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LEVERAGED CAPITAL NEWSLETTER Leveraged Capital, is a free monthly newsletter that presents growth and strategy issues effecting entrepreneurs and owners of small to medium size enterprises (SME's). Leveraged Capital is published and delivered electronically to subscribers. Your privacy is strictly respected and we do not share or sell subscriber email addresses to anyone outside of Graham Financial Corporation. If you enjoy what we present, please forward a copy of Leveraged Capital to clients and associates. They can subscribe to Leveraged Capital, by clicking on this link: http://www.GrahamFinancial.com/newsLetter.htm and filling out the quick form.
Is Richard Grasso to blame or, in this day and age of supposed focus on corporate governance and board accountability, is the NYSE Board to blame? I subscribe to the "you don't ask, you don't get philosophy" for most things in life. Grasso asked, the Board gave - but wait, now the Board says they didn't realize at the time what his compensation package could mean. Very educated people, who are assumed to be at the top of their game, simply didn't understand! Deferring most of his huge bonuses in 2000 and 2001 and investing in mutual funds was not a bad move on Grasso's part - to the tune of over $140 million. This is a unique situation where the NYSE as a quasi-governmental regulatory body that also competes to be a profit focused company. Given all the press this week against Grasso, the Board should be pointing fingers firmly into their own chests. Grasso was being true to his capitalist roots and asked. I wonder how William Donaldson really feels about Grasso's payday? Donaldson is Grasso's predecessor and is now chairman of the Securities and Exchange Commission and makes about $143,000 per year! Alan Greenspan by the way makes about $172,000 per year. Much (long-term) success to you, DPG.
In This Months Issue: (Click on the Article Title To Go To The Full Story.)
Quote Of The Month: Investment Hindsight:
This is part three in a series of articles relating to various types of U.S. work permits. In this article, we consider intra-company transfer status, known as the L-1 visa. L-1
visas are heavily used by multinational companies of all sizes to move persons
from an affiliate, subsidiary, branch or parent company outside of the United
States to a related U.S. corporation. It
allows the holder of the visa to work in the U.S. as a senior manager or
executive (L-1A) or as an employee possessing specialized knowledge of the
company's products, services, processes or methodologies (L-1B). General
Requirements
You
should note that the L-1 visa may be secured even where an employee is not being
formally transferred to the United States.
For example, an employee may continue to be on the foreign company's
payroll, and travel to the U.S. on an intermittent basis where he or she can
carry out a work authorized function in L-1 status. L-1A - Managers and Executives. The
L-1A may be granted for an initial period of three years, and can be renewed
twice for a total work-authorized period of seven years.
To qualify as a senior manager, the person should:
Note
that first line managers are not generally considered senior managers but there
are some exceptions to this rule. L-1B - Specialized Knowledge Employees.
The L-1B is granted for an initial period of three years, and may be renewed
once for a total period of five years. The specialized knowledge nature of the
position abroad must have a special knowledge of the company product and its
application in international markets or have an advanced level of knowledge of
processes and procedures of the company. Dependants.
Family members (a spouse and unmarried children under the age of 21) of the of
L-1 holder are classified in the L-2 category. They are permitted to accompany
the L-1 holder to the United States and remain there for the duration of his or
her status. With a 2001 amendment
to the law, spouses of L-1 holders may now work while in the U.S. Processing.
Typically, L-1 petitions are sent to a Bureau of Citizenship and Immigration
Service (BCIS) processing center where they are processed, usually in two to
three months. To expedite the
process, the BCIS has an added fee-based 'premium processing' service that cuts
the adjudication of the L-1 petition to 15 days or less.
With the notable exception of Canadians, once approved by the BCIS, a
consular visa is also required, and is generally obtained at a U.S. consulate or
embassy in the jurisdiction where the employee resides. As
noted above, Canadians are not required to obtain a consular visa.
In addition, Canadian citizens can take advantage of North American
Free Trade Agreement provisions that allow them to apply for the L-1 at a
border or an airport, where the L-1 is adjudicated and issued, often in minutes.
