Stanford victims on the losing end of federal ruling
A federal district judge delivered a blow to the victims of R. Allen Stanford's $7 billion Ponzi scheme today by rejecting a request for an industry-backed fund to start a court proceeding that could lead to victim compensation, Reuters reports. The Securities and Exchange Commission had sought to force the Securities Investor Protection Corp. to start liquidation proceedings for the victims, some of whom lost millions of dollars to the fraud. The judge found that the SEC did not meet its legal burden of showing why SIPC should be compelled to act. SIPC, which has handled high-profile liquidations such as Bernard Madoff's Ponzi scheme, has long contended that Stanford's offshore bank fell outside the scope of its authority. The law, SIPC argued, limits it to protecting customers against the loss of missing cash or securities in the custody of failing or insolvent SIPC-member brokerage firms. While Stanford's Texas-based brokerage Stanford Group Company was a SIPC member, its offshore bank was not. And in any case, SIPC maintains it was not chartered by Congress to combat fraud or guarantee an investment's value. Sen. David Vitter immediately released a statement decrying today's ruling. "This is horribly disappointing news, especially since it's crystal clear that Allen Stanford flagrantly defrauded so many investor victims," Vitter says. "I will be encouraging Securities and Exchange Commission Chair Mary Schapiro to explore every possible appeal option. The Stanford Ponzi scheme victims should be first in line for protection, not last in line way behind SIPC's Wall Street members." Get the full story here.
Maginnis: Louisiana at center of week's D.C. events
The U.S. Supreme Court's ruling on health care last week shook the nation, but what Congress did the day before rocked Louisiana, for better and worse. On Wednesday, the House and Senate's agreement on the transportation bill included the RESTORE Act language, which directs 80% of up to $20 billion in oil spill fines against BP to five Gulf states, with Louisiana in line to get the largest share. This time, Congress is doing right by Louisiana from the start, as it did not do in the aftermath of Hurricane Katrina. If the total fines come in on the high end, the state will have secured the first big chunk of funding for its 50-year, $50 billion coastal restoration plan. Last month, the state Legislature missed an opportunity to act maturely by failing to pass a proposed constitutional amendment to lock in all the fine money for coastal work. But Congress likely will provide adult supervision by attaching coastal strings to those funds. Beyond that, the actual transportation portion of the bill included a bigger-than-usual share of highway funding for Louisiana, along with more money for dredging and maintaining its ports. And Louisiana residents will benefit as much or more than anyone from the five-year extension of the flood insurance program. Our delegation's success would have been complete had Congress ignored Louisiana for the rest of the day. Instead, it singled out this state's Medicaid program for an $859 million haircut. Read the full column here.
(John Maginnis publishes LaPolitics Weekly, a newsletter on Louisiana politics, at LaPolitics.com.)
Medicaid expansion rejection could cost state billions, may hurt hospitals
Gov. Bobby Jindal's decision to reject the Affordable Care Act provision that calls for expanding Medicaid may end up hurting Louisiana hospitals that treat uninsured patients. John Matessino, president of the Louisiana Hospital Association, says beginning in 2014, the federal government plans to cut the Disproportionate Share Hospital program, which is an important revenue stream for hospitals that treat large numbers of uninsured patients. The thinking at the time was that many of those patients would be covered by an expansion of Medicaid. But if Louisiana refuses to expand Medicaid, hospitals may suffer the DSH cut without the extra Medicaid help. "I think [the Centers for Medicare & Medicaid Services], and the federal government, and perhaps the courts, will ultimately have to decide that," Matessino says. "I'm not saying the governor's wrong. What I'm saying is there are a lot of questions that need to be answered." —David Jacobs Read the full story here.
