SEC expands probe into overseas hiring by U.S. banks

NEW YORK (CNNMoney)

At issue: Did the banks give jobs to friends and family of government officials, and in doing so, violate laws prohibiting bribery of foreign officials?

JPMorgan Chase has already disclosed that it is the subject of an investigation by the SEC and U.S. Justice Department related to its hiring in Hong Kong and the Asia-Pacific region.

The person familiar with the expanded probe said the SEC has sent out letters to multiple institutions asking for information about their hiring practices. The person said the Justice Department has yet to contact other banks.

Related: Governments lose trust as corruption soars

The Wall Street Journal reported Wednesday that Morgan Stanley (MS, Fortune 500) and Citigroup (C, Fortune 500) were among the banks that have been contacted by the SEC. Neither bank would comment, nor would the SEC.

The Foreign Corrupt Practices Act bars U.S. companies from using bribes to conduct businesses overseas.

Numerous companies have disclosed investigations into allegations of such practices, including Wal-Mart Stores (WMT, Fortune 500) and French food maker Danone (DANOY).

Last year drugmakers Eli Lilly (LLY, Fortune 500) and Pfizer (PFE, Fortune 500) each agreed to pay the SEC tens of millions of dollars because of bribes paid in overseas markets.

First Published: November 27, 2013: 10:26 AM ET

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Sriracha factory ordered to put a lid on smell after locals pepper city with complaints

NEW YORK (CNNMoney)

A judge in Los Angeles County has ordered Sriracha maker Huy Fong Foods to suspend operations at a plant in the city of Irwindale that local residents claim has caused an overpowering odor.

Irwindale claimed in a lawsuit that the stench was causing watery eyes, sore throats and headaches, prompting complaints from dozens of residents.

"You couldn't stay outside in some places," Irwindale city manager John Davidson said. "We've had softball teams that have had to cancel their games and practices because their eyes were watering."

The judge's ruling orders Huy Fong to "immediately make changes in its site operations reducing odors and the potential for odors." The city has been pushing Huy Fong to install a new filtration system to address the issue.

"We want to find a balance between letting this business be a business and protecting our residents," Davidson said. "We hope this will allow us to sit down with Huy Fong and come up with a solution that meets the needs of the community."

Huy Fong declined to comment.

For most of its lifespan, Huy Fong has produced the Thai chili sauce without incident in Rosemead, Calif., but it shifted some production to Irwindale earlier this year.

While Huy Fong isn't the originator of Sriracha, the company's distinctive green-topped bottles have become a staple on grocery shelves, kitchen lines and restaurant tables since it began U.S. production in 1983.

The company produced 20 million bottles of Sriracha in 2012, or $60 million worth, all without the benefit of advertising. Consumer devotion to the brand has inspired cookbooks, embroidery, jewelry and a limited-edition flavor of Lay's potato chips.

First Published: November 27, 2013: 4:31 PM ET

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Report linking Bitcoin and Silk Road retracted

NEW YORK (CNNMoney)

The academic report had suggested that Satoshi Nakamoto, the yet-unidentified creator of virtual currency Bitcoin, gave an unusually large sum of money to someone known as Dread Pirate Roberts, founder of the online black market Silk Road.

However, the person accused of sending the money to the Silk Road founder turned out to be Dustin Trammell, a tech-savvy libertarian in Austin, Texas. In actuality, he sent it to Mt. Gox, a Bitcoin exchange. Trammell said he's communicated by email with the famous Satoshi, but that's it.

"Unless I have split personalities and this is Fight Club, I definitely am not Satoshi Nakamoto," Trammell recently wrote on his blog.

Related: Bitcoin prices top $1,000

The Weizmann Science Institute researchers, Dorit Ron and Adi Shamir, admitted that they were wrong, even though they said the link was merely a theory.

"Now that a better explanation exists, we no longer believe that the [account] belonged to Satoshi," the researchers said in an email.

In his blog, Trammell denied having any connection to Silk Road, saying he made the large transfer of money to himself. That wouldn't be odd, given that Bitcoin users often keep multiple digital wallets.