Changes to the Law. Recently, there have been legislative changes proposed to the L-1 category, which would render the application process more complex and will make the visa more difficult to obtain. In part, these changes can be attributed to the weak U.S. economy, and the perceived view that non-U.S. citizens or residents are filling much sought-after U.S. jobs. Changes currently under consideration by U.S. legislators include a reduction in the period of stay (i.e. duration) of the L-1A and L-1B visa, caps as to the numbers of issued L-1s in any one year, and the requirement that the U.S. department of labor be involved in reviewing wage matters for those applying for the L-1 visa. Alex Israel is a lawyer with Toronto based business immigration lawyers, Egan LLP who are allied with Ernst & Young LLP. Alex can be contacted at alex.d.israel@ca.eyi.com. See also www.EganLLP.com for more information.
Chief Executive magazine, the definitive source of information for more than 42,000 chief executive officers and their peers, announced this week that the CEO Confidence Index in the nation's economic recovery continued its steady climb this month, with many top executives beginning to see the proverbial light at the end of the tunnel. Yet most corporate leaders predict fourth-quarter numbers will show only modest growth, and they remain concerned about unemployment, the deficit and global unrest, according to the latest survey by Chief Executive magazine. The overall CEO Confidence Index rose to 134.7, a seven-point jump over last month's number -- and 35 percent higher than when the magazine started polling its readers in October 2002. And while Current Confidence has risen steadily over the past four months -- to 126.7, up 6.5 points from the month before -- the more fickle Future Confidence took a strong leap, rising seven points, to 140.2, after falling slightly a month ago. Looking at the larger picture of CEO Confidence over the past 11 months, an interesting pattern continues: Since October, CEO Confidence has more or less followed the Dow Jones Industrial Average. While it's difficult to say precisely why, the trend suggests a strong correlation between CEO confidence and market performance. "There continues to be a fascinating interplay between CEO Confidence and the Dow Jones Index, with both increasing significantly, suggesting a link between economic and financial recovery," said Edward M. Kopko, chairman and CEO of the Chief Executive Group. "The CEO Confidence this month reinforces that the recovery is going forward into next year." Our bonus question this month asked readers to quantify their forecasts on economic recovery by estimating how quickly the U.S. economy would grow in the fourth quarter of 2003. Respondents expressed their caution: Nearly one half of CEOs, or 46 percent, said the economy would grow a paltry 2 percent or less, and another 39 percent predicted less than 3 percent growth. "Many CEOs see fourth quarter economic growth as 2 percent, while the majority of economists are predicting 4 percent," noted William J. Holstein, Chief Executive's editor in chief. "So it appears that CEOs are gaining in confidence, but they're still much more conservative than prevailing economic opinion." The Index is released on the third Tuesday of each month. For additional information regarding the confidence of public -- and private-company CEOs, details about regional CEO attitudes on employment, investment and business conditions, as well as confidence differences between service and non-service industry CEOs, visit our full report at http://www.chiefexecutive.net/ceoindex. Chief Executive is a controlled circulation magazine that reaches 42,000 chief executive officers and their peers. It is published 10 times a year and reaches a total readership of 143,000. Chief Executive Group facilitates "Chief Executive of the Year," a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of his or her peers. Jack Welch, Bill Gates, John Chambers, Michael Dell and Sandy Weill are just some of the leaders who have been honored throughout the award's 17-year history. Chief Executive also organizes roundtable meetings and conferences to foster opportunities for top corporate officers to discuss key subjects and share their experiences within a community of peers. Contact Robin Uhl at 201-476-5505 or by email at ruhl@chiefexecutive.net . Also, click on www.chiefexecutive.net for more information.
