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Jeffrey Epstein died by apparent suicide in jail. Here's everything we know about the convicted sex offender's past, famous connections, and his court case.

Sat, 08/10/2019 - 12:09pm

  • Disgraced financier Jeffrey Epstein died by apparent suicide at the Metropolitan Correctional Center early Saturday morning.
  • Epstein was being held without bail on federal charges of sex trafficking of minors and conspiracy.
  • Epstein took a secretive, widely criticized plea deal in 2008 for charges including procuring a minor for prostitution. Many of his high-profile friends supported him after his 13 months in jail.
  • His other connections include former Israeli Prime Minister Ehud Barak, who frequented a Manhattan building that housed young models, girlfriends, pilots, and other Epstein associates for years, a Business Insider investigation found.
  • From Epstein's death, to his connections, to his finances, and to his legal battles, here's what Business Insider has learned about the multimillionaire.
  • Visit BusinessInsider.com for more stories.

Jeffrey Epstein died by apparent suicide early Saturday morning at Manhattan's Metropolitan Correctional Center. He faced federal charges of sex trafficking of minors and conspiracy.

Epstein flew former President Bill Clinton on his private plane, partied with President Donald Trump at Mar-a-Lago in the '90s, and managed money for a high-profile billionaire.

Despite his tabloid-worthy exploits, the disgraced money manager kept much of his life under wraps. Here's what we learned about his finances, network, and sex trafficking charges.

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Hedge-fund giant Glenn Dubin and his wife, Eva, told Jeffrey Epstein's probation officer they were '100% comfortable' with the sex offender around their kids. New documents show the extent of the billionaire couple's relationship with Epstein.

Sat, 08/10/2019 - 12:02pm

  • The hedge-fund founder Glenn Dubin and his wife, Eva, have longstanding business and social ties with the convicted sex offender Jeffrey Epstein that persisted even after Epstein's 2008 conviction for soliciting a minor.
  • The couple told Epstein's probation officer in 2009 they were "100% comfortable" having the sex offender around their children, including their then teenage daughter, according to a previously unreported email obtained by Business Insider.
  • If they had known about the current round of allegations against Epstein, their spokesperson said, "they would have cut off all ties and certainly never have allowed their children to be in his presence." 
  • The Dubins have other business and philanthropic connections to Epstein that were uncovered by Business Insider, including a hedge-fund deal gone south. 
  • They're the latest high-profile Wall Street family to come under scrutiny for ties to Epstein. Last week, Business Insider revealed that Epstein was the director of the private-equity guru Leon Black's family foundation from at least 2001 through 2012. The Blacks later said that he resigned in 2007 and that they submitted erroneous tax forms for years. 

Jeffrey Epstein spent his first Thanksgiving out of jail as he had many others before that: dining with one of America's wealthiest and best-connected families, new documents reviewed by Business Insider reveal. 

In 2009, the financier — and newly registered sex offender — went to a large Thanksgiving celebration at the Palm Beach, Florida, home of Glenn Dubin and Eva Andersson-Dubin, a prominent hedge-fund manager and his model-turned-doctor-turned-donor wife. They had long invited Epstein, a onetime boyfriend of Eva Dubin who remained a family friend, to their Thanksgivings.

Instead of distancing themselves from Epstein after he spent 13 months in jail on charges including procurement of a minor for prostitution, the Dubins wrote to Epstein's probation officer and asked for permission to break bread with him — a decision they now say they regret. 

Eva Dubin even went so far as telling the probation officer via email that she and her husband were "100% comfortable" with Epstein spending time with their three children, the oldest of whom was then a teenager, according to an email obtained by Business Insider. 

"I, Eva Dubin, am an internist and have known Jeffrey for over 20 years," she wrote.

Now, though, after Epstein was arrested last week on sex-trafficking charges and his business and social circles have come under intense scrutiny for their association with the disgraced financier, the Dubins have changed their tune. 

"The Dubins are horrified by the new allegations against Jeffrey Epstein," a spokeswoman said in a statement. "Had they been aware of the vile and unspeakable conduct described in these new allegations, they would have cut off all ties and certainly never have allowed their children to be in his presence."

But in the 2008 email, which is signed "Eva and Glenn Dubin," the couple made clear that they were aware that Epstein was "a registered sex offender and had plead guilty [sic] to soliciting for prostitution, and procuring a minor for prostitution."

Epstein was a 'long-time investor' in prominent hedge fund Highbridge Capital

The Dubins are well known in New York and Palm Beach circles and have a net worth of more than $2 billion, according to Forbes. But they are far from the only couple among the ultrarich who are scrambling to distance themselves from Epstein. 

Last week, Business Insider revealed that the private-equity guru Leon Black's family foundation listed Epstein as a director in tax returns from at least 2001 through 2012. The Blacks later said he resigned in 2007 and that they accidentally submitted erroneous tax forms for years — though they have yet to provide amended returns or respond to follow-up questions about their relationship with Epstein.

The Dubins, though, appear to have had a more intimate relationship with Epstein. 

Eva Dubin once dated him, and they remained friendly after she married Glenn in 1994. That friendship helped bring Epstein into an investment opportunity that, before his 2008 jail stint, went badly for everyone.

Glenn Dubin cofounded the hedge fund Highbridge Capital Management in the 1990s and more recently started a quant fund called Engineers Gate. In 2002, Dubin connected Epstein to one of his former Highbridge employees, Daniel Zwirn, according to a 2010 complaint Epstein's Financial Trust Co. lodged against Zwirn. Dubin also advised Epstein to invest in one of Zwirn's funds, which partly focused on issuing debt to radio stations.

"One of the early investors that I introduced to Zwirn was Jeffrey Epstein," Dubin said in a 2010 sworn affidavit in subsequent litigation over money lost in the investment. "Epstein was both a personal friend of mine and a long-time investor in [Highbridge]."

Epstein's Financial Trust Co. invested $80 million from 2002 to 2005 in D.B. Zwirn Special Opportunities Fund, which lent money to several radio stations and other businesses, according to a complaint Epstein filed. In November 2006, the complaint says, Epstein tried to pull his investment — which had grown to $140 million — after Zwirn's chief financial officer was fired for approving the purchase of a $3 million Gulfstream 400 jet for Zwirn using investor funds. (The CFO later sued Zwirn with his own allegations that he was wrongly thrown under the bus for the accounting irregularities.) Dubin, court records say, eventually convinced Epstein to only partially withdraw his investment. 

It didn't save the fund, though, which was later sued by several of its radio-station borrowers, who accused it of predatory lending. The financial irregularities Zwirn disclosed to Epstein led to a Securities and Exchange Commission investigation and caused investors to pull their money en masse, and eventually, Zwirn wound down his hedge fund. 

An alleged 'loan-to-own' scheme

Dubin and Epstein lost millions. The litigation between Epstein and Zwirn went to private mediation in 2010. The outcome of the case is unclear. Zwirn's fund alleged in court filings that Epstein's company had failed to honor withdrawal-notice obligations.

The radio-station owners accused Zwirn's fund of engaging in a "loan-to-own" scheme, presenting itself as a friendly lender before hammering clients over defaults and then taking over the companies. Those allegations were largely unsuccessful. The stations were overwhelmed, several of the former owners told Business Insider, by large law firms with deep pockets. At least one former station manager is still suing. 

To fight back, the broadcast-station owners also filed complaints with the Federal Communications Commission, saying Zwirn's fund should be barred from holding a broadcast license both because it was operated through an offshore entity and because Epstein, by then a confessed sex offender, was an investor.

The FCC found in Zwirn's favor, saying he was not required to disclose Epstein's company as an investor and that he didn't fail to disclose offshore ownership.

"We were just some minority broadcasters," said Glenn Cherry, who previously owned Tama Broadcasting Inc., which operated nine stations funded by Zwirn in Florida and Georgia. "The FCC were talking about 'why don't we have minority ownership [of broadcast stations]?' And they watched [Zwirn] take us out and they didn't do anything about it."

The FCC did not immediately respond to comment. 

Social and philanthropic ties

Meanwhile, other documents show that the Dubins' relationship with Epstein continued after he was released from jail.

For example, when Epstein wanted to contribute to Eva Dubin's breast-cancer organization — the Dubin Breast Center of the Tisch Cancer Institute at Mount Sinai — in 2009, he understood that a public donation from a registered sex offender might not be welcome. So Eva established a new nonprofit, called the Celina Dubin United Fund, to serve as a pass-through.

Epstein gave $50,000 to the Celina Dubin United Fund, which in turn donated about $26,600 to the breast-cancer group from 2010 through 2012, according to tax documents reviewed by Business Insider. In 2013, according to a source familiar with the matter, Glenn Dubin learned about the arrangement and asked Eva to wind it down. The Celina Dubin United Fund returned about $22,000 that had not yet been spent to one of Epstein's foundations.

Over the years, Epstein's foundations donated to a number of causes close to the Dubins, according to a review of dozens of tax filings and charities' annual reports. Those organizations — with which many prominent Wall Street families are also affiliated — include:

  • Trinity School, the elite New York school, which two of the Dubin children attended.
  • Robin Hood, the anti-poverty charity cofounded by Glenn Dubin that's popular with Wall Street donors.
  • The Hasty Pudding Foundation, a Harvard student theater group with which one of the Dubins' children was involved.
  • New York Tennis & Learning, a kids' tennis organization. Both Epstein and Glenn Dubin donated tens of thousands of dollars each to the charity in 2012, according to its annual report.

Lawyers for Epstein did not respond to a request for comment.

Correction: This post erroneously reported that Glenn Dubin described Jeffrey Epstein in an affidavit as an adviser to his hedge fund, Highbridge Capital. He described him as a "long-time investor" in the fund, but not an adviser. The post has been updated to correct the error.

Do you have a story to share about Epstein or the Dubins? Contact this reporter via encrypted messaging app Signal at +1 (646) 768-1627 using a non-work phone, email at mmorris@businessinsider.com, or Twitter DM at @MeghanEMorris.

With reporting by John Cook.

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Jeffrey Epstein hired a college student for erotic massages. She also gave a massage to his billionaire friends Glenn and Eva Dubin — though they say they don't recall it.

Sat, 08/10/2019 - 12:01pm

  • Glenn and Eva Dubin, a billionaire couple with deep ties to Jeffrey Epstein, received a massage recommendation from the financier years ago, according to interviews and police records reviewed by Business Insider.
  • Epstein hired one masseuse as an assistant when she was 23, before she received her massage-therapy license. She gave Epstein erotic massages and massaged his close friends and assistants, as well as the Dubins on at least one occasion.
  • The Dubins said they did not recall the massage, and the masseuse said there was no erotic component. The couple, who remained friendly with Epstein after he went to jail on charges including soliciting a minor for prostitution, reiterated that had they known of the new allegations against the disgraced financier, they would have cut off contact.
  • The masseuse said that she "massaged many of Epstein's friends" while she worked for him but that none of them expected any sexual favors.

In 2003, a young college student was recruited to answer phones and run errands for the financier Jeffrey Epstein in Palm Beach, Florida.

The job turned into much more, including massages for Epstein and a referral to massage at least one billionaire couple, according to a police report from January 2006. The massages for Epstein, she told the police, became sexual.

Over the course of the Palm Beach Police Department's investigation into the now disgraced sex offender, which ended in a secretive 2008 plea deal, investigators spoke with Johanna Sjoberg. Her story offers a window into how Epstein's network functioned, from the way he found girls and women to service his needs to how some of them connected with his rich and famous friends.

See more: Hedge-fund giant Glenn Dubin and his wife, Eva, told Jeffrey Epstein's probation officer they were '100% comfortable' with the sex offender around their kids. New documents show the extent of the billionaire couple's relationship with Epstein.

On a referral from Epstein, for example, Sjoberg gave at least one massage to Glenn and Eva Dubin, the billionaire couple with longtime ties to Epstein that they now say they regret.

The Dubins' patronage, at Epstein's recommendation, of a masseuse who had given him erotic massages has not been previously reported. She gave a statement to the police in 2006 and spoke with the Daily Mail in 2007, and Business Insider has confirmed details of her story. A lawyer for Epstein did not respond to a request for comment.

Now a hairstylist, Sjoberg told the police she met Epstein in 2003, when she was 23, according to the 2006 report. She said she was approached on the campus of Palm Beach Atlantic University, the private Christian college she attended, by Epstein's longtime friend Ghislaine Maxwell, who was looking for assistants for Epstein's Palm Beach house.

Sjoberg took the part-time job and began providing massages to Epstein before she received her massage-therapy license, which public records indicate was issued in November 2003. She also massaged Epstein's paramour Nadia Marcinkova and his assistant Sarah Kellen, the police statement said.

