08242023 BUSINESS

THURSDAY, AUGUST 24,

2023

FTX Bahamas demanding $9.15bn from US affiliates

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

FTX’s Bahamian liquidators are seeking to recover a total $9.15bn from the crypto exchange’s US entities with some 84 percent of this sum involving assets that were “misappropriated” prior to its late 2022 collapse.

The extent of the Bahamian provisional liquidators’ claims were revealed in latenight court filings by John Ray, head of the 134 FTX US entities in Chapter 11 bankruptcy protection in Delaware. Besides seeking to “clawback” more than $7.7bn in transfers made from FTX Digital Markets, the crypto exchange’s local subsidiary, the trio are also asserting a further $1.4bn is due to the Bahamian liquidation estate.

Brian Simms KC, the Lennox Paton senior partner, and PricewaterhouseCoopers (PwC) accounting duo Kevin Cambridge and Peter

Greaves, are also demanding $1.117bn in “indemnification” based on the articles of incorporation for FTX Trading, the Chapter 11 parent, which purportedly require it to compensate “agents” such as the Bahamian subsidiary for any loss and damages.

Recovery of the $256mplus that financed FTX’s high-end residential real estate and office purchases is also included in the $9.15bn total, along with $47.628m worth of “inter-company”

claims against other FTX entities and $16.226m to cover “corporate expenses”. Most of FTX Digital Markets’ “inter-company” claim, some $45.948m, is against Alameda Research, the private trading vehicle of embattled FTX founder Sam Bankman-Fried, which played a central role in the collapse.

Mr Ray, in responding to the Bahamian provisional liquidators’ recovery bid, asserted that the claims are “far-fetched” and based on

Deficit in ‘jeopardy’ on VAT under-shoot

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE OPPOSITION’S

finance spokesman yesterday warned the failure to hit VAT targets for 2022-2023 could place the current year’s forecasts in “even more jeopardy” and potentially trigger spending cuts to meet the $131m deficit goal.

Kwasi Thompson, who was minister of state for finance in the Minnis administration, told Tribune Business that missing revenue targets in the 20232024 fiscal year could spark “a domino effect” that forces the

FTX US chief blasts ‘meddling’ liquidators

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

a “fiction” because the international exchange platform, together with its millions of customers and billions in assets, was never transferred to FTX Digital Markets, and this nation’s jurisdiction, before the crypto exchange imploded in early November 2022. The Bahamian provisional liquidation trio holds the exact opposite position, and this is at the centre of their jurisdictional battle for

SEE PAGE B4

Government to make expenditure cuts to achieve its deficit forecast and retain credibility with ratings agencies, investors and the wider capital markets.

Speaking after Simon Wilson, the Ministry of Finance’s financial secretary, conceded that the Government is unlikely to meet its 2022-2023 full-year VAT target of $1.412bn, he added: “What

FTX’s Bahamas properties rack up $450k unpaid fees

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

FTX’s US chief has revealed that the collapsed crypto exchange’s Bahamian property empire has amassed $450,000 in unpaid fees to local services providers over the ongoing impasse over how to sell the portfolio.

John Ray, who heads 134 FTX entities in Chapter 11 bankruptcy protection, alleged in papers filed with the Delaware Bankruptcy Court just before midnight on Wednesday that the crypto exchange’s Bahamian provisional liquidators have “allowed the secret use, and even potential rental” of some of the

high-end properties without his team’s permission.

While he provided no evidence to back this assertion, the FTX US chief also accused Brian Simms KC, the Lennox Paton senior partner, and the PricewaterhouseCoopers (PwC) accounting duo of Kevin Cambridge and Peter Greaves, of failing to “adequately manage” a portfolio that includes residential properties in developments such as Albany and Goldwynn.

To back up this claim, Mr Ray asserted that FTX Property Holdings, the entity that holds the Bahamian real estate, received a bill for $79,000 in unpaid

SEE PAGE B6

PM: FTX ‘lessons learned’ will make Bahamas better

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE PRIME Minister yesterday pledged that “the lessons we learned” from the FTX crypto exchange’s collapse will enable The Bahamas to better strengthen its regulatory regime and emerge as a regional digital assets hub.

Philip Davis KC, speaking at a financial technology (fintech) summit organised by MasterCard, conceded that The Bahamas had been “put to the test by the unprecedented situation” created by FTX’s failure but argued that the experience will serve the country well

as it moves to upgrade the Digital Assets and Registered Exchanges (DARE) Act - the centrepiece of its digital assets supervisory framework.

“When put to the test by the unprecedented situation

FTX’s US chief has resumed battle with the crypto exchange’s Bahamian liquidators by asserting that their “meddling is hindering” efforts to return recovered assets to former clients and creditors.

John Ray, in his latest broadside against FTX Digital Markets’ provisional liquidators and The Bahamas more generally, accused the trio of masquerading as “humble fiduciaries” when their real objective was to “usurp” himself and the Delaware Bankruptcy Court and seize control of the collapsed crypto exchange’s winding-up.

Pointing out that the vast majority of assets recovered to-day remain within his and the Delaware Court’s control, rather than under the Supreme Court’s jurisdiction, he was unable to resist a re-hash of previous attacks on The Bahamas, the Government and the Securities Commission as FTX’s regulator.

Mr Ray, who heads the 134 FTX entities in Chapter 11 bankruptcy protection, also alleged that one of the high-end Bahamian properties purchased by FTX had been acquired from one of its now-joint provisional liquidators. He did not, though, identify which of Brian Simms KC, the Lennox Paton senior partner, and PricewaterhouseCoopers (PwC) accounting duo of Kevin Cambridge and Peter Greaves, he was referring to.

BRIAN SIMMS KC

KWASI THOMPSON

JOHN RAY

PHILIP DAVIS KC

$5.98 $5.75 $5.81 $5.94

BAHAMIAN RUM SEALS UK DISTRIBUTION DEAL

A RUM manufactured in Freeport has become the first such Bahamian product to be distributed in the UK.

Bassett’s rum, produced by Bahamas Distilling Company, has secured a contract - with support from the UK High Commissionthat will see it distributed across the UK by Chelsea Vintners, a British wine and spirits distributor.

The development was revealed during an event at 67 Pall Mall, an exclusive wine and spirit trade-only club in central London.

The final negotiations were conducted and hosted by Steven Boon, the British High Commission’s wine and spirits advisor, and James Mead, director at Chelsea Vintners.

Guests included representatives from the UK foreign office, the

Bahamian High Commission in London and the Royal Navy, which has a long-standing association with rum. Chelsea Vintners said it believes Bassett’s will succeed in the specialist high-end bracket, and intends to promote it to key hotels such as the Ritz, Savoy and other major brands. Talks have already begun about having a key buyer event at the Bahamas High Commission in London to promote it, too. The UK High Commission has been supporting several Bahamian rum producers in their efforts to access the UK market. It hopes Bassett’s success will be pave the way for other Bahamian exporters as part of the UK-Caribbean Economic Partnership Agreement (trade agreement), which facilitates low-duty and duty-free

exports from The Bahamas to the UK.

Thomas Hartley, UK high commissioner to The Bahamas, said: “This is fantastic news. We’ve been working so hard with Bahamian exporters and the Trade Commission to organise export seminars, trade meetings, promotion events and professional mentoring, and now we have secured our first real world success.

"Well done to the Bassett’s team, and thank you to Steven Boon – our wine and spirits advisor – and to the Bahamian High Commission in London for securing this success. I can't wait to serve Bassett’s in its spiritual home in Freeport.”

Alan Bassett, co-founder and chairman of Bahamas Distilling Company, said: “The whole team at the Bahamas Distilling Company is excited and proud

to send out Bassett's rum as a representation of The Bahamas. We hope that in some small way we have captured the essence of what makes these islands, the people and the culture so very special.”

A spokesperson for the Bahamas High Commission in London said: “Now we have a genuine Bahamian rum that we can celebrate in

BTC OPENS ENHANCED MARSH HARBOUR OUTLET

The Bahamas Telecommunications Company (BTC) says customers will enjoy an improved experience at its newly-opened retail store in Marsh Harbour.

Sameer Bhatti, BTC's chief executive, who was in Abaco for the opening, said: “As a business we are reaffirming our commitment to our colleagues and the people of Abaco to provide best-in-class connectivity and service. We call moments like these 'blue letter' days, and I am so happy to be here with the team to celebrate such a huge milestone. This is

more than just the opening of a new store; it’s the introduction of a new retail experience.”

The 1,080 square foot store features digital signage with location maps, allowing staff to customise solutions for the customer based on their location. BTC agents will also process installation requests and service orders using tablets. Besides the new retail experience, BTC said it has focused on upgrading Abaco communities to the company’s fibre-to-thehome network. Residents in Central Pines, Murphy

Town, Green Turtle Cay, Spring City, Dundas Town and Cooper’s Town can now upgrade to faster Internet speeds, clear TV channels and landline services via an all-in-one bundled rate. They can also access up to 1GB (gigabyte) of download speed.

Mr Bhatti added: “Since the devastating impact of Hurricane Dorian, we’ve remained committed to supporting our people. We are proud that we have retained our colleagues and stood by them and their families during that difficult time. We are thankful for their tenacity, and we

are looking forward to even better days ahead."

BTC’s retail location and its central office were flooded and destroyed during Hurricane Dorian. In just weeks, the company began serving customers using its store on wheels and, a few months later, via a temporary retail store located in Maxwell’s Supermarket and home store plaza. The store's hours are from Monday to Friday from 9.30am to 4.30pm. BTC has 23 retail outlets across The Bahamas.

the UK, and the world can now enjoy a real Bahama Mama and Goombay Smash made with a Bahamian rum outside of The Bahamas. We’ve started discussions about having a Bassett's Rum party at The World Travel Market in London in November."

Senator Barry Grif-

fin, the Bahamas Trade Commission's deputy

chairman, said: “It’s an incredible accomplishment for Bassett’s to be the first Bahamian rum export to the UK. We know how good Bahamian rum is; now the world will get a taste. I hope that other rum, spirits and beverage manufacturers will soon follow Bassett’s lead.”

