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<ul class="summary-list"><li><keyword id="19945948" type="General" weightage="100" keywordseo="Spirit-Airlines" source="keywords" meta.keywordsubtype="org" meta.entityname="Spirit Airlines" meta.hostid="261" meta.entityid="Spirit Airlines">Spirit Airlines</keyword> may file for Chapter 11 amid major debts after a failed merger with JetBlue.</li><li>The airline is saddled with debt of about $3.3 billion.</li></ul>Spirit Airlines stock plunged in premarket trading on Friday after a report that it may file for <keyword id="20424206" type="General" weightage="20" keywordseo="Chapter-11-bankruptcy" source="keywords">Chapter 11 bankruptcy</keyword> protection. Following a failed merger with <keyword id="20245146" type="General" weightage="20" keywordseo="JetBlue-Airways" source="keywords" meta.keywordsubtype="org" meta.entityname="JetBlue Airways" meta.hostid="261" meta.entityid="JetBlue Airways">JetBlue Airways</keyword>, Spirit had been grappling with heavy losses, making it difficult to manage its $3.3 billion debt load that includes $1.1 billion of secured bonds due within the next year, The Wall Street Journal <a target="_blank" href="https://www.wsj.com/articles/spirit-airlines-in-talks-with-bondholders-over-terms-of-potential-bankruptcy-filing-fdd23fae?st=oS9e7Q&amp;reflink=desktopwebshare_permalink">reported</a> late Thursday. The <keyword id="20376051" type="General" weightage="20" keywordseo="budget-airline" source="keywords">budget airline</keyword> is also exploring restructuring options to alleviate some of its financial pressures, though no filing is imminent, the Journal reported. The report pushed the carrier's stock down as much as 36% in premarket trade on Friday. The shares have fallen 86% this year. <keyword id="23550986" type="General" weightage="20" keywordseo="CEO-Ted-Christie" source="keywords">CEO Ted Christie</keyword> said on an August earnings call that Spirit was in talks with advisors and bondholders over its debt. While Spirit faces a turbulent future with a potential Chapter 11 filing, it isn't necessarily a death sentence for the airline. Rather, <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-score/what-is-chapter-11-bankruptcy">Chapter 11</a> allows businesses to reorganize their debts while continuing their operations. Other airlines have used the process to stay afloat. Most recently, <a target="_blank" href="https://www.businessinsider.com/scandinavian-airlines-filed-chapter-11-bankruptcy-after-pilot-strike-sas-2022-7">Scandinavian Airlines</a> filed for Chapter 11 in the US in 2022 following a pilot strike. The airline underwent a $3 billion restructuring plan to revise its fleet and raise money, while continuing to operate. The company emerged from bankruptcy in August. In 2005, <a href="https://www.businessinsider.com/companies-went-bankrupt-bounced-back-successful#delta-air-lines-filed-for-bankruptcy-in-2005-and-spent-a-year-and-a-half-restructuring-3" target="_blank">Delta Air Lines</a> filed for bankruptcy after shedding 6,000 jobs and slashing $1 billion in labor costs. By optimizing its Atlanta hub and increasing its international routes, the company recovered from its financial troubles and remains one of the <a href="https://www.businessinsider.com/best-and-worst-airlines-in-the-us-according-to-the-points-guy-2024-6" target="_blank">largest airlines</a> in the US. A potential bankruptcy filing could serve as a similar lifeline for Spirit's management of debt and finances. This came as Spirit <a target="_blank" href="https://www.businessinsider.com/spirit-airlines-ticket-changes-bundled-fares-bags-snacks-premium-seats-2024-7">bumped</a> its ticketing prices in July, shifting away from its ultra-low-cost model to boost revenue after suffering a $143 million loss in the first quarter of this year and a <a target="_blank" href="https://www.businessinsider.com/airlines-spirit-southwest-jetblue-struggle-profit-scrambling-changes-tickets-seats-2024-8">$193 million</a> loss in the second quarter. Spirit has been bogged by annual losses since before the COVID-19 pandemic, despite the travel industry's recovery, and continues to struggle against larger airlines that offer competitive fares. The airline has cut routes, furloughed pilots, and shrunk its operational capacity by nearly 20%. Spirit Airlines did not respond to a request for comment from Business Insider outside normal working hours. Correction: October 4, 2024 — An earlier version of this story misstated the year Delta filed for bankruptcy protection. It was 2005, not 2007.