But the man that federal authorities have arrested and accused of launching Silk Road, Ross Ulbricht, is from Austin too. Given the folklore surrounding Bitcoin and Silk Road, get ready for rumors that Trammell is Satoshi hiding in plain sight.

First Published: November 27, 2013: 10:59 AM ET

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Black Friday 2013: What to expect

NEW YORK (CNNMoney)

So what should you expect this year?

For starters, Black Friday has given way to Black Thursday, since most major retailers are opening their doors earlier than ever before on Thanksgiving day itself.

Kmart leads the pack, opening at 6 a.m. on Thanksgiving day and staying open for 41 hours straight. Toys R Us is opening at 5 p.m., Wal-Mart (WMT, Fortune 500) will start its sales at 6 p.m., while Macy's (M, Fortune 500), Kohl's (KSS, Fortune 500), J.C. Penney (JCP, Fortune 500) and Sears (SHLD, Fortune 500) will let customers in at 8 p.m.

Related: 8 must-have holiday toys

The early openings has fueled people to vent on social media calling the stores' decisions "heartless," "greedy" or "shameful" for taking away Thanksgiving from store employees.

For shoppers who decide to head out there early, they can expect some big savings.

Like every year, some of the hottest deals are on consumer electronics, like Apple's (AAPL, Fortune 500) iPad, Amazon's (AMZN, Fortune 500) Kindle and laptops from various brands.

Staples (SPLS, Fortune 500) will be selling the new Kindle Fire 7 inch 16GB tablet for $79, which is roughly half off, though this deal is only for 1 per customer and as supplies last. Wal-Mart will give iPad mini buyers $100 gift cards.

Related: Wal-Mart's 2013 Black Friday deals

Best Buy (BBY, Fortune 500) is getting a lot of hype for its sales, which include a 55-inch LG flat screen television for $499.

Black Friday deal experts say some of the best deals could come from Wal-Mart, since the doorbuster sales offered during specific hours are guaranteed to any shopper in line for the items at that time. If something sells out in stores, shoppers will get a voucher for the item at the sale price.

Related: Retailers brace for a tough holiday season

While shoppers will be out looking for big discounts, some retail workers across the country are planning to join protests demanding better pay. OUR Walmart, a union-backed group said it is planning 1,500 protests at Wal-Mart stores across the country.

Workers held similar demonstrations last Black Friday, and the protests have continued throughout the year.

First Published: November 27, 2013: 11:10 AM ET

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RBS under fire for lending practices

More pain for RBS amid claims its lending practices deliberately harmed small businesses.

LONDON (CNNMoney)

The claims stem from two reports released this week concerning lending practices at RBS (RBS), one of the U.K.'s biggest banks.

A report by U.K. government adviser Lawrence Tomlinson claims the bank moved healthy businesses into its turnaround division to generate more profits.

Firms faced higher fees and struggled to return to the mainstream bank or find alternative financing once housed in the distressed unit.

Based on evidence from businesses and former RBS bankers, Tomlinson found that the bank "unnecessarily engineered" company defaults to move them into its restructuring division.

"The businesses affected are often perfectly viable," the report said.

Related: Misconduct costs Barclays another $1.6 billion

A second report by a former deputy Bank of England governor, commissioned by RBS, also criticized the bank's small business lending practices.

It recommended that the bank conduct an internal inquiry into the damaging accusations. The bank has hired top London law firm Clifford Chance to lead a review with the findings expected next year.

Bank of England Governor Mark Carney has described the claims as "deeply troubling and extremely serious."

Quizzed about the unfolding scandal, he told British lawmakers Tuesday that the Financial Conduct Authority is responsible for investigating the allegations.

Related: Bigger than Libor? Forex probe hangs over banks

"Authorities need to be involved and that's absolutely necessary," he said.

The FCA declined to comment. The Financial Times reported that the bank could face a criminal investigation by the Serious Fraud Office, which prosecutes cases of serious and complex fraud.

The SFO declined to comment.

RBS, which is still majority owned by the U.K. government, has shelled out hundreds of millions in fines to U.K. and U.S. regulators this year to settle various misconduct charges.