NEW AIRLIFT SET TO CONNECT MULTIPLE CITIES TO ABACO

NEW airlift to Marsh Harbour aims to connect Abaco to Dallas and White Plains via Florida when it launches on December 14 this year

The Ministry of Tourism, Investments and Aviation, in a statement yesterday, said JSX Airlines will provide service between Miami and Marsh Harbour when the service starts just prior to the Christmas holidays. David Drabinsky, JSX's vice-president of strategy and corporate development, said the carrier aims to service multiple markets before it departs Florida.

“The airline’s plan is to connect Dallas and White Plains through Miami for service to/from Marsh Harbour by flying five roundtrips per week,” he said.

Chester Cooper, deputy prime minister and minister of tourism, investments and aviation, said the launch was a collaborative effort that took months of positive talks with JSX.

“We are excited to support this new launch to match the ever-growing demand for the Abacos as travel continues an impressive recovery in the aftermath of Hurricane Dorian and the COVID-19 pandemic,” Mr Cooper said.

“The additional air stopover arrivals from such important key markets will expose new and returning visitors to a widely-refreshed product, and bring tremendous economic benefits for the local community and industry stakeholders."

John Pinder, parliamentary secretary in the Ministry of Tourism, and MP for south and central Abaco, said the additional airlift will aid the recovery of Abaco’s economy following the twin blows of Dorian and the COVID-19 pandemic.

“It’s welcome news for all of us on Abaco,” he said.

“The Ministry of Tourism is actively seeking to build direct linkages to different destinations in The Bahamas in order to spur the economic development and growth we need.”

JSX is a US carrier that is described as a 'hop-on' jet service. A public charter operator, it offers travellers the perks of private air travel on 30-seat jets, booked by the seat, at attainable fares. “We look forward to this new service and hopefully adding more destinations to The Bahamas in short order”, said Mr Drabinsky.

FROM L to R: Scott Adams (UK foreign office); Russell Crane (UK foreign office); Giles Cooper (director, Chelsea Vintners); Steven Boon, representing Bassetts; Marche Mackey (acting Bahamas High Commissioner); Anthony Stuart (Bahamas tourism director).

CARMEN WILLIAMS, manager of BTC’s retail store in Marsh Harbour, cuts the ribbon to officially open the outlet. She is flanked by other members of the Marsh Harbour team. From left to right are BTC’s chief executive, Sameer Bhatti; BTC’s deputy chairman, Valentine Grimes; and BTC’s Board member, Peter Cartwright.

MINISTER URGES BAHAMIANS TO REPORT OVER-CHARGING JITNEYS

A CABINET minister is urging Bahamians who are being charged $1.50 by jitney drivers to report such incidents to the Road Traffic Department for investigation as the practice is illegal.

Jobeth Coleby-Davis, minister of transport and housing, said jitney drivers should not be charging increased fares as this has not yet been approved by Cabinet. She said: “That should not be the case and, if that is happening, then they should report it to the Road Traffic Department so we can put it before the tribunal."

Earlier this month, the Bahamas Unified Bus Drivers Union (BUDU) released a statement advising its franchise holders, bus owners and drivers that jitney fares will be increasing by 25 cents for adults and junior and high school students with effect from August 14, moving bus fare from $1.25 to $1.50. The Ministry of Transport and Housing responded by advising that the Davis administration “has not concluded its deliberations for an effective date for the implementation of an increase in fares for the jitney industry”. Some passengers, including an adult female, complained that a jitney she rode in the Carmichael area required her to

JOBETH COLEBY-DAVIS

pay $1.50 fare as opposed to $1.25.

Mrs Coleby-Davis maintained her ministry’s stance in its previous statement, adding that it is planning to hold a series of Town Hall meetings before Cabinet

MasterCard aiming to drive Bahamas fintech solutions

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net

A MASTERCARD

executive yesterday said the company is committed to driving Fintech (financial technology) solutions in The Bahamas so that its "underserved and unbanked" populations can better access such services.

Jimena Elia, MasterCard's country manager for the western and Dutch Caribbean market, told Tribune Business during the firm's fintech summit that it is also “bridging” gaps between the public and private sector on solutions for small and medium-sized businesses (SMEs).

"We want to continue to develop The Bahamas to bring finech to the centre of the dialogue so we really can serve the underserved and unbanked segments of the population with new technology, with new ideas, disrupting the traditional way to serve those segments," she said

MasterCard is also focused on “better market inclusion” for SMEs as commercial banks exit branches and a physical presence in the Family Islands, aiming to fill the void in financial services access that this has created. It is supporting all types of fintech and “there is no preference" between online services, credit card machine stations and even digital wallet providers.

“We work with everyone and everyone is welcome to work with us,” Ms Elia said.

“From a fintech point of view there is no difference between the fintechs that work with crypto and fintechs that work without crypto. A crypto, at the end of the day, will respect the value proposition of every single partner. I want to stress how we can really serve the SMEs who, at the end of the day, are not being 100 percent served by the banks.

"SMEs don’t need to be afraid to accept electronic payments. I know that

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probably they have a lot of fears in regards to transparency, and they also have fears on paying a lot of fees. But, at the end of the day, when they start engaging and they start utilising and embracing the new technologies they start… to realise that sales gross a lot, people are more engaged and the check out is super flawless.”

Acceptance of electronic and touchless payment methods has increased in the wake of the COVID-19 pandemic, while merchants

are seeing the benefits of having access to more sales data and information on customer habits than they did when using cash only.

“They then become promoters for more adoption of electronic payments,” Ms Elia said.

"That’s the productive cycle we’re trying to get, working very closely with SMEs, and that’s why the role of SMEs is crucial and critical in every single economy, especially in developing countries.”

grants approval for an increase. She said the meetings will be conducted this year.

"I think we already provided clarity through a press statement where the effective date of that bus increase has not been set by Cabinet as yet," the minister said. “And we've actually requested opportunity to have a public dialogue, so we will be organising a few public Town Hall meetings, I think about two or three of them, before the end of the year, so that we can get an approved effective date for the fare increase to come into effect.”

Mrs Coleby-Davis said that the new code of conduct for taxi drivers should be in force next month. She explained that the code is

currently being reviewed by stakeholders and the approved document will be provided to the public in September. She said: “The code of conduct is going through a process of review by the taxi union, by the Bahamas Hotel and Tourism Association and the Road Traffic board. They are together collectively trying to come to a complete approved document for us to review and then provide publicly.

“And that process, I think they plan to end that and for it to come into full force in the month of September. So hopefully they should be settling that process within the next few days or in the next week or two.”

Wesley Ferguson, the Bahamas Taxi Cab Union’s

(BTCU) chief, told Tribune Business the roll-out of the new code of conduct for drivers will help curb conflicts involving the sector and visitors. He conceded that the taxi industry’s current code of conduct lacks the “teeth” to be effective and levy proper disciplinary measures against drivers who have “spiralled out of control”.

He said: ”We need the ministry to agree on it and have it gazetted, basically as law, so it can give the authorities more teeth in order to have efficient and good governance in the taxi industry. Because of a lack of administrators and the lack of disciplinary measures levied against taxi drivers, they seem to basically spiral out of control.”

National cyber breach plan may ‘take years’

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net

A BAHAMAS-based cloud services provider yesterday said developing a comprehensive national response strategy to deal with cyber security breaches can be “complicated” and “take years”.

Scott MacKenzie, Cloud Carib's chief executive, told Tribune Business that forming a Computer Incident Response Team (CIRT) national strategy is “very complicated” because multiple factors must be considered.

“It definitely takes years for governments and nation states to develop that as a practice, because it’s not really building out like a company or a business; it’s really more like being a broker and managing relationships with carriers and service providers and public emergency response

services and things like that, our police force and law enforcement. So it’s very, very complicated what they’re trying to achieve," he explained.

The Bahamas' CIRT strategy has not been developed to a point where it can be presented to the public because it is still being developed. There are also gaps in the cyber security legislative framework that currently prevent the national strategy from being fully realised.

Mr MacKenzie said:

“CIRTs are typically used as both reactive and proactive [measures], so it would typically work with the Office of the Attorney General and law enforcement to bolster policy and generate policy and legal reform, but also at the same time be used to set up what happens in the event of an incident or when there is a response to it.

“For example, if the hospital got hacked or their equipment got malware

or something like that, the police would have to come in and do an investigation. So it’s not as simple as saying you have an IT problem because you have to follow the chain of evidence for the IT infrastructure, so it’s a very complicated procedure.”

Part of this complication involves taking snapshots of IT systems before they are breached, so investigators can have something to compare before and after any cyber breach occurs. This can become a “long and lengthy legal process", which has “to be followed from a cyber response perspective”, Mr MacKenzie added.

“I’ve been through a couple of cyber incidents like that in my lifetime, and usually it's 24 to 72 hours that people are actually in data centres just to actually do the evidence and information gathering because of the activity that happened," he recalled.

FTX BAHAMAS DEMANDING $9.15BN FROM US AFFILIATES

control of FTX’s fatewhich customers and assets belong to which estate, FTX Digital Markets and The Bahamas, or Mr Ray’s Chapter 11 entities. Once that is worked out, both will then have to determine which assets belonged to the crypto exchange, and which are client assets, so that the process of returning funds to the latter can begin.

Mr Ray, in legal papers filed with the Delaware Bankruptcy Court just before midnight on Wednesday morning, confirmed: “The joint provisional liquidators have also filed 101 proofs of claim - one in each of the debtors’ jointly administered cases - asserting more than $9bn in total claims.