She told the police that Epstein turned some of the massages into sexual encounters:

"He would instruct her to rub his nipples as he masturbated himself. [She] stated she felt 'grossed' about the behavior but as she was getting paid, she just continued. [She] also advised she would on occasion perform the massages naked. Epstein would on occasion, utilize the vibrator/massager on her vagina area when she performed the massages. Sjoberg explained that Epstein never exposed himself to her."

Epstein paid her and "took care of" her college tuition, in addition to renting a car for her for a week, the police statement said. She later told the Daily Mail that Epstein also covered the down payment on her home and paid for her to become a masseuse and hairstylist. (She told the Daily Mail that she met Epstein in 2001, when she was 21 —two years earlier than in her account to police investigators.)

'Nothing inappropriate is being alleged'

Epstein referred Sjoberg to at least one other client, she told the Palm Beach police in January 2006.

"Epstein also recommended her to another client who resides at Breakers Row in Palm Beach area," the police report of her interview said. "The client she was referred to was 'Glenn' unknown last name, and his wife, who she provided a massages [sic] to."

Business Insider has confirmed that the Glenn referred to in the statement was Glenn Dubin, who had a house with a Breakers Row address until 2012, according to public records. Sjoberg gave Dubin and his wife at least one massage.

See more: Private-equity guru Leon Black's family foundation is scrambling to distance itself from sex-offender Jeffrey Epstein, but it's raising more questions

It's unclear when the massage took place, and there was no erotic component, Sjoberg told Business Insider.

"I massaged many of Epstein's friends when I worked for him, because I was a talented licensed massage therapist," Sjoberg said. "To me, Glenn was just another person on the table. There was never any other expectation by his friends. If something inappropriate happened I would have a memory of it."

"The Dubins have no recollection of this person or event but regardless, nothing inappropriate is being alleged," a spokeswoman for the couple said. "Any suggestion to the contrary is highly irresponsible and completely inaccurate."

The Dubins' relationship with Epstein dates back to the 1980s, when Epstein dated Eva Dubin — then Eva Andersson — and continued after he went to jail in 2008 on charges including procuring a minor for prostitution.

Business Insider reported last month that Eva Dubin emailed Epstein's probation officer in 2009 ahead of hosting a large Thanksgiving meal, saying the couple was "100% comfortable" with Epstein around their children, including their then-teenage daughter.

Epstein and the Dubins have financial ties as well as personal ones. Epstein was a "longtime investor" in Highbridge Capital, the hedge fund Glenn Dubin founded in the 1990s, according to an affidavit Dubin submitted in a court case in 2010. And both men were investors in a fund run by D.B. Zwirn, a former Highbridge Capital employee. According to Vanity Fair, Epstein "arranged" the sale of Highbridge to JPMorgan Chase, and Epstein made a $75 million investment in a fund run by another former Highbridge portfolio manager at Dubin's recommendation.

Epstein and the Dubins were also philanthropically intertwined. In 2009, Epstein sought to make a donation to Eva Dubin's breast-cancer charity, the Dubin Breast Center of the Tisch Cancer Institute at Mount Sinai. To avoid public scrutiny over a donation from a registered sex offender, he made the donation through another charity established by Eva Dubin, the Celina Dubin United Fund, which in turn donated about $26,600 to the breast-cancer group from 2010 through 2012, according to tax records.

The Dubins said they were "horrified" by last month's federal charges against Epstein. The money manager is accused of running a sex-trafficking ring in Florida and New York for years, involving girls as young as 14.

"Had they been aware of the vile and unspeakable conduct described in these new allegations, they would have cut off all ties and certainly never have allowed their children to be in his presence," the Dubins said through a spokeswoman, adding that they thought Epstein had rehabilitated himself and "deserved a second chance."

Other finance links

The Dubins aren't the only high-profile family whose ties to Epstein have recently come under scrutiny.

Leon Black, the private-equity titan who cofounded Apollo Global Management, continues to be criticized as lacking transparency around his social, financial, and philanthropic links to Epstein. Weeks after Business Insider and other outlets reported his various ties to Epstein, Black said in memos to employees and investors that Apollo never did business with Epstein.

He countered a Bloomberg report that said he allowed Epstein to pitch his services to Apollo executives. Black did acknowledge that he donated money to Epstein's charities and vice versa. He has not explained why he donated $10 million to an Epstein-run foundation in 2015, years after the money manager was released from jail.

See more: Billionaire private-equity guru Leon Black is reaching out to Apollo investors about his relationship with Jeffrey Epstein

He also has not provided amended tax returns to confirm that he and his wife removed Epstein as the director of their family foundation in 2007. Epstein's name appeared on tax documents through 2012 in what the Blacks' spokeswoman said was a clerical error.

Epstein also reportedly funneled dozens of wealthy clients to James "Jes" Staley when he led JPMorgan's wealth-management business. Staley is now CEO of Barclays.

Do you have a story to share about Epstein or the Dubins? Contact this reporter via encrypted messaging app Signal at +1 (646) 768-1627 using a non-work phone, email at mmorris@businessinsider.com, or Twitter DM at @MeghanEMorris.

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'Old Town Road' has rejuvenated Wrangler jeans, CEO says

Sat, 08/10/2019 - 10:48am

  • Lil Nas X, the artist behind the chart-topping song "Old Town Road," has breathed much-needed life into the Wrangler jeans brand.
  • The singer mentions Wrangler in his hit song, which has held the top spot on the Billboard 100 chart for a record-breaking 18 weeks and counting.
  • The CEO of Kontoor Brands, the parent company of Wrangler, told Kim Bhasin of Bloomberg that the endorsement was making Wrangler more popular with a wider audience.
  • Watch Kontoor Brands trade live.

"Wrangler on my booty." Those four words appear to be helping a struggling jean brand make a comeback.

They're from Lil Nas X's "Old Town Road," a crossover smash hit that's been ranked No. 1 on the Billboard Top 100 chart for a record-setting 18 weeks and counting.

As the up-and-coming artist rises to cultural stardom, his reference to Wrangler is helping the brand through a transition period.

Scott Baxter, the chief executive officer of Kontoor Brands, Wrangler's parent company, told Kim Bhasin at Bloomberg that the endorsement was helping push Wrangler jeans in a new direction.

"We knew nothing about it, and then it just took off from there," he said in an interview with Bloomberg. "It's introduced Wrangler to a more diverse group of folks, and that's where we want to be as a brand."

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In the past, Wrangler's primary brand ambassadors have been the former NFL quarterback Brett Favre and the NASCAR racer Dale Earnhardt Jr. The brand decided to branch out after seeing the success of "Old Town Road" and partner directly with the song's creator.

Wrangler ran a limited-edition collaboration with Lil Nas X that included graphic tees, jean jackets with "Old Town Road" printed on them, and cowboy-cut slim-fit jeans. Baxter said shoppers couldn't get enough of the product line.

"Every time we put more product online, it's sold out immediately," Baxter told Bloomberg.

According to Bloomberg, Wrangler plans to roll out a new marketing campaign in the next few weeks designed to keep spreading the brand's reach to a wider audience.

Kontoor Brands reported its first earnings report as a standalone company on Thursday after being spun out from the apparel conglomerate VF Corporation in May.

While Kontoor's sales as a whole decreased 8% in the second quarter to $610 million, the company expects revenue to accelerate in the second half of the year. One of Kontoor's largest customers went into bankruptcy, which had a downward impact on sales.

Global revenue for Wrangler dropped by 8% as well, but excluding the customer bankruptcy, sales increased by 2%, the company said.

Kontoor reaffirmed its guidance for the year and still expects to hit $2.5 billion in revenue for 2019.

Shares of Kontoor are down roughly 16% year-to-date.

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Many people get short-term disability insurance through work, but it's usually not enough

Sat, 08/10/2019 - 10:28am

  • Financial planners strongly encourage having disability insurance to protect your income if you can't earn a living due to an injury or chronic illness.
  • Many employers offer short-term disability insurance — i.e. group disability insurance — at little or no cost to employees, but it usually isn't enough coverage. The benefit period is short and the payments may be taxed as income.
  • To supplement short-term disability coverage, you can buy an individual long-term policy and customize coverage.
  • You can compare disability insurance policies with Policygenius. Get started for free »

Shopping for disability insurance doesn't sound fun, we know, but it's one of the smartest ways to protect yourself and your family financially.

For the uninitiated, there are two main types of disability insurance: short-term and long-term. For most people, it's not an "either, or" situation. Both can help replace your income if you become injured or ill and can't perform the regular duties of your job, or if you can't work at all.

If you support anyone — children, a spouse, or otherwise — and rely on a steady paycheck to pay regular bills or stay on track financially, you probably need disability insurance, explains insurance-comparison site Policygenius. 

What is short-term disability insurance?

The good news is you can usually get short-term disability insurance through your job. Otherwise known as group disability insurance, it may be offered as part of your benefits package at little or no cost.

The short-term disability insurance you get through work will typically replace up to 66% of your salary, but usually less. The payments typically only last between three and six months and may be taxed as income if your employer covered part or all of the premium. And if you leave the company, you'll lose your benefits.

While group disability insurance is a nice benefit to have, coverage is obviously limited. If you financially support anyone other than yourself — or your regular expenses eat up most of your paycheck — you probably need a private insurance policy, too.

If you're unsure what your employer offers in terms of group disability insurance, ask your human resources team for details. If you do have short-term disability insurance but aren't satisfied with the benefit amount — the check you would receive every month while on disability — you may want to consider buying a private, long-term disability insurance policy to supplement it.

Benefits on a long-term disability insurance policy usually don't begin to accrue until at least 90 days after you become disabled — this is referred to as the waiting or elimination period — so they effectively pick up where your short-term policy leaves off.

Long-term disability coverage is customizable — you can choose how to define "disability" and how much you want to receive in benefits. Depending on the specifics of your policy, your annual premium should cost around 1% to 3% of your annual pretax salary, according to Policygenius. What's more, any benefit payments you receive while disabled are completely income-tax free.

The bottom line: Don't assume your employer-sponsored disability insurance policy is enough to replace your income. Take a few minutes to read through the coverage details and figure out whether you need more.

Policygenius can help compare disability policies and prices to find the right coverage for you » Related coverage from How to Do Everything: Money

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The famous connections of Jeffrey Epstein, the elite wealth manager who died in jail while awaiting trial on sex trafficking charges

Sat, 08/10/2019 - 10:27am

Jeffrey Epstein, 66, died by suicide in a Manhattan jail on Saturday, August 10, as he awaited trial on charges of sex trafficking of minors.

The former hedge-fund manager and registered sex offender may have kept his client list under wraps, but he often bragged of his elite social circle that included presidents and Hollywood stars.

Epstein, who ran a business out of the US Virgin Islands, was known for jet-setting with the likes of former President Bill Clinton, and Prince Andrew (the third child of the UK's Queen Elizabeth).

"I invest in people — be it politics or science," Epstein was known to say, according to New York Magazine. "It's what I do."

According to a July 22 article from NY Magazine's Intelligencer, a number of royals and royal connections were among Epstein's contacts. That includes Prince Andrew; Prince Andrew's then-wife, Sarah Ferguson, the Duchess of York; and Charles Althorp, Princess Diana's brother. According to Intelligencer, all three were named in Epstein's black book; Ferguson and Prince Andrew were also named in his private jet log.

Read more: How Jeffrey Epstein, the mysterious hedge-fund manager arrested on sex-trafficking charges, made his fortune

Epstein had been in police custody since July 6; he was arrested shortly after exiting his private jet in New Jersey. He pleaded not guilty on July 8 and was being held without bail in New York City. On July 25, Epstein was placed on suicide watch after a reported suicide attempt that led to his hospitalization.

In 2007, Epstein pleaded guilty to charges of solicitation of prostitution and procurement of minors for prostitution in Florida.

Here is what we know about the famous people who crossed paths with Epstein.

SEE ALSO: The life of Jeffrey Epstein, the disgraced financier who rubbed elbows with Donald Trump, Bill Clinton, and Kevin Spacey

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President Donald Trump once considered Epstein a friend.

The future president claimed in 2002 that he had a long friendship with Epstein. "I've known Jeff for 15 years. Terrific guy," Trump said, according to New York Magazine. "He's a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side. No doubt about it — Jeffrey enjoys his social life."

According to Counselor to the President Kellyanne Conway, Trump now believes the crimes Epstein was charged with are "completely unconscionable and obviously criminal." She also labeled them "disgusting," according to a report from the Associated Press.

"The president told me this morning he hasn't talked to Epstein, he doesn't think he's talked to him or seen him in 10 or 15 years," Conway added.

Read more: Everything we know about Trump's connection to financier Jeffrey Epstein, who was charged with sex trafficking



Former President Bill Clinton traveled with Epstein in 2002 and 2003.

A statement released by Clinton spokesperson Angel Ureña said the former president traveled to Europe, Asia, and twice to Africa on Epstein's private jet. Clinton's staff and Secret Service agents also went on these trips, which were to further the work of the Clinton Foundation, according to the statement.

