Citigroup rocked with fines, questions about Apple Watch sales and a shake-up at Toshiba top our roundup of the day's top business news stories.
Citigroup Hit with $70 Million in Fines
Under its agreement with the Consumer Financial Protection Bureau, Citigroup will refund $700 million to consumers and pay $70 million in fines for illegal and deceptive credit card practices, the Associated Press reports. Under its agreement with the CFPB, Citi will issue refunds to 8.8 million affected consumers who paid for add-on products such as credit score monitoring or “rush” processing of payments, and will pay two separate $35 million fines to the CFPB and to the federal bank regulator the Office of the Comptroller of the Currency. Bank of America reached a similar, slightly larger settlement with regulators in 2014 and JPMorgan Chase was fined in 2013. The CFPB was created five years ago through passage of the Dodd-Frank law that overhauled the financial industry following the 2008 economic collapse.
U.S. Existing Home Sales Near 8-1.2-Year High
The National Association of Realtors Wednesday reports that U.S. existing home sales increased 3.2 percent to an annual rate of 5.59 million units, the highest level since February 2007. Sales are up 9.6 percent from a year ago.
Falling Apple Stock One to Watch
Apple's stock fell 8 percent in after-hours trading Tuesday after the company’s latest financial report charted iPhone sales beneath Wall Street expectations and the company offered a weaker revenue forecast for the current quarter. The iPhone is still the key driver of the company's success with more than 47.5 million iPhones sold during the three months ending in June, or 59 percent more than a year ago. But the company did not disclose results for the Apple Watch. Many analysts and investors see the watch as an important indicator of the company's ability to produce successful new products, CNN reports.
June Unemployment Rates Fell in Nearly Half of U.S. States
Unemployment rates fell last month in 21 U.S. states and were unchanged in 17, the Labor Department said Tuesday. Employers added jobs in 31 states and cut them in 17, with little change in the remaining two states. Nebraska has the lowest unemployment rate, at 2.6 percent, while West Virginia has the highest, at 7.4 percent. New York gained 25,500 jobs last month, the most of any state, followed by 23,000 in California and 16,000 in Texas, the Associated Press reports. Regionally, the unemployment rate fell to 5 percent in the Midwest, from 5.1 percent in May, and 5.3 percent in the South, from 5.4 percent. Unemployment in the Northeast declined to 5.4 percent from 5.6 percent. Only the West reported an unchanged rate, at 5.8 percent.
Toshiba CEO Resigns Following Cover-Up Scandal
Toshiba CEO Hisao Tanaka and eight other executives resigned Tuesday to take responsibility for doctored books that inflated profits at the Japanese technology manufacturer by 152 billion yen ($1.2 billion) over several years, the Associated Press reports. Toshiba Corp. acknowledged a systematic cover-up, which began in 2008. Subordinates faked results after failing to meet earnings targets for the various parts of the financially struggling company's sprawling business, including computer chips and personal computers.
LifeLock Drop 49 Percent Following FTC Action
Tempe, Ariz.-based Lifelock sells a variety of services to help customers protect their personal information. But who will protect Lifelock from the Federal Trade Commission? On Tuesday, the FTC announced that LifeLock violated a 2010 settlement with the agency and 35 state attorneys general by continutng to make deceptive claims about its services, and by failing to take steps required to protect its users’ data. The agency asked the U.S. District Court for the District of Arizona to impose an order requiring LifeLock to provide full redress to all consumers affected by the company’s order violations. Following the announcement, LifeLock shares plummeted 49 percent.