“The joint provisional liquidators’ claims include a claim for almost $8bn for the alleged ‘misappropriation of FTX Digital Markets funds’ as well as an unliquidated claim for ‘international customer deposits’ on the FTX international platform. The joint provisional liquidators base these claims on the same assertions they are making in this proceeding - that ‘all the international customers using the FTX international platform migrated or were

otherwise legally novated to FTX Digital Markets’. “The joint provisional liquidators allege that FTX Digital Markets held digital assets and fiat currency in accounts opened by FTX Digital Markets, and that these assets were then transferred to various debtors. The joint provisional liquidators also assert that, because the new terms of service effected a transfer of FTX Trading’s business to FTX Digital Markets, FTX Digital Markets has a ‘claim for the total deposits held on the FTX international platform in an unliquidated amount of no less than $7.871bn.”

Mr Ray and his team continue to vehemently reject the Bahamian provisional liquidators’ position (see other articles on Page 1B).

However, the Bahamian liquidator trio, in outlining the basis for their claim, alleged that FTX Digital Markets directors - Mr Bankman-Fried and Ryan Salame - “never considered” whether the $7.7bn allegedly transferred from the Bahamian subsidiary was in the best interests of the company, its clients or potential creditors.

Describing the purported “misappropriation”, Mr Simms and the PwC duo alleged: “Between November 2021 and November

2022, certain of the funds in the FTX Digital Markets accounts were transferred to various US debtors [FTX US entities] without notation on FTX Digital Markets’ trial balance or other internal accounts.

“The documents in the joint provisional liquidators’ possession indicate that FTX Digital Markets directors gave no consideration as to whether such transfers were in the interests of FTX Digital Markets, its creditors or, to the extent it was a trustee, to its trust beneficiaries. There is also no evidence that FTX Digital Markets received any consideration in return for the transfers.

“Indeed, the records available to the joint provisional liquidators, including bank statements, reveal no less than approximately $7.7bn of such unauthorised deposit transfers, with approximately $2.1bn to Alameda Research LLC, Alameda Research Ltd and North Dimensions Inc, collectively, and $5.6bn sent to FTX Trading. The US debtors do not dispute the occurrence of the transfers.”

The provisional liquidators asserted that there are numerous means by which the $7.7bn transfers could be declared void or “subject to clawback” under

Bahamian law. As a start, they argued that because FTX Digital Markets’ directors failed to consider whether these actions were in the Bahamian subsidiary’s best interests, they could be found “in breach of their fiduciary duties” and therefore the US entities under Mr Ray’s control are acting as a ‘constructive trustee’ of the assets.

This, Mr Simms and his colleagues argued, would then give FTX Digital Markets a secured claim against the Chapter 11 entities. They also argued that the transfers could be void as a “preferential” payment, given that they may have occurred when FTX Digital Markets was insolvent or during the six months immediately prior to the liquidation. If they happened during the latter period, they would be subject to recovery and clawback.

“Upon information and belief, the transfers were made without the receipt of reasonably equivalent value, and were made with the intent to harm the creditors of FTX Digital Markets, including customers of the FTX international platform,” the Bahamian trio added, citing several other breaches of this nation’s laws that would make the $7.7bn recoverable.

Most of the $91.5bn total claim’s balance, some $1.117bn, was made on the basis that - even if a court concludes no international customers were migrated to FTX Digital Markets - the Bahamian subsidiary was acting as an “agent” for FTX Trading, and therefore covered by the indemnification or compensation pledge contained in the latter’s articles of incorporation.

“The claimant asserts, in the alternative, an indemnification claim against FTX Trading for any amounts that might arise in the provisional liquidation - by customers or creditors - the overhead costs of running the FTX international platform, potential customer claims asserted against FTX Digital Markets, and FTX Digital Markets’ counsel fees,” the Bahamian provisional liquidators asserted.

“Such claim is in an amount of no less than $1.117bn against FTX Trading for all expenses and liabilities related to FTX Digital Markets’ services as agent to FTX Trading, including (but not limited to) all expenses and liabilities related to FTX Digital Markets performance as service provider for the FTX international platform.”

PM: FTX ‘lessons learned’ will make Bahamas better

FROM PAGE B1

with FTX, our regulations ensured that immediate and effective action was taken to appoint joint liquidators and secure assets, which are now under the control of the Bahamian regulator,” Mr Davis said, referring to the Securities Commission.

“The lessons we learned in the wake of FTX will only strengthen our DARE framework in the longterm and propel our digital assets sector forward. New amendments to the legislation include, among other things, measures to

clarify the regulation of stablecoins, more robust investor and consumer protection mechanisms, and the regulation of staking for digital asset-related mining in The Bahamas.

“We are innovating, not only in response to our own experiences and insights, but in anticipation of the direction that the industry is headed.” Mr Davis added that creating an “effective regulatory framework” is key to The Bahamas’ longterm success in fintech and digital assets.

“In The Bahamas, our Digital Assets and

Registered Exchanges (DARE) Act is hailed as one of the most rigorous and effective frameworks in the world,” he argued. “The DARE framework reflects global best practices with an added touch of Bahamian innovation, positioning us a world leader in the regulation of digital assets.

“The legislation is comprehensive and provides clarity and oversight without stifling innovation. It is also highly responsive. We knew we needed an approach that was highly adaptive to keep pace with industry changes.

Recognising the importance of staying ahead of the curve, we intend to pass a series of amendments to the DARE Act this year with the Digital Assets Registration and Exchanges Bill 2023.

“The revamped regime aims to encompass lessons learned globally since the introduction of DARE and to situate The Bahamas at the forefront of the rapidly-evolving digital asset regulatory space with an even stronger, more comprehensive regulatory framework.”

Mr Davis said The Bahamas’ history and experience as an international financial centre (IFC) have left it and others “well-positioned to serve as strategic industry hubs for digital assets enterprises doing business

throughout the Americas”. He added: “Our ability to adapt our regulatory framework to the most stringent global standards, while building a competitive financial services product that appeals to clients from around the globe, makes us the ideal jurisdiction for emerging fintech opportunities.

“In fact, the very survival of our financial services industry hinges on our ability to innovate and adapt to emerging trends. The integration of fintech is the next step in our continued evolution as a leading financial services jurisdiction.... We believe digital technologies can play a large role in the new Bahamian economy that is emerging.”

The Prime Minister continued: “We all

Elsewhere, the Bahamian provisional liquidators also claimed $256m-plus to recover the funds that FTX Digital Markets allegedly advanced to FTX Property Holdings, an entity still in Chapter 11 bankruptcy protection under Mr Ray, to finance the acquisition of high-end real estate at developments such as Albany, Goldwynn, One Cable Beach and elsewhere.

“Amounts paid for each of the Bahamian properties, including the purchase price, the fees and maintenance costs for each of the Bahamian properties, were paid by FTX Digital Markets but title was transferred to or remained in the name of FTX Property Holdings,” the Bahamian provisional liquidators alleged.

“The payments made by FTX Digital Markets for FTX Property Holdings’ properties were either directly paid to the seller or accounted for as debts owed by FTX Property Holdings to FTX Digital Markets on FTX Digital Markets’ books and records. As of October 5, 2022, the total amount recorded as owed by FTX Property Holdings to FTX Digital Markets was $256.291m.”

find ourselves competing in a rapidly-changing world that demands we get with the times or risk finding ourselves on the outside looking in. We are all working toward the digital transformation of businesses, societies and governments.

“For our part, the Government of The Bahamas has seen tremendous success with the launch of the MyGateway platform, which provides centralised online access to over 200 government services. This platform is a central component of a wider government push to expand access to public services while improving transparency, strengthening auditing and control mechanisms, and enhancing security.

“If a government cannot embrace digitisation within its own systems, how can it truly welcome the digital innovation that marks our modern era? Government cannot rightly be said to have embraced digital innovations if its own systems are not a part of the wider digital ecosystem. Our digital transformation agenda will make The Bahamas more competitive on the global stage.”

Deficit in ‘jeopardy’ on VAT under-shoot

is telling for me is the Ministry of Finance’s concession that it may not meet this year’s VAT target. That is telling, because in the last two months of the fiscal year, we know the deficits are very high.”

The Government incurred a combined $399.6m deficit for May and June 2022, the last two months in the 20212022 fiscal year. Spending exceeded revenue by $80.9m in May 2022, and then by $318.7m in June, due to the large number of bills - many of which the Ministry of Finance knows nothing about - being presented for payment by ministries, departments and agencies before year-end. This creates an annual deficit spike towards the end of fiscal years - a trend that has become the norm. However, Mr Thompson said this phenomenoncombined with any VAT under-shoot - could leave the Government struggling to meet its revised $520.6m fully-year deficit target.

Mr Wilson, though, previously told this newspaper that the 2022-203 deficit is close to that

forecast although he did not provide an exact figure. He also pointed out that the VAT under-shoot was being offset by better-than-projected international trade taxes, and the Government stood a reasonable chance of hitting its total revenue and total tax goals for the 2022-2023 full-year. Total revenues and total tax revenue, at $2.356bn and $2.079bn, respectively, stood at 82.4 percent and 81.9 percent of full-year target after the first ten months, and appear much more in reach. However,

Mr Thompson said: “We are very concerned they will miss last year’s revenue target, and if you miss last year’s revenue target that puts the fiscal deficit target in jeopardy.

“If last year’s deficit target is in jeopardy, it puts this year’s deficit target in jeopardy. I think we all ought to be very concerned with what is going on. We’re going to be watching it very closely to see where the Government ends up for the last fiscal year. Obviously, if you have difficulty in meeting the previous year’s target, that puts next year’s target in even more

jeopardy. It’s a domino effect.”

VAT was projected to account for almost 50 percent or half the Government’s $2.857bn total revenues in 2022-2023. Yet despite collections of this tax likely under-performing the full-year $1.412bn target, VAT revenues are now projected to increase by almost $180m yearover-year to $1.591bn for the current 2023-2024 fiscal year. This raises questions as to how the Government will hit this hiked target, although Mr Wilson voiced optimism that it is achievable through increased enforcement and compliance in areas such as the Family Islands, the marine sector, tourism services in general.