At the time, Clinton told New York Magazine through a spokesperson that Epstein was a "both a highly successful financier and a committed philanthropist with a keen sense of global markets and an in-depth knowledge of twenty-first-century science."

Ureña also said that Clinton and Epstein haven't spoken in "well over a decade" and that Clinton "knows nothing about the terrible crimes" Epstein was charged with.

Read more: Bill Clinton said he 'knows nothing' about charges against Jeffrey Epstein



Actor Kevin Spacey and comedian Chris Tucker also took trips with Epstein.

Epstein, Clinton, Spacey, and Tucker spent a week in 2002 touring AIDS project sites in South Africa, Nigeria, Ghana, Rwanda, and Mozambique for the Clinton Foundation, according to a New York Magazine report.

Spacey has also been charged with sexual assault, although the case may be dismissed, according to The New York Times.



Socialite Ghislaine Maxwell is Epstein's ex-girlfriend — and alleged madam.

Maxwell, 57, is a British socialite and the daughter of media tycoon Robert Maxwell.

She started dating Epstein shortly after moving to New York in 1991, Business Insider previously reported. After they broke up, court documents allege that Maxwell started recruiting underage girls for him to have sex with.

Read more: What to know about British socialite Ghislaine Maxwell, Jeffrey Epstein's alleged madam



Prince Andrew and Epstein were close friends, the Guardian reported in 2015.

Maxwell introduced Epstein and the Duke of York in the 1990s, the Guardian reported, and the two became close friends.

The Duke is the son of the UK's Queen Elizabeth. He has also been criticized for frequently taking flights on the taxpayer's dime while serving as the country's special representative for international trade. This earned him the nickname "Airmiles Andy," according to the Washington Post.

Court documents reviewed by the Guardian allege that Epstein instructed Virginia Roberts Giuffre, a 15-year-old employee at Trump's Mar-a-Largo resort, to have sex with Prince Andrew on three separate occasions.

Buckingham Palace said in 2015 that the allegations against Prince Andrew were "false and without any foundation," according to the Guardian.

Read more: New charges against Jeffrey Epstein highlight his reported past ties to the British royal family



L Brands CEO Les Wexner is Epstein's only confirmed client.

Epstein became a trusted confidant of Wexner's while Epstein managed the CEO's fortune, according to Vanity Fair. Wexner has a net worth of $6.7 billion, Bloomberg reported. The magazine reported that Wexner allowed Epstein to take an active role in L Brands, which owns Bath & Body Works, Express, and Victoria's Secret.

In 1989, Wexner used a trust to buy an Upper East Side townhouse that is believed to be the largest private residence in Manhattan for $13.2 million, Vanity Fair reported. Epstein moved in after Wexner and his wife, Abigail Koppel, moved to Ohio in 1996. Wexner's trust transferred ownership of the house to Epstein in 2011 for $0, Bloomberg reported.

Wexner later fired Epstein as his money manager. "Mr. Wexner severed ties with Mr. Epstein more than a decade ago," an L Brands spokesperson told Forbes.

Read more: How Victoria's Secret head Les Wexner went from small-town Ohio shopkeeper to facing scrutiny for his ties to convicted sex offender Jeffrey Epstein



Former Secretary of Labor Alexander Acosta worked with Epstein's legal team to arrange a plea deal after Epstein was charged with solicitation of prostitution and procurement of minors for prostitution in Florida in 2007.

An investigation by the Miami Herald revealed that Acosta, then a US attorney, had enough evidence against Epstein to request a life sentence. Instead, he reportedly met with one of Epstein's lawyers, who happened to be a former colleague of Acosta's.

In the resulting plea deal, Epstein served 13 months in a private wing of a county prison, which he was allowed to leave six days a week to work in his office.

Business Insider previously reported that Acosta said he was "pleased that NY prosecutors are moving forward with a case based on new evidence," on Twitter.

Tweet Embed:
//twitter.com/mims/statuses/1148618145671917571?ref_src=twsrc%5Etfw
The crimes committed by Epstein are horrific, and I am pleased that NY prosecutors are moving forward with a case based on new evidence.

Acosta resigned on July 12.

Read more: Stunning new report details Trump's labor secretary's role in plea deal for billionaire sex abuser



Film publicist Peggy Siegal planned a star-studded dinner party for Epstein and Prince Andrew at Epstein's New York mansion in 2010.

Siegal, known for hosting events to promote films including "The Big Short," "Argo," and "The Revenant" to Oscar voters, invited Epstein to screenings after he was released from prison in 2010, according to The New York Times.

"I was a kind of plugged-in girl around town who knew a lot of people," Siegal told The New York Times. "And I think that's what he wanted from me, a kind of social goings-on about New York."

Siegal also planned a dinner party for Epstein and Prince Andrew at his Upper East Side home. The event was attended by Katie Couric, George Stephanopoulos, and Chelsea Handler. "The invitation was positioned as, 'Do you want to have dinner with Prince Andrew?'" Ms. Siegal said. Many of the guests didn't know who the host was or about his criminal history, The New York Times reported.

A spokesperson for Siegal told Business Insider that Siegal's relationship with Epstein was social, not professional. Siegal told The New York Times that she ended her relationship with Epstein at the height of the #MeToo era in 2017.

Read more: Meet Peggy Siegal, the NYC publicist who got Jeffrey Epstein into A-list events and has been called the 'best way' to make sure your movie wins an Oscar



11 signs you're not ready to buy a house, even if you think you are

Sat, 08/10/2019 - 10:15am

Making the leap from renting to buying is thrilling and liberating — for many, it signifies the realization of the American Dream.

But it's also a big decision, both for your future and your finances. 

It's a long-term commitment that requires strong financial standing, and in many ways it's about more than just money. 

Read more: 7 things I wish I knew before buying a house

If any of the following signs strike a chord with you, you may want to delay the home-buying process. 

You have a low credit score

Before considering home ownership, you'll want to check your credit score, which you can do through free sites like Credit Karma, Credit.com, or Credit Sesame.

"The higher your score, the better the interest rate on your mortgage will be," writes personal finance expert Ramit Sethi in "I Will Teach You To Be Rich." Good credit can mean significantly lower monthly payments, so if your score is not great, consider delaying this big purchase until you've built up your credit.



You're doing it as an investment

If someone asks why you want to buy a house and your first answer is something along the lines of "Because I'm wasting money on rent" or "Because it's a good investment," you might not be mentally prepared for all the responsibilities that come with home ownership.

"When you look at the average price increase of a home across the country over the last 100 years, it's only about 3%," says Eric Roberge, CFP and founder of Beyond Your Hammock. "If you take away extra costs plus inflation, you're not really making any money on average on a single-family home."

Read more: A financial planner explains why you shouldn't invest the money you're saving to buy a house in the next few years

It's smarter to look for a house that meets non-monetary goals: It's in your dream neighborhood or it's a good place to start a family. "A home is a utility, not an investment," Roberge says.



You have to direct more than 30% of your income toward monthly payments

Personal finance experts say a good rule of thumb is to make sure the total monthly payment doesn't consume more than 30% of your take-home pay.

"Any more than that, and your finances are going to be tight, leaving you financially vulnerable when something inevitably goes wrong," write Harold Pollack and Helaine Olen in their book, "The Index Card." "To be fair, this isn't always possible. In some places such as New York and San Francisco, it can be all but impossible."

While there are a few exceptions, aim to spend no more than one-third of your take-home pay on housing.



You don't have a fully funded emergency savings account

And no, your emergency fund is not your down payment.

Pollack and Olen write:

"We all receive unexpected financial setbacks. Someone gets sick. The insurance company denies a medical claim. A job is suddenly lost. However life intrudes, the bank still expects to receive our monthly mortgage payments ... Finance your emergency fund. Then think about purchasing a home. If you don't have an emergency fund and do own a house, chances are good you will someday find yourself in financial turmoil."

Certified financial planner Jonathan Meaney recommends having the equivalent of a few years' worth of living expenses set aside in case there is a job loss or other surprise.

Read more: The 13 biggest mistakes people make when buying a home, according to real-estate agents

"Unlike a rental arrangement with a one- or two-year contract and known termination clauses, defaulting on a mortgage can do major damage to your credit report," he previously told Business Insider. "In addition, a quick sale is not always possible or equitable for a seller."



You aren't putting anything into savings

Even with a full emergency fund, you should still be able to continue putting money away for other goals.

"If you're saving money every month, that means your cash flow is in good shape, which is a good sign you're ready to buy a home," Roberge says. 

If you can't spare anything more than the mortgage payment, consider putting off purchasing a home until your cash flow is more stable.  



You can't afford a 10% down payment

Technically, you don't always have to put any money down when financing a home today, but if you can't afford to put at least 10% down, you may want to reconsider buying, says Sethi.

Ideally, you'll be able to put 20% down — anything lower and you will have to pay for private mortgage insurance, which is a safety net for the bank in case you fail to make your payments. PMI can cost between 0.5% and 1.50% of mortgage, depending on the size of your down payment and your credit score — that's an additional $1,000 a year on a $200,000 home.

Read more: 10 years after I bought my house, I spent over $21,000 for updates and repairs. Here are 6 expenses I never saw coming.

"The more money you can put down toward the initial purchase of a home, the lower your monthly mortgage payment," Pollack and Olen explain. "That's because you will need to borrow less money to finance the home. This can save you tens of thousands of dollars over the life of the loan."



You're planning other big expenses in the next few years

It's important to consider your housing budget within the context of your future goals. "Keep in mind the next couple of years down the road and what you have coming up," Roberge says.

If you don't have any other big expenses looming, it will be easier to make paying off your house a priority. Consider this: If you can afford mortgage payments of $1,000 a month right now, but you have a baby next year, will you still be able to afford the same amount? If not, it's time to choose your priorities.



You plan on moving within the next five years

"Home ownership, like stock investing, works best as a long-term proposition," Pollack and Olen explain. "It takes at least five years to have a reasonable chance of breaking even on a housing purchase. For the first few years, your mortgage payments mostly pay off the interest and not the principal."

Sethi recommends staying put for at least 10 years.

Read more: I own a 3-bedroom, 2-bath house near Daytona Beach, Florida. Here's exactly what it costs every month.

"The longer you stay in your house, the more you save," he writes. "If you sell through a traditional realtor, you pay that person a huge fee — usually 6% of the selling price. Divide that by just a few years, and it hits you a lot harder than if you had held the house for ten or twenty years."

Not to mention, moving costs can be exorbitant on their own.



You won't be able to keep up with other goals

Don't feel like you need to have every penny worth of debt paid off before you can purchase a home. But do a deep dive into why you have debt and how you're planning to deal with it, from student loans to credit card charges.

"Why do you have the credit card debt? Was it just a random occurrence where you had to put something on the credit card and you know you're going to pay it off soon? Or have you been spending more than you make and it's increasing over time?" Roberge says.

It's okay to still be paying off your student loans or paying down past credit card debt. But if the added costs that come with buying a house — mortgage payments, taxes, and repairs — impede your ability to continue putting money toward those goals each month, you might want to hold off for now and let your other expenses take priority.



You're deep in debt

While it's okay to have some debt, if it's a significant enough amount, it could hinder your ability to buy a house at all.

"If your debt is high, home ownership is going to be a stretch," Pollack and Olen write.

When you apply for a mortgage, you'll be asked about everything you owe — from car and student loans to credit card debt.

"If the combination of that debt with the amount you want to borrow exceeds 43% of your income, you will have a hard time getting a mortgage," they explain. "Your 'debt-to-income ratio' will be deemed too high, and mortgage issuers will consider you at high risk for a future default."



You've only considered the sticker price

You have to look at much more than just the sticker price of the home. There are a mountain of hidden costs — from closing fees to taxes — that can add up to more than $9,000 each year, real estate marketplace Zillow estimates. And that number will only jump if you live in a major US city.

You'll have to consider things such as property tax, insurance, utilities, moving costs, renovations, and perhaps the most overlooked expense: maintenance.

"The actual purchase price is not the most important cost," says Alison Bernstein, founder and president of Suburban Jungle Realty Group, an agency that assists suburb-bound movers.

"What's important is how much it's going to cost to maintain that house," she previously told Business Insider.

Read up on all of the hidden costs that come with buying a home before making the leap.

Kathleen Elkins and Emmie Martin contributed to previous versions of this story.



Everything you need to know about New York City's mansion tax — and what it means for the luxury market

Sat, 08/10/2019 - 10:13am

After the revised mansion tax was passed in April, Manhattan's luxury real-estate market was sent into a frenzy as wealthy clients rushed to close deals before the new tax rates went into effect on July 1, The Wall Street Journal reported.

The revision of the mansion tax was bittersweet for New York City's luxury market. While the market dodged a costly and long-debated tax on expensive second homes, wealthy buyers didn't get off scot-free.

The progressive mansion tax is expected to raise $365 million a year. The money will, according to the New York State Division of the Budget, be used to improve the city's subway system.

