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June 2, 2012 at 1:32 PM   |   Comments

Senator calls Facebook IPO specious

WASHINGTON, June 2 (UPI) -- U.S. Sen. Richard Blumenthal, D-Conn., says Facebook's initial public offering is the "poster child," for practices on Wall Street that favor big investors.

"This IPO is a poster child for all that's wrong with current practices," Blumenthal said in an interview, The Washington Post reported Saturday.

The Securities and Exchange Commission has not confirmed or denied that it is conducting an investigation into the Facebook IPO that was marred by technical problems, including a 30 minute delay and difficulty for traders to confirm transactions on the day of Facebook's public debut.

Areas of concern include underwriter Morgan Stanley giving one set of information on Facebook's revenue forecast to one set of investors and holding that information back from others, the Post reported.

"You wonder, isn't there something wrong with this picture? Where the underwriters selectively pick (who should receive) information, then the public is not only permitted but encouraged to participate?" Blumenthal asked.

Morgan Stanley's Chief Executive Officer James Gorman has insisted that the firm followed established rules throughout the IPO. Some, however, say the case provokes new questions, including whether or not the recently passed JOBS Act went too far by allowing companies with under $1 billion in revenue a separate set of rules about what must be disclosed before an IPO compared to larger companies.

The law was supposed to make it easier for smaller companies to go public.

"I voted against the JOBS Act, and the Facebook IPO may be Exhibit A why we need to revisit some of the issues that were given so little attention," Blumenthal said.


Debt debate veers with Greek polls close

ATHENS, Greece, June 2 (UPI) -- The final set of voter polls allowed in Greece before the next national election show a tight race between leftist Syriza and centralist New Democracy parties.

Although emerging a surprisingly strong contender in the May 6 election, which failed to establish a coalition government, Alexis Tsipras, leader of the Syriza party, is beginning to sway the debate on international assistance in his direction, The New York Times reported Saturday.

The final set of credible polls in Greece, which are suspended by law within two weeks of an election, show the race essentially tied in two polls and the Syriza party ahead 32 percent to 26 percent in the third.

Tsipras has contended all along that he would toss out the international agreement concerning billions of dollars in bailout assistance that have come with tough mandates for austerity control of the Greek budgets.

Leaders of the New Democracy party and the Socialist Pasok party are now saying they would at least re-negotiate the terms of the deals.

A spokesman for the International Monetary Fund -- a third of the so-called troika, which includes the European Union and the European Central Bank -- said Thursday that the IMF was open to "any ideas" about fiscal targets the loans have established.

The loans mandate Greek abolish collective bargaining agreements and reduce the minimum monthly wage by 22 percent, two steps Tsipras said he would cancel.

He also said he would reduce the national sales tax "and start taxing the wealthy who evade tax."

Further, Tsipras would suspend repayment of international loans until Greece's economy, now in a prolonged recession, returned to growth.

"We don't claim that there is plenty of money. Greek people are not asking for money. They are asking for work and the ability to make a living," he said.


Home prices drop in China

BEIJING, June 2 (UPI) -- Home prices in China dropped 1.53 percent from a year earlier in May, the China Index Academy said.

Xinhua reported Saturday that prices in 100 Chinese cities fell 0.31 percent month-to-month from April to May. The average price for housing in the survey stood at $1,372 per square meter, which is slightly more than 10 square feet.

In May, the average price in the country's 10 most expensive cities was $2,403 per square meter, a 0.5 percent drop from April.

While economists worry about a bubble in the price of property in China, new home sales rose 22.6 percent in the first three weeks in May compared to the same three weeks of 2011.

The government keeps control of the market by setting standards on lending, which includes control of mandatory down payments. It has also banned ownership of a third home.

Some analysts say the government is not likely to change these policies in the near future.


SAG-AFTRA reach record label deal

HOLLYWOOD, June 2 (UPI) -- Screen Actors Guild-AFTRA has reached a deal with major record labels to provide health benefits and retirement plans to dancers who perform on music videos.

The deal, reached Friday after three days of negotiations, would also provide 12-hour rest periods, wardrobe allowances and a binding grievance and arbitration process for music video performers, the Los Angeles Times reported Friday.

"Our negotiations were productive, resulting in solid gains for SAG-AFTRA members," SAG-AFTRA National Executive Director David White said. "We also laid the groundwork for a cooperative partnership with the industry that will benefit members throughout the term of the agreement."

The three-year deal was reached with Universal Music Group, Sony Music Entertainment, Warner Music Group and Walt Disney Co.

"We are grateful for the strong partnership that we continue to have with SAG-AFTRA," said Lucian Grainge, Universal Music Group's chairman and chief executive. "This agreement not only reflects that relationship, but is testament to the vision that we share ... in working together to meet the many new challenges facing the music industry."

The agreement must now be approved by the SAG-AFTRA National Board, the Times reported.

SAG merged with its smaller sister union, the American Federation of Television of Radio Artists, in March to create the largest labor group in Hollywood with 160,000 actors, singers, dancers and performers.

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