With revenue key to meeting the $131.1m deficit forecast for 2023-2024, Mr Thompson said any slippage on the Government’s income side would need to be offset by spending cuts or reductions to keep it on track. “This anticipated failure to meet the revenue projections also puts the forecasted $520.6m deficit at risk of being higher than

expected,” he added of the 2022-2023 fiscal year.

“Although the deficit sits at $240m at the end of April, the deficits in the final two months of the previous year combined amounted to $399.5m. If the trend holds true, the deficit for the last fiscal year may be significantly higher than forecasted by the Government.

“The slowdown in the pace of revenue growth must also lead the Government to reconsider its lofty projections for revenue in the current fiscal year and the planned elevated expenditure that was tied to revenue numbers that may not materialise.

“The FNM reiterates its stance that this administration must take a cautious and prudent approach to public expenditure. Given the revenue trends, the Government must now expressly scale back on unnecessary and extravagant expenditure so that its current deficit target of $131.1m is not put at risk.”

Mr Thompson yesterday told Tribune Business that if revenue fails to meet expectations “we are emphasising and saying to the Government that they must make

the necessary spending adjustments. They must cut down on the discretionary spending, the extravagant spending, to make the necessary adjustments”.

While not identifying areas where he believes cuts should be made, the Opposition finance spokesman added: “That’s what they’re going to have to do in terms of fiscal responsibility to ensure that, if revenues are not working out, you either find alternative sources of revenue - which this government has not been able to effectively do - or you cut down on spending.

“It’s hugely important. You have rating agencies looking at this, you have investors looking at this, you have the public looking at this. We keep emphasising about credibility with the rating agencies and investors, but credibility with the Bahamian public is even more important.”

Mr Thompson, in a statement, added: “Local and international creditors - as well as credit rating agencies - are watching to see if the Government meets its fiscal consolidation goals. If the Government’s planned reduction in the deficit is not met, it will drive public

FTX US chief blasts ‘meddling’ liquidators

Nor was the property in question identified, and Mr Ray seemingly provided no evidence to back-up his assertion. However, The Bahamas continues to be in his sights, as he reiterated allegations that embattled FTX co-founder, Sam Bankman-Fried, and the clique around him “spent considerable energy and money embedding themselves into the Bahamian political and legal establishment”.

Suggesting that the former FTX chief and his associates “quickly developed close relationships with high-placed Bahamian officials”, Mr Ray claimed that they “sought to leverage those relationships to minimise their criminal and civil exposure should the massive fraud be discovered”.

While again providing no evidence to back his assertions, the FTX US chief also argued that the Securities Commission’s transfer of hundreds of millions of dollars in digital assets to its sake-keeping in the days after the crypto exchange’s implosion breached the worldwide asset freeze imposed by the US Chapter 11 proceedings.

This, though, ignores the Securities Commission’s previous explanation that it

acted to prevent FTX client assets being lost or stolen due to a suspected hack. Mr Ray also previously praised the Bahamian regulator’s actions when a temporary truce prevailed between him and the FTX Digital Markets liquidators in the aftermath of their January 6, 2023, co-operation agreement signing. Now the FTX chief appears to have returned to the warpath, and The Bahamas as well as the crypto exchange’s clients and creditors are being caught in the crossfire. His latest onslaught also comes just weeks before he and the Bahamian provisional liquidators are scheduled to attend mediation before retired judge Judith Fitzgerald, highlighting the scale of the task she faces.

Mr Ray’s broadside also includes his ‘counterclaim to the counterclaim’ submitted by the Bahamian provisional liquidators to his original lawsuit, which sought to cut off their access to any assets caught in the crypto exchange’s multibillion dollar collapse.

In response, besides seeking an order that he has breached their cooperation agreement, the Bahamian liquidators also want the Delaware Bankruptcy Court to affirm that Mr Ray and his team have breached the Chapter

15 recognition and asset freeze previously granted to FTX Digital Markets and themselves.

However, the FTX US chief hit back yesterday by pointing out that “virtually all property distributable” to former clients and creditors is under his and the Delaware court’s control. He implied that he only agreed to the January cooperation agreement so that his team would have some means of control over the liquidation of the crypto exchange’s $256m Bahamian property portfolio, which he described as “the most significant assets located in The Bahamas”.

“But the limitations of the co-operation Agreement became apparent to the FTX debtors almost immediately,” Mr Ray alleged in court filings. “Rather than allowing for an efficient division of responsibilities, it has emboldened the defendants [joint provisional liquidators] to interfere in matters entirely unrelated to FTX Digital Markets, FTX Property Holdings or The Bahamas.

“Since the co-operation agreement’s execution, the defendants have attempted to weaponize its terms in an effort to undermine this court’s jurisdiction over the Chapter 11 debtors’ assets, and the joint provisional liquidators’ meddling is hindering the Chapter 11 debtors’ ability to expediently return value to their creditors and stakeholders.

“Moreover, despite the defendants’ repeated assertion that they have ‘materially performed on all of their obligations under the co-operation agreement’, the defendants have, in fact, failed to adhere to the terms of the co-operation agreement.”

The Bahamian liquidation trio, though, have uttered exactly the same accusations against Mr Ray that he and his team have failed to abide by that agreement. The FTX chief, though, yesterday doubled down on allegations that The Bahamas is seeking to seize control of the crypto exchange’s fate via the legal process.

“From the beginning of these Chapter 11 cases,

the joint provisional liquidators have advanced the view that they, aided by the Bahamian courts, are the sole and appropriate stewards of what remains of the FTX international exchange business and its assets - substantially all of which are currently in the custody of the debtors other than certain property seized by the US government,” Mr Ray alleged.

“But the joint provisional liquidators try to mask their intention, portraying themselves as humble fiduciaries who are simply fulfilling their basic duties as the joint liquidators of FTX Digital Markets. In reality, their larger ambitions are clear, as underscored by the expansive nature of their assertions in this proceeding.....

“They seek to usurp the role of this court, the debtors in possession of nearly all of FTX’s assets, and the debtors’ independent management and directors who have worked tirelessly to maximise recoveries for customers and other creditors under the watchful eye of this court.”

debt higher than currently projected. This will undoubtedly place undue pressure on our country’s credit ratings and its ability to raise new financing on favourable terms.”

He also voiced concern about the lateness of the Government’s fiscal reporting, given that the April 2023 report was released in mid-August when the legal date for disclosure was the first week in June. May’s report, which is supposed to be released in early July, is now also late and Mr Thompson said the status of the Fiscal Responsibility Council, a key watchdog on fiscal matters, is also uncertain.

“The Government still has not ensured the publication of the legally mandated 2021 and 2022 Fiscal Responsibility Council reports on the Government’s annual fiscal strategy,” Mr Thompson said. Despite another seemingly idle promise from the Prime Minister, Bahamians have still not received an update on the current composition of the Fiscal Responsibility Council, nor a timeline for when the council will produce its delayed reports.”

Mr Ray then alleged that Mr Bankman-Fried and his associates chose to relocate FTX to The Bahamas as this would “give them a patina (veneer) of regulatory scrutiny to perpetrate their fraud”. He continued: “They spent considerable energy and money embedding themselves into the Bahamian political and legal establishment through, among other things, lucrative legal engagements and the acquisition of hundreds of millions of dollars in Bahamian real estate, including from one of the joint provisional liquidators himself.....

“The co-conspirators quickly developed close relationships with highplaced Bahamian officials... The co-conspirators sought to leverage those relationships to minimise their criminal and civil exposure should the massive fraud be discovered.

“To further their fraudulent scheme, the coconspirators created FTX Digital Markets, a Bahamian entity. The purpose of FTX Digital Markets was not to serve as a legitimate regulated business, but rather to further facilitate the co-conspirators’ fraud, albeit with a veneer of legitimacy.”

FTX’s Bahamas properties rack up $450k unpaid fees

homeowners association fees due on a $5.2m property at One Cable Beach. He also alleged that the Bahamian liquidator trio possess 102 computers and electronic devices used by senior and key FTX personnel that should have been turned over to his team as part of the two sides’ January 6 co-operation agreement.

The latter assertion ignores the fact that the Bahamian liquidators have consistently complained that Mr Ray and his team have failed to turn over far more data on FTX Digital Markets, the entity they are responsible for, and which has impeded the progress of its liquidation before the Supreme Court. And the Bahamian trio have also previously blamed the FTX US chief’s non co-operation for the failure to start liquidating the Bahamian property portfolio.

Still, Mr Ray, in his latest legal filing, while describing the high-end real estate as “the most valuable assets” of FTX located in The Bahamas, argued that Mr Simms and his colleagues had met “none of the conditions” for managing the properties as stipulated in their co-operation agreement. And he added that any sales strategy to

monetise them, and extract value for FTX clients and creditors, has to be approved by him and the Delaware court.

Pointing out that the agreement “does not permit unilateral action” by the Bahamian liquidators, Mr Ray alleged: “Despite their lack of authority, the defendants [Bahamian liquidators] served a statutory demand letter on FTX Property Holdings on February 14, 2023.

“Without consulting the debtors as required by the co-operation agreement, and in a clear violation of the automatic stay, the defendants demanded prompt payment of $238.549m. The defendants rescinded the statutory demand after they were informed that it was a violation of the automatic stay.”

However, Mr Ray further alleged: “Upon information and belief, the joint provisional liquidator defendants have allowed the secret use, and even potential rental, of FTX Property Holdings properties without the consent of FTX Property Holdings or representatives of the Chapter 11 debtors.

“On May 1, 2023, the Chapter 11 debtors received correspondence from Ms. Rolle-Kapousouzoglou, counsel to the joint provisional liquidator defendants. The

letter asserted control by the joint provisional liquidator defendants over the FTX Property Holdings properties and went so far as to exclude representatives of FTX Property Holdings from accessing the properties to investigate and ensure the properties were being properly maintained.”

The FTX US chief continued: “Representatives of FTX Property Holdings have generally been denied access to properties owned by FTX Property Holdings by property managers acting at the direction of the joint provisional liquidators. Yet while the joint provisional liquidators claim the sole right pursuant to the co-operation agreement to manage the properties, they are not adequately doing so.

