WASHINGTON (Reuters) –
President Barack Obama said on Saturday this week's positive job and economic growth figures proved that his big spending efforts to stimulate the economy were working.
But he cautioned in his weekly radio address to Americans that "we have a long way to go before we return to prosperity" and more job losses were likely in coming days.
Democrats and Republicans agree the economy will be the top issue for the 2010 congressional elections, although the White House has disputed suggestions that they will be a judgment on Obama and his policies.
Voting in next week's Virginia and New Jersey governors' races will render a first judgment on Obama, who was sworn into office just over nine months ago in the midst of the worst recession since World War Two.
The U.S. unemployment rate remains stubbornly high at 9.8 percent, despite a $787 billion economic stimulus that Obama and his fellow Democrats, who control Congress, pushed through in February.
New unemployment numbers due out next Friday are expected to show U.S. employers cut 175,000 jobs in October, according to economists polled by Reuters. The unemployment rate is forecast to rise to 9.9 percent for October.
But new data this week showing the U.S. economy growing in the third quarter for the first time in more than a year, signaling the end of the worst recession in 70 years, was good news for the Obama administration.
"Now, economic growth is no substitute for job growth," Obama stressed in his radio address. "But we will not create the jobs we need unless the economy is growing."
REPUBLICANS QUESTION FIGURES
Obama said steps taken by his administration to jump-start the economy, including the stimulus package of spending and tax cuts, had helped "blunt the worst of this recession."
The White House said on Friday the stimulus had directly saved or created more than 640,000 jobs so far, based on data about who had received loans or grants through the American Recovery and Reinvestment Act.
Obama said overall the stimulus had created or saved more than one million jobs.
"It took years to dig our way into the crisis we've faced. It will take more than a few months to dig our way out," said Obama, who blames Republicans for the economic crisis he inherited.
Republicans, who favor tax cuts, say the stimulus has failed to halt rising joblessness and they also questioned the White House's figures on jobs saved or created.
"It's bewildering to see the same administration that sold its trillion-dollar spending plan this spring as a guarantee against 8 percent unemployment -- today it's nearly 10 percent
-- claiming it created 1 million jobs, especially since it is a sad fact 3 million jobs have been lost since the stimulus was signed into law," Senate Republican leader Mitch McConnell said in a statement.
(Reporting by Ross Colvin, editing by Alan Elsner)
NEW YORK (Reuters) –
The Securities and Exchange Commission is in settlement talks with several large financial institutions to resolve investigations into the awarding of municipal investment contracts, the Wall Street Journal reported on Saturday.
UBS (UBSN.VX) and Bank of America Corp (BAC.N) are among a few firms negotiating settlements with the SEC, the Journal said, citing people familiar with the matter.
The report comes after the three-year investigation led to indictments on Thursday against CDR Financial Products Inc and some of its current and former executives, for bid-rigging and fraud related to municipal bond contracts.
The charges were the first to be filed in the U.S. Justice Department's ongoing investigation into bid-rigging in the municipal bond industry.
The SEC had no immediate comment on Saturday. Officials at the Justice Department, Bank of America and UBS could not immediately be reached for comment.
Bank of America entered into a leniency agreement with the Justice Department in connection with a probe into bidding practices, the bank said in February 2007. In a leniency agreement, the Justice Department promises not to bring criminal charges in exchange for the company's information about wrongdoing.
(Reporting by Tiffany Wu and Rachelle Younglai; Editing by Eric Beech)
BOSTON (Reuters) –
A former top executive at hedge fund firm ValueAct Capital is one of seven people charged with trading on inside information in Acxiom Corp.
Ronald Yee, who had been the San Francisco-based hedge fund firm's chief financial officer until June 2008, was named in a civil suit filed by the Securities and Exchange Commission on Friday.
The SEC did not identify Yee's former employer.
ValueAct, a nine-year-old firm that invests roughly $3.5 billion in undervalued securities, said it has been cooperating with the SEC since the agency began probing Yee in 2008.
The firm, which made national headlines when its co-founder Jeffrey Ubben became the chairman of Martha Stewart Living Omnimedia Inc, put Yee on administrative leave in April 2008. In June 2008 the partners accepted Yee's request to resign.
ValueAct said it requires all employees to participate in rigorous training on how to handle non-public information and immediately told investors about the probe into Yee in 2008 and then wrote to them on Friday to detail the charges against him.
The hedge fund is not implicated in the scheme in any way and received a no-action letter from the SEC, confirming that it is not a target in the investigation, said George Hamel, ValueAct's co-founder and chief operating officer.
Yee's lawyer said he is innocent and will contest the charges.
The matter has drawn attention because it comes only two weeks after prosecutors charged prominent hedge fund firm Galleon Group's founder Raj Rajaratnam with insider trading.
At that time sources familiar with regulators' insider trading probes said there would likely be more charges, but they did not give details about specific cases.
The cases are very different however. In the Galleon matter, the fund's founder has been charged while in the Yee matter the hedge fund and its current partners have not been implicated in the scheme.
The SEC alleges that Yee, who joined ValueAct as chief financial officer in 2005, tipped off his brother-in-law, Chen Tang, who then traded on the information through personal accounts. Tang was employed at private-equity firm Friedman Fleischer & Lowe. The two men had previously founded a financial consulting firm together.
In 2007 Tang learned from Yee that ValueAct was trying to acquire Little Rock, Arkansas-based data management company Acxiom, the SEC said. Yee later found out that the deal was in jeopardy and passed the information to Tang, who then tipped his friends and family.
According to the complaint, Yee did not make any trades himself. Tang and the others used Yee's tips to trade Acxiom's securities and earned more than $6 million in illegal profits, the SEC said.
"Mr. Yee denies the charges against him and intends to vigorously contest them," said Yee's lawyer, Michael Celio, a partner at Keker & Van Nest in San Francisco.
Since the $65 billion Madoff Ponzi scheme came to light last year and the average hedge fund posted its worst-ever returns by losing 19 percent in 2008, many investors have demanded more data from hedge funds to try and eliminate any whiff of potential problems.
Two analysts said ValueAct's ongoing communication with investors about the Yee case and the fact that the SEC has not implicated the firm in any way will likely calm clients' nerves and prevent them from pulling money out hastily.
ValueAct owns roughly 3.5 million shares of ThomsonReuters.
(Additional reporting by Rachelle Younglai in Washington and Matthew Lewis in Chicago; Editing by Eric Beech)