Spirit Airlines stock plunges after report it's considering filing for Chapter 11 bankruptcy

<ul class="summary-list"><li>American consumers and businesses are having a hard time paying off credit card, auto, and commercial real estate debt.</li><li>US banks have increased their reserves in part to prepare for potential loan losses.</li></ul>US banks are having a harder time <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-score/what-is-debt-collection">collecting debts</a>, so they're taking precautions.According to Federal Reserve data, the past-due debt share for <a target="_blank" href="https://www.businessinsider.com/paid-off-credit-card-debt-solid-plan-2024-6">credit card</a>, <a target="_blank" href="https://www.businessinsider.com/consumer-credit-card-debt-auto-loans-delinquency-economic-outlook-bofa-2024-9">auto</a>, and <a target="_blank" href="https://www.businessinsider.com/commercial-real-estate-debt-property-losses-mortgage-interest-rates-prices-2024-7">commercial real estate</a> has recently risen to above pre-pandemic levels. The share of debt banks have written off as a loss because they couldn't collect it has also <a target="_blank" class="" href="https://www.federalreserve.gov/releases/chargeoff/chgallsa.htm">ticked up</a>, with the charge-off rate for two of these three loan types the <a target="_blank" class="" href="https://fred.stlouisfed.org/series/CORCCACBS">highest</a> they've been in <a target="_blank" class="" href="https://fred.stlouisfed.org/series/CORCREXFACBS">more than a decade</a>.Business Insider spoke to industry insiders who said this has prompted a response from big banks anticipating a continued increase in bad loans. <a target="_blank" href="https://www.businessinsider.com/largest-banks-us-list">US banks</a> have increased their reserves in recent years, effectively setting aside cash to cover potential loan losses.While it's commonplace for banks to increase their reserves as loan levels rise over time, reserves have started gradually making up a bigger share of total loans at firms like <a target="_blank" href="https://www.wellsfargo.com/assets/pdf/about/investor-relations/earnings/third-quarter-2024-earnings.pdf">Wells Fargo</a>, <a target="_blank" href="https://d1io3yog0oux5.cloudfront.net/_9d388ee07cccbcc3c8dc5bafe2ea4aff/bankofamerica/db/775/10116/webcast_transcript/2024-10-15+BAC+3Q+Earnings+Call_ADA.pdf">Bank of America</a>, <a target="_blank" href="https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2024/3rd-quarter/6bca0e4a-703c-4fff-8e70-f026f015fee5.pdf">JPMorgan</a>, and <a target="_blank" class="" href="https://www.citigroup.com/rcs/citigpa/storage/public/Earnings/Q32024/3Q24-SUPP-ForWeb.pdf">Citigroup</a>. Since June 2022, Wells Fargo's and Bank of America's reserves have risen by about $1.8 billion and $2.4 billion respectively. Still, for context, these firms' cash coffers are still considerably lighter than they were during the Great Recession.<h2 id="3bd35426-2903-4a17-860b-981ba0e86427">America's 3 debt pain points</h2>Each month, the New York Fed <a target="_blank" class="" href="https://www.newyorkfed.org/microeconomics/sce#/debtexp-1">asks</a> roughly 1,300 Americans to estimate the chance they'll be unable to make a minimum debt payment over the next three months. Aside from the pandemic, Americans haven't been this pessimistic since 2017.Consumers' struggles to repay credit card and auto debt suggest that <a target="_blank" href="https://www.businessinsider.com/inflation-september-cpi-consumer-price-index-federal-reserve-interest-rates-2024-10">inflation</a> and <a target="_blank" href="https://www.businessinsider.com/fed-cuts-interest-rates-how-much-september-fomc-powell-inflation-2024-9">interest rates</a>, while moderating in recent months, are still taking a toll on their finances. Additionally, businesses' struggles to pack back commercial real estate debt show that factors like elevated interest rates and the <a target="_blank" href="https://www.businessinsider.com/office-market-interest-rates-commercial-real-estate-federal-reserve-pandemic-2024-9">remote work revolution</a> are still having lingering effects.Here's a closer look at each of the three debt categories:<h3 id="df61242d-618b-4bfb-824d-874b5a53ce4d">Credit card debt</h3>As of the second quarter of this year, more than <a target="_blank" class="" href="https://fred.stlouisfed.org/series/DRCCLACBS">3%</a> of all credit card accounts in the US had past-due balances — up from less than 2% in 2021.The steady uptick in past-due credit card debt over such a short period of time provides some cause for concern, Bruce McClary, a nonprofit credit counselor and senior vice president at the National Foundation for Credit Counseling, told BI."What we are seeing is that people are struggling to repay debt while continuing to use up what is left of their available credit — forcing more people to start falling behind on their payments and into the hands of debt collectors," he said.David Schiff, senior managing director at FTI, told BI that prolonged debt-repayment problems will eventually present a bigger risk to the economy.The increase in reserves raises "real concerns about the softness of certain assets classes — specifically ongoing uncertainty around the commercial real estate market, and increasing worry about the number of revolving credit card customers and their rapidly growing balances," Schiff told BI.