“On July 25, 2023, FTX Property Holdings received a demand letter for payment of approximately $79,000 of unpaid homeowners association fees (and associated legal costs) for a property located at One Cable Beach valued at $5.2m. Failure to pay these fees further calls into question whether the joint provisional liquidators are even managing the FTX Property Holdings properties.

“To date, unpaid fees across service providers to

the properties have accumulated to approximately $450,000. The joint provisional liquidators have informed the debtors that good faith discussions have been held with the service providers, who have verbally agreed that payment can be made at a later date, although it remains unclear to the Chapter 11 debtors why the joint provisional liquidators would not obtain this deferral agreement in writing, particularly in light of the recent demand letter received.”

However, the Bahamian liquidators previously accused Mr Ray and his team, aided by their local law firm, of going behind their backs in attempting to sell the $256m worth of real estate domiciled in this jurisdiction. They alleged that Mr Ray and his team confessed to instructing their US-based financial advisers to sell the highend Bahamian real estate acquired by the imploded crypto exchange “for cash” without first informing them.

And the Supreme Courtappointed trio also asserted that Mr Ray’s advisers were aided in this effort by the FTX US chief’s Bahamian attorneys, Peter Maynard & Company, with such activities only “causing confusion” as to who has

ultimate control of valuable real estate assets - the FTX Digital Markets liquidators or the US chapter 11 proceedings before the Delaware Bankruptcy Court. The Bahamian liquidators alleged, in legal papers filed with the Delaware court, that the actions of Mr Ray’s agents represented a violation of the same January 6, 2023, co-operation agreement that had been hammered out during last year’s Christmas holiday. This stipulated that the local trio would take the lead in selling-off Bahamian real estate to recover valuable assets on behalf of FTX creditors, with both sides agreeing on the process to be used.

And, explaining the statutory demand situation, the Bahamian liquidators added:“Service was objected to by the Chapter 11 debtors as being a violation of the automatic stay, even though the co-operation agreement expressly contemplated a winding-up by the Supreme Court of The Bahamas, and the service of a statutory demand was a condition precedent to such a winding-up.

“While the joint provisional liquidators disagreed entirely with the Chapter 11 debtors’ position on this matter, in the spirit of co-operation the

joint provisional liquidators agreed to rescind the statutory demand with the understanding that the debtors would engage in discussions to commence the agreed-upon liquidation proceeding in The Bahamas.

“However, since this time, the Chapter 11 debtors have not engaged in discussions regarding the commencement of a liquidation proceeding and limited progress has been made to obtain control over the real estate. The joint provisional liquidators’ intention is to market and sell the properties as contemplated by the cooperation agreement and they will, if necessary, seek the assistance of the Supreme Court to do so,” the Bahamian trio added.

“Some of the property purchases were not completed at the time of the joint provisional liquidators’ appointment, and the joint provisional liquidators are considering the strategy in relation to these with a view towards maximising recoveries for customers and creditors. The joint provisional liquidators hope to present the strategy for the sale of all the properties and seek the debtors’ agreement for the process to proceed.”

By CHRISTOPHER RUGABER AP Economics Writer

A YEAR ago, Chair

Jerome Powell delivered a stark warning: To fight persistently high inflation, the Federal Reserve would continue to sharply raise interest rates, bringing "some pain" in the form of job losses and weaker economic growth.

Since Powell spoke at last summer's annual

conference of central bankers in Jackson Hole, Wyoming, the Fed has followed through, raising its benchmark rate to 5.4%, its highest level in 22 years. Substantially higher loan rates have followed, making it harder for Americans to afford a home or a car or for businesses to finance expansions. Yet so far, broadly speaking, not much pain has arrived.

Instead, the economy has powered ahead. Hiring has remained healthy, confounding legions of economists who had forecast that the spike in rates would cause widespread layoffs and a recession. The unemployment rate is near a half-century low. Consumer spending keeps growing at a healthy rate. As Powell and other central bankers return to Jackson Hole this week, the economy's resilience has

thrust a new set of questions at the Fed: Is its key rate high enough to slow growth and cool inflation? And will it need to keep its rate elevated for longer than expected to slow growth and tame inflation?

"The economy seems to be humming along well, inflation is coming down," said David Beckworth, a longtime Fed-watcher who is a senior fellow at the Mercatus Center at George Mason University, a think tank. "It seems more and more likely that we'll have higher growth and higher interest rates going forward."

One after another, economists have postponed or reversed their earlier forecasts for a U.S. recession. Optimism that the Fed will pull off a difficult "soft landing" — in which it would manage to reduce inflation to its 2% target without causing

a steep recession — has risen. Nearly seven in 10 economists polled by the National Association for Business Economics say they're at least somewhat confident that the Fed will achieve a soft landing, according to the NABE's latest survey.

On Friday, Powell's keynote speech at this year's Jackson Hole conference will be scrutinized for any hints that the Fed intends to keep borrowing rates high for a prolonged period. Wall Street traders, who earlier this year had predicted that the Fed would begin cutting rates by year's end, now don't envision any rate cuts until well into 2024.

In the meantime, optimism is rising in financial markets not only for a soft landing but for an acceleration of growth. Last week, the Fed's Atlanta branch estimated that the

economy is growing at a blistering 5.8% annual rate in the current July-September quarter — more than double its pace last quarter. That estimate is likely too high, but it still suggests the economy is likely accelerating from last quarter's 2.4% rate.

Such expectations have helped fuel a surge in bond yields, notably for the 10-year Treasury note, which heavily influences long-term mortgage rates. The 10-year yield, which was around 3.75% in midJuly, has soared to 4.3%, its highest level in 15 years.

Accordingly, the average fixed rate on a 30-year mortgage has topped 7%, the highest level in 22 years. Auto loans and credit card rates have also shot higher and will likely weaken borrowing and consumer spending, the lifeblood of the eeconomy.

Halsbury Chambers is seeking to employ an Attorney who specializes in Commercial Law and Civil Litigation with a minimum of seven (7) years practical and professional experience.

Interested applicants should deliver their curriculum vitas to carolyn.adderley@halsburylawchambers.com

Surprisingly durable US economy poses key question: Are we facing higher-for-longer interest rates?

A HIRING sign is displayed at a fast food restaurant in Northbrook, Ill., on May 22, 2023. Although the Federal Reserve has sharply raised interest rates, the unemployment rate is near a half-century low. Photo:Nam Y. Huh/AP

DOLLAR TREE AND FAMILY DOLLAR AGREE TO TAKE STEPS

TO IMPROVE WORKER SAFETY AT THE BARGAIN STORES

NEW YORK

U.S. regulators on Wednesday announced a settlement with the company that runs Dollar Tree and Family Dollar aimed at improving worker safety at thousands of the bargain stores across the country.

Labor Department officials cited hazards at the stores including blocked exits, unsafe storage of materials, and improper access to fire extinguishers and electrical panels.

Under the agreement, the chains operated by Dollar Tree Inc. are required to find the "root causes" of violations that the Occupational Safety and Health Administration has repeatedly cited at multiple stores and fix them within two years, the department said.

Assistant Labor Secretary Doug Parker noted that OSHA has issued 403 violations at Dollar Tree and Family Dollar stores since 2017, resulting in more than $13.1 million in fines to date. The company "made

some significant improvement" in worker safety following a 2015 settlement that expired in 2018 but continued violations show more work needs to be done, Parker said. "These are entirely preventable violations and hazards. And it's the employer's ... responsibility, to keep these workers safe," Parker told reporters. "These improvements will not happen overnight, but this agreement will create a pathway for significant investment by the company to put in place controls that we believe will make workers safer."

The agreement, which was entered into last week, covers all Family Dollar and Dollar Tree stores in OSHA's federal jurisdiction — totaling 10,000 locations nationwide, according to Solicitor of Labor Seema Nanda. It also calls for the company to maintain a 24-hour hotline for safety complaints and antiretaliation protections for workers, Nanda added.

Dollar Tree and Family Dollar also face hefty fines for future violations. If hazards are not adequately corrected within 48 hours of an OSHA notification, the company can face $100,000 fine per day of violation, up to $500,000 for each store, as well as further inspection and enforcement from OSHA.

Beyond these fines, Dollar Tree and Family Dollar is paying $1.4 million in penalties to settle existing contested and open inspections of similar alleged violations, the Labor Department said Wednesday.

"We are implementing substantial safety policies, procedures, and training, all

A SIGN hangs above a Dollar Tree store in Des Moines, Iowa. U.S. regulators on Wednesday, Aug. 23, 2023, have announced a settlement with the company that runs Dollar Tree and Family Dollar aimed at improving worker safety at thousands of the bargain stores across the country.

intended to safeguard the wellbeing of our associates," Mike Creedon, chief operating officer of Dollar Tree, said in a Wednesday statement. "We appreciate the opportunity to engage with OSHA on our safety initiatives as we move forward, seeking to establish our position as a leading retailer in workplace safety."

Dollar Tree Inc., based in Chesapeake, Virginia, acquired Family Dollar in 2015 for almost $9 billion. The company operates more than 16,000 Dollar Tree and Family Dollar stores in 48 states and Canada, employing more than 193,000 people, according to the Labor Department.

Foot Locker lowers full-year outlook again, pauses dividend as 2Q sales fall on cautious consumers

By MICHELLE CHAPMAN

Business Writer

AP

FOOT Locker is cutting its full-year outlook again and pausing its quarterly dividend as sales dropped in its fiscal second quarter with consumers continuing to be more cautious about their purchases.

Shares tumbled more than 33% in morning trading Wednesday. The footwear and clothing retailer said quarterly sales declined to $1.86 billion from $2.07 billion. That's short of the $1.88

billion that analysts polled by Zacks Investment Research were calling for.

Same-store sales, a key indicator of a retailer's health, dropped 9.4% in the quarter.

"We did see a softening in trends in July and are adjusting our 2023 outlook to allow us to best compete for price-sensitive consumers," President and CEO Mary Dillon said in a statement. Dillon joined the company as CEO last August.