FTC Releases Survey of Identity Theft in U.S. 27.3 Million Victims in Past 5 Years, Billions in Losses for Businesses and Consumers The Federal Trade Commission early this month released a survey showing that 27.3 million Americans have been victims of identity theft in the last five years, including 9.9 million people in the last year alone. According to the survey, last year’s identity theft losses to businesses and financial institutions totaled nearly $48 billion and consumer victims reported $5 billion in out-of-pocket expenses. The agency also released a Commission report detailing its ID theft program since its inception. “These numbers are the real thing,” said Howard Beales, Director of the FTC’s Bureau of Consumer Protection. “For several years we have been seeing anecdotal evidence that identity theft is a significant problem that is on the rise. Now we know. It is affecting millions of consumers and costing billions of dollars. This information can serve to galvanize federal, state, and local law enforcers, the business community, and consumers to work together to combat this menace.” The FTC is the nation’s consumer protection agency. Since 1998, the FTC has had an Identity Theft Program to assist identity theft victims and provide guidance on how to resolve the problems, provide law enforcement training, maintain a nationwide database of ID theft complaints available to law enforcement and refer complaints to criminal law enforcement agencies, and provide business and consumer education. The FTC also maintains the nation’s primary identity theft Web site, which provides critical resources for consumers, businesses, and law enforcers at www.consumer.gov/idtheft. A number of laws limit consumers’ liability if they are the victim of identity theft. Not all costs are covered, however. The survey reviewed the different impact on victims who had existing accounts misused and those victims where the thieves opened new accounts in their names. Where the thieves opened new accounts, the per-victim dollar loss to both businesses and victims was higher and the time spent resolving the problems was greater. The survey found in the past 12 months that 3.23 million consumers discovered that new accounts had been opened, and other frauds such as renting an apartment or home, obtaining medical care or employment, had been committed in their name. In those cases, the loss to businesses and financial institutions was $10,200 per victim. Individual victims lost an average of $1,180. Where the thieves solely used a victim’s established accounts, the loss to businesses was $2,100 per victim. For all forms of identity theft, the loss to business was $4,800 and the loss to consumers was $500, on average. According to the survey results, fifty-two percent of all ID theft victims, approximately 5 million people in the last year, discovered that they were victims of identity theft by monitoring their accounts. Another 26 percent - approximately 2.5 million people - reported that they were alerted to suspicious account activity by companies such as credit card issuers or banks. Eight percent reported that they first learned when they applied for credit and were turned down. While most identity thieves use consumer personal information to make purchases, the survey reports that 15 percent of all victims - almost 1.5 million people in the last year - reported that their personal information was misused in non-financial ways, to obtain government documents, for example, or on tax forms. The most common non-financial misuse took place when the thief used the victim’s name and identifying information when stopped by law enforcement or caught committing a crime. Sixty-seven percent of identity theft victims - more than 6.5 million victims in the last year - report that existing credit card accounts were misused and 19 percent reported that checking or savings accounts were misused. The survey reports that 51 percent of the victims - about 5 million victims - say they know how their personal information was obtained. Nearly one-quarter of all victims - roughly 2.5 million people in the last year - said their information was lost or stolen, including lost or stolen credit cards, checkbooks or social security cards. Stolen mail was the source of information for identity thieves in 4 percent of all victims - 400,000 in the last year. The report detailing the FTC’s ID theft program since its inception in 1998 states that complaints to the agency about identity theft have nearly doubled each year since then. Consumers can file complaints by calling the toll-free hotline at 1-877-IDTHEFT or through the FTC’s identity theft Web site at www.consumer.gov/idtheft. The complaints are entered into a secure database, the Identity Theft Clearinghouse, which can be accessed by criminal law enforcers across the country. Today, more than 725 federal, state, and local law enforcement agencies have access to the database, providing more than 4,200 individual law enforcement agents access to the system from their desktops, 24 hours a day. In conjunction with the U.S. Postal Inspection Service, the U.S. Secret Service, and the Department of Justice, the FTC provides identity theft investigation training to state and local law enforcers. These and similar training sessions have been held in 10 cities across the country, and 1,000 officers representing more that 280 different agencies have participated. Other outreach initiatives include participation in a CD-ROM resource guide produced by the Secret Service that instructs officers on identity theft, investigative resources, and victim assistance. These CD-ROMS are being sent to over 40,000 law enforcement departments across the country. The FTC report notes that the Agency also has worked with private industry on identity theft issues. In conjunction with industry and consumer advocates, the FTC developed a single, standard form for victims to use in reporting identity theft. In addition, the FTC has worked with the three major credit reporting agencies, who now share victims’ requests for fraud alerts with each other, eliminating the need for consumers to contact all three agencies. The agency will soon publish a guide to help businesses and other organizations securely maintain the personal identifying information they have. Consumers can download a
consumer education book, “Identity Theft: When Bad Things Happen to Your Good
Name” in English or Spanish. The FTC has distributed 1.2 million copies of the
booklet since its release in February 2000, and other government agencies,
including the Social Security Administration, the Securities and Exchange
Commission, and the Federal Deposit Insurance Commission have printed and
distributed copies.
To celebrate last week’s Toronto International Film Festival, the (NFIB) National Federation of Independent Business put together a "Top 10 List" of what they considered to be the best business films. These films were chosen because they deal with real world issues affecting SME's. The Top 10 SME Business Flicks.
Source: National Federation of Independent Business, www.nfib.com
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