<h3 id="2c271636-eeeb-43a1-a28b-b69f0c808b83">Auto debt</h3>A Federal Reserve <a target="_blank" class="" href="https://www.federalreserve.gov/econres/notes/feds-notes/rising-auto-loan-delinquencies-and-high-monthly-payments-20240926.html">report</a> published on September 26 found that auto loan delinquency rates rose "substantially" above pre-pandemic levels by the end of 2023, driven in large part by growth in monthly debt payments.In fact, a growing number of Americans owe more than their cars are worth, according to a <a target="_blank" href="https://affiliate.insider.com?h=76e351eb917843c15c21c91acd7d8e92304c81583e3e5bb129c38093d6e7aff2&amp;postID=67114ad8434c477c23344eb6&amp;postSlug=big-banks-preparing-loan-loss-credit-card-auto-debt-cre-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.edmunds.com%2Findustry%2Fpress%2Fnegative-equity-on-the-rise-the-average-amount-owed-on-upside-down-car-loans-hit-an-all-time-high-in-q3-2024-according-to-edmunds.html%3Futm_source%3Dsubstack%26utm_medium%3Demail">report</a> published on October 15 by the automotive website Edmunds. Stephen Biggar, director of financial services research at Argus Research, told Business Insider that if a bank is forced to repossess such a vehicle, the car's value wouldn't even cover the loan, resulting in losses to the bank. He said that the uptick in auto delinquencies is "not a spike, but is kind of a concern about what goes on from here."<h3 id="108a8464-8ec8-4eb3-8b19-f2eb7af18b2d">Commercial real estate</h3>Another problem for banks is that some businesses with commercial real estate loans are struggling to repay them. Biggar said some of this is tied to high vacancy rates among offices. While many companies have called employees back to the office since the height of the pandemic, office vacancy rates still <a target="_blank" href="https://www.axios.com/2024/07/09/office-vacancy-rate-record-high">rose</a> to <a target="_blank" href="https://www.businessinsider.com/real-estate-outlook-office-buildings-vacancies-commerical-markets-investors-remote-2024-1">record highs</a> over the past year.Elevated interest rates have also made it difficult for businesses to pay back debt on commercial real estate loans related to offices, retail, hotel, and apartment building properties, among others. That's because some loans are coming due — forcing businesses to refinance at <a target="_blank" href="https://www.businessinsider.com/commercial-real-estate-big-trouble-crash-bank-crisis-2024-2">much higher interest rates</a>.To be sure, we're still far from a debt crisis: The share of past-due and charged-off debt generally remains in line with historical levels after rising from pandemic-era lows. Additionally, some banks are simply restoring reserves that were depleted during the pandemic. However, if the <a target="_blank" class="" href="https://www.businessinsider.com/recession-outlook-economy-layoffs-inflation-spending-job-market-tariffs-morgan-stanley-2024-10">economy slows</a> and the <a target="_blank" class="" href="https://www.businessinsider.com/job-market-recession-unemployment-rate-september-payrolls-report-fed-cuts-2024-10">unemployment rate</a> rises further, the uptick in delinquencies could become a larger concern, Biggar said.<h2 id="3723386c-1711-4911-97f5-b3d9337f3327">Wall Street acknowledgement</h2>While <a target="_blank" href="https://www.businessinsider.com/wall-street-banks-earnings-calls-interest-rates-fed-cuts-debt-2024-10">banking executives</a> this earnings season generally spoke highly of the economy, they did acknowledge that elevated prices and interest rates continue to weigh on American consumers."Our customers are healthy, but more discerning in their spend with signs of stress isolated," <a target="_blank" class="" href="https://www.fool.com/earnings/call-transcripts/2024/10/15/citigroup-c-q3-2024-earnings-call-transcript/">said</a> Jane Fraser, Citi's CEO, referring to consumers with lower credit scores.Brian Moynihan, Bank of America's CEO, <a target="_blank" href="https://www.fool.com/earnings/call-transcripts/2024/10/15/bank-of-america-bac-q3-2024-earnings-call-transcri/">said</a> that overall consumer spending remains strong but that "consumers are worried of the cost of living, worried about higher rates, and other matters."Charles Scharf, Wells Fargo's CEO, <a target="_blank" class="" href="https://www.fool.com/earnings/call-transcripts/2024/10/11/wells-fargo-wfc-q3-2024-earnings-call-transcript/">said</a> the bank hasn't seen "meaningful changes" in delinquency rates across its credit portfolio, but that there is evidence of financial strain among some Americans."We continue to see more pronounced stress in certain customer segments with lower deposit and asset levels where inflation has partially offset strong employment and wage growth," he said.Jeremy Barnum, JPMorgan's CFO, <a target="_blank" class="" href="https://www.fool.com/earnings/call-transcripts/2024/10/11/jpmorgan-chase-jpm-q3-2024-earnings-call-transcrip/">said</a> that consumers' discretionary spending has "normalized" following particularly strong levels in recent years.The financial roller coaster of pandemic payments, whipsawing inflation, and high interest rates are especially affecting lower-income Americans."We know consumers at a certain income level and below are strapped," Biggar said, adding, "There's been a lot of concern, particularly at the lower income category, that people are unable to make ends meet."Going forward, Biggar said that many banks could continue adding to their reserves, particularly if the unemployment rate rises further. That might not ultimately be necessary, since the jobless rate has <a target="_blank" href="https://fred.stlouisfed.org/series/UNRATE">stabilized</a> over the past two months after a surprise increase."I'm not expecting any big spike from here unless the unemployment rate moves materially higher," Biggar said of further reserve reinforcements.