The government has no immediate plans to sell its stake but a fresh investigation and possible penalties by the FCA could further delay a return of RBS to public ownership.

First Published: November 27, 2013: 10:28 AM ET

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Bitcoin prices top $1,000

Bitcoin has been on a spectacular run this year, soaring to new highs even though some thought the Bitcoin bubble burst in April.

NEW YORK (CNNMoney)

The price of one bitcoin has surged 78-fold in 2013 on hopes the experiment in digital money will eventually become a legitimate global currency. Prices hit a new peak of $1,044 in early trading Wednesday. One bitcoin was worth about $13 in January.

Bitcoin, which trades non-stop on the Mt. Gox exchange and other online markets, has been extremely volatile. It rose to what was then an all-time high of $900 earlier this month, only to fall back to $500 in the span of 28 hours.

Demand for bitcoin has been particularly strong in China, where the leading search engine, Baidu (BIDU), now accepts the currency for certain services.

In the United States, lawmakers have been examining potential regulations for bitcoin, which is the currency of choice on certain online markets for drugs and other illicit goods.

Federal authorities shut down the online drug bazaar Silk Road last month, though a new version of the market has resurfaced a few weeks later.

Bitcoin has received a measure of support from officials at the Federal Reserve, including chairman Ben Bernanke, who said the currency "may hold long-term promise" as part of the international payment system.

Some proponents say government regulation would be a positive for bitcoin, since it could lead to wider adoption of the currency. But others argue that bitcoin is decentralized by design and the government should leave well enough alone.

Related: 8 things you can buy with bitcoins right now

Investors say bitcoin is highly speculative, and should not exceed 1% of a portfolio. Many have compared bitcoin to a lottery ticket, saying it could be worth a lot, or nothing at all.

Bitcoin prices surged in April following an unprecedented bailout of the banking system in Cyprus, a move that led to concerns about the stability of European banks and the euro currency. But prices plunged in May in what many saw as the bursting of a bubble. Bitcoin traded in a range around $100 for most of the summer before the current rally kicked off in October.

Meanwhile, a growing number of businesses now accept bitcoins, ranging from some Subway sandwich shops to Richard Branson's commercial space travel venture, Virgin Galactic.

The program behind Bitcoin was created anonymously and introduced on the internet in 2010. Unlike traditional paper currencies, bitcoins are not managed by a central authority and exist only in cyberspace.

Bitcoins are "mined" by powerful computers that complete complex math problems. The total quantity of bitcoins is capped at 21 million, and about 12 million are currently in circulation, according to blockchain.info.

First Published: November 27, 2013: 10:22 AM ET

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American, US Air cleared to land merger

US Airways and American Airlines are now set to merge into the largest airline company on Dec. 9.

NEW YORK (CNNMoney)

Judge Sean Lane approved an antitrust settlement reached earlier this month between the airlines and the Justice Department. Justice's earlier objections to the deal had been the major impediment to the merger.

But the department believes that concessions made as part of the settlement, including the transfer of some key airport slots to low-cost carriers such as JetBlue (JBLU, Fortune 500) and Southwest, (LUV, Fortune 500) will provide for increased competition

While the passenger group has indicated that it intends to pursue a private antitrust case against the merger, Lane ruled that should not stop American parent AMR (AAMRQ, Fortune 500) from emerging from bankruptcy and combining with US Airways. The passengers still believe the merger will result in higher fares and reduced choice.

The merger of the two companies is now set to take place Dec. 9, with the shares in the new combined American Airlines trading under the symbol AAL.

Related: Storm prompts airlines to relax travel policies

Passengers will still be booking flights under both the American Airlines and US Airways (LCC, Fortune 500) names for some time. Details about when the airlines will combine reservations and ticketing, frequent flier clubs and other operations are still being worked out, and those combinations are not likely until the beginning of 2014, at the earliest.

Related: US Airways-American settlement - what it means for fares

The formal combination of the companies' two separate operating certificates with the Federal Aviation Administration might not take place until 2015. But the combined company that will exist on Dec. 9 will be the largest airline in the world in terms of revenue, passengers carried and the number of miles flown by paying passengers, surpassing United Continental Holdings (UAL, Fortune 500), which was also formed by a merger.