Consumers being more selective in their purchases due to inflation concerns is

an issue plaguing the retail sector. Macy's has heavily discounted its spring goods to make room for fall and holiday merchandise in the face of customers' cautious spending. Meanwhile, Target reported its first quarterly sales decline in six years, dragged down by cautious spending in addition to backlash by some customers to its Pride merchandise.

Foot Locker now anticipates full-year sales will fall 8% to 9%. Its prior guidance was for a 6.5% to 8% decline. It predicts samestore sales will now drop

9% to 10%. Previously, it forecast a 7.5% to 9% decline.

Full-year adjusted earnings are now predicted to be in a range of $1.30 to $1.50 per share. The New York-based company's previous outlook was for adjusted earnings between $2 and $2.25 per share.

Foot Locker Inc. previously lowered its full-year sales and earnings outlooks in May when it reported

its first-quarter financial results.

For the second quarter, the company moved to a loss of $5 million, or 5 cents per share, for the period ended July 29. That compares with a profit of $94 million, or 99 cents per share, a year earlier. Its adjusted earnings were 4 cents per share. That's a penny shy of what Wall Street expected.

During the quarter Foot Locker opened 15 new stores, remodeled or relocated 16 stores, and closed 108 stores, leaving it with nearly 2,600 stores in 26 countries. The closures are part of the company's plan to get rid of underperforming locations. The company said its second-quarter dividend of 40 cents per share, or a total of $37 million, will be paid in October.

PEDESTRIANS walk past a Footlocker store, Wednesday, May 16, 2018, in New York. Foot

is cutting its full-year outlook again and pausing its quarterly dividend as sales dropped in its

second quarter with consumers continuing to be more cautious about their purchases. Shares tumbled more than 27% before the market open on Wednesday, Aug. 23, 2023.

Locker

fiscal

Photo:Ted Shaffrey/AP

Photo:Charlie Neibergall/AP

BUSINESS TYCOON CARLOS GHOSN’S RISE, FALL AND DRAMATIC ESCAPE IS SUBJECT OF NEW APPLE TV+ SERIES

By MARK KENNEDY AP Entertainment Writer

CARLOS Ghosn, the former rock star businessman who fell from grace and fled authorities smuggled in a music instrument box, is getting what his dramatic story deserves — a multi-part documentary series.

"Wanted: The Escape of Carlos Ghosn" is the juicy real tale of how the auto executive went from attending red carpets as the head of both Nissan and Renault to fleeing to Lebanon with the help of a former Green Beret.

"The Carlos Ghosn story is unbelievable in the sense that it's a Shakespearean tragedy in which we have an archetypal tragic hero who everybody wants to root for but knows the train crash is coming," said Sean McLain, a consulting producer on the Apple TV+ series and Wall Street Journal reporter.

The four-part series, which starts Friday, takes a wider lens to Ghosn's story, tracing the childhood and rise of the auto

executive which Time magazine once put ahead of Bill Gates among the 15 most influential global business executives.

Voices included are Louis Schweitzer, former CEO of Renault; Andy Palmer, former COO of Nissan; Arnaud Montebourg, former French minister of economy; Takashi Yamashita, former Japanese minister of justice; and Hiroto Saikawa, former Nissan CEO.

Most crucially, director James Jones went to Lebanon and sat down with Ghosn and his wife, Carole, on camera. Jones got the job before he'd secured access to the couple but knew he had to have them participate.

"You need to hear from the people in the room. You can't just have pundits commentating on what happened or kind of rehashing the story second-hand," Jones says. "For me, getting Carlos and Carole Ghosn to talk frankly was a huge thing and I think that the series would have been a struggle to make without that."

Many viewers may tune in because of the brazen way Ghosn left Japan in 2019 after being accused of financial improprieties. He turned to Mike Taylor, a former Green Beret, who hid the executive in a large music instrument box — with breathing holes drilled in — and got him out on a private jet.

"My initial reaction was like, 'Is there enough for four parts?' I know he's an interesting guy who is a brilliant businessman, and the escape is thrilling," said Jones. "But then when I spent the time reading up about it, it did feel rich and the kind of thing that's quite satisfying to really get your teeth into."

The Brazilian-born Ghosn took refuge in Lebanon, his ancestral homeland, which has no extradition treaty with Japan. He denied the financial improprieties charges and said Japan's justice system was unfair. "I did not escape justice. I fled injustice," he said at the time.

The series also investigates Japan's legal system,

which critics say amounts to "hostage justice," allowing suspects to be questioned for days without a lawyer present while they are kept in solitary confinement in a small, spartan cell. The conviction rate of over 99% has raised questions over forced confessions.

The case against Ghosn centers on elaborate calculations to compensate him after retirement for a pay cut he took beginning in 2009, when disclosure of big executive pay became a legal requirement in Japan.

Ghosn argues the case against him was concocted in a power struggle within Nissan's boardroom and the series does show a conspiracy by Nissan officials to get rid of Ghosn because

they feared a merger with Renault. "He was wronged and yet these allegations look very bad," said Jones. "And by hiding out in Lebanon, he's not helping the appearance of innocence."

Ghosn may have escaped but not everyone who helped him did the same.

Taylor was sentenced to two years in prison, while his son, Peter, was sentenced to one year and eight months for his part. They claim in the series that Ghosn never paid them for their work helping him escape.

Jones sees the Ghosn saga as a cautionary tale of a leader who lost his bearings. The executive may have believed that because he'd saved Nissan and

THEN Nissan Motor Co. President and CEO Carlos Ghosn speak during a press conference in Yokohama, near Tokyo on May 11, 2012. Ghosn, the former rock star businessman who fell from grace, is the subject of a multi-part documentary series, “Wanted: The Escape of Carlos Ghosn,” premiering globally on Apple TV+, Friday, Aug. 25.

/AP

Renault that he deserved extra compensation.

"He thought he had saved these companies from extinction and made them successful and made them in his own image and therefore was kind of entitled to play by his own rules to some extent," he said.

McLain, whose book with fellow Wall Street Journal reporter Nick Kostov "Boundless" informed the series, said Ghosn's fall illustrates the need for checks and balances in the C-suite.

"He was going to retire a very wealthy man, but because he wanted more, what he's going to be known for from now on is spiriting himself away from Japan by hiding in a box."

Peloton 4Q sales top Street, but posts bigger-than-expected loss partly on recall costs

By MICHELLE CHAPMAN AP Business Writer

PELOTON managed to beat sales expectations during its fiscal fourth quarter, but the exercise equipment maker reported a bigger loss than anticipated partly due to recall costs and a shift in consumer spending.

Shares plunged more than 23% in afternoon trading on Wednesday.

Revenue fell to $642.1 million from $678.7 million in the quarter, but still topped the $640.5 million that analysts surveyed by Zacks Investment Research expected.

Subscription revenue rose 10%, while connected fitness products revenue slipped 25%.

The number of members declined 5% to 6.5 million from 6.9 million.

In a letter to shareholders, President and CEO Barry McCarthy said that consumers have been

shifting their spending to travel and experiences, but that the New York-based company is starting to see an uptick in hardware sales.

McCarthy also said that costs related to a seat post recall that was announced in May had substantially exceeded initial expectations.

"An estimated 15,000 to 20,000 of our 2.2 million impacted members elected to pause their monthly subscriptions in Q4 pending the receipt of a replacement seat post," he added.

Peloton Interactive Inc. lost $241.8 million, or 68 cents per share, for the three months ended June 30. A year earlier, the company lost $1.26 billion, or $3.72 per share.

Wall Street was calling for a loss of 45 cents per share.

McCarthy cautioned on the upcoming quarters.

"We don't currently expect to remain free cash flow positive in the two

upcoming quarters, mainly due to seasonality of our hardware sales, timing of inventory payments, marketing spend as we invest for growth and prepare for the holiday season, and one-time cash outlay for seat posts; but we do expect to achieve this objective once again in the second half of fiscal 2024," he said.

In addition, Peloton plans to resume pre-sales of its Tread+ treadmill in the U.S. this holiday season. McCarthy said that the Consumer Product Safety Commission approved its design for a new rear guard for the product this past quarter. Peloton will start retrofitting existing Tread+ products later this year. It will install the rear guard for members that request one, which is 17,000 to date. Looking ahead to the first quarter, Peloton foresees revenue in a range of $580 million to $600 million.

Photo:Koji Sasahara

I was surprised when some of my student loans were canceled. Yours might be, too

By JAE BRATTON

IN 2022, I left the teaching profession, convinced that the public service loan forgiveness (PSLF) I had been pursuing for the past 14 years was no longer a possibility. When I changed careers, I had nearly $50,000 in student loan debt. But in 2023, my loan servicer informed me that almost $40,000 of that balance had been forgiven.

This surprising reversal happened because a limited PSLF waiver temporarily gave borrowers credit for payments toward loan forgiveness that normally wouldn't count toward PSLF — and waived the requirement that borrowers must work in public service at the time of application and forgiveness. The bad news: The waiver that helped me get loan forgiveness expired Oct. 31, 2022. The good news, according to Abby Shafroth, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center: "If you didn't already take advantage of the limited waiver … there's still time to receive almost the same benefits," which may lead to loan cancellation for some borrowers.

Here's how.

TAKE ADVANTAGE OF RULE CHANGES

Millions of borrowers will see their payment counts toward forgiveness increase through a one-time adjustment that'll be applied to accounts in waves from July 2023 through sometime in 2024. According to the U.S. Department of Education, the adjustment isn't tied to public service and applies to borrowers with a Direct Loan or Federal Family Education Loan (FFEL), including Parent PLUS loans, and gives credit toward PSLF or incomedriven repayment (IDR) loan forgiveness for:

— Any month in which a borrower was in a repayment status, regardless of whether payments were partial or late, the loan type or the repayment plan.

— Any month in which loans were in an eligible repayment, deferment or

forbearance status prior to consolidation.

