Editor’s Note: This is the Paw Print Rewind, a daily recap of the top news headlines.
Merrill Lynch pays $11M to settle short sale violations
Two Merrill Lynch, Bank of America’s brokerage arm, units have agreed to pay $11 million and admitted that they violated certain federal rules by using inaccurate data for short sale orders, according to U.S. regulators.
The brokerage has since “taken steps to improve our internal controls related to execution of short sales,” according to a Bank of America spokesman.
The Securities and Exchange Commission (SEC)’s case against Merrill Lynch centers on a rule known as Regulation SHO, which governs short sale transactions.
Short selling involves the sale of borrowed securities. Typically, customers will ask their brokers to help locate stock available for short sales and brokers prepare so-called “easy-to-borrow” lists.
Some of the stock Merrill placed on the list later became no longer easily available for borrowing, according to the SEC. Although staff at the brokerage stopped using the lists, the trade execution platforms were still programmed to process short sale orders using the outdated information.
The flaw in Merill’s system caused it to use data that was over 24 hours old, according to the SEC.
Merrill began implementing new systems to correct the problem after the SEC began investigating, according to the agency.
As part of the settlement, Merrill is also required to retain an independent compliance consultant.
Silk Road website creator gets life sentence for drug plot
The accused Silk Road mastermind has been sentenced to life in prison for orchestrating a scheme that enabled more than $200 million of anonymous online drug sales using Bitcoin.
31-year-old Ross Ulbricht was sentenced by U.S. District Judge Katherine Forrest in Manhattan after a federal jury found him guilty of charges including distributing drugs through the Internet and conspiring to commit computer hacking and money laundering in February.
“What you did was unprecedented. And in breaking that ground as the first person, you sit here as the defendant having to pay the consequences for that.”
-Katherine Forrest, Manhattan U.S. District Judge
Ulbricht stood silently as Forrest announced the sentence, which also included an order to forfeit $189.9 million.
Outside of court, Joshua Dratel, his lawyer, promised an appeal, calling the sentence “unreasonable, unjust and unfair.”
“I wanted to empower people to make choices in their lives and have privacy and anonymity.”
-Ross Ulbricht, Silk Road creator
“This was not some disinterested do-gooder.”
-Serrin Turner, prosecutor
Silk Road operated for over two years, allowing users to anonymously buy drugs and other illicit goods and generating over $214 million in sales in the process, according to prosecutors.
Ulbricht ran Silk Road under the alias Dread Pirate Roberts, according to prosecutors, a reference to the 1987 movie The Princess Bride.
The website relied on the Tor network, which lets users communicate anonymously, according to prosecutors, and accepted Bitcoin as payment, which allowed users to conceal their identities and locations.
Ulbricht, who grew up in Austin, TX, according to prosecutors, took extreme steps to protect Silk Road, soliciting the murders of several people that posed a threat. No evidence exists for the murders to be carried out.
The online black market was shutdown in October 2013, when authorities seized the website and arrested Ulbricht at a San Francisco library.
Silk Road became a blueprint for other so-called “dark market” websites that allow illegal drug sales, according to prosecutors, a phenomenon law enforcement agencies continue to battle.
“Ulbricht went from hiding his cybercrime identity to becoming the face of cybercrime and as today’s sentence proves, no one is above the law.”
-Preet Bharara, Manhattan U.S. Attorney
At trial, according to Dratel, Ulbricht created what he intended to be a “freewheeling, free market site” where all but a few harmful items could be sold.
Ulbricht handed off the website to others after it became too stressful, according to Dratel, and was lured back to become the “fall guy” for its true operators.
Ahead of sentencing, Forrest was urged to take into account how at least six people died from overdoses on drugs linked to Silk Road, according to prosecutors. The parents of two of them spoke at the hearing.
“[Ulbricht] did not consider the impact on society of the expansion of the market for deadly drugs.”
-Richard, whose son overdosed in Boston in 2013 using heroin bought on Silk Road
“I wish I could go back to convince myself to take a different path, but I can’t do that.”
Bad weather forces solar-powered plane to land in Japan
A solar-powered plane attempting a flight around the world cut the seventh leg of its 22,000-mile journey short, landing in Nagoya, Japan, because of bad weather.
The Solar Impulse 2 solar-powered plane left Nanjing, China to fly over the Pacific Ocean to Hawaii. The plane took off from Abu Dhabi in March.
The journey across the Pacific Ocean was expected to be the most difficult stretch of the journey.
Overall, the trip was expected to span approximately 25 flight days broken up into 12 legs at speeds between 30-60mph.