Big banks are bracing for losses as Americans struggle to pay off debt

<ul class="summary-list"><li>HPE says it will continue to pursue its $4 billion lawsuit against <keyword id="20559006" type="General" weightage="20" keywordseo="Mike-Lynch" source="keywords">Mike Lynch</keyword>’s estate.</li><li>Lynch, along with his daughter and top attorney, died when his superyacht sank in August.</li></ul><keyword id="20092876" type="General" weightage="20" keywordseo="Hewlett-Packard-Enterprise" source="keywords" meta.keywordsubtype="org" meta.entityname="Hewlett Packard Enterprise" meta.hostid="261" meta.entityid="Hewlett Packard Enterprise">Hewlett Packard Enterprise</keyword> said Monday that it wouldn't drop its lawsuit against the late <keyword id="22561489" type="General" weightage="20" keywordseo="tech-tycoon" source="keywords">tech tycoon</keyword><a href="https://www.businessinsider.com/the-life-of-mike-lynch-autonomy-hp-2017-5" target="_blank"> Mike Lynch</a>'s estate. The news came two weeks after Lynch died in a tragic<a href="https://www.businessinsider.com/tech-tycoon-mike-lynch-confirmed-dead-superyacht-shipwreck-obituary-2024-8" target="_blank"> yacht sinking</a> off the coast of Sicily. Lynch, along with seven others, including his daughter and his<a href="https://www.businessinsider.com/nyc-lawyer-died-yacht-wrote-chilling-linkedin-post-months-ago-2024-8" target="_blank"> top attorney</a>, drowned when his superyacht, Bayesian, sank. Before his death, Lynch had been embroiled in a nine-year legal battle with the company. Hewlett-Packard bought his software company, <keyword id="19954078" type="General" weightage="20" keywordseo="Autonomy" source="keywords" meta.keywordsubtype="org" meta.entityname="Autonomy" meta.hostid="261" meta.entityid="Autonomy">Autonomy</keyword>, in 2011 and later accused Lynch of valuing it inaccurately. Hewlett-Packard broke into two companies — <keyword id="19960268" type="General" weightage="100" keywordseo="Hewlett-Packard" source="keywords" meta.keywordsubtype="org" meta.entityname="Hewlett Packard" meta.hostid="261" meta.entityid="Hewlett Packard">Hewlett Packard</keyword> Enterprise and HP — in 2015. An HPE spokesperson said Monday that the company would continue to pursue the lawsuit, which seeks $4 billion in damages. <keyword id="22857988" type="General" weightage="20" keywordseo="Angela-Bacares" source="keywords">Angela Bacares</keyword>, Lynch's wife who survived the yacht tragedy, is now expected to inherit her late husband's fight with HPE, Fortune <a target="_blank" class="" href="https://fortune.com/europe/2024/09/02/hewlett-packard-mike-lynch-bereaving-family-4-billion-lawsuit/">reported</a>. "In 2022, an English High Court judge ruled that HPE had substantially succeeded in its <keyword id="23150565" type="General" weightage="20" keywordseo="civil-fraud-claims" source="keywords">civil fraud claims</keyword> against Dr Lynch and Mr Hussain," the spokesperson said in a Monday <a target="_blank" class="" href="https://apnews.com/article/hewlett-packard-mike-lynch-autonomy-bayesian-yacht-sinking-014f4b2195a702a3fc4c0d81eef24e57">statement to the Associated Press.</a> "A damages hearing was held in February 2024 and the judge's decision regarding damages due to HPE will arrive in due course," they added to the outlet. "It is HPE's intention to follow the proceedings through to their conclusion." The Monday statement comes after the group initially sent a statement to several media outlets declining to comment on legal matters in light of the tragedy. "We do not think it appropriate to comment on legal matters in these tragic circumstances," the spokesperson said, per <a target="_blank" class="" href="https://fortune.com/europe/2024/08/27/hp-dilemma-mike-lynch-family-4-billion-claim/">Fortune</a>. We're saddened by this tragic event and our thoughts are with the families and friends of all the victims." The yacht sank just weeks after Lynch and Stephen Chamberlain, his former vice president of finance, were acquitted by a San Francisco jury in June of all criminal charges related to Autonomy's sale. The indictment <a target="_blank" class="" href="https://www.businessinsider.com/mike-lynch-autonomy-hp-legal-battle-court-superyacht-sinking-2024-8">accused</a> Lynch and Chamberlain of falsifying financial documents, lying to auditors and regulators, and suppressing people who criticized Autonomy's financial practices. A representative of HP did not immediately respond to a request for comment from Business Insider sent outside regular business hours. Correction: September 3, 2024 — An earlier version of this story misstated when Lynch and Chamberlain were acquitted of criminal charges. They were acquitted weeks before the yacht sank, not weeks after. An earlier version also misstated the timeline of the lawsuit. It has been in process for nine years, not 13. The story has also been updated to clarify that Hewlett Packard Enterprise is pursuing the lawsuit against Lynch’s estate. HPE broke off from Hewlett-Packard in 2015.

