Musk settles with SEC
It’s been an eventful few days for Elon Musk and Tesla. Last week the SEC charged Mr Musk with securities fraud “for a series of false and misleading tweets about a potential transaction to take Tesla private”. This referred to Mr Musk’s tweet in August that he could take Tesla private for $420 a share – “a substantial premium to its trading price at the time” – and that funding had been secured. The SEC alleged that Mr Musk “knew that the potential transaction was uncertain”. But Mr Musk and Tesla have since settled. Each must pay $20m, and Mr Musk steps down as chairman for three years – remaining as chief executive.
HoF bosses dismissed
By Sports Direct
In a succinct statement, Sports Direct (SPD) revealed that it has dismissed the former directors and senior management of House of Fraser, following the collapse of the business on 10 August and “subsequent calls for an investigation into the circumstances of that collapse”. It has been reported that House of Fraser’s chief executive, Alex Williamson, is among those leaving. Sports Direct acquired House of Fraser for £90m, just after the department store appointed administrators. Boss Mike Ashley has said that he seeks to turn it into “the Harrods of the high street”.
FCA fines Tesco Bank
For cyber attack failings
Tesco’s (TSCO) banking arm has been fined £16.4m by the Financial Conduct Authority (FCA), for “failing to exercise due skill, care and diligence in protecting its personal current account holders” against the cyber-attack that hit Tesco Bank in November 2016. Indeed, the regulator found that the perpetrators “exploited deficiencies” in Tesco Bank’s debit card design, in its financial crime controls and in its financial crime operations team – making off with £2.26m. But for factors including Tesco Bank’s cooperation with the FCA, its full compensation of customers and its agreement to an early settlement, the penalty could have been £33.6m.
Just Group: CFO departs
Shares tumbled
Shares in Just Group (JUST) have tumbled more than a tenth following the news that chief financial officer Simon Thomas will depart on 31 October, after 12 years, with the mutual consent of the company. David Richardson, deputy chief executive and managing director of the UK corporate business, will step in as his interim replacement. Back within September’s half-year results, Just Group revealed that it had deferred declaring an half-year dividend. It “felt it appropriate” to do so until gaining more clarity on its capital position, amid uncertainty about the outcome of the Prudential Regulation Authority’s consultation into the holding of lifetime mortgages to back annuities.
"Chuck Chequers”
Can’t stay “half in, half out”
In a much-anticipated speech delivered at the Conservative Party conference in Birmingham, former British foreign secretary Boris Johnson told his audience that this is the moment to “chuck Chequers” - meaning to abandon the prime minister’s current Brexit proposal. He said that if Chequers were agreed, it would “only embolden” those now calling for a second referendum. Mr Johnson added that if the UK were to remain “half in, half out”, we will “protract this toxic, tedious business”. But did Mr Johnson’s address constitute a signal of his future leadership ambitions?
Funding Circle IPOs
Shares fall
Funding Circle has joined London’s main market, trading under the ticker ‘FCH’. The offer price had been set at 440p, after the group originally gave a pricing range of 420p to 530p. But in conditional dealing, ahead of Wednesday’s official IPO, the shares were trading at a discount to this figure. And on the morning of flotation day, they hit a low of 340p, before rising again. A peer-to-peer lender, Funding Circle was founded in 2010 and connects small- and medium-sized enterprises with sources of lending. Car maker Aston Martin also announced its offer price this week, £19, and also saw its shares decline in conditional dealing .
UK services: growth slows
Down on August
Business activity across the UK services sector grew at a slower rate in September than in August, according to the IHS Markit/ CIPS UK Services Purchasing Managers’ Index (PMI) – coming in at 53.9, against 54.3. Together with news of expansions in manufacturing and construction, IHS Markit chief business economist Chris Williamson said this implies that the UK economy expanded by just under 0.4 per cent in the third quarter. New work and competitive pricing contributed to business activity. But higher fuel prices caused another significant increase in input costs. And Mr Williamson noted “Brexit worries continue to dominate the outlook”.
Italy’s 10-year Italian bond yield reached its highest levels since 2014 earlier this week, but this trajectory reversed slightly on Wednesday.
The initial sell-off, and consequent rise in yield, followed the news that the Italian government had agreed to a budget deficit of 2.4 per cent of GDP for the next three years – something which could bring it into dispute with Brussels.
But the yield’s apparent decline at the time of going to press came amid reports that Italy’s budget deficit is now expected to fall gradually after 2019.