Iran court holds second hearing in Washington Post journalist espionage trial
The second hearing in the trail of jailed Washington Post correspondent Jason Rezaian on espionage charges took place behind closed doors in Tehran on Monday, according to Iraq’s Tasnim news agency.
The first hearing of the Iranian-U.S. citizen also was held behind closed doors on May 26 at Branch 15 of Tehran’s Revolutionary Court. Rezaian has been in Tehran’s Evin prison since his July 2014 arrest.
Yahoo shutting down Maps, other services
Yahoo is shutting down a few of its services, including Yahoo Maps, as it realigns itself to focus on search and digital content.
Maps.yahoo.com will shut down at the end of the month, according to Yahoo chief architect Amotz Maimon in a blog post.
Yahoo’s search and other services like Flickr will still support Yahoo Maps, according to Maimon.
The company is also scaling back mail support on the built-in Mail app for older versions of iOS, according to Maimon.
Yahoo’s Philippines homepage will be shuttered, along with Yahoo Music in France and Canada, and Yahoo Movies in Spain.
Yahoo TV and Yahoo Autos will also be stopped in the UK, France, Germany, Spain, and Italy at the end of June.
OPEC agrees to keep pumping
The Organization of the Petroleum Exporting Countries (OPEC) has agreed to stick by its unconstrained output for another six months.
Concluding a meeting, OPEC rolled over its current output ceiling, according to Saudi Arabian oil minister Ali al-Naimi.
OPEC will meet again on December 4th, according to Niami.
“You’ll be surprised how amicable the meeting was.”
-Ali al-Naimi, Saudi Arabia oil minister
Libya hopes to double production to about one million bpd by September if key ports resume working.
“The markets are moving in OPEC’s favor. Prices are stimulating robust demand growth and slowing capex. This was the objective of the Saudi strategy and it’s working.”
-Gary Ross, PIRA Energy Group executive chairman
“The economy is growing, demand is growing. We see non-OPEC supply is not growing as in the past.”
-Abdullah al-Badri, OPEC Secretary-General
Teva raises stake in Mylan
Teva has accumulated around 10.5 million shares in its $40 billion takeover proposal for Mylan, as the latter continues pursuing its own bid for over-the-counter drug company Perrigo Company.
Last week, Teva disclosed a 1.8% stake in Mylan, which breached antitrust laws because of the stake’s size, according to Teva CEO Erez Vigodman.
Mylan, which is incorporated in the Netherlands, argues that it is entitled to antitrust protection because its principal offices are located within the United State for U.S. Federal Trade Commission purposes, even as it lists its principal executive offices in the UK in filings with the SEC.
Following Mylan’s letter, Teva stopped purchasing shares in Mylan from June 1 to June 3, resuming on June 4.
Egyptian court adjourns Al Jazeera journalists’ retrial to June 11
On Thursday, a Cairo court adjourned the retrial of Al Jazeera journalists until June 11 for more closing statements by the defense team.
The journalists are charged with aiding a terrorist organization, a Muslim Brotherhood reference, which was outlawed in Egypt after the army ousted Islamist president Mohamed Mursi amid mass protests against his rule in 2013.
Mohamed Fahmy, a naturized Canadian who has given up his Egyptian citizenship, and Egyptian Baher Mohamed were released on bail in February after spending more than a year in custody.
Australian Peter Greste, a third Al Jazeera journalist, was deported in February.
The journalists were originally sentenced to between seven and 10 years in prison time on charges including spreading lies to help a terrorist organization, which they have denied.
Egypt’s high court ordered the retrial in January.
Walmart relaxes dress code to address worker concerns
Walmart is relaxing its dress code and raising the temperature at its stores as part of an effort to improve working conditions at its 4,555 U.S. stores.
The effort, which includes a new training program and upgraded handheld terminals for department managers, is being billed as a sign that management was listening to about one million hourly workers that its employs in the United States.
“My job is to make [employees]’ life easier.”
-Greg Foran, Walmart U.S. operations head
Under a new dress code launching in July, store workers will be allowed to wear black and khaki denim pants in addition to the khaki trousers permitted by the existing code. Workers with physically demanding jobs will also be able to wear blue denim and T-shirts.
Wal-Mart will also raise the temperature in its store to address worker complaints that they are too cold, according to the retailer. The retailer controls temperatures centrally at its Bentonville, AR headquarters.
Foran vowed that U.S. stores would be “clean, fast, friendly and in stock” by the year-end holiday shopping season.