— Months while a borrower spent at least 12 consecutive or 36 cumulative months in forbearance.

— Any month spent in deferment (except in-school deferment) prior to 2013.

Borrowers in the PSLF program or who have ever been enrolled in a payment plan don't need to do anything to receive the adjustment. But if you're aiming for PSLF, you may need to submit an employment certification form to ensure that months worked in public service count toward the required 120 total payments. Borrowers who don't qualify for PSLF need 240 or 300 qualifying payments to get forgiveness, depending on the type of loans.

"We recommend submitting a PSLF form every year and every time you switch jobs to make sure your payment count is updated," says Amy Czulada, outreach and

advocacy manager at the Student Borrower Protection Center.

Borrowers who have a commercially managed FFEL, Perkins or Health Education Assistance Loan (HEAL) must apply for a Direct Consolidation Loan by Dec. 31, 2023, to receive the one-time adjustment. Check your loan type and apply for consolidation at studentaid.gov.

BE

PREPARED TO PUSH BACK

After submitting my PSLF application, I received periodic correspondence from Mohela, my loan servicer, with updated payment counts. By December 2022, I had 66 qualifying payments; a month later, I had 91. Finally, in May 2023, I passed the 120-payment threshold on two loans and was notified that those balances were forgiven. But getting across the finish line required self-advocacy. When I noticed that some of my

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employment hadn't been approved — even though I correctly filled out my PSLF application — I called Mohela and asked a loan counselor to reevaluate my PSLF form and update payment counts accordingly.

"Don't assume that everything (on the loan servicer's end) is correct," says Shafroth. "If something seems wrong, you should feel empowered to say something."

These tips can help you work with your loan servicer:

— Be prepared. Before speaking with a loan

NEW graduates line up before the start of a community college commencement in East Rutherford, N.J., on May 17, 2018. The Supreme Court struck down the Biden administration’s plan to forgive up to $20,000 of student loan debt per borrower, yet loan forgiveness is still possible for those pursuing Public Service Loan Forgiveness or income-driven repayment forgiveness. A one-time account adjustment that began in July 2023 is still ongoing and gives credit for certain periods of deferment, forbearance or default that normally wouldn’t count toward forgiveness. (AP Photo/Seth Wenig

counselor, gather information like payment counts, paperwork submission dates and loan amounts.

— Keep detailed records. Save all correspondence and take notes during phone calls.

— Be knowledgeable. Review the loan forgiveness rules so you can reference them when needed.

INCLUDE PANDEMIC FORBEARANCE

MONTHS

When calculating the number of eligible payments you've made toward PSLF or IDR forgiveness, remember to add at least 36 to account for the duration of the COVID-19 payment pause. This time counts even if you didn't make any payments. Borrowers in the PSLF program must certify any period of public service employment that coincided with the payment pause to get credit for these months.

Remember, too, that

borrowers only qualify for PSLF if they work in public service at the time of application (that waiver expired in 2022).

Those who don't qualify for PSLF or IDR forgiveness after the adjustment need to enroll in an incomedriven repayment plan to make sure any subsequent months count.

Czulada says borrowers who have been in repayment the longest can expect to have their payment counts updated first. Account audits will continue every two months starting in July 2023.

If your loan servicer reports a count that seems inaccurate, Shafroth recommends trying to resolve the issue with them first. Request a payment history from the servicer and compare it against your own records. Ask to speak to a supervisor, if needed. As a last resort, you may file a complaint with the FSA's Ombudsman Group.

Workers in Disney World district criticize DeSantis appointees’ decision to eliminate free passes

By MIKE SCHNEIDER Associated Press

EMPLOYEES of Walt Disney World's governing district on Wednesday confronted new board members appointed by Gov. Ron DeSantis over a decision to eliminate their access to free passes and discounts to the theme park resort, saying it makes park visits unaffordable.

During a monthly board meeting, several current and former district firefighters spoke emotionally about how the free passes to Disney parks were a benefit for them and their families that played a major role in their decision to work for the 56-year-old district, which provides municipal services like mosquito control, drainage, wastewater treatment, planning and firefighting to Disney World.

"The removal of this benefit takes away, for some, their entire reason for working here," said firefighter Pete Simon.

The Central Florida Tourism Oversight District earlier this week said that $2.5 million in season passes

and discounts on hotels, merchandise, food and beverages that their Disneysupporting predecessors provided the district's 400 employees amounted to unethical perks that benefited the company, with the district footing the bill. The district on Monday submitted a complaint to a state Inspector General, which investigates fraud, mismanagement, waste and abuse.

The five members of the district's board were appointed by DeSantis earlier this year after his takeover of the district in retaliation for Disney's opposition to a state law banning classroom lessons on sexual orientation and gender identity in early grades.

Firefighter Aaron Clark, whose father was also a district firefighter, choked up as he recounted how growing up his dad took him to the parks using the passes and how he now does the same thing with his three daughters. His father, Ricky Clark, called the elimination of the passes "disturbing" and said that the adversarial attitude

NOTICE

NOTICE is hereby given that ROMAINE BLAKE of Roberts Boulevard, Coral Heights West, New Providence, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/ naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 24th day of August, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

the district and DeSantis have taken toward Disney "has nothing to do with district employees."

"My family had many memories at the park, spending time together, memories that can never be taken away," Ricky Clark said. Board chair Martin Garcia defended the decision. The passes and

discounts unfairly favored Disney over other restaurants and shops that operated within the district, employees with large families got a greater benefit than single employees and a private company can't give gifts to government workers who provide services to it, Garcia said. In its place, the district was offering employees

NOTICE

NOTICE is hereby given that MARIO EXANTUS, of General Delivery, Cooper Town, Abaco, The Bahamas applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 24th day of August, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

more than $1,400 in a wage increase, he said.

The tussle over whether the free passes and discounts were an unethical benefit came as the new district administrator, who board members appointed last May, faced an ethics dilemma of his own.

Glen Gilzean, who earns $400,000 annually in his new job, also was chair of the Florida Commission on Ethics. A legal opinion last week said he was unable to simultaneously be a commission board member and work for the district because the commission prohibits public employees from serving on its board.

Gilzean announced at Wednesday's board meeting

THE CINDERELLA Castle is seen at the Magic Kingdom at Walt Disney World, July 14, 2023, in Lake Buena Vista, Fla. The new administrator of Walt Disney World’s governing district can’t continue to work in his new job and be chair of Florida’s ethics commission at the same time, according to a legal opinion issued Thursday, Aug. 17.

that he had resigned from the ethics commission. A fight between DeSantis and Disney began last year after the company, facing significant pressure internally and externally, publicly opposed the state law which critics have called, "Don't Say Gay."

As punishment, DeSantis took over the district through legislation passed by the Republican-controlled Florida Legislature and appointed a new board of supervisors to oversee municipal services for the sprawling theme parks and hotels. But the new supervisors' authority over design and construction was restricted by the company's agreements with Disneysupporting predecessors, which were signed before the new board took over.

In response, Florida lawmakers passed legislation that repealed those agreements. Disney has sued DeSantis in federal court, claiming the governor violated the company's free speech rights.

PUBLIC NOTICE

INTENT TO CHANGE

NAME BY DEED POLL

The Public is hereby advised that I, JANAI KOURTNEIGH-GRACE EDGECOMBE of P.O Box N 85 Winton Heights, New Providence, Bahamas intend to change my name to JANAI KOURTNEIGH-GRACE FERGUSON If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Offcer, P.O.Box N-742, Nassau, Bahamas no later than thirty (30) days after the date of publication of this notice.

NOTICE

NOTICE is hereby given that DOTHLYN BLAKE of Smith’s Bay, Cat Island, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/ naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 24th day of August, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

NOTICE

NOTICE is hereby given that LEDEANO VIRGILE of Ida Street, off Balfour Avenue, Nassau, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 17th day of August, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

NOTICE

NOTICE is hereby given that WALVENS GARCONVIL of Wulff Road, Nassau, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/ naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 17th day of August, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

Photo:John Raoux/AP

PUTIN AND OTHER LEADERS LOCKED IN DISCUSSIONS

OVER AN EXPANSION OF THE BRICS ECONOMIC BLOC

By GERALD IMRAY

Associated Press

THE leaders of Brazil, Russia, India, China and South Africa held closeddoor discussions Wednesday on the possible expansion of their BRICS economic bloc, a move they've framed as a way to amplify the voice of developing nations, but which also serves the geopolitical interests of Beijing and Moscow.

A decision on whether to accept new members had been expected late Wednesday, the second day of a three-day BRICS summit in Johannesburg. But officials said that was looking unlikely and a declaration might be made on Thursday.

Chinese President Xi Jinping, Brazilian President Luiz Inácio Lula da Silva, Indian Prime Minister Narendra Modi and South African President Cyril Ramaphosa met at a conference center in the Sandton financial district in South Africa's biggest city.

Russian President Vladimir Putin, who did not travel to the summit after being issued an International Criminal Court arrest warrant, joined via video link from Moscow. Foreign Minister Sergey Lavrov was in Johannesburg to represent Russia.

South Africa's Ramaphosa said all five leaders backed the principle of expansion. "We stand at the cusp of expanding the BRICS family, because it is through this expansion that we will be able to have a much stronger BRICS in these turbulent times that we live in," Ramaphosa said.

More than 20 countries have applied to join BRICS, which was formed by Brazil, Russia, India and China in 2009, and added South Africa in 2010.

Saudi Arabia is among the nations seeking membership, raising the possibility of the oil giant moving a little closer to China and Russia. Others who have applied include Argentina, Egypt, Ethiopia, Iran, Indonesia and the United Arab Emirates, according to officials. Even if the BRICS leaders reach a consensus on expansion, it's not clear if any new members would be announced at this week's meeting. The five must first thrash out details of the criteria new countries must meet to join the economic bloc. BRICS is consensusbased and decisions are only made if all five agree.

"We welcome moving forward on this based on consensus," Indian leader Modi said, also giving his support to expansion.

