Business Briefs – December 22, 2016

Adaptation: Small Retailers Shift Plans as Online Sales Grow

NEW YORK (AP) – When shoppers walk into JAM Paper, they can choose from hundreds of bows, rolls of wrapping paper and gift bags, in addition to thousands of everyday stationery items. Yet the store will account for just 2 percent of the company’s business this year.

JAM Paper now gets so much of its revenue online that the company has scaled back from five stores to a single Manhattan location.

Some small and independent retailers feeling the impact of the growing preference for online shopping have adapted by focusing more on their web business, including diverting more advertising dollars to those areas.

There’s room for both types of retailing, but the increasing competition means store owners must be able to meet customers’ demands for the right merchandise, convenience, good service and an enjoyable experience whether it’s in a store or on a website.

Goldman Ordered to Pay $120M To Settle Manipulation Charges

WASHINGTON (AP) – Goldman Sachs has been ordered to pay $120 million to settle federal regulators’ charges that it deliberately manipulated a global benchmark for interest-rate swaps to its advantage.

The U.S. Commodity Futures Trading Commission said Wednesday that several Goldman traders, including the head of the bank’s Interest Rate Products Trading Group in the U.S., used trades and false reports to manipulate the benchmark between 2007 and 2012.

The CFTC cited emails and audio recordings in which Goldman traders “stated their manipulative goals in plain language.” The traders “even objected when their attempts to manipulate were not performed as inexpensively as possible,” the CFTC said.

Existing U.S. Home Sales Reach Highest Since February 2007

WASHINGTON (AP) – Americans bought homes in November in the fastest pace in nearly a decade. But rising mortgage rates, a deepening shortage of houses and higher prices are likely to weigh on the market next year.

The National Association of Realtors said Wednesday that sales of existing homes rose 0.7 percent last month to a seasonally adjusted annual rate of 5.61 million. That was up from a downwardly revised 5.57 million in October and the highest since sales hit a 5.79 million pace in February 2007. Sales were up 15 percent from a year earlier.

Fewer than 1.9 million homes were on the market, down 9 percent from a year earlier. The tight supply pushed the median price to $234,900 last month, up 6.8 percent from a year ago.

Brazilian Companies to Pay Combined $3.5B in Bribery Case

WASHINGTON (AP) – Odebrecht, the largest construction company in Brazil, and major petrochemical company Braskem have agreed to pay a combined penalty of at least $3.5 billion to settle allegations that they bribed government officials for business, U.S. authorities said Wednesday.

The companies admitted to paying hundreds of millions of dollars in bribes, money that law enforcement officials say was authorized at the highest corporate levels and was disguised through complex financial arrangements. Both companies pleaded guilty to bribery-related charges in federal court in New York.

The Justice Department called it the largest foreign bribery case under the Foreign Corrupt Practices Act. The 1977 law makes it illegal to bribe foreign government officials for business.

The companies have both agreed to co-operate with law enforcement, including in investigations into individual company officials.

Senators Urge Action to Block Drastic Drug Price Hikes

WASHINGTON (AP) – Angered by skyrocketing drug prices, a pair of senators on Wednesday urged Congress to block companies from cornering the market on old, off-patent drugs.

Sens. Susan Collins (R-Maine) and Claire McCaskill (D-Mo.) released findings from a year-long investigation into companies like Turing Pharmaceuticals, which generated national outrage last year after hiking the price of a life-saving anti-infection drug by more than 5,000 percent.

Committee investigators concluded that Turing and several other companies “engaged in price gouging … to make massive profits from decades-old life-saving therapies.” The lawmakers, top members of the Special Committee on Aging, presented similar findings at three hearings over the past year.