On The Money — Senators turn up the heat on FTX
FTX founder Sam Bankman-Fried is facing calls for a criminal investigation from Congress. We’ll also look at the rising unemployment claim numbers, higher new home sales and the U.N.’s most recent attempt to write international tax rules.
But first, see former President Trump’s reaction to the Supreme Court’s tax returns ruling.
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Senate Dems call for probe of FTX’s Bankman-Fried
Sens. Elizabeth Warren (D-Mass.) and Sheldon Whitehouse (D-R.I.) sent a letter to the Department of Justice (DOJ) Wednesday calling for a criminal investigation of what they called the “fraudulent tactics” of Sam Bankman-Fried, the founder and CEO of FTX Trading Ltd., which filed for bankruptcy this month.
The collapse of FTX, one of the world’s largest cryptocurrency exchanges, which was once valued at $32 billion, leaves investors facing as much as $8 billion in losses.
The senators pointed out that in the days leading up to FTX’s collapse, Bankman-Fried tweeted that the exchange “has enough to cover all client holdings” and asserted “we don’t invest client assets (even in treasuries).”
Bankman-Fried later admitted that an affiliated trading platform owed FTX approximately $10 billion in customer deposits that were lent without customers’ consent, which Warren and Whitehouse called “a violation of both U.S. securities laws and FTX’s own terms of service.”
“The fall of FTX was not simply a result of sloppy business and management practices, but rather appears to have been caused by intentional and fraudulent tactics employed by Mr. Bankman-Fried and other FTX executives to enrich themselves,” the senators wrote.
The Hill’s Alexander Bolton has more here.
📈 CLAIMS UP AGAIN
Unemployment claims highest since August
Unemployment claims last week rose to their highest level since August but still remained relatively low as economists worry a recession could be on the horizon in the near future.
The Labor Department reported on Wednesday that 240,000 people applied for unemployment benefits last week, an increase of 17,000 from the previous week.
The four-week moving average also jumped up by 5,500 to 226,750, but the unemployment rate stands at 3.7 percent, just above a half-century low.
Despite rising interest rates and record inflation, the unemployment rate has consistently remained low. While unemployment claims are up from their historic lows earlier this year, the U.S. added 261,000 jobs last month.
Jared Gans has more here.
🏠 HOME SALES UPTICK
New home sales rise in October
New home sales jumped last month despite consistently high mortgage rates that experts say have hampered affordability and pushed potential buyers out of the market.
Sales of new single-family homes rose by 7.5 percent in October at a seasonally adjusted annual rate of 632,000, according to Census Bureau data released on Wednesday.
The rise comes after mortgage rates fell from their highs. Rates fell again this week to 5.58 percent, according to Freddie Mac data released on Wednesday.
Still, the new sales fell behind the October 2021 estimate by 5.8 percent.
Adam Barnes has more here.
🇺🇳 TAKING ON TAX RULES?
UN votes to take the reins on global tax standards
The United Nations (U.N.) General Assembly’s finance committee voted unanimously Wednesday to start discussions on international taxation standards.
The move effectively challenges a similar long-standing initiative led by advanced economies in the Paris-based Organization for Economic Cooperation and Development (OECD).
Wednesday’s resolution calls for “developing an international tax cooperation framework or instrument that is developed and agreed upon through a United Nations intergovernmental process.”
At stake in the agreement are new rules about whether multinational corporations should be allowed to store their profits in tax havens overseas and in what jurisdictions corporations can be taxed for the use of their products.
Tobias Burns breaks it down here.
Good to Know
Your refund for the 2022 tax year may be smaller than in years past, the Internal Revenue Service said Wednesday. That’s because of several recently passed changes to the tax code.
The IRS said taxpayers who take the standard deduction instead of itemizing their taxes will no longer be able to deduct their charitable contributions. Also, 2021’s American Rescue Plan Act lowered the reporting threshold for third-party networks that process payments for those doing business.
Other items we’re keeping an eye on:
Sen. Chuck Grassley (Iowa), the highest-ranking Republican on the Senate Judiciary Committee, pressed new Twitter CEO Elon Musk over data security concerns raised by a Twitter whistleblower who came forward before Musk completed his acquisition of the company.
An accountant for former President Trump has testified that the former president reported major losses on his tax returns every year for a decade, including a $700 million loss in 2009.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you next week.
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