Dennis Michael Nouri, CEO of Smart Online Inc., his brother and four brokers were arrested yesterday in connection with an alleged scheme to artificially inflate their company’s stock price. The men have been charged with Securities fraud and conspiracy.
They each face a maximum of 20 years in prison on the securities fraud charge. In addition however, the Securities and Exchange Commission brought civil charges against the men.
Smart Online Inc. is a Durham North Carolina based software company that offers a private-label syndicated online business platform that enables on-demand Web delivery of applications and services used to start and manage small businesses.
Their software solutions are designed to automate and streamline business processes, reduce operating costs, and improve internal controls.
Angelo Mozilo, CEO of financially troubled Countrywide Financial is about to pull a Donald Trump on 12,000 of his employees. Mozilo has announced that Countrywide plans to fire 10,000-12,000 people within the next three months.
In a letter to employees, Mozilo said, “The current downturn in the U.S. housing and mortgage markets is certainly the most severe in the contemporary history of our industry.”
Weak housing demand, rising foreclosures and tightening credit markets are being blamed for the cuts.
The company said cuts would be mainly in mortgage production and general and administrative support. Banking, insurance and loan servicing operations are unlikely to be affected.
A 12,000 person reduction would amount to approximately 20 percent of Countrywide’s work force.
Earlier this year Bank of America CEO Kenneth D. Lewis ticked off the banking industry’s problems to a group of BOA Executives which included a faltering housing market and a difficult interest rate environment. Yet, Lewis said he foresaw a watershed year for Bank of America…one that would give his bank a chance to inflict pain on competitors that lacked its scale, diversity and cash.
In his own words, “This is the time I think we could go for the jugular, really be disruptive and take market share,” he said, to loud applause.
According to the Wall Street Journal, within months, Mr. Lewis agreed to buy Chicago’s LaSalle Bank for $21 billion, he rolled out free online stock trades causing a blow to discount brokers, and he introduced a “no-fee” mortgage program designed to take business from competitors.
To top it all off, last week the aggressive CEO made an even more drastic move. He invested $2 billion in the much troubled Countrywide Financial Corp. A deal which at once helped stabilize the credit markets and gave Bank of America a sizeable position in the largest mortgage lender in the country. Countrywide’s shares rallied on the news.
Many wonder if Kenneth Lewis’ drive to be the best and the biggest stems from his humble beginnings and modest upbringing. Whatever the reason, there is no doubt that the man raised as an army brat and whose father left the family when he was just a boy…feels that he has something to prove. And by all accounts, he’s well on his way to proving it. Read.
According to reports, Billionaire Warren Buffett is considering a purchase of Countrywide Financial Corporation.
Much talk has been circulating about Countrywide being on the verge of bankruptcy. The company has been beaten down because of turmoil in the credit market.
That turmoil led to Countrywide having to tap into $11.5 billion in bank credit lines last week. In addition, the company’s stock has dropped some 49 percent over the past year.
So will Buffett swoop in and save Countrywide from their demise?
If history means anything, financial companies account for 41% of the value of Buffet’s Berkshire Hathaway’s stock holdings indicating that he has a clear preference for financial company investments.
Buffett apparently sees value in Countrywide. We’ll keep you posted.
Nasdaq Stock Market Inc. CEO Robert Greifeld says that he remains fully committed to his organization’s proposed merger with OMX. Greifeld, who spoke to analysts after Nasdaq announced it wanted to sell its 31 percent stake in London Stock Exchange Group Plc LSE.L, said investment bank advisers were already in touch with “a number of interested parties.”
Nasdaq’s decision to give up the London Stock Exchange comes three days after Borse Dubai, owner of Dubai’s two stock exchanges, trumped its bid for OMX. Chief Executive Officer Robert Greifeld, who needs about $355 million to top Dubai’s 27.7 billion kronor ($3.96 billion) bid, said last week that Nasdaq can afford to alter its offer. Greifeld went on to say that his company remains flexible in how it structures a deal.
“Nasdaq is trying to raise money for its OMX bid,” said David Bennett, CEO of the Association of Private Client Investment Managers and Stockbrokers, whose members are shareholders and customers of LSE.
OMX is a Swedish-Finnish financial services company, formed in 2003 through a merger between OM AB and HEX plc.
It has two divisions: OMX Exchanges, which operates seven stock exchanges in the Nordic and Baltic countries, and OMX Technology, which develops and markets systems for financial transactions used by OMX Exchanges, as well as by other stock exchanges. The company is a world leader in financial instruments trading systems.
We reported a few weeks back that Hedge Fund manager John Devaney of United Capital Markets had run into some tough times…having to put his luxury yacht up for sale. Devaney was seeking $23.5 million for his 142-foot yacht, “Positive Carry”.
We have now learned that Devaney has put his helicopter on the sales block. He is reportedly seeking $10,995,000 for the high-end Sikorsky S76C helicopter. According to the brochure which markets the helicopter to prospective buyers, the reason for the sale was “changing corporate travel requirements.”
Devaney also owns a Rolls-Royce, a Gulfstream Jet, a 12,000-square-foot waterfront mansion in Key Biscayne, Florida as well as a few Renoirs and a valuable 1823 reproduction of the Declaration of Independence.