'Real Estate Weekly': Bosco's moving into old Perkins Road Hardware
Little more than two years after opening in the University II Shopping Center just south of LSU on Nicholson Drive—and fewer than six months since closing—Bosco's Frozen Yogurt is set to reopen with a slight name change in the Perkins Road Hardware complex on Thursday. Bosco's Yogurt Bar retains the atmosphere and self-serve concept of the former LSU area shop, but is in a location that should prove even more successful, its owners say. Chad Hughes, a Bosco's co-founder who now owns the business with his wife, Christina Bourg, says the original store wasn't closed because the location was a bad fit for frozen yogurt sales. He simply came up with a concept he thinks is even better for that site: The Man Cave Haircut Bar. Think lots of spots on lots of big-screen TVs, and haircuts that come with a free beer. The niche bar is set to open in the coming weeks. "That location had also become oversaturated with yogurt places," Bourg says. The couple says Bosco's new location—the former home of Denim Library nestled between Jimmy John's and Rock-n-Sake—will be a better fit for the yogurt shop. "There's a lot more foot traffic, and all the bars and restaurants in this area keep it busy into the evenings," Hughes says. It also doesn't hurt that the Perkins Road Overpass area is currently without a self-serve frozen yogurt joint. Bosco's will be open daily from 11 a.m. to 11 p.m. —Steve Sanoski Read the rest of this week's Real Estate Weekly e-newsletter here.
B.R. senior housing community included in ownership transfer
The Sunrise Senior Living community at 9351 Siegen Lane is one of seven Sunrise properties around the country being acquired in part by CNL Healthcare Trust, an Orlando, Fla.-based real estate investment firm focused on senior housing and health care real estate. The seven acquired properties are valued at approximately $226 million, and they also include a Sunrise community in Metairie. Baton Rouge's other Sunrise community, located at the corner of Jefferson Highway and Essen Lane, is not included in the deal. According to terms of the agreement released by the companies, CNL will own approximately 55% of the seven properties in the deal, while McLean, Va.-based Sunrise Senior Living will retain a 45% stake. Sunrise will continue to operate the communities. Approximately $50 million of CNL's contribution in the deal was used to pay down existing financing on some of the properties, and Sunrise also received about $5 million in cash. Outside Baton Rouge and Metairie, other Sunrise communities included in the deal are located in Santa Monica, Calif.; Washington, D.C.; Gilbert, Ariz.; Louisville; and Lombard, Ill. As of March 31, Sunrise operated 308 senior communities located in the United States, Canada and the United Kingdom.
Big U.S. banks submit 'living wills' to regulators
Nine of the largest U.S. banks today submitted plans to federal regulators that show how they would break up and sell off their assets if they are in danger of failing. The Federal Deposit Insurance Corp. released summaries of the "living wills" today for Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and UBS. The plans were required under the 2010 financial overhaul, which gave regulators the power to seize and dismantle banks that threaten the broader financial system. The government did not have a plan for winding down troubled banks during the 2008 financial crisis; instead, it provided taxpayer-funded bailouts to the banks. More than 100 other banks are required to submit living wills by the end of next year. You can access summaries of all the banks' submitted plans at the FDIC website here.
News roundup: Arbitrator rules for Brees in franchise tag matter … Mississippi opposing Louisiana expansion of state waters … Study: Most put in 7 hours of voluntary overtime per week
One in the win column: An arbitrator in Philadelphia has ruled in Drew Brees' favor in a dispute over how much the Saints would have to pay him if they applied the franchise tag to the star quarterback again in 2013. The ruling provides some leverage to Brees, who has so far skipped the Saints' off-season practices while holding out for a new long-term contract with New Orleans. The Saints have already used the tag on Brees for 2012, meaning he can't negotiate with another team and could be forced to settle for a one-year, $16.3 million deal if he cannot reach a new long-term deal by a July 16 deadline specified in the league's collective bargaining agreement. Read the full story here.
Battle lines drawn: The state of Mississippi will oppose Louisiana's effort to extend its state water boundaries out to 10.4 miles—in what is now federal waters— from the current three miles. The Mississippi Commission on Marine Resources on Monday unanimously passed a resolution opposing Louisiana's plan. Mississippi officials says the extension would force some Mississippi charter boats to pay Louisiana a fee to fish in waters they now angle in freely. Mississippi recreational fishermen would also have to get a Louisiana license for areas south of Mississippi waters that are now federal. Check out the full story here.
Our work is never over: When you leave the office today, chances are you probably won't really be done working. And on Wednesday's holiday? Yeah, you'll probably be working some then, too—if you're like most people included in a new survey by enterprise mobility company Good Technology. The survey shows 80% of people continue working for more than an hour a day when they leave the office; on average, survey respondents worked seven hours a week in voluntary overtime, or about 30 hours each month. Get more of the survey results here.
Editor's note: Daily Report will not be published Wednesday, in observance of Independence Day. It will return Thursday. Have a safe and happy holiday.