Hewlett Packard Enterprise confirms it will continue its $4 billion suit against Mike Lynch's estate after he died in a tragic yacht sinking

<ul class="summary-list"><li>Trump's arguments for overturning his $454M civil fraud verdict received a warm reception Thursday.</li><li>Appellate judges questioned the New York AG's 'mission creep' and lack of 'guardrails' in the case.</li></ul>Lawyers for Donald Trump enjoyed a warm reception in a Manhattan appellate courtroom on Thursday as they argued for the overturning of a <a target="_blank" href="https://www.businessinsider.com/trump-massive-ny-fraud-fine-has-ballooned-during-appeal-2024-9">massive $454 million civil fraud verdict</a> won this year by the New York Attorney General's Office.During a brief but rapid-fire dialogue, four of the five justices on the panel expressed support of Trump's arguments for overturning, or at least modifying, the costly verdict against the former president and his New York-based real-estate and golf-resort empire.One justice went so far as to wonder aloud if the Trump fraud case represents "mission creep," calling into question the AG's use of one of the country's toughest anti-fraud laws."The immense penalty in this case is troubling," that judge, Justice Peter H. Moulton, also said, speaking toward the end of Thursday's hearing in an intermediate-level state appellate court.A second justice suggested the state's present and future attorneys general need firmer "guardrails" in pursuing fraud cases.The AG herself, <a target="_blank" class="" href="https://www.businessinsider.com/letitia-james-takes-verdict-victory-lap-calls-trumps-ego-staggering-2024-2">Letitia James,</a> was not mentioned by name during a tense 45 minutes of arguments. But the tone of much of the judges' questioning suggested most could be open to at least trimming the scope of James' landmark case.The justices also suggested the fraud case's underlying law — New York's AG-empowering <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.nysenate.gov/legislation/laws/EXC/63">Executive Law 63(12)</a> — needed an overhaul.The law, approved by state lawmakers in 1956, lets attorneys general sue anyone who "shall engage in repeated fraudulent or illegal acts " and recover the proceeds of that fraud to "protect honesty and integrity" in the marketplace.In Trump's case, the law empowered James to successfully sue for what a trial-level Manhattan judge eventually agreed was Trump's decade of billion-dollar exaggerations in the <a target="_blank" class="" href="https://www.businessinsider.com/trump-has-stopped-issuing-net-worth-statements-2024-7">annual financial statements</a> used to pocket more than $400 million in loans and profits."You hear, underneath all these questions, the question of mission creep," Moulton said at one point, as he wondered aloud if there needs to be "some limitation on what the attorney general can do in interfering in these private transactions.""Has 63(12) morphed into something that it was not meant to do?" he asked."You know the history of this statute," Justice John Higgitt said at another point, breaking into arguments by an attorney for James, Judith Vale, a deputy solicitor general."The common thread was the AG needs greater powers, as the people's lawyer, to protect consumers, civil rights, and the environment," Higgitt continued."And so, again, with that sort of historical backdrop to this law, how do we draw a line, or at least put up some guardrails, to know when the AG is operating well within her admittedly broad sphere of 63(12), and when she is going into an area that wasn't intended for her jurisdiction?" he added.Vale responded that the law was designed to protect New Yorkers from the kind of fraud and deceptions that <a target="_blank" class="" href="https://www.businessinsider.com/financial-crisis-scariest-moments-2015-9">brought down Lehman Brothers</a> in the financial crisis of 2008."In an ideal world," Vale answered, "the attorney general or somebody else would have gone in and stopped that fraud and illegality" before the public suffered.But where do you draw the line, a fourth justice, Dianne T. Renwick, asked, if there is no imminent risk to the public?Trump attorney D. John Sauer has made this line drawing a central point of his appeal.The appeal argues that James' fraud case wrongly interfered in the decisions of "sophisticated" banks that had been happy to loan Trump money regardless of any exaggerations. <a target="_blank" class="" href="https://www.businessinsider.com/deutsche-bank-trump-haircut-trial-2023-10">Deutsche Bank relied on Trump's financial statements</a> in loaning him $400 million to develop his Chicago skyscraper, his Washington, DC hotel, and his Miami golf resort."We have a situation where there were no victims," said Sauer, who has been Trump's go-to appellate lawyer.Earlier this month, Sauer argued for the overturning of Trump's 2023 sexual-assault and defamation <a target="_blank" class="" href="https://www.businessinsider.com/trump-mimics-harvey-weinstein-arguments-e-jean-carroll-appeal-2024-9">loss to writer E. Jean Carroll</a>, an appeal that has yet to be decided.In April, he successfully argued before the US Supreme Court that former presidents <a target="_blank" class="" href="https://www.businessinsider.com/supreme-court-trump-immunity-case-january-6-2024-4">deserve sweeping immunity</a> from prosecution for their official acts. In November, in the Washington, DC, election-interference