The daily business briefing: March 15, 2018
Trump picks Larry Kudlow as his top economic adviser, Toys "R" Us plans to close its U.S. stores, and more
Trump taps Kudlow for top economics job
CNBC commentator and conservative economist Larry Kudlow said Wednesday that President Trump had selected him to replace Gary Cohn as the top White House economic adviser. "The president offered me the position last evening and I accepted," Kudlow told Reuters. He said the White House probably would formally announce his nomination to lead the National Economic Council on Thursday. Kudlow has long been close with Trump, and his selection was interpreted as part of an ongoing effort by Trump to surround himself with like-minded advisers. Cohn, a Democrat and "globalist," stepped down after a clash over Trump's new steel and aluminum tariffs. Kudlow also warned the tariffs could harm U.S. workers, but he was a key adviser on tax cuts during Trump's campaign.
Toys "R" Us to close all of its U.S. stores
Toys "R" Us plans to close or sell all 800 of its U.S. stores, according to media reports on Wednesday. The toy store chain said in a bankruptcy court filing Thursday that it had to liquidate and start winding down U.S. operations. The move would affect up to 33,000 employees, but the company told employees the closures would not occur all at once. The toy store chain also is closing all 100 of its outlets in the U.K. Once the dominant toy retailer in the U.S., Toys "R" Us has been struggling for years against other big-box stores and online rivals. It filed for bankruptcy protection six months ago, struggling to find a way to pay down nearly $8 billion in debt.
Theranos founder Elizabeth Holmes settles 'massive fraud' charges
The Securities and Exchange Commission announced Wednesday that Theranos' founder Elizabeth Holmes had agreed to give up voting control over her blood-testing company and pay $500,000 to settle "massive fraud" charges. The SEC accused Holmes and former president Ramesh "Sunny" Balwani of duping investors by exaggerating the blood-testing company's income by a factor of 1,000. Under the terms of the agreement, Holmes also will be barred from serving as an officer or director in any public company. The SEC conducted a two-year investigation after The Wall Street Journal reported that Theranos used its proprietary blood-testing technology in only a fraction of the tests it provided in Walgreens stores, and that some company employees had doubts about the technology's accuracy.
Senate votes to roll back Dodd-Frank reforms
The Senate on Wednesday approved a bipartisan measure seeking to ease the Dodd-Frank Wall Street reform law enacted under former President Barack Obama in 2010. Every Republican present and 13 Democrats backed the bill, passing it 67-31 and sending it to the House. The measure will free small banks with less than $250 million in assets from yearly Federal Reserve stress tests and higher capital requirements meant to make sure they can survive a future financial crisis. White House Press Secretary Sarah Huckabee Sanders said the legislation "provides much-needed relief from the Dodd-Frank Act for thousands of community banks and credit unions and will spur lending and economic growth without creating risks to the financial system." Critics said the bill was a gift to Wall Street disguised as help for small lenders.
Unilever ditches London to make Rotterdam its sole headquarters
Unilever, Britain's third biggest company, said Thursday that it would scrap its dual-headquarters structure, leaving London and consolidating its base in the Dutch city of Rotterdam. The company, which makes a wide variety of products, from Dove soap to Ben & Jerry's ice cream, started reviewing its complex corporate structure in 2017 after resisting a $143 billion takeover bid from Kraft Heinz. The company's decision dealt a blow to British Prime Minister Theresa May's government as it negotiates the terms of its exit from the European Union, although Unilever said its move was driven by the need to improve its corporate governance and financial dealings. "This is not about Brexit," Chief Executive Paul Polman said.