Specifically, the revenue, as the New York State Divison of the Budget details, will be used to support up to $5 billion in financing for MTA projects.

Business Insider spoke with industry leaders about the history of the mansion tax and the impacts its new rates will have on New York City's luxury market. 

What is the mansion tax?

In 1989, former Governor of New York Mario Cuomo issued the mansion tax mandating a 1% tax on statewide home sales of $1 million or more. 

Over the next 30 years, the number of homes — priced at $1 million and more — sold in New York City, in particular, grew astronomically. With home sales regularly in the multimillions, the suggestion of higher taxes on expensive real estate in the city became a pressing topic of conversation.

And in March of 2019, billionaire Ken Griffin purchased a $238 million Manhattan apartment — the most expensive home ever sold in the US. Less than a month after Griffin's purchase was made public, lawmakers passed two new sales taxes on multimillion-dollar homes in New York City.

First, the progressive mansion tax was implemented, which taxes home sales of $2 million or more upwards at 1%, capping at a 3.9% tax on home sales of $25 million or more. 

Second, a .25% transfer tax was put into place. That is now an additional tax on top of the already-existing, statewide .4% transfer tax.

Homes outside of New York City that sell for $1 million or more will not be affected by the progressive mansion tax or the new transfer tax.

What does the new mansion tax mean for luxury real estate in Manhattan?

As Barbara Fox, founder and president of the real-estate brokerage Fox Residential, told Business Insider, "It's the newness of [the new progressive mansion tax] that's causing the issues."

New York's luxury housing market has taken a hit over the past year, seeing price cuts and an influx of inventory. Now, with the new mansion tax in effect, there is a lingering worry among industry professionals that it will continue to slow down the already-slow market. 

Forbes' contributing writer Frederick Peters, the CEO of the real-estate firm Warburg Realty, wrote that over time, the progressive mansion tax will become a normal factor in transactional negotiations between buyers and sellers.

While Fox told Business Insider that she is confident the market will continue to climb in 2019, she predicts the progressive mansion tax will make it move slower. For the ultra-wealthy, an extra tax during closing isn't going to be a deal-breaker, Fox explained.

"The market will still climb, but it will climb more slowly in the balance of this year than it may have otherwise," Fox told Business insider.

What happened to the luxury market in June?

According to Douglas Elliman's Q2 Manhattan market report, for the first time in six quarters, year-over-year sales increased in June as buyers rushed to save thousands, and in some cases, millions of dollars in mansion taxes.

Jamie Heiberger, president and founder of Heiberger & Associates, PC, told Business Insider she closed more deals this past June than usual because buyers wanted to avoid the progressive mansion tax.

"So many deals that may have not closed until later got moved up because they wanted to get in before the deadline [July 1]," Heiberger told Business Insider.

How are people reacting to the new mansion tax — and why are some New Yorkers celebrating it?

Before revising the mansion tax rates, lawmakers proposed a pied-à-terre tax that would mandate an annual tax on second homes worth $5 million or more. Industry leaders feared it would push buyers and developers away from New York.

"That [proposed pied-à-terre tax] will dramatically affect prices, which will dramatically affect the appetite for developers to keep developing, which affects the employment of tens of thousands," David Juracich, principal of JDS Development Group, told digital-media company Bisnow in March of 2019.

According to Mansion Global, a home worth $25 million would come with a $370,000 annual pied-à-terre tax. So, when lawmakers instead passed the progressive mansion tax, industry leaders were relieved.

"We probably dodged a bullet here," Steven James CEO of Douglas Elliman's New York City division, told Bloomberg in an interview.

SEE ALSO: Mansions and penthouses are lingering on the market in major US luxury markets. Plummeting interest among foreign buyers is largely to blame.

DON'T MISS: New York is in a race to be carbon neutral by 2050. The city's glossy, glass-encased luxury buildings may be one of the first casualties

Join the conversation about this story »

NOW WATCH: Nxivm leader Keith Raniere has been convicted. Here's what happened inside his sex-slave ring that recruited actresses and two billionaire heiresses.

Here's how much it costs to rent a one-bedroom apartment in the 49 largest US cities

Sat, 08/10/2019 - 10:03am

Living in or near a big city comes with perks, like great entertainment options, shopping centers, and career opportunities. 

But just how much will you have to fork over in living expenses to call one of these areas home?

Depending on where you live, the median rent for a one-bedroom apartment in the country's top metro areas can be less than $720 a month or higher than $2,500 a month.

Read more: Here's how much space $1,000 in rent will get you in 11 major US cities

Business Insider teamed up with Zillow's rental site, HotPads, to find the median rent for a one-bedroom apartment in each of the 49 US metro areas with the largest populations (as determined by Zillow). We also used Data USA to find the median household income in each of these areas.

The data was compiled using HotPad's Repeat Rent Index. Each of the one-bedroom apartments analyzed in the study has been listed for rent on HotPads for longer than a month.

Keep reading for the full rundown, from the metro areas with the cheapest one-bedrooms to the areas with the priciest.

SEE ALSO: The 50 best suburbs in America, ranked

DON'T MISS: 9 US cities that are paying people thousands of dollars to move there

Oklahoma City, Oklahoma: The median rent for a one-bedroom apartment in the Oklahoma City metro area is $710.

The median household income in the Oklahoma City metro area is $56,260.

Source: HotPads



Birmingham, Alabama: The median rent for a one-bedroom apartment in the Birmingham metro area is $800.

The median household income in the Birmingham metro area is $53,107.

Source: HotPads



San Antonio, Texas: The median rent for a one-bedroom apartment in the San Antonio metro area is $880.

The median household income in the San Antonio metro area is $56,774.

Source: HotPads



Kansas City, Missouri: The median rent for a one-bedroom apartment in the Kansas City metro area is $890.

The median household income in the Kansas City metro area is $63,404.

Source: HotPads



St. Louis, Missouri: The median rent for a one-bedroom apartment in the St. Louis metro area is $905.

The median household income in the St. Louis metro area is $61,571.

Source: HotPads



Indianapolis, Indiana: The median rent for a one-bedroom apartment in the Indianapolis metro area is $905.

The median household income in the Indianapolis metro area is $59,566.

Source: HotPads



Pittsburgh, Pennsylvania: The median rent for a one-bedroom apartment in the Pittsburgh metro area is $925.

The median household income in the Pittsburgh metro area is $58,521.

Source: HotPads



Cincinnati, Ohio: The median rent for a one-bedroom apartment in the Cincinnati metro area is $930.

The median household income in the Cincinnati metro area is $61,653.

Source: HotPads



Houston, Texas: The median rent for a one-bedroom apartment in the Houston metro area is $945.

The median household income in the Houston metro area is $63,802.

Source: HotPads



Cleveland, Ohio: The median rent for a one-bedroom apartment in the Cleveland metro area is $960.

The median household income in the Cleveland metro area is $52,489.

Source: HotPads



Raleigh, North Carolina: The median rent for a one-bedroom apartment in the Raleigh metro area is $975.

The median household income in the Raleigh metro area is $72,576.

Source: HotPads



Columbus, Ohio: The median rent for a one-bedroom apartment in the Columbus metro area is $995.

The median household income in the Columbus metro area is $63,764.

Source: HotPads



Buffalo, New York: The median rent for a one-bedroom apartment in the Buffalo metro area is $995.

The median household income in the Buffalo metro area is $55,448.

Source: HotPads



Orlando, Florida: The median rent for a one-bedroom apartment in the Orlando metro area is $1,005.

The median household income in the Orlando metro area is $55,089.

Source: HotPads



Louisville-Jefferson County, Kentucky: The median rent for a one-bedroom apartment in this metro area is $1,010.

The median household income in the Louisville-Jefferson County metro area is $57,279.

Source: HotPads



Jacksonville, Florida: The median rent for a one-bedroom apartment in the Jacksonville metro area is $1,025.

The median household income in the Jacksonville metro area is $58,709.

Source: HotPads



Las Vegas, Nevada: The median rent for a one-bedroom apartment in the Las Vegas metro area is $1,030.

The median household income in the Las Vegas metro area is $57,189.

Source: HotPads



Dallas-Fort Worth, Texas: The median rent for a one-bedroom apartment in the Dallas-Fort Worth metro area is $1,055.

The median household income in the Dallas-Fort Worth metro area is $67,382.

Source: HotPads



Richmond, Virginia: The median rent for a one-bedroom apartment in the Richmond metro area is $1,085.

The median household income in the Richmond metro area is $67,633.

Source: HotPads



Virginia Beach, Virginia: The median rent for a one-bedroom apartment in the Virginia Beach metro area is $1,105.

The median household income in the Virginia Beach metro area is $64,255.

Source: HotPads



Detroit, Michigan: The median rent for a one-bedroom apartment in the Detroit metro area is $1,120.

The median household income in the Detroit metro area is $58,411.

Source: HotPads



Hartford, Connecticut: The median rent for a one-bedroom apartment in the Hartford metro area is $1,120.

The median household income in the Hartford metro area is $71,414.

Source: HotPads



Tampa, Florida: The median rent for a one-bedroom apartment in the Tampa metro area is $1,140.

The median household income in the Tampa metro area is $52,212.

Source: HotPads



Charlotte, North Carolina: The median rent for a one-bedroom apartment in the Charlotte metro area is $1,145.

The median household income in the Charlotte metro area is $61,156.

Source: HotPads



Phoenix, Arizona: The median rent for a one-bedroom apartment in the Phoenix metro area is $1,180.

The median household income in the Phoenix metro area is $61,506.

Source: HotPads



Milwaukee, Wisconsin: The median rent for a one-bedroom apartment in the Milwaukee metro area is $1,190.

The median household income in the Milwaukee metro area is $59,448.

Source: HotPads



Salt Lake City, Utah: The median rent for a one-bedroom apartment in the Salt Lake City metro area is $1,227.

The median household income in in the Salt Lake City metro area is $71,510.

Source: HotPads



Nashville, Tennessee: The median rent for a one-bedroom apartment in the Nashville metro area is $1,290.

The median household income in the Nashville metro area is $63,939.

Source: HotPads



Minneapolis-St Paul, Minnesota: The median rent for a one-bedroom apartment in the Minneapolis-St Paul metro area is $1,325.

The median household income in the Minneapolis-St Paul metro area is $76,856.

Source: HotPads



Riverside, California: The median rent for a one-bedroom apartment in the Riverside metro area is $1,330.

The median household income in the Riverside metro area is $61,994.

Source: HotPads



Austin, Texas: The median rent for a one-bedroom apartment in the Austin metro area is $1,390.

The median household income in the Austin metro area is $73,800.

Source: HotPads



Atlanta, Georgia: The median rent for a one-bedroom apartment in the Atlanta metro area is $1,400.

The median household income in the Atlanta metro area is $65,381.

Source: HotPads



Philadelphia, Pennsylvania: The median rent for a one-bedroom apartment in the Philadelphia metro area is $1,405.

The median household income in the Philadelphia metro area is $68,572.

Source: HotPads



Providence, Rhode Island: The median rent for a one-bedroom apartment in the Providence metro area is $1,405.

The median household income in the Providence metro area is $65,226.

Source: HotPads



Baltimore, Maryland: The median rent for a one-bedroom apartment in the Baltimore metro area is $1,405.

The median household income in the Baltimore metro area is $77,394.

Source: HotPads



Denver, Colorado: The median rent for a one-bedroom apartment in the Denver metro area is $1,415.

The median household income in is $76,643.

Source: HotPads



Miami-Fort Lauderdale, Florida: The median rent for a one-bedroom apartment in the Miami-Fort Lauderdale metro area is $1,445.

The median household income in the Miami-Fort Lauderdale metro area is $54,284.

Source: HotPads



Sacramento, California: The median rent for a one-bedroom apartment in the Sacramento metro area is $1,500.

The median household income in the Sacramento metro area is $67,902.

Source: HotPads



New Orleans, Louisiana: The median rent for a one-bedroom apartment in the New Orleans metro area is $1,515.

The median household income in the New Orleans metro area is $50,528.

Source: HotPads



Chicago, Illinois: The median rent for a one-bedroom apartment in the Chicago metro area is $1,555.

The median household income in the Chicago metro area is $68,403.

Source: HotPads



Portland, Oregon: The median rent for a one-bedroom apartment in the Portland metro area is $1,595.

The median household income in the Portland metro area is $71,931.

Source: HotPads



Seattle, Washington: The median rent for a one-bedroom apartment in the Seattle metro area is $1,800.

The median household income in the Seattle metro area is $82,133.

Source: HotPads



Washington, DC: The median rent for a one-bedroom apartment in the Washington, DC metro area is $1,820.

The median household income in the Washington, DC metro area is $99,669.

Source: HotPads



San Diego, California: The median rent for a one-bedroom apartment in the San Diego metro area is $1,885.