prosecution, Sauer argued<a target="_blank" class="" href="https://www.businessinsider.com/judges-skeptical-trump-effort-revoke-jan-6-case-gag-order-2023-11"> Trump's failed appeal</a> of a gag order barring attacks on potential witnesses.Vale, arguing for the AG, noted the financial institutions were, in fact, victimized. She mentioned <a target="_blank" class="" href="https://www.businessinsider.com/donald-trumps-accountants-quit-while-preparing-his-and-melanias-taxes-2022-2">Trump's accountants at Mazars USA</a>, and Deutsche Bank, which <a target="_blank" class="" href="https://www.businessinsider.com/trumps-secret-ugly-breakup-with-deutsche-bank-revealed-2022-10">forced Trump into a "managed exit"</a> from his debts in the aftermath of the AG's initial 2021 fraud revelations."When deceptively hidden risks are injected into the market, that does hurt the counterparties," Vale told the judges."And I will stress, your honor, that this does have harm to the public and the markets," she said of <a target="_blank" class="" href="https://www.businessinsider.com/trump-fraud-continued-despite-attorney-general-probe-2024-2">Trump's persistent financial frauds</a>.It is unclear when the panel will release a decision; a majority of three justices is needed to reverse or revise the verdict of the trial judge, New York Supreme Court <a target="_blank" class="" href="https://www.businessinsider.com/trumps-fraud-judge-declines-to-recuse-himself-over-nothingburger-2024-7">Justice Arthur Engoron</a>.

NY appellate judges voice serious doubts about Trump's $454M civil fraud verdict

<ul class="summary-list"><li>Andrew Left, a short-seller known for his research and social-media activity, has been accused of fraud.</li><li>The Justice Department alleges that Left "knowingly exploited his ability to move stock prices."</li></ul>Andrew Left, the famed short-seller who made millions betting against public companies, has been charged with fraud by federal prosecutors.The Citron Research founder was charged with 17 counts of securities fraud on Friday, as well as making false statements to federal investigators, according to a <a target="_blank" class="" href="https://www.justice.gov/opa/pr/activist-short-seller-charged-16m-stock-market-manipulation-scheme">release</a> from the Justice Department.Left — who prosecutors say took in profits of at least $16 million — rose to prominence on Wall Street nearly a decade ago, when he made a <a target="_blank" href="https://www.businessinsider.com/valeant-stock-plunge-timeline-2015-10#:~:text=Valeant%20Pharmaceuticals'%20share%20price%20went,it%20to%20Enron%20on%20Wednesday.">high-profile bet against Valeant Pharmaceuticals</a>, now known as Bausch Health. His report, which compared the company to Enron and quickly tanked the stock, proved largely accurate. An executive at the firm was later convicted as part of a kickback scheme that gave business to the pharmacies it controlled.With his high profile established, Left regularly used social media and TV appearances to promote his research as a short-seller.His subsequent bearish commentary focused on other popular companies, including <a target="_blank" class="" href="https://www.businessinsider.com/stock-market-short-selling-andrew-left-citron-bets-hertz-nikola-2020-6">Hertz</a>, Nikola, and American Airlines, arguing that their stocks were overvalued. Prosecutors specifically cited sharp share-price losses in American after a tweet from Left, after which he closed out most of his short position.But not all of Left's public commentary was negative. In 2018, he said on Twitter that he was bullish on Tesla. He sold more than half his stake within a minute of posting, making $1 million on the share pop, the indictment said."Left established long or short positions in the public company on which he was commenting in his trading accounts and prepared to quickly close those positions post-publication and take profits on the short-term price movement caused by his commentary," prosecutors said.Left also had some misfires. He incurred a high-profile <a target="_blank" class="" href="https://www.wsj.com/finance/stocks/gamestop-burned-andrew-left-in-2021-hes-betting-against-the-stock-again-4377cecb">loss on GameStop</a> as the stock skyrocketed following an unprecedented groundswell of retail-investor activity. <a target="_blank" href="https://markets.businessinsider.com/news/stocks/citron-stop-publishing-short-seller-research-gamestop-squeeze-andrew-left-2021-1-1030020509">Citron stopped publishing reports</a> in the wake of the short squeeze, with Left saying his <a target="_blank" href="https://markets.businessinsider.com/news/stocks/citron-andrew-left-gamestop-fight-angry-mob-investors-harass-family-2021-1-1029995012">family was harassed</a> by an "angry mob" of GameStop investors. Even then, he maintained an online presence, posting about various companies on social media or, at times, appearing on televised segments on <a target="_blank" href="https://www.cnbc.com/2021/09/24/citron-research-short-seller-andrew-left-on-evergrande-debt-crisis.html">CNBC</a>, <a target="_blank" class="" href="https://www.foxbusiness.com/video/6296565778001">Fox</a>, and <a target="_blank" class="" href="https://www.bloomberg.com/news/videos/2023-07-11/left-doesn-t-know-why-feds-are-investigating-him-video">Bloomberg</a>."The commentary routinely included sensationalized headlines and exaggerated language to maximize the reaction it would get from the stock market," prosecutors