Prominent CEO Caught up in Insider Trading Investigation and other top news stories of the day.
Prominent CEO Caught up in Insider Trading Investigation
Citing unnamed sources, The New York Times reports that federal prosecutors are expected to file criminal charges today against Rajat K. Gupta, a former director of Goldman Sachs and Procter & Gamble, and the head of the McKinsey & Co. consulting firm. Gupta is expected to surrender to authorities investigating whether he leaked corporate secrets to hedge fund manager Raj Rajaratnam, sentenced earlier this month to 11 years in prison for insider trading.
The case against the 62-year-old Gupta extends the federal probe beyond Wall Street traders and into the boardrooms of some of America’s most prestigious corporations, The Times said.
Obama Works for Student Loan Relief
The White House yesterday announced plans to reduce student loan payments for some 6 million Americans by allowing them to consolidate their debt, Bloomberg News reports. The plan would also speed up plans to cap federal student loan payments to 10 percent of income by imposing the cap next year instead of in 2014. The changes could reduce their payments by hundreds of dollars every single month.
President Barack Obama is expected to discuss student loan relief today while speaking at the Denver campus of the University of Colorado. The changes do not require a Congressional vote and are part of a campaign to enact some of Obama’s economic policies despite Republican opposition to the president’s $447 billion jobs plan.
Fissures Emerge on Eve of European Union Summit
Crucial financial issues remain unresolved before today’s European Union summit meeting to bring about a comprehensive solution to the continent’s sovereign debt crisis, The New York Times reports. Among other issues, Italy’s Prime Minister Silvio Berlusconi faces strong opposition inside his own governing coalition to the proposal, which includes deeply restructuring Greek debt, expanding a bailout fund for distressed nations and providing new capital for European banks, The Times said.
A meeting of European Union finance ministers, scheduled to take place before today’s summit , was abruptly canceled yesterday as negotiations continued over whether to reduce the face value of Greek debt by as much as 60 percent. Banks have yet to agree to the losses.
Perry Unveils His Own Flat Tax Plan
Not to be outdone by rivals for the Republican nomination for presidential candidate, Gov. Rick Perry of Texas yesterday announced his own flat-tax plan, The New York Times reports. Perry proposes replacing the current graduated income tax with a flat 20 percent tax. The proposal, which would result in tax cuts for wealthy Americans, also includes cuts to Social Security and Medicare. Perry said the proposal would also provide relief for middle-class Americans by allowing a $12,500 deduction for every member of a household and preserving exemptions for state and local taxes, mortgage interest and charitable contributions for anyone making less than $500,000. The Times describes the plan as an attempt to Perry to recapture some of the spotlight from Herman Cain and his popular 9-9-9 flat tax plan, and to differentiate himself from a more moderate Mitt Romney.
The Top 1 Percent of Earners Increase Income Share
A report released yesterday by the Congressional Budget Office finds that the top 1 percent of U.S. earners more than doubled their share of the nation’s income over the last three decades, the New York Times reports. From 1979 to 2007, average inflation-adjusted after-tax income grew by 275 percent for the top 1 percent in income. In the same time period, the bottom one-fifth of the population saw an 18 percent increase in average real after-tax household income. The office found the government is doing less than in the past to reduce the concentration of income. The shift is due in part to a move away from more progressive income taxes to less progressive payroll taxes.
IBM Names First Female CEO
IBM has named the first woman to head the company in its 100-year-history, reports USA Today. Virginia Rometty will succeed Sam Palmisano as chief executive officer. The 54-year-Rommety currently serves as senior vice president and head of sales, marketing and strategy, the most recent position held in her 30-year career with IBM.
Rometty is credited with integrating Pricewaterhouse Coopers into IBM and helping the computing giant shift from hardware to software and services.