The median household income in the San Diego metro area is $76,207.

Source: HotPads



Boston, Massachusetts: The median rent for a one-bedroom apartment in the Boston metro area is $1,945.

The median household income in the Boston metro area is $85,691.

Source: HotPads



New York, New York: The median rent for a one-bedroom apartment in the New York metro area is $2,070.

The median household income in the New York metro area is $75,368.

Source: HotPads



Los Angeles-Long Beach-Anaheim, California: The median rent for a one-bedroom apartment in this metro area is $2,131.

The median household income in the Los Angeles-Long Beach-Anaheim metro area is $69,992.

Source: HotPads



San Francisco, California: The median rent for a one-bedroom apartment in the San Francisco metro area is $2,560.

The median household income in the San Francisco metro area is $101,714.

Source: HotPads



San Jose, California: The median rent for a one-bedroom apartment in the San Jose metro area is $2,640.

The median household income in the San Jose metro area is $117,474.

Source: HotPads



FREE SLIDE DECK: The Future of Fintech

Sat, 08/10/2019 - 10:01am

Digital disruption is affecting every aspect of the fintech industry. Over the past five years, fintech has established itself as a fundamental part of the global financial services ecosystem.

Fintech startups have raised, and continue to raise, billions of dollars annually. At the same time, incumbent financial institutions are getting in on the act, and using fintech to remain competitive in a rapidly evolving financial services landscape. So what's next?

Business Insider Intelligence, Business Insider's premium research service, has the answer in our brand new exclusive slide deck The Future of Fintech. In this deck, we explore what's next for fintech, how it will reach new heights, and the developments that will help it get there.

Join the conversation about this story »

I talked to 6 elite matchmakers about the world of millionaire dating — and their answers made it clear that dating with money can be surprisingly difficult

Sat, 08/10/2019 - 9:55am

  • Six elite matchmakers who work with millionaires gave Business Insider an inside look at the jet-set dating world of the rich for its month-long series, "Dating Like a Millionaire."
  • They all said millionaires really do splurge on lavish fairy tale dates.
  • But they also said money breeds entitlement, which can cause a host of problems — like having to determine a date's motives, flaunting their wealth too much on dates, and expecting the perfect partner.
  • Visit Business Insider's homepage for more stories.

Finding "the one" can be tough, but it becomes a whole different game for millionaires.

I spoke with six elite matchmakers who try to help millionaires meet the love of their lives. The matchmakers work with clients locally and globally, from royals and celebrities to entrepreneurs and CEOs, who have net worths ranging from the low millions into the billions.

In Business Insider's month-long series, "Dating Like a Millionaire," I dove into the jet-set dating world of the rich and the elite — and some common themes emerged. There were several specific aspects about millionaire dating that every matchmaker mentioned.

Here's what it's really like to date as a millionaire.

They really do whisk their dates away on private jets

Millionaires really do splurge on lavish dates — the era of the private jet is very much alive in the world of millionaire dating. Nearly all matchmakers mentioned their clients had taken dates on a private jet trip across the world.

Most commonly mentioned? Lavish private jet trips to Paris for dinner and a stay in the Ritz. But Paris isn't the only place millionaires jet to for pricey date nights.

Mairead Molloy of Berkeley International, who's based in London, told Business Insider she had one client who asked if they could hire a private charter plane complete with live musicians on board for a full evening of dinner and dancing in Miami — all in a 24-hour whirlwind of a date that Molloy estimated to exceed £650,000 ($817,410). 

Patti Stanger of Los Angeles-based Millionaire's Club calls these "Princess Diaries dates" — when millionaires transform the romance of Hollywood movies and fairy tale dreams from fantasy into reality. These can also include trips to the Kentucky Derby or a yacht cruise to Dubai.

Read more: From yacht trips to Dubai to charity events with Prince William, 6 elite matchmakers share the wildest dates their millionaire clients have gone on

Money comes with a lot of problems

But while money can buy impressive dates like trips to Paris, it can also buy a host of problems. All of the matchmakers agreed there are potential repercussions to dating when you're part of the super-rich elite. 

Resentment can set in if one person pays all the time, and millionaires have to determine whether people are dating them for the wrong reasons — money may influence someone's perceived romantic interest in high-net-worth individuals. Several of the matchmakers said they can spot a gold digger from a mile away.

Millionaires are a successful and ambitious group of people — but money can also breed a sense of entitlement, which can make them super picky. Acting entitled or picky is one of the biggest mistakes millionaires make when dating, according to the matchmakers.

"Often times, people who have a lot of money are used to always getting their way and calling the shots," April Davis of Luma Search in New York City said. "When you're dating someone who also has money or doesn't really care what your job or status is, then that is different than how you may be used to being treated at the office or in other circumstances."

Read more: I talked to 6 elite matchmakers, and they said the biggest difference between dating as a millionaire and an average Joe is also the most obvious one

Too many millionaires show up to their dates in a Ferrari 

Money also drives another common mistake millionaires make — picking up their date in a fancy car, which many matchmakers cited as a prime example of millionaires leading with their money — a big issue, they all said.

Amy Andersen of San Francisco-based Linx Dating calls this "peacocking," or overdoing it early in the relationship. "Showing up in a Ferrari, for example, or talking way too much about career success and history at the very beginning, not only might come off [as] arrogant but also does not highlight some of their more important personal qualities," she said.

Other turn-offs, according to matchmakers, include talking about their net worth, how many shares they have vested in their company, or anything involving material possessions like planes or their lavish homes. The matchmakers always advise their clients to avoid talk of assets, which can come off as bragging.

They want the whole package

If there was one theme the matchmakers reiterated, it was that millionaire men want it all.

"Men want someone who enriches their life and makes it even more fantastic," Carly Spindel of Janis Spindel Serious Matchmaking Inc. in New York City said.

According to the matchmakers, millionaire men want someone who is attractive — beautiful with a fit body — and intelligent; they want someone who can challenge them or teach them something. They also want a partner with a full life — someone who is independent, passionate, and happy with their own career, relationships, and social awareness.

Read more: Breaking down 'the 4 B's' of millionaire dating: A mother-daughter matchmaking duo dish on what rich men look for in a partner

Like men, millionaire women also want the whole package, said the matchmakers. But while they seek an attractive and intelligent partner, at the end of the day, comfort and security take priority.

"With money, your brain thinks differently," Janis Spindel, also of Janis Spindel Serious Matchmaking Inc. said. "[Millionaires] call the shots, they want the whole package."

SEE ALSO: I talked to 6 elite matchmakers, and they all said there are 3 red flags they watch for when vetting millionaire clients

DON'T MISS: 2 elite matchmakers say they always make house calls before helping a millionaire find love — and they can tell a lot by what's in their fridge and closet

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NOW WATCH: Jeff Bezos is worth over $160 billion — here's how the world's richest man makes and spends his money

Read the comic book that data analytics startup Thinknum used instead of a pitch deck to win over investors for its $11.6 venture capital round

Sat, 08/10/2019 - 9:40am

  • Thinknum, a data analytics startup for financial services, raised $11.6 million in Series A funding in March from Green Visor Capital.
  • Because data analytics is an especially competitive industry, the Thinknum team had to get creative to get investors' attention while they were fundraising, so they ditched a traditional pitch deck in favor of a comic book called "Quest for Alpha."
  • Thinknum Chief Growth Officer Marta Lopata told Business Insider that art is one of her personal passions and that nontraditional storytelling is a big part of the small company's culture.
  • Click here for more BI Prime stories.

Thinknum, a data analytics startup for financial services, needed to stand out.

The overcrowded data analytics space, combined with investor fatigue around financial services, meant the small startup's team had to think outside the box when they started fundraising.

"We had happy customers but they didn't want to talk about it, and this is a very competitive space with a high probability of failure," Thinknum Chief Growth Officer Marta Lopata told Business Insider. "There's so much that's already been said in the big data space over the years. At some point, we ran out of options so I started thinking about bringing art into the picture because its something I'm personally attracted to."

And so, late last year, Thinknum took an unusual tactic as it embarked on raising its Series A round: Rather than use a traditional investor pitch deck, it decided to create a comic book titled "Quest for Alpha," written by Lopata herself, and illustrated by artists Billy McDermott and Butcher Billy. 

It worked. In March, the team announced $11.6 million in Series A funding from Green Visor Capital.

Read More: Here's the pitch deck that Holloway used to raise $4.6 million from NEA and the New York Times for its online 'how-to' manual business

Lopata said she designed and wrote the book, which was then sent via PDF file to potential investors ahead of their meetings. She had the book printed as well and brought several copies to the board room. The comic has since become part of the on-boarding process for new employees as a part of laying out its corporate vision.

"We've been using this comic book to talk about culturally who we are and how our values are represented beyond just a pitch deck," Lopata said. "It shows what type of identity and culture we are trying to develop."

Although many of their clients are hedge funds and large banks, Lopata said Thinknum has always tried to think prevent itself from being pigeonholed in those industries. Numbers are the core of Thinknum's business, Lopata explained, but she wanted to create an emotional connection through art with every investor, customer, and employee.

"When you are working at a startup, you are constantly trying to find the straight line in the chaos, and the artistic process is very similar," Lopata said. "They're both about how you get to that clear vision when you have all these crazy things happening around you."

All told, Thinknum has raised $12.6 million in total venture capital, according to Pitchbook data.

Here's the comic book that helped put Thinknum on the map.

SEE ALSO: Eco-friendly home product maker Grove Collaborative acquires feminine care startup Sustain Natural for undisclosed amount



































Here are the 5 biggest questions facing WeWork as it prepares for its IPO (UBER, LYFT, CBRE, WORK)

Sat, 08/10/2019 - 9:32am

  • WeWork is preparing for an initial public offering and is expected to make public its IPO paperwork as soon as next week.
  • The company has been valued like a tech company by private investors.
  • But it faces numerous questions and concerns as it gears up for its offering.
  • Among them: whether it really should be put in the same class as tech companies and how its business will fare in a recession.
  • Click here for more BI Prime stories.

WeWork is gearing up for a big public offering.

But as it does so, it's facing some similarly big questions that could dampen investors' enthusiasm for its shares, limit the amount of money it raises in the IPO, and dog its stock on into the future.

The coworking business, which now calls itself the We Company, will reportedly make public its IPO documents as soon as next week. It is the most valuable startup to head for the public markets since Uber earlier this year.

Read this: WeWork's IPO filing will reportedly be revealed as soon as next week, giving us our best look yet at its business

With a $47 billion valuation, it has been treated like a tech company. And in some ways it has performed like one. It has expanded rapidly and more than doubled its sales last year while also doubling its loss.

But it's also been dogged by consistent concerns about its business model and about its CEO and founder Adam Neumann. Some of those questions may be answered by its IPO paperwork. Answers for others won't be known for months or even years after its debut on the public markets.

As the company prepares for its IPO, here as some of the biggest questions it faces:

SEE ALSO: WeWork has raised $6.1 billion and pioneered the co-working movement — but it increasingly looks like it doesn't understand commercial real estate

Just what is WeWork?

Adam Neumann describes what the We Company is doing as a "global physical platform." But he's been investing heavily in technology and has bought a succession of software startups in recent years. The company has also argued that it's been and will generate valuable data about its clients over the years and how they use its space and that data could be offered as its own service or could form its own future products and services.

But many see We as just a real-estate company. Nearly all its revenue comes from memberships — essentially the rent payments made by its tenants. It's also likely that most of its investments are going toward leases on properties and furnishings for those properties.

The answer to the question about whether its more a tech company or a real estate firm is important because it could have a direct bearing on its valuation — and how much public investors will pay for its stock.

Neumann has been able to convince venture investors, including Softbank, that We is deserving of a valuation akin to a tech company. With a valuation of about $47 billion based on its last funding round, the We Company is worth more than 15 times its expected revenue this year.

By contrast, real estate companies are generally not valued so highly. CBRE Group, for example, has a market capitalization of $18.4 billion, or less than half We's. But the company posted $21 billion in sales last year — more than 10 times the startup — and it was profitable to the tune of $1 billion. Boston Properties, which is considered overvalued, generated about 50% more revenue than We last year, but its market capitalization is less than half that of Neumann's company.

Whether We is a technology company or a real-estate one is "the biggest fundamental question that people seem to be asking," said Robert Siegel, a lecturer in management at Stanford Graduate School of Business. He continued: "The jury is still out on that."



What happens in a recession?

There are good reasons to worry about what might happen to the We Company when the next economic downturn hits.

The company was formed in 2010, after the economy was already starting to rebound from the Great Recession. So it has never experienced a downturn in the US, its largest market, or in many of the other markets it serves, and there's no way to now how it will weather one.

But Regus, which pioneered the co-working market, offers a cautionary tale. It saw a booming market during the 1990s, the last tech-led boom. But when that market went bust, it saw a sharp downturn in its fortunes and ended up filing for bankruptcy.