said. "As alleged, Left knowingly exploited his ability to move stock prices by targeting stocks popular with retail investors and posting recommendations on social media to manipulate the market and make fast, easy money."The indictment also claimed Left made false statements about his research firm's connection to hedge funds. Prosecutors said he falsely stated on one occasion that his research firm "never" received compensation or lined up its trading with another hedge fund before releasing a report."To further the scheme, Left allegedly advanced the false pretense that his investment recommendations were credible because he was independent and free from any financial conflicts of interest," the complaint added. "However, Left allegedly concealed Citron's financial relationships with a hedge fund by fabricating invoices, wiring payments through a third party, and making false and misleading statements to the public about Citron's relationship with hedge funds."Left has downplayed his role as a Wall Street financier. Citron's website lists him as the firm's "<a target="_blank" href="https://citronresearch.com/who-is-citron-research/#:~:text=Citron%20Research%20%2D%20Andrew%20Left%20%7C%20Founder%20%26%20Executive%20Editor">executive editor</a>," saying Citron's goal is to "provide truthful information in an entertaining format.""Sometimes, you have a great story and the biggest challenge is, 'How do I get people to read it?'" Left said in a 2015 interview with The Wall Street Journal. "Wall Street research is painfully boring. I enjoy being entertaining."In an interview with Bloomberg last year, Left said he didn't know why investigators were looking into his firm."I don't know what the government is going to do," he said. "Activists are just people who basically just do extra homework and express their opinion. I don't know what the exact investigation is about, but it has to do with short-sellers and activist short-sellers, obviously."Citron Research did not immediately respond to a request for comment from Business Insider.Correction: July 26, 2024 — An earlier version of this story misstated the status of Nikola. It is still in business, not defunct.

Feds accuse famed short-seller Andrew Left of fraud and market manipulation

<ul class="summary-list"><li><keyword id="19901401" type="General" weightage="20" keywordseo="Rudy-Giuliani" source="keywords">Rudy Giuliani</keyword> interrupted his <keyword id="22438211" type="General" weightage="20" keywordseo="bankruptcy-hearing" source="keywords">bankruptcy hearing</keyword> after an attorney said he would commit <keyword id="19898489" type="General" weightage="20" keywordseo="fraud" source="keywords">fraud</keyword>.</li><li>He is $152 million in debt, almost all of which is owed to election workers he defamed.</li></ul>Rudy Giuliani erupted during a bankruptcy hearing Wednesday morning, interrupting the proceedings to complain it was "<keyword id="20245032" type="General" weightage="20" keywordseo="defamatory" source="keywords">defamatory</keyword>" to suggest he would commit bankruptcy crimes by hiding his assets. His interruption came as Rachel Strickland, an attorney representing two Georgia election workers whom Giuliani defamed and <a target="_blank" href="https://www.businessinsider.com/rudy-giuliani-trial-jury-verdict-defamation-damages-georgia-election-workers-2023-12">owes $148 million</a>, urged the judge to dismiss <a target="_blank" href="https://www.businessinsider.com/rudy-giuliani-bankruptcy-filings-spending-habits-2024-6">the bankruptcy case</a> and allow the claims against Giuliani to play out in different courts. Keeping the case in bankruptcy court would inevitably lead to Giuliani hiding his assets and being charged with bankruptcy crimes, Strickland said. "We will all be stayed while the trustee in this court wades through the morass of sexual assault and other allegations while Mr. Giuliani continues to play golf," Strickland said, her voice scathing. Giuliani's attorneys appeared in person in Manhattan's bankruptcy court for the hearing, but Giuliani himself called in by phone. "Ted! Would you get them on the phone and stop—" Giuliani shouted, appearing to refer to his spokesperson Ted Goodman. "Alright, someone's got a live microphone, and that's not a good situation," the bankruptcy judge said. As muffled noises continued to emerge from Giuliani's phone line, the judge, Sean H. Lane, tried to silence it. "We keep having that same telephone pop up," Lane said. "Let me ask in court if we can make sure to have that muted, please." "Your honor, this is the Rudolph Giuliani," Giuliani said amid the static of his phone. He asked for a break to talk to his lawyers and address Strickland's "defamatory remarks." Lane asked Giuliani to wait his turn to speak. Later in the hearing, Giuliani's attorney Gary Fischoff assured the court that his client would not commit bankruptcy fraud. "I just wanted to state something for the record," Fischoff said. "There were some statements that the debtor would commit bankruptcy fraud. So I just wanted to state for the record that Mr. Giuliani, the debtor, would not commit any bankruptcy fraud." <h2>The judge said he'll probably dismiss Giuliani's bankruptcy case</h2>Wednesday's bankruptcy hearing comes at a major turning point for Giuliani's bankruptcy process — where he may actually score a major legal win. <a target="_blank" href="https://www.businessinsider.com/rudy-giuliani-bankruptcy-millions-owed-defamation-chapter-11-2023-12">Giuliani