First Published: November 27, 2013: 11:40 AM ET

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Disgusted shoppers threaten to boycott Black Friday Thursday

This badge is circulating on Facebook and was shared more than 959,000 times as of mid-day Wednesday.

NEW YORK (CNNMoney)

Among their biggest targets: Kmart plans to kick Thanksgiving day off, opening stores at 6 a.m. and remaining open for 41 hours straight.

Toys "R" Us starts its doorbusters at 5 p.m. At Wal-Mart stores (many of which are open all day), the deals start at 6 p.m.

Best Buy opens at 6 p.m., and then Macy's, Kohl's, J.C. Penney, Target and Sears all open at 8 p.m.

An "I pledge to not shop on Thanksgiving" badge is circulating on Facebook and has been shared more than 959,000 times as of mid-day Wednesday.

Related: Are you working during the holidays? Share your story

"5 pm open on Thanksgiving? Really?" wrote Jaime Etheridge Krauss on the Toys "R" Us Facebook page. "A store who is devoted to children and families opens when Americans sit down at the dinner table? What about your employees?!?"

"Hey Kmart! Because of you being Open on Thanksgiving and totally disrespecting your employees, Our Family will never spend a $ in your store!" writes Frank Chip Munroe.

"Kohl's has always been my absolute favorite place to shop. However, as much as it breaks my heart to say this I will no longer be shopping at Kohl's from this point on or any of the other retailers that are opening ON THANKSGIVING. This is a day for family and giving thanks," wrote Kelli Williams Lord.

"Macy's I am disappointed in you for opening your stores on Thanksgiving. Let your employees have a day with their families! It is not the end of the world to wait until Friday to start the chaos!" wrote Katie Buchanan Reynolds.

"I always wanted to believe that Target was somehow better than Walmart in product, and in policies. I realize that Target does not share my values and will no longer get my business. Give your employees a paid day off!" wrote Sean Pierce.

"Even Ebenezer Scrooge let Bob Cratchit go home a few minutes early on Christmas Eve," wrote Dan Hall on J.C. Penney's page. "When you're eating your Thanksgiving turkey this year, remember that your employees are taking time away from their families to help satisfy your greed."

Poll: Do you think Black Friday is worth it?

Of course, the real test of shopper anger will come tomorrow night: Will the the outraged shoppers be outnumbered by people who turn out for the deals?

The holiday shopping season was cut six days shorter this year because Thanksgiving falls later on the calendar, and retailers are fearing sales could be flat.

First Published: November 27, 2013: 2:18 PM ET

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Black Friday: Is it worth it?

NEW YORK (CNNMoney)

Some of the nation's largest retailers plan to open their doors on Thanksgiving Day, kicking off with Kmart (SHLD, Fortune 500) at 6 a.m.,Toys R Us at 5 p.m. Wal-Mart (WMT, Fortune 500) and Best Buy (BBY, Fortune 500) at 6 p.m. and Macy's (M, Fortune 500), Target (TGT, Fortune 500) and others will open throughout the evening.

The big enticement will be so-called "doorbusters," limited-time only deals offered to the first shoppers in the store. Hot-ticket doorbusters are typically electronic items like TVs and laptops at deep discounts of 50% or more.

Poll: Will you shop on Black Friday or not?

Yet most stores keep such limited supplies of these deals, that few shoppers walk away with them, said Marshal Cohen, chief retail analyst at the NPD Group. "If you're looking for that ultimate score, the half-price big screen TV, if you're not the 24th person in the line, 'good luck,'" he said.

Some die-hard shoppers started camping out in front of an Ohio Best Buy as early as last week to nab its popular doorbuster deals on big-screen TVs, laptops,video games and other electronics, such as a $500 55-inch LG flat-screen TV.

One exception: Wal-Mart is guaranteeing prices for some of its best deals, as long as customers are in line during specific times. If a store runs out of the product, shoppers get a voucher guaranteeing the product at the sale price.