The concerns about We center around its business model. It rents space on long-term leases, then turns around and, essentially, sublets it to other companies on short-term, often month-to-months, deals. If the economy goes into recession, many of its startup customers could go out of business and many of its growing number of enterprise customers could sharply cut back on their office space. Because their deals with We are likely shorter term than their traditional leases, the startup could bear the brunt of their cutbacks.

"It has not been battle tested, and it's sitting right in one of the most cyclical sectors of the economy that we have," said Tom Smith, cofounder of Truss, an online commercial real estate marketplace. How it will endure a downturn, he continued, is "the many billion dollar question."

In an interview with Business Insider earlier this year, Neumann argued the startup will be well positioned in a downturn. It offers competitive rents that will be attractive to companies looking to cut costs. A growing portion of its customers are enterprise companies, and they're staying in its spaces for longer periods. And it could benefit from the downturn by getting lower prices on leases and seeing less costly construction costs for finishing out its spaces, he said.

Plus, the company has already experienced — and survived — downturns in Brazil, Argentina, and China, he said.

"We have proven in markets where [a recession] has occurred already," Neumann said in the interview. "We're stronger while [a downturn] happens and come out much stronger."



How much can and should investors trust Adam Neumann?

Neumann dominates We. He has majority control of the company despite not having a majority economic interest in it, thanks to shares that give him extra voting power. Such arrangements have come under increasing scrutiny, because they've helped protect tech titans such as Facebook's Mark Zuckerberg, Alphabet's Larry Page, and Snap's Evan Spiegel from being held accountable by investors or the public at large.

But even before his company has gone public, Neumann has given potential investors reason to worry about how he'll exercise his power once it does.

He reportedly purchased buildings only to turn around and lease them to WeWork. Over the last five years, he's raised $700 million by selling off his WeWork shares or using them to guarantee personal loans. And he and the company reportedly set up a new corporate structure recently that will allow him and other insiders to avoid paying taxes on any dividends We may pay out — while sticking other investors with double taxation.

Those moves are "red flags" for potential investors, said David Erickson, a senior fellow in finance at the University of Pennsylvania's Wharton School of business.

When you consider them in combination with each other, "People start to get a little nervous about, geez is this right management?"

In May, We announced that it is setting up a $2.9 billion fund jointly with outside investors to purchase commercial properties that the fund will then lease to WeWork. Neumann plans to hand over his interest in the properties he's purchased and leased to WeWork over to the new fund. 

But the fund raises its own questions, because its outside investors' interests may not always be aligned with We's.



Will this be another Uber?

We is only the latest unicorn, or startup worth $1 billion or more, to head to the public markets this year. But it's the most valuable and, perhaps, the most anticipated since Uber.

But that's not necessarily such great company to keep. Uber's stock has performed poorly since its IPO and is trading below its offering price. And it's not alone. Lyft and Slack — two other mammoth, well publicized startups that went public earlier this year — are also trading well below their initial prices.

Uber in particular, though, may worry We and its watchers. The company's offering price was significantly below initial expectations and ended up valuing the startup at only a slight premium to its highest private valuation.

And public investors have proven less tolerant of its ongoing losses than its private backers. After announcing a $5 billion loss for its second quarter, the company saw its stock plunge

If you're an institutional investor and bought shares in Uber or Lyft or Slack at the IPO, "you've lost money to this point," said Wharton's Erickson.

That's left a bad taste in the mouths of such investors, who are going to be crucial to the success We's debut.

"That creates a potentially challenging backdrop" to the IPO, he said.



How is competition affecting the market?

When Neumann founded WeWork in 2010, his new company had few rivals other than Regus. But the market has changed drastically since then, especially recently.

Dozens of other startups now offer coworking spaces. And many of the established names in real estate are getting into the game, either by setting up their own coworking divisions or by teaming up with the players.

International giant Hines recently announced a deal with startup Industrious to create Hines Squared, focused on coworking. Boston Properties has Flex, its own coworking offering. Tishman Speyer, another big commercial landlord, last year launched Studio, yet another coworking concept.

Last year, 69 different coworking providers listed space on Truss, said Smith, its cofounder. This year, that number is past 256.

"A lot of people don't talk about that and aren't really aware of how many other competing coworking and [flexible lease] concepts are out in the market competing with WeWork that did not even exist a year ago," Smith said.

That growing competition could pose multiple challenges for WeWork. Much of its business model hinges on being able to charge a higher price for rent than it's paying landlords and, potentially, to be able to raise its prices over the life of its leases. But in a competitive market, it may not be able to raise prices and, in fact, may have to offer significant discounts to lure customers. That's particularly the case as other coworking concepts try to compete against it by offering more high-end features or targeting potentially profitable niches of customers.

But it also could face an increasingly competitive market not just for clients, but also for space. WeWork owns few of the buildings it uses. Landlords could lease space to rivals, reserve space WeWork would have gotten access to in the past for their own coworking arms, or only offer the startup space in less desirable buildings or areas.

For now, WeWork is kind of like the Kleenex of the coworking market, Smith said. It's the brand potential customers recognize and seek out. It also has a big advantage from its huge network of spaces; when they travel, its customers can often find a WeWork office in which to work if they need one.

But as its rivals become better known, begin to offer similar or better services, and build out or team up to create their own networks of spaces, those advantage could fade, said Walter Johnston, a vice president of credit ratings at research firm Morningstar.

"That's definitely a concern going forward," he said.



These 7 tech CEOs and executives lost millions, along with the companies they helped build

Sat, 08/10/2019 - 9:28am

  • Statistics show nine out of 10 startups end up failing — one of the top reasons being lack of cash. So it is no wonder when a company goes bankrupt, its founder or founders may, too.
  • In Silicon Valley, it seems failure is a rite of passage. Medium blog posts by founders detailing why a company is folding and how it is best for the "community" have become all too common.
  • Many failed CEOs of one startup may go on to found bigger and better companies — but some don't.
  • Here are seven tech executives who lost millions, along with the companies they helped build.
  • Visit Business Insider's homepage for more stories.

Capitalism can be an ugly beast.

According to statistics, nine out of 10 startups are guaranteed to fail — and most of the time it's because a company simply spent all of its money. This means that not only do companies lose millions of dollars, but so do their founders. When companies go broke, the bank accounts and net worths of CEOs typically also take a drastic hit. 

Silicon Valley isn't a place where entrepreneurs are down for long. Failure is seen almost as a rite of passage in some cases — but in others, failure can mean years-long court battles and the possibility of bankruptcy or criminal charges for misleading shareholders. 

Read more: These 10 billionaires have all gone broke or declared bankruptcy — read the wild stories of how they lost their fortunes

The most prominent, widely covered, and dramatized downfall may be that of founder and former CEO of Theranos Elizabeth Holmes, who faces criminal fraud charges alleging she misled not only investors, but policy makers about the capability of her company's blood-testing technologies.

Another example, but with a happier ending, is Napster — the popular, early-aughts music-sharing software, brought down in part by a lawsuit facilitated by metal band Metallica. Though Napster didn't survive, founders Sean Parker and Shawn Fanning recovered — Parker became the first president of Facebook and Fanning has since invested in a variety of startups himself. 

Failure in the tech industry cannot be thwarted — the risk of losing everything seems to be part of the game. 

Here's the tech execs who lost millions and the companies they built.

SEE ALSO: The first jobs of 14 of the biggest tech executives

By now, Elizabeth Holmes, founder and former CEO of blood-testing company Theranos, is a household name. Holmes was able to secure nearly $1 billion in funding, notably from investors like Rupert Murdoch and US Education Secretary Betsy DeVos, before questions about the technology and fraud charges against Holmes caused Theranos to shut down.

Theranos was founded in 2003 when Holmes was 19 and attending Stanford University. By 2015, Theranos had a $9 billion valuation.

But a year later, Wall Street Journal reporter John Carreyrou published a story detailing how the company was operating at a limited capacity and had been generating false and unreliable results for patients. By the end of 2017, Theranos was drowning — the company had no money and its board members were leaving. 

Last September, Theranos laid off its workforce and Holmes faced charges of wire fraud. The company shut down just days later for good. Holmes, who Forbes once estimated had a net worth of $4.5 billion, now has an estimated net worth of $0. 

Source: Business Insider, The Wall Street Journal, Business Insider, Forbes



Antoine Balaresque and Henry Bradlow founded drone startup Lily Robotics in 2013. By 2015, Lily Robotics had over $15 million in funding and nearly $35 million in pre-sales thanks to a viral video showing the "drone" in action. But just two years later, Lily Robotics shut down, filed for bankruptcy, and was raided by federal agents. The much-sought-after drone? It reportedly never existed.

Lily Robotics pitched itself as a free-following, video-capturing, autonomous drone company. The company captured the gaze of investors like the Winklevoss twins (who famously sued Mark Zuckerberg over Facebook) and firms like Spark Capital (known for funding Twitter and Slack).

Cofounder Balaresque wrote in an email obtained by San Francisco District Attorney that the famed footage of a Lily drone following skiers and kayakers while they trekked through mountains and rivers was shot using a GoPro mounted on a $2,000 DJI Inspire drone. And according to bankruptcy paperwork, Lily was burning through roughly $1 million a month, while customers anxiously awaited their drones. The company filed for bankruptcy, and said in 2017 it plans to refund customers, but it's not clear if anyone has received a refund yet

Business Insider tried contacting Balaresque and Bradlow, but they did not respond to requests for comment. According to LinkedIn, Bradlow is now a product manager at e-scooter company Lime. 

Sources: Wired, Venture Beat, Forbes, Business Insider, Vox/Recode



In its heyday, circa 2011, Sidecar was considered a ride-share pioneer, beating even Uber and Lyft to launch. With just a little over $35 million in funding, though, Sidecar cofounder and former CEO Sunil Paul said the company just could not compete with Uber, which raised over $6.6 billion.

Sidecar eventually shut down operations in 2015, yet was able to sell its assets to General Motors the following year.

"Our vision is to reinvent transportation and we've achieved that with ridesharing and deliveries. It is, however, a bittersweet victory," Paul wrote in 2015. He largely blamed Uber's "aggressive" tactics and "anti-competitive behavior" for Sidecar's defeat, even going as far to file a lawsuit against the company last year.

Paul did not immediately respond to request for comment made by Business Insider, but according to his LinkedIn profile, he is now the founder of Spring Ventures, a venture capital firm. 

Sources: Vox, Reuters, Forbes



Napster was founded in 1999 by then-teens Sean Parker and Shawn Fanning as a free music-sharing and file-swapping service. But after several high-profile lawsuits, Napster folded and agreed to pay $26 million to publishers.

By 2002, Wired called Napster "the company that launched the most innovative Internet program."

But Napster was ultimately and very publicly brought down by a multitude of widely-covered lawsuits, including one facilitated by metal band Metallica, crushing the hearts of its 57 million users in the process. 

This colossal failure did not keep the two software engineers down for long, however. Parker went on to become the first president of Facebook (though ultimately left after a scandal) and Fanning has gotten into investing

Sources: Wired, Business Insider, AdWeek



Jawbone Health, a wearable health and fitness tracker, raised about $950 million. Jawbone spent nearly $1 billion over the course of a decade, but was ultimately unable to produce a wearable that could compete with rival Fitbit.

Jawbone founder and CEO Hosain Rahman filed for Chapter 7 bankruptcy for the company in 2017 with plans to sell some of its assets. J.P. Morgan even sued Rahman alleging he defaulted on loans, but the two parties later settled.

Reuters described Jawbone as "the second largest failure among venture-backed companies." 

None of this deterred Rahman's ability to raise millions of dollars, however — he was able to raise over $65 million for a new company this year.

Rahman did not immediately respond to a request for comment. 

Sources: TechCrunch, Forbes, Axios



The meteoric rise of Aereo, the television/video-streaming startup spearheaded by Chet Kanojia, was shot down by the US Supreme Court in 2014 after the court ruled it violated copyright law in 2014, just two years after it was founded. Five months later, Kanojia and Aereo ended up in court yet again — but this time to file for bankruptcy, according to a blog post written by Kanojia himself, in order to "maximize the value of [the] business and assets."

However, Silicon Valley isn't a place where failed entrepreneurs are down for long. In 2016, Kanojia announced his plan to disrupt the broadband industry by providing cheap, fast internet to customers with Boston-based startup Starry.

Business Insider was unable to immediately reach Kanojia for comment. 

Sources: Forbes, Vox, Business Insider, The New York Times



The story of taxi-hailing app Karhoo is one that can be told in five words: It ran out of money. Just 18 months after launch, Karhoo founder and CEO Daniel Ishag stepped down, and days later, the company announced its plan to shut down.

According to TechCrunch, Ishag never declared how much Karhoo was able to raise, but according to Forbes, the company reportedly blew through $52 million in its short life and ultimately filed for bankruptcy.