filed for Chapter 11 bankruptcy</a> in December, shortly after a jury in Washington, DC, found him liable for $148 million in damages for defaming Ruby Freeman and Wandrea Moss, the two election workers who he falsely claimed manipulated ballots in the 2020 election. The bankruptcy filing paused their lawyers from enforcing the judgment against them, which formed nearly all of his $152 million in debt. It also paused all the other civil cases against Giuliani, including a sexual abuse lawsuit from Noelle Dunphy and another defamation lawsuit from the election technology company Dominion Voting Systems. Over the past seven months, Giuliani has tried to buy time with motions to slow down the bankruptcy process as he appeals the $148 million judgment. At the same time, creditors have accused Giuliani of filing misleading and incomplete financial statements, and of hiding streams of income. They <a target="_blank" href="https://www.businessinsider.com/rudy-giuliani-bankruptcy-trustee-could-take-financial-control-2024-6">asked Lane to appoint a Chapter 11 trustee</a>, who would have the power to seize legal control of his assets and sell them to satisfy everyone who was owed money. The trustee also may be able to waive attorney-client privilege on Giuliani's behalf, possibly opening him up to further legal risk. <div type="image" title="img657a40da0ec98e92f74f4426" height="1667" width="2500" msid="111642267" hostid="261" sizebytes="309288" caption="&amp;lt;p&amp;gt;Wandrea Moss testifying in front of the House committee that investigated the Jan. 6 attack on the US Capitol, while her mother, Ruby Freeman, comforted her.&amp;lt;/p&amp;gt;"></div>But in court filings this week, lawyers for Giuliani, Freeman, and Moss all agreed that dismissing the bankruptcy case entirely would be the best course of action. They said Giuliani would agree not to file for bankruptcy again for another year, giving time for appeals in the $148 million defamation judgment to play out. "It is in the interest of creditors for their claims to be heard in the forum of their choosing" and not bankruptcy court, Strickland said in Wednesday's hearing. Lane said he was inclined to agree and dismiss the bankruptcy, citing "the difficulties we've had in terms of transparency in this case." "That's not going to magically change if you continue the case in 11 with the trustee," Lane said. The judge said that a Chapter 11 trustee could easily liquidate Giuliani's two apartments and jewelry, which comprise the bulk of his estimated $8 million estate. But liquidating Giuliani's other assets, like his media company and coffee operation, would be difficult to disentangle from the former New York City mayor's personal brand, he said. Dealing with those could incur expenses that would ultimately come out of the pockets of creditors who were owed money, the judge said. Philip Dublin, an attorney representing the other creditors in the bankruptcy — including Dunphy and Dominion — objected to that plan. He said the best way to fairly split Giuliani's assets would be to appoint a Chapter 11 trustee who would liquidate Giuliani's assets. But Strickland said her clients had priority — and they wanted the case dismissed. "We are the significant focus of the case," she said. "We are $148 million." The judge said he would issue an order by Friday and asked the parties to meet and figure out how to pay expenses for a discovery vendor, a third-party company that has already done months of work obtaining and organizing Giuliani's records for the case. Lane also said he would not approve Giuliani's preferred backup plan of converting the bankruptcy process from Chapter 11 to Chapter 7, which would allow him to save future income for himself while liquidating his current assets. Justin Kelton, an attorney representing Dunphy, told Business Insider that she would continue to pursue her sexual abuse claims in court if the judge dismissed the bankruptcy case. "Our client Noelle Dunphy remains as strong and steadfast as ever in her commitment to pursuing justice," he said. "If Mr. Giuliani's bankruptcy is dismissed, she will continue pursuing her claims in court, and we look forward to the day when we can present this case to a jury." Giuliani has brought upon himself a barrage of indignities as he falsely insisted that the 2020 election results were rigged. In addition to his numerous civil cases, the former US attorney and personal lawyer to Donald Trump <a target="_blank" href="https://www.businessinsider.com/rudy-giuliani-disbarred-new-york-donald-trump-2024-7">was disbarred in New York </a>and is on the verge of losing his law license in Washington, DC. He was also indicted in two criminal cases, in Georgia and Arizona, over his efforts to overturn the results of the 2020 election in those states. Correction: July 11, 2024 — Due to an editing error, an earlier photo caption in this story misstated who was testifying in front of the House committee in the photo. Wandrea Moss was testifying while her mother, Ruby Freeman, comforted her.

You Searched For "financial loss due to fraud" and got 6 results

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Feds accuse famed short-seller Andrew Left of fraud and market manipulation

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Rudy Giuliani interrupts his own bankruptcy hearing, yelling it's 'defamatory' to accuse him of bankruptcy fraud

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