Roundup: Big Lots CEO faces probe; Consumer borrowing rises to record; more
Probe of Big Lots roil shares
Shares of Big Lots Inc. slumped on news that federal officials are investigating stock trades by its CEO. In a Securities and Exchange Commission filing, the Columbus, Ohio, company said that it received a grand jury subpoena from the U.S. Attorney for the Southern District of New York on Nov. 29 requesting information on trades by CEO Steven Fishman. The SEC has also begun its own probe on the matter. The Wall Street Journal reported Thursday that the Federal Bureau of Investigations and federal prosecutors were looking at whether Fishman had sold $10.3 million in stock in March based on an insider's knowledge of a coming negative corporate announcement. Officials for Big Lots and the FBI did not return calls. An SEC spokeswoman declined comment.
USW ratifies pact with Esmark at Ohio mill
Esmark Inc.'s new Ohio Cold Rolling Co. said it reached a four-year deal with 160 United Steelworkers members employed at the Yorkville, Ohio, plant, or who will be recalled to jobs there. CEO James P. Bouchard said Esmark is pleased that “after months of negotiations, the union members found the contract offer to provide for a strong wage, benefits and profit-sharing package.” Voting results showed 81 percent of the workers represented by USW Local 1223 accepted the agreement. Sewickley-based Esmark paid $6.25 million for the former Wheeling-Pittsburgh Steel Corp. plant and a half-interest in a nearby tin plate production plant in October as assets of bankrupt RG Steel LLC were being sold. Esmark plans to restart the plant, idled since July, in the spring depending on how soon it can negotiate energy and supply agreements and make some improvements, spokesman Bill Keegan said Friday. A few workers are there now, and others are to be brought back in stages, he said.
CFTC fines Goldman $1.5M
Goldman Sachs & Co. is paying $1.5 million to settle civil charges that it failed to properly supervise a former trader who cost the firm more than $118 million. The Commodity Futures Trading Commission announced the action Friday. The CFTC says Goldman also agreed to make changes in its supervision procedures for futures trading. The CFTC last month filed civil fraud charges against the former trader, Matthew Marshall Taylor. Regulators said he failed to disclose an $8.3 billion position on a futures contract that came back to hurt Goldman in December 2007. The agency is seeking unspecified penalties against Taylor.
Consumer borrowing rises to record
Americans swiped their credit cards more often in October and borrowed more to attend school and buy cars. The increases drove U.S. consumer debt to an all-time high. The Federal Reserve said Friday that consumers increased their borrowing by $14.2 billion in October from September. Total borrowing rose to a record $2.75 trillion. Borrowing in the category that covers autos and student loans increased by $10.8 billion. Borrowing on credit cards rose by $3.4 billion, only the second monthly increase in the past five months. The strong rise in borrowing came in a month when Americans cut back on consumer spending, reflecting in part disruptions from Hurricane Sandy.
Other business news
• PPG Industries Inc. said on Friday that its chemical manufacturing plant in Lake Charles, La., was shut down by a power outage last month. The chlor-alkali plant is operating again but the multiday disruption will reduce Downtown-based PPG's fourth quarter earnings by $4 million to $8 million. No chemicals were released during the outage, which was caused by the failure of a major generator transformer, and no workers were hurt, the company said.
• The number of rigs actively exploring for oil and natural gas in the U.S. fell this week by 11 to 1,800. Houston-based oilfield services company Baker Hughes Inc. said Friday that 1,382 were exploring for oil and 417 were searching for gas. One was listed as miscellaneous. A year ago, Baker Hughes counted 1,987 rigs. Of the major oil- and gas-producing states, Arkansas, Colorado and Pennsylvania each gained one rig.
• Team Pennsylvania Foundation will fund two $5,000 scholarships for two small businesses to participate in Gov. Tom Corbett's Jobs First mission to Brazil and Chile in April. Pennsylvania businesses can find more information and obtain applications at paglobal.org; applications are due Jan. 1.
— Staff and wire reports
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