When Karhoo closed up shop in 2016, it still owed nearly $2 billion in wages to its workers in cities across the world. However, Karhoo found some hope when Nissan/Renault came in to acquire the failed startup. Ishag did not immediately respond to Business Insider's request for comment.

According to Business Wire, Ishag has since left the transportation and tech realm and entered healthcare with new venture called Baseline Health Technologies, which uses technology to map human health. 

Sources: Wall Street Journal, TechCrunch, Forbes, Business Wire



Shyp, an on-demand shipping startup, was frequently compared to Uber for its potential to disrupt an entire industry — but it just wasn’t in the cards. Shyp was able to raise $60 million in funding from firms like Kleiner Perkins, but was ultimately unable to find success. And when Shyp attempted to raise more money, it was turned down.

Shyp's former CEO and cofounder Kevin Gibbon wrote a blog post in March 2018 detailing the plans to shut down Shyp, saying, "Uber had transformed the way consumers thought about transportation. We could do the same, I was told. And I believed it."

Fortune wrote Shyp's failure illustrates an alarming, if not ever-present trend in Silicon Valley, where gullible CEOs like Gibbon believe "that piles of money last forever, and that attracting famous VCs guarantees success."

Just last month, Shyp announced on Twitter its plan to resurrect, but without Gibbon. Gibbon did not immediately respond to Business Insider's request for comment.

Sources: TechCrunch, Forbes, Fortune, The New York Times 



12 former Facebook insiders who ditched the company and are now outspoken critics (FB)

Sat, 08/10/2019 - 9:03am

  • Not every Facebook employee leaves with a high opinion of the social media giant or its CEO Mark Zuckerberg.
  • Cofounder Chris Hughes thinks the company is too powerful and should be broken up. Founding President Sean Parker worries what Facebook is doing to kids' brains. A former strategic partner manager says Facebook has failed its black employees and users.
  • The founders of Whatsapp, Instagram, and Oculus — some of Facebook's biggest acquisitions since 2012 — have all left the company.
  • We rounded up the parting musings of 12 former Facebook employees.
  • Visit Business Insider's homepage for more stories.

Facebook has seen its share of talent come and go in its 15 year history, and not always with great things to say. Some former employees have looked back at their time at the social media giant and questioned the value and impact that their work has had on society.

Cofounder Chris Hughes made headlines earlier this year by publicly calling for Facebook to be broken up, becoming the highest profile ex-Facebooker to turn on the company. Of course, there are plenty of insiders who have left Facebook who continue to support it. 

Here are 12 former Facebook employees who have criticized Facebook or CEO Mark Zuckerberg since leaving.

SEE ALSO: Here's why the internet is obsessed with 'number neighbors,' a viral trend where people text phone numbers one digit away from their own

12. Chris Hughes — Cofounder

Chris Hughes, Zuckerberg's Harvard roommate, cofounded Facebook. He left in the company in 2007. In 2019, he says the company is too powerful and is calling for it to be broken up. 

"I've been critical of a lot of the company's decisions over the past year, and (Mark) knows that," Hughes said in an interview with CNN Business in May 2019. "It's not personal beef, but it is personal."

"I've been friends with Mark for fifteen plus years, I dont know if we'll be friends on the other side of this piece," Hughes said in the CNN interview. 

In July 2019, The New York Times reported that Hughes had been in meetings with the FTC, DOJ, and state attorneys about a potential antitrust case against Facebook.

 

Sources: New York Times, New York Times, CNN Business

 



11. Palmer Luckey — Oculus founder

Palmer Luckey founded his VR company Oculus in 2012, which Facebook acquired in 2014 for about $2 billion. By 2017, he was out, following a Daily Beast report in 2016 that Luckey was "putting money behind an unofficial Donald Trump group dedicated to 's---posting' and circulating internet memes maligning Hillary Clinton."

In October 2018, Luckey told CNBC's Andrew Ross Sorkin, "it wasn't my choice to leave." When Zuckerberg testified before congress in April 2018, he said Luckey's departure was not related to politics, according to the Wall Street Journal.

Sources: Wall Street Journal, TechCrunch, The Daily Beast, Facebook, CNBC



10. Sean Parker — Founding president

The Napster cofounder joined Facebook as its founding president in 2004. He was arrested — but not charged — for cocaine possession in 2005. According to Vanity Fair, the arrest worried Facebook investors, and consequently "with much anguish, (Parker) agreed to depart."

In November 2017, Parker criticized Facebook at an Axios event, saying "God only knows what it's doing to our children's brains."

 

Sources: Axios, Business Insider, Vanity Fair



9. Kevin Systrom and Mike Krieger — Instagram cofounders

Kevin Systrom and Mike Krieger launched Instagram in 2010, and Facebook acquired it for $1 billion in 2012. In 2018, both cofounders left Facebook.

According to The New York Times, disagreements about changes to the service and staffing led to their decision to leave. The Times also reported that the founders weren't happy about the level of control Zuckerberg had begun to assert over Instagram.

At the Wired 25 conference after his departure, Systrom said "there are no hard feelings" towards Facebook, but "No one ever leaves a job because everything's awesome, right?" according to The Verge.

Source: The Verge, New York TimesBusiness InsiderThe New York Times



8. Alex Stamos — Former chief information security officer

Alex Stamos served as Facebook's chief information security officer from 2015 to 2018. According to The New York Times, prior to his departure Stamos "advocated more disclosure around Russian interference of the platform" but colleagues disagreed — his tasks were delegated out consequently. Stamos also reportedly clashed with COO Sheryl Sandberg, once blindsiding her at a board meeting where he began speaking about Russian intelligence operations.

"The truth is there is a bit of a Game of Thrones culture among the executives," Stamos said in a February 2019 interview with CNN. "One of the problems about having a really tight-knit set of people making all these decisions ... if you keep the — the same people in the same places, it's just very difficult to admit you were wrong, right?"

In May 2019, Stamos said Zuckerberg wields too much power and therefore should step down as Facebook's CEO.

Sources: Business Insider, Business Insider, New York Times, CNN



7. Mark Luckie — Former strategic partner manager for global influencers

Mark Luckie, who worked at Facebook from 2017 to 2018, circulated a memo to Facebook employees globally when he left the company and then posted it on Facebook. It's opening line read: "Facebook has a black people problem." Luckie went on to detail how Facebook has failed its black employees and users. He wrote that underrepresented groups are systematically excluded from communication and that racial discrimination at Facebook is real.

Facebook's 2019 diversity report showed that only 3.8% of Facebook employees identified as black, with only 1.5% of technical employees identifying as black.

"We want to fully support all employees when there are issues reported and when there may be micro-behaviors that add up," A Facebook spokesperson wrote to Business Insider around the time Luckie published his memo. "We are going to keep doing all we can to be a truly inclusive company."

Sources: LinkedIn, Facebook, Facebook, Business Insider



6. Chamath Palihapitiya — Former VP

Chamath Palihapitiya worked at Facebook from 2008 to 2011, serving as VP of platform and monetization, and then VP of user growth, mobile & international. 

In November 2017, Palihapitiya criticized Facebook at a talk at Stanford's Graduate School of Business, saying he felt "tremendous guilt" about the effect of social media on society. "In the back, deep, deep recess of our mind, we kind of knew something bad could happen." 

"Chamath has not been at Facebook for over 6 years," Facebook wrote in a response statement. "Facebook was a very different company back then, and as we have grown, we have realized how our responsibilities have grown too."

Palihapitiya consequently backpedaled, writing "I genuinely believe that Facebook is a force for good in the world" in a Facebook post.

Sources: Facebook, Business Insider, Business Insider, Business Insider, LinkedIn



5. Justin Rosenstein — Former engineering manager

Justin Rosenstein worked as an engineering manager at Facebook from 2007 to 2008, during which time he helped develop the Like button. After leaving Facebook, he cofounded digital project management platform Asana in 2008. 

Rosenstein told The Guardian in 2017 that he restricts his own use of social media these days, saying, "Everyone is distracted...all of the time." 

Sources: Business Insider, LinkedIn, Guardian



4. Leah Pearlman — Former product manager

Leah Pearlman also worked on creating Facebook's Like button; in retrospect, she had concerns about the validation feedback loop she created.

In a 2017 interview with Vice, Pearlman said, "You know that episode of Black Mirror, that one where everyone is obsessed with likes? When I saw that I suddenly felt terrified of becoming those people, as well as thinking I'd created that environment for everyone else."

Source: Vice, Business Insider



3. Brian Acton — WhatsApp cofounder

Brian Acton left Facebook in September 2017, three years after it acquired his messaging platform WhatsApp for $19 billion. According to Forbes, Acton's pro-privacy and anti-ads stance for WhatsApp caused friction with Zuckerberg and Facebook.

In February 2018, Wired reported that Acton was working with WhatsApp competitor Signal (which has end-to-end encryption), investing $50 million.

In March 2018, he called for users to #deletefacebook as the Cambridge Analytica privacy scandal came to light. 

Tweet Embed:
//twitter.com/mims/statuses/976231995846963201?ref_src=twsrc%5Etfw
It is time. #deletefacebook

Sources: Wired, Forbes



2. Jan Koum —WhatsApp cofounder

Jan Koum followed his cofounder Brian Acton out the door of Facebook. In April 2018, Koum announced his intent to leave the company. The Washington Post reported that Koum made the decision "after clashing with (WhatsApp's) parent, Facebook, over the popular messaging service's strategy and Facebook's attempts to use its personal data and weaken its encryption." 

Koum posted on Facebook announcing his departure; Zuckerberg commented, saying "I'm grateful for everything you've done to help connect the world, and for everything you've taught me, including about encryption."

Sources: Washington Post, Verge, Facebook



1. Eduardo Saverin — Cofounder

Zuckerberg's Harvard classmate Eduardo Saverin was the cofounder of Facebook. He managed the business side of Facebook until 2005, when Zuckerberg boxed him out by creating a new Delaware corporation to acquire Facebook's old Florida LLC, distribute new shares to everybody, and leave Saverin out.

Zuckerberg wrote an email to his lawyer asking, "Is there a way to do this without making it painfully apparent to him that he's being diluted to 10%?" about Saverin.

What followed were lawsuits from Facebook and Saverin, Saverin approaching the Winklevoss twins, and Saverin approaching author Ben Mezrich about the book that would become Accidental Billionaires, which would eventually be made into the film The Social Network by David Fincher and Aaron Sorkin in 2010. 

When Saverin and Facebook's lawsuits were settled, Saverin signed an NDA and ceased communication with the press. In a 2012 interview with Veja, a Brazilian magazine, Saverin said, "I have only good things to say about Mark, there are no hard feelings between us." In a 2019 interview with Forbes, Saverin said, "I'm incredibly proud of what Mark has done, to build an institution of its size and value. He'll work hard to get things right."

Sources: Business Insider, Business Insider, Business Insider, Forbes



Facebook is replacing some of Instagram's tech to improve privacy. Here's why it will also super-size the app's money-making potential. (FB)

Sat, 08/10/2019 - 8:30am

  • It looks like Instagram is gearing up to bring a major new revenue stream online.
  • The Facebook-owned app's messaging service, Instagram DMs, is being reengineered with the tech that underpins Facebook Messenger.
  • In theory, this means Instagram will be well-positioned to roll out myriad tried-and-tested revenue generating features such as chatbot ads.
  • A Facebook spokesperson declined to comment on whether the company is planning this.
  • Click here for more BI Prime stories.

Instagram looks to be setting the stage for a major new cash-printing machine.

This week, Bloomberg broke the news that Instagram's messaging service, Direct Messages (abbreviated as DMs), is undergoing a major restructuring. The entire product is being rebuilt using the same tech that underpins Messenger, one of Facebook's other messaging apps. 

It's all part of an ambitious reengineering of Facebook's multiple messaging products — Instagram DMs, Messenger, and WhatsApp — that will allow them all to communicate with each other seamlessly, as well as adding end-to-end encryption. 

Facebook is describing the move as part of its "pivot to privacy" —a strategic shift aimed at safeguarding users' privacy after years of constant scandals. Skeptics argue it's a way to try and make it harder to break the company up under antitrust law if the company's critics arguing that Facebook is an anticompetitive monopoly.

That may be true.

But the move has another likely consequence: It will help Instagram make a ton more money.

A 'Swiss-Army knife' messaging app

Over the years, Facebook has built Messenger into an impressively multi-functional messaging app that lets users do everything from play games with friends to receive receipts for their online shopping. Accordingly, it's stuffed full of monetization opportunities for the company, with ad units and sophisticated integrations for brands looking to interact directly with potential customers. 

Instagram DMs, in contrast, are much more straightforward — they're basically just a standard messaging service. 

Bloomberg reported that the basic look of Instagram DMs "won't change much" post-reengineering. But by integrating Messenger's tech under the hood, Facebook is putting in place a foundation that can accommodate new brand-centric, money-making product features. Chatbot capabilities for example, which are currently available in Facebook Messenger but not in Instagram, allow users to interact with retailers and other businesses through automated chatbots. That's a potential for revenue, through things such as paid chatbot ads, that Instagram doesn't currently have. 

