchin III is the father of Heather Bresch, the chief executive of Mylan.
Tussles Over Tax
Is the European Commission becoming a “supranational tax authority”? The Treasury Department certainly considers it a possibility and said so, in an apparent effort to dissuade Brussels from demanding billions of euros in unpaid taxes from Apple, as The Financial Times reports.
The Commission, the European Union’s executive arm, has accused Ireland of granting Apple a sweetheart tax deal and has been investigating it in the biggest crackdown on corporate tax avoidance across the 28-nation bloc.
A ruling is expected next month, but in the meantime, the Treasury has warned that Brussels is threatening international agreements on tax reform.
At the same time, Britain is toughening up its own penalties for tax evasion ahead of a new transparency initiative that will help it track down individuals who have hidden money offshore.
It is proposing new legislation that would require taxpayers with outstanding tax liabilities to come forward by September 2018, or be subject to harsher punishments. The safe havens for tax evaders are getting fewer and fewer.
Coming Up
• Parties involved in the settlement between Volkswagen and car owners affected by the company’s emissions cheating scandal will update a federal judge on the progress of their discussions.
• The Commerce Department will release data on durable goods orders for July.
• Tiffany will publish its latest quarterly earnings.
Contact amie.tsang@nytimes.com
Boardroom Battles
Keith Meister holds a large stake in the Williams Companies.
Former Director Unveils Disputed Plan for Williams Board
By LESLIE PICKER
Keith Meister nominated himself and employees of his hedge fund as directors, saying he didn’t have time to come up with an independent slate.
BREAKINGVIEWS
Thomas Dooley Is Viacom’s Best Bet for a Breakup
By JENNIFER SABA
Mr. Dooley may be well suited to finding the best value for Viacom’s various assets.
 
Banking
STREET SCENE
Goldman Sachs, Banker to the Elite, Turns to the Common Man
By WILLIAM D. COHAN
With new online lending and savings businesses, Goldman Sachs is hoping that millions of ordinary people will be a new source of riches.
A Surprise Windfall for Bank of America
By THE STREET
Since the end of June, the three-month London interbank offered rate, or Libor, has surged by about 25 percent, creating a boon for lenders like Bank of America since Libor is used to set the interest levels collected on many floating-rate commercial loans.
Hong Kong Securities Regulator Fines Morgan Stanley
By THE WALL STREET JOURNAL
The Securities and Futures Commission fined Morgan Stanley Hong Kong Securities $2.4 million for failure of its internal controls related to trading between 2013 and 2016.
 
For the latest updates:
Go to NYTimes.com/DealBook
 
Legal Disputes
STATE OF THE ART
Gawker’s Gone. Long Live Gawker.
By FARHAD MANJOO
Even if you avoided Gawker.com, you can’t escape its influence. Elements of its tone, style, sensibility, business model and work flow have colonized just about every other media company.
Duke University Makes Claim on Aubrey McClendon’s Estate
By THE WALL STREET JOURNAL
Mr. McClendon, who founded Chesapeake Energy and became a major benefactor of Duke University, had unfunded commitments to athletics funds, scholarships and campus improvement projects worth about $9.94 million, the school claimed in a court filing.
 
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Initial Public Offerings
Alipay Said to Consider Hong Kong I.P.O.
By BLOOMBERG
Ant Financial, which owns Alipay, is considering an initial public offering in Hong Kong in the first half of 2017 after running into regulatory hurdles with a Hong Kong-Shanghai dual listing, according to people familiar with the matter.
Chinese Online Lender Considers Hong Kong I.P.O.
By THE WALL STREET JOURNAL
Lufax, the Chinese online lender valued at $18.5 billion in its latest funding round, is preparing for an initial public offering in Hong Kong before the end of 2017.
 
Business
Uber Partners With Betterment to Offer Drivers I.R.A.s
By LIZ MOYER
Drivers in Boston, Chicago, Seattle and New Jersey can now sign up for retirement accounts as part of Uber’s rewards program for its drivers.
World’s First Self-Driving Taxis Hit the Road
By THE WALL STREET JOURNAL
Singapore became the first country in the world to launch a self-driving taxi service on Thursday, beating the ride-hailing giant Uber Technologies by days to public road tests of a technology that could revolutionize the transport industry.
The first fruit of Questlove’s partnership with Pandora is a weekly radio show that will debut on Sept. 7.
Pandora Looks for a Way Out of the Doldrums. Cue Questlove.
By BEN SISARIO
The involvement of Questlove, of the Roots, is an important endorsement as the internet radio giant tries to compete directly with Spotify, Apple Music and Tidal.
The Indian Navy’s first Scorpène submarine at Mazagon Docks, a naval vessel ship-building yard, in Mumbai.
French Manufacturer Building Indian Submarines Suffers Major Data Leak
By DAVID JOLLY
Detailed plans for stealth submarines being built for the Indian navy have been leaked, leaving France and India scrambling to assess the damage.
FEATURE
Inside Facebook’s (Totally Insane, Unintentionally Gigantic, Hyperpartisan) Political-Media Machine
By JOHN HERRMAN
How a strange new class of media outlet has arisen to take over our news feeds.