The news at a glance
Wall Street: Record sentence for insider trading; Publishing: Amazon muscles out book publishers; Free trade: Congress okays trade agreements; Telecom: The end of cell-phone “bill shock”; Unemployment: Veterans hit harder than civilians
Wall Street: Record sentence for insider trading“A virus in our business culture that needs to be eradicated.” That’s what a New York federal judge called insider trading last week as he sentenced billionaire Raj Rajaratnam to 11 years in prison, the longest term ever imposed in an insider trading case, said Susan Pulliam and Chad Bray in The Wall Street Journal. Rajaratnam, 54, the former head of hedge fund Galleon Group, was convicted in May of securities fraud and conspiracy in a probe that has resulted in more than two dozen convictions; prosecutors said Rajaratnam made more than $70 million through illegal tips from corporate insiders and corrupt traders. He was also hit with a $10 million fine and ordered to forfeit nearly $54 million.
The prison sentence doesn’t have the “symbolic heft” of the 19 to 24 years prosecutors requested, said Peter Lattman in The New York Times. But it “continues a trend of ever-stiffer penalties against white-collar criminals.” And Wall Street seems to have taken notice of the tough punishment and the government’s use of “hardball tactics” like wiretapping to bring down a major hedge fund manager. “These heavy sentences do send a powerful message,” said former federal prosecutor Jonathan B. New.
Publishing: Amazon muscles out book publishersAmazon has a message for book authors: Ditch your publisher, said David Streitfeld in The New York Times. The e-commerce giant is “aggressively wooing” top writers to bypass traditional publishing houses and publish their work directly with Amazon. “The only really necessary people in the publishing process now are the writer and reader,” says Amazon executive Russell Grandinetti. In a “striking acceleration” of the company’s ambitions, it will release more than 120 original books this fall, direct from authors. “Publishers are terrified,” said Dennis Loy Johnson of independent publisher Melville House.
Free trade: Congress okays trade agreementsCongress has approved the “most significant expansion of trade relations in nearly two decades,” said Zachary A. Goldfarb and Lori Montgomery in The Washington Post. Lawmakers last week passed long-stalled free trade agreements with South Korea, Panama, and Colombia, despite U.S. labor unions’ protests that the pacts would cost jobs. The Latin American deals will likely have “limited economic impact,” but advocates say the agreement with South Korea could create up to 280,000 U.S. jobs by making it easier for U.S. automakers and farmers to sell products in the world’s 15th biggest economy.
Telecom: The end of cell-phone “bill shock”The days of sticker shock from your cell-phone bill “could be coming to an end,” said Jim Puzzanghera in the Los Angeles Times. Verizon, AT&T, Sprint, and T-Mobile have agreed to alert customers when they approach monthly usage limits so they can avoid hefty and unexpected phone charges. Customers will also be notified when they exceed their plan’s allowances or are about to incur expensive international roaming fees. The alerts, which the telecom industry proposed under the threat of new government regulations, should begin within 18 months.
Unemployment: Veterans hit harder than civiliansMany veterans are making the painful discovery that their military training “means little to civilian employers,” said Michael A. Fletcher in The Washington Post. The jobless rate among veterans is 11.7 percent, higher than the overall rate of 9.1 percent. The White House wants to give firms tax credits of up to $9,600 a year for each vet they hire, but such incentives don’t solve the problem “that employers often have only the vaguest notion of what people learn in the military.”