A spokesperson for Facebook declined to comment on whether the company was considering this when contacted by Business Insider. But as a strategic move, it makes sense; it would allow Facebook to implement tried-and-tested money making opportunities in Instagram — producing new revenue streams without having to build anything from scratch, and leveraging the Messenger team's existing knowledge on what works.

Ultimately, Facebook's goal is likely for its messaging apps to look a lot more like China's WeChat — an all-in-one messaging app from which users can do everything from ordering food to paying utility bills.  

Instagram is already a cash-printing machine, with an estimated value of over $100 billion, and with a brand that has managed to stay largely free of its parent company's scandals. But this change illustrates that when it comes to monetizing the app, there are still plenty of opportunities that have still yet to be tapped. 

Got a tip? Contact this reporter via encrypted messaging app Signal at +1 (650) 636-6268 using a non-work phone, email at rprice@businessinsider.com, Telegram or WeChat at robaeprice, or Twitter DM at @robaeprice. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

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Apple's long-awaited credit card with Goldman Sachs is launching. A Wall Street firm crunched the numbers around how much money it could make.

Sat, 08/10/2019 - 2:04am

  • The long-awaited Apple Card is rolling out. Alliance Bernstein has estimated it could reap as much as $1 billion in annual revenues for the Apple within a few years.
  • To reach the $1 billion mark, the Apple Card would have to become one of the largest credit cards in the industry, rivaling the Chase Sapphire Reserve and the Amex Platinum.
  • That's a tough hurdle, but it's plausible given Apple's hundreds of millions of iPhone users and its brand cachet.
  • "This revenue should be almost pure profit to Apple, as Goldman Sachs bears all of the operational and credit risk for the program," Bernstein wrote in a May research note.
  • Visit Business Insider's homepage for more stories

Apple has officially launched its much ballyhooed credit-card, in collaboration with Goldman Sachs. Within a few years the card could reap as much as $1 billion in annual profit for the tech giant, with little downside risk.

That's according to estimates that Wall Street research shop Alliance Bernstein put out in May, which analyzed the potential profit prospects of Apple Card and other new business lines against plateauing sales of the iPhone and slowed growth from existing services like iTunes, iCloud, and Apple Care.

Apple Card doesn't represent the largest revenue opportunity of services Apple has planned — that distinction goes to the advertising and TV programs, according to Bernstein — but the card could wind up being some of the easiest cash Apple ends up pocketing.

Here's how the math breaks down.

The revenue split

There are several ways the fee-free card will make money — primarily via swipe fees and interest payments from customers who carry a balance — and if Apple's co-brand partnership is in line with industry standards, the iPhone maker will take a percentage of the revenues. 

Typically, this figure is in the 5% to 10% range, but as Bernstein pointed out, Apple is a premium brand and Goldman is a newcomer to the credit-card business, so the terms were likely sweeter for the tech company. Apple was also more intimately involved the technology behind the card, which integrates with the iPhone and Apple Wallet. 

That notion is further reinforced by the fact that there were several bidders for the Apple Card partnership, and that Citigroup backed out after advanced negotiations over fears the card's consumer-friendly, anti-fee framework would make it a money loser, according to a report from CNBC.

"The split is likely more in favor of Apple given its relative negotiating leverage over Goldman Sachs," Bernstein wrote in the research report. 

But how much revenue can the card generate? Bernstein notes that the two largest rewards cards today, the Chase Sapphire Reserve and the Amex Platinum, each likely earn in excess of $4 billion in annual revenue. 

The analysts thought it is plausible for the Apple Card to match this over time, though they're aware that doing so for a brand-new card "is obviously a high hurdle."

Millions of iPhone users and unmatched brand cachet give Apple an edge

What the Apple Card has going for it, Bernstein noted, is seamless integration via the iPhone and thus a massive cache of easy-to-reach customers, as well as "brand cachet" among those customers that "is obviously unmatched."

Bernstein has estimated there will be roughly 935 million installed iPhones in circulation worldwide by the end of 2019.

Much of that user base is outside the US — only 42% of Apple's revenues came from the Americas region in 2018, according to financial filings — and the credit card will only be available in the US to start with. But the US alone still represents vast and wealthy group of customers. 

Moreover, the instant cash-back feature along with a competitive 2% cash-back rate for digital purchases should make it popular with low- to middle-income customers. 

If adoption is strong, the card could make Apple as much as $1 billion annually within the next three to five years, but Bernstein said "hundreds of millions" is a more likely scenario.

'This revenue should be almost pure profit to Apple.'

Even if Apple takes 20% of the revenues — double the high end of the traditional co-brand range — that's $800 million a year if the card matches the success of the Sapphire Reserve and the Amex Platinum. 

By comparison, Amazon's co-brand credit cards likely earn the firm $500 million to $1 billion annually, Bernstein estimated.

But the kicker for Apple is this revenue stream comes with with very little work or risk going forward.

Goldman Sachs is essentially paying Apple for access and marketing to its lucrative customer base. The bank will do all the work of operating the credit-card — assessing and managing credit exposure, dealing with angry or confused customers, and collecting bills from delinquent cardholders. 

"This revenue should be almost pure profit to Apple, as Goldman Sachs bears all of the operational and credit risk for the program," Bernstein wrote in the note. 

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WeWork's IPO filing will reportedly be revealed as soon as next week, giving us our best look yet at its business

Fri, 08/09/2019 - 6:22pm

Coworking space startup WeWork could unveil its IPO filing as soon as next week, according to a Bloomberg report Friday.

The company, which is part of The We Company, confidentially filed to go public in April and was valued at $47 billion in its most recent private funding round in January. The S-1 filing in question would give us our best look yet at the high-profile startup's business yet.

According to its most recent financial report in July, WeWork still isn't profitable, but it's growing fast, with its losses and revenues both doubling in 2018 to $1.9 billion and $1.8 billion, respectively, from the year prior. 

WeWork has been sharing select financial information with the public since it began issuing bonds in 2018, but the filing will be the most comprehensive look at its finances yet. According to the Bloomberg report, WeWork is planning to raise more than $3.5 billion in its IPO, which, if it comes to fruition, would make it the second largest IPO in the United States this year.

The company has raised $10 billion in venture funding and debt funding since cofounder and CEO Adam Neumann started the company in 2011. The IPO would allow its roster of prominent investors, including SoftBank, to cash out their shares.

Read More: WeWork cofounder and CEO Adam Neumann reportedly sold shares he owned in the company and took loans worth $700 million

The company's financials have come under scrutiny in the run-up to its public debut as it struggles to turn large real estate investments into a profitable business model. Neumann himself came under fire in July for cashing out a portion of his stake in WeWork and taking loans worth $700 million in total, an uncommon move ahead of such a highly-anticipated IPO. 

WeWork declined to comment. 

SEE ALSO: Eco-friendly home product maker Grove Collaborative acquires feminine care startup Sustain Natural for undisclosed amount

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Elizabeth Warren and Bernie Sanders just slammed the Swiss drug giant Novartis over a new controversy swirling around the world's most expensive drug

Fri, 08/09/2019 - 4:44pm

  • Elizabeth Warren and Bernie Sanders are among a group of five senators who slammed Novartis' AveXis for submitting manipulated data to the FDA ahead of the approval of its gene-therapy drug. 
  • The FDA revealed the data-manipulation issue earlier this week, saying that it affected only a small portion of product-testing data and that the regulator was confident the drug, Zolgensma, should keep being sold. 
  • "This scandal smacks of the pharmaceutical industry's privilege and greed, and Americans are sick of it," the senators wrote in a letter to Ned Sharpless, the acting head of the FDA. 
  • Novartis said it first learned about the data problem in March. But the Swiss drug giant informed the FDA months later, after the gene therapy was approved, the FDA said
  • The five senators encouraged the FDA to "use your full authorities to hold AveXis accountable for its malfeasance," adding that "anything short of a forceful response would signal a green light to future pharmaceutical misbehavior."
  • Visit Business Insider's homepage for more stories.

Five senators, including Elizabeth Warren and Bernie Sanders, are slamming the Swiss drug giant Novartis for submitting manipulated data to the US Food and Drug Administration — which was part of a package that led to its $2.1 million drug getting approved.

The FDA made the data problem public earlier this week. It appears to affect only a small amount of data, and the FDA said it "remains confident" the drug, Zolgensma, should still be sold. 

In the pharmaceutical industry, where data is the basis for approval of life-or-death drugs, data manipulation is serious business. The controversy has bubbled up this week, magnified by the visibility of Zolgensma, which at $2.1 million is the most expensive drug in the world, as well as the high profile of Novartis, whose new, young, and charismatic CEO has sought to transform the company

"This scandal smacks of the pharmaceutical industry's privilege and greed, and Americans are sick of it," the senators wrote in the letter, which was addressed to Ned Sharpless, the FDA's acting head. In addition to Warren and Sanders, both 2020 presidential hopefuls, the letter was also signed by Sens. Richard Durbin, Tammy Baldwin and Richard Blumenthal, who are all Democrats.

Novartis declined to comment on the letter from the senators.

.@Novartis manipulated testing data to rush its drug to market & exploit govt perks. Now its $2.1M spinal muscular atrophy drug is the most expensive med in US history. The @US_FDA works for the people, not big pharma, & must hold Novartis accountable. https://t.co/jo7kxqKlp7

— Elizabeth Warren (@SenWarren) August 9, 2019

 

Data-manipulation timeline provokes outrage from senators

The timeline of Novartis' disclosure to the FDA also inspired ire from the senators. Novartis heard allegations of data manipulation in March, before Zolgensma was approved in May. But the drugmaker disclosed it to the FDA a month after the approval, on June 28, the FDA said.

Read more: A top executive at Swiss drug giant Novartis told us the inside story of the $2.1 million price tag for the most expensive drug in the world

In a conference call with investors this week, Novartis CEO Vas Narasimhan said the company had been investigating the allegations itself and denied that it had been influenced by the timing of Zolgensma's approval. The data manipulation was carried out by only a few people, and Novartis would "exit" them, he said. 

The drugmaker "tried to do all of the right things," Narasimhan said. "There will be bumps on the road, we'll never be perfect, but we will be relentless in trying to keep improving and being the most highly respected company in our industry."

But the senators disagreed, calling Novartis's actions "unconscionable" and urging the FDA to take action. The regulator has previously said it could impose either civil or criminal penalties.

"We urge you to use your full authorities to hold AveXis accountable for its malfeasance," they said. "Anything short of a forceful response would signal a green light to future pharmaceutical misbehavior." 

The senators also asked the FDA why it had scrapped a regulation proposed last fall, which would have required healthcare companies to quickly report falsified data, and whether that regulation would be reissued because of the AveXis news.

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Stocks slump as US-China trade tensions escalate yet again

Fri, 08/09/2019 - 4:04pm

Stocks returned to a downward spiral on Friday after President Trump floated the idea of canceling upcoming trade talks with China in September, bringing into question whether the world's two largest economies can avoid escalating their trade war. 

While speaking to reporters on the South Lawn of the White House, Trump was asked whether the planned talks with China would be cancelled, to which Trump replied: "Maybe. We'll see what happens." The comments come a few weeks before a new round of tariffs on $300 billion worth of Chinese exports are scheduled to take effect on September 1. 

Trump also said the US would sever ties with the controversial Chinese telecommunications giant Huawei. But, if a trade deal was achieved, Trump suggested the ban could be lifted. The company was temporarily banned from doing business with the US earlier this summer. 

Here's a look at the major indexes as of the 4 p.m. close on Friday: 

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All three major US indexes are poised to close in positive territory for the week after days of wild swings brought on by trade comments from Trump and China, fears of a currency war, and loosening monetary policy around the world.

Shares of Nektar Therapeutics cratered 40% on Friday after the company disclosed a quality control problem with one of its key cancer treatments. Wall Street analysts moved swiftly to downgrade the stock as concern grew over the future success of the cancer therapy. 

Shares of Uber plunged as much as 10% after the ride-hailing services lost more money in the second quarter than investors and analysts anticipated. Uber said it lost $5.2 billion during the period, but chief executive officer Dara Khosrowshahi assured investors and analysts that losses would drop in the coming years. 

CannTrust, a major cannabis producer, fell as much as 8.8% after the company's auditor withdrew results for its most recent quarterly and full-year filings. The Canada-based producer said last week it may have to restate its earnings for the two filings after regulators discovered unlicensed pot greenhouses in early July. The stock then saw a torrid rebound in the afternoon. 

Within the S&P 500, these were the largest gainers:

And the largest decliners:

Healthcare and utilities posted the only gains in the S&P 500 on Friday. Energy, technology, and consumer discretionary firms were the index's biggest losers.

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