But shoppers may not need to venture out to nab most Black Friday deals in the first place. With competition fierce, many retailers' are offering deals online that rival the ones being offered in stores, said Walter Loeb, a retail analyst and president of Loeb Associates.

Target, for example, will start offering almost all of its in-store deals in the early morning hours of Thanksgiving on Target.com before stores even open. Meanwhile, Consumer Reports has noted that Amazon (AMZN, Fortune 500) is offering Black Friday prices on big-screen TVs that are similar to deals available at Wal-Mart and Best Buy stores.

Related: Black Friday 2013: What to expect

"Prices during the holidays, even for some of the doorbusters, aren't necessarily the best prices of the season," said Patricia Huddleston, a professor of retailing at Michigan State University.

A recent survey by personal finance site, NerdWallet.com, found that 23 out of 25 stores were offering at least one product at the exact same price as last year, while some stores had multiple deal repeats or offered better prices on certain products earlier in the year.

And certain products will likely see even deeper discounts as Christmas approaches.

For example, better prices on winter clothing and generic toys are often found in the final week or two before Christmas as stores attempt to clear their shelves, said Trae Bodge, a spokesperson for RetailMeNot.com, a web site that tracks consumer deals.

So unless you have your eye on a hot product that you're worried will sell out, it's often best to wait. "Black Friday is about specific items," Bodge said. "Do the remainder of your shopping afterwards."

Related: 5 Black Friday tricks to avoid

Jessica Kessler had her first Black Friday experience several years ago, waking up at 3 a.m. on Friday to stand outside in the cold with hundreds of people waiting for Kohl's to open. Since then, she has ventured out with her husband's family in the early morning hours of Black Friday to hunt for deals. But she said there is no discount deep enough to draw her from her home on Thanksgiving.

"I was able to knock out a good bit of my shopping in the years that we went and got some deals that I was happy with," she said. "But at this point, there is no amount of savings that they could offer that would make it worth it to me."

First Published: November 27, 2013: 12:05 PM ET

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U.K. moves to cool property market

The Bank of England says U.K. house price inflation is accelerating and spreading out from London.

LONDON (CNNMoney)

House prices have increased by about 7% in a year, and by much more in London, raising concerns that borrowers may have trouble making repayments when interest rates start to rise from their record low levels.

Bank of England Governor Mark Carney said house price increases were gaining momentum, and broadening out across the country, but that the risks were manageable.

It was important to act now to avoid more dramatic intervention later, and to allow the bank to keep supporting the broader recovery in the U.K. economy with its low-rate policy, he told reporters.

"Risks to financial stability may grow if there are further substantial and rapid increases in house prices and a further build-up of household indebtedness," he said.

Household mortgage debt stands at about 110% of annual disposable income, below the 2008 peak of 128% but well above the longer term average.

Related: Five housing bubbles to watch

The changes announced Thursday mean that from next year, U.K. banks will no longer be able to use the "Funding for Lending" program to access cheap credit for mortgages and personal loans. Lending to businesses will be unaffected.

The Bank of England is also giving itself the power to vary the affordability criteria that mortgage borrowers must meet. This is supposed to ensure banks don't take on excess risk and homeowners are better able to service their debts if circumstances change.

But some analysts say the measures don't go far enough, particularly as a separate program of subsidized mortgages for borrowers with small deposits -- known as "Help to Buy" -- is unaffected.

Since April, such borrowers have been able to access interest-free loans for five years on newly-built homes. The program will be extended to help buyers purchase existing properties worth up to £600,000.

Related: Surging U.K. economy surprises central bank

Both programs were launched with the aim of stimulating lending in the wake of the financial crisis to support the economic recovery and job creation. But just months after the U.K. was teetering on the brink of a triple-dip recession, a surge in consumer spending and rising house prices have led to a dramatic turnaround.

The strength of the comeback took the Bank of England by surprise, and earlier this month it upgraded its forecasts for growth and signaled that interest rates could rise much sooner than it was forecasting earlier in the year.

The pound has rallied 10% since July to trade near a 12-month high of $1.63.

First Published: November 28, 2013: 8:12 AM ET

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