While China and Russia have pushed for expansion, others have only given their approval more recently.

An expanded BRICS has been seen as a possible boost to China and Russia in forming a symbolic coalition amid growing China-United States friction and the collapse of Russia's relationship with the West because of its war in Ukraine.

Summit host South Africa had been eager to keep the conversation on the issue of cooperation among countries in the developing world, but the gathering has been marked by anti-Western pronouncements from China and Russia on both of the first two days.

Putin used a 17-minute pre-recorded speech on the opening day to lambast the West over the financial sanctions placed on Russia as punishment for its invasion of Ukraine. On Wednesday, the Russian leader blamed the West for the war in a live speech via video call.

NOTICE

Chinese leader Xi said the world was being controlled by those with the "strongest muscles" and the "loudest voice" -- a reference to the U.S. and the West. But he also called for a "lowering of the temperature."

The BRICS bloc has sometimes struggled to put into action any coherent policy with the disparate economic and political priorities of its members and the rivalry between China and India -- the developing world's economic powerhouses.

The only other concrete policy that's been raised in Johannesburg is a broad plan to move away from using the U.S. dollar for trade between BRICS nations in favor of local currencies.

The dominant dollar is one of a number of gripes in the developing world, where many also view international institutions like the U.N., the World Bank

and the International Monetary Fund as not serving their interests. The BRICS countries have repeatedly spoken of creating a fairer world order and reforming global institutions, although with little substantive progress. The group's stated intention to move away from the world's dominant currency won't take down the dollar overnight. According to calculations by Federal Reserve researchers, 96% of trade in the Americas from 1999 to 2019 was invoiced in dollars, and 74% of trade in Asia. Everywhere else outside Europe, 79% of trade was done in dollars,

underlining its status as the world's de facto currency. There's also no clear BRICS consensus on a trade currency, so while Putin claimed that the "process of the de-dollarization of our economic times is gaining pace," Ramaphosa said "further discussions need to take place, particularly amongst our finance ministers."

Still, analysts maintain that the more than 20 countries applying to join BRICS and another 20 who have expressed interest should serve as some kind of wakeup call to the West.

"Whatever the achievements of the BRICS bloc

... its very existence and the queue of developing economies trying to join show a much broader unhappiness in the Global South with the current global order," said Cobus van Staden of the China Global South Project, which tracks China's engagement with developing countries. On the sidelines of the summit, South Africa signed eight agreements with China's state-owned electricity companies to address its energy crisis, which has seen Africa's most advanced economy experiencing daily scheduled power outages across the country.

EXECUTIVE CONDO FOR RENT –SKYLINE LAKES

•

•

•

•

•

Notice is hereby given that all persons having any claim or demand against the above Estate are required to send their names, addresses and

• No pets

•

And Notice is hereby given that all persons indebted to the said Estate are requested to make full settlement on or before the date herein before mentioned.

FROM left, Brazil President Luiz Inacio Lula da Silva, China President Xi Jinping, South African President Cyril Ramaphosa, Prime Minister of India Narendra Modi and Russia’s Foreign Minister Sergei Lavrov pose for a BRICS family photo during the 2023 BRICS Summit at the Sandton Convention Centre in Johannesburg, South Africa, Wednesday, Aug. 23, 2023.

Photo:Gianluigi Guercia/AP

Children’s advocates ask FTC to investigate Google for targeting ads to kids

By BARBARA ORTUTAY AP Technology Writer

CHILDREN’S advocacy groups including Fairplay and Common Sense Media are asking the Federal Trade Commission to investigate Google, saying the tech giant serves personalized ads to kids on YouTube despite federal law prohibiting the practice.

The letter follows a report from The New York Times last week that found that ads on YouTube may have led to the online tracking of children. The federal Children’s Online Privacy Protection Act, or COPPA, requires kid-oriented websites to get parents’ consent before collecting personal information of children under 13.

In response to the Times report, Google said last week that it did not run personalized ads on children’s videos and that its ad practices fully complied with COPPA. When ads appear on children’s videos, the company told the Times, they are based on webpage content, not targeted to user profiles.

But Wednesday’s letter to the FTC — also signed

by the nonprofit Center for Digital Democracy — says Fairplay, as well as independent ad buyers, conducted follow-up research suggesting that the ads are, in fact, personalized. They did this by running test ad campaigns on YouTube, selecting series of users of attributes and affinities for ad targeting and instructed Google to only run the ads on “made for kids” channels.

“We do not allow ads personalization on made for kids content and we do not allow advertisers to target children with ads across any of our products. We also do not offer advertisers the option to directly target made for kids content as a whole. Given the allegations, we wish the author of the report had contacted us first.”

THE FEDERAL Trade Commission building is seen, Jan. 28, 2015, in Washington. In a letter, Wednesday, Aug. 23, 2023, children’s advocacy groups, including Fairplay and Common Sense Media, asked the Federal Trade Commission to investigate Google, saying the tech giant serves personalized ads to kids on YouTube despite federal law prohibiting the practice.

In theory, the groups say, these test campaigns should have resulted in zero placements, because under Google and YouTube’s policy, no personalized ads are supposed to run on “made for kids” videos. But Fairplay says its targeted $10 ad campaign resulted in over 1,400 impressions on “made for kids” channels and the ad buyers reported similar results.

Google said the report’s conclusions “point to a fundamental misunderstanding of how advertising works on made for kids content.”

“We do not allow ads personalization on made for kids content and we do not allow advertisers to target children with ads across any of our products,” the company said in a statement. “We also do not offer advertisers the option to directly target made for kids content as a whole. Given

the allegations, we wish the author of the report had contacted us first.” Its parent company, Alphabet, agreed in 2019 to pay $170 million to settle allegations that YouTube collected personal data on children without their parents’ consent.

In response, the company agreed to work with video creators to label material aimed at kids and said it will limit data collection when users view such videos, regardless of their age.

“If Google’s representations to its advertisers are accurate, it is violating COPPA,” said Josh Golin, executive director of Fairplay, in a statement. “The FTC must launch an immediate and comprehensive investigation and use its subpoena authority to better understand Google’s black box child-directed ad targeting.”

Photo:Alex Brandon/AP

Google

CAUSEWAY: PART STOCK FUND + PART DONORADVISED FUND = A NEW BID FOR YOUNG DONORS

By DREW LINDSAY

WHAT might persuade affluent 20- and 30-somethings to give to charity?

Charity Navigator, which millions of Americans use to guide their giving, is betting it has an answer to that vexing question for nonprofits: a new online platform that promotes giving to causes, not individual organizations. The ratings giant announced Tuesday its acquisition of Causeway, the startup company behind the platform.

Causeway, which launched only last year in a test with about 100 donors, invites the charitably minded to make monthly recurring gifts to one of its cause funds — curated bundles of nonprofits rated as highly effective. The structure mimics that of a mutual or stock exchange fund, in which investors put money into a basket of publicly traded companies rather than individual stocks.

Charity Navigator aims to expand the Causeway model and boost giving, particularly among younger Americans, says CEO Michael Thatcher. Millennials and members of Generation X are often eager to, say, bring clean water to developing countries, Thatcher says. But they don't care who gets it done. "They're impatient with the brand and identity of individual organizations. They're really just looking for results."

Causeway co-founders

Ben Horwitz and Reed Rosenbluth — tech entrepreneurs in their late 20s — created the platform after they saw many of their high-income friends sitting on idle donor-advised funds, paralyzed about how to give effectively. Others were "firing from the hip," Horwitz says, without a plan or research.

Causeway, Horwitz says, seeks to simplify and spur giving. Its online format aims to replicate the digital experience of managing finances or stocks. "My generation wants to do this in three clicks and know that they're getting the best possible organizations," Horwitz says. There's also a chance to build online communities around donors' shared passion and commitment to a cause, he says.

Horwitz, who will join Charity Navigator, quit his job in business development at Facebook to start Causeway. Rosenbluth is a software engineer who previously worked at Ripple, a cryptocurrency exchange. Research shows that younger Americans, while generous and philanthropically inclined, aren't making financial donations at the same rates as baby boomers or older generations, says Woodrow Rosenbaum, chief data officer at GivingTuesday, which analyzes trends in giving. Millennials and Generation Z don't have the same affinity for nonprofits and traditional charity, perhaps because organizations aren't engaging with them.

"I have thought for a long time that there's untapped opportunity for these kinds of curated cause funds," Rosenbaum says.

So far, Causeway has established five cause funds through which it funnels donations to 25 nonprofits in animal welfare, climate change, global health, poverty alleviation, and racial equity. Donors also can add individual nonprofits outside the cause funds to their portfolio.

With a slogan of "donations that make a real difference," Causeway promotes gifts to its funds as a way to get the most good for the charitable dollar. It says it has worked with philanthropy experts to select groups that it believes are cost effective, transparent,

and in need of funding to ensure success.

Most notably, Causeway teamed with GiveWell, perhaps the pre-eminent name in charity evaluation. Started in 2007 by two former hedge-fund analysts, GiveWell relies on data and deep analysis in a search for top-performing organizations. Guided by the principles of effective altruism, it researches only groups whose work can improve the lives of the largest number of the global poor.

GiveWell also offers donors several funds through which it funnels gifts to a set of organizations, including its Top Charities Fund, which supports its top-rated charities that have the highest-priority funding needs. The four charities in Causeway's global health fund are also organizations that have been recommended by GiveWell.

Other charity evaluators partnering with Causeway are: Animal Charity Evaluators, the Center for High Impact Philanthropy at the University of Pennsylvania, and Giving Green.

Causeway's value proposition — that it can identify highly effective charities — hinges on the nascent, complicated, and expensive field of measuring and evaluating nonprofit performance. There's no consensus as to what metrics define impact, and few nonprofits have the will

or resources to rigorously evaluate their work.

GiveWell's extensive analysis means it rates only a handful of organizations each year. Charity Navigator introduced an impact score to its ratings in 2020, but so far, it has such data for only 1,500 of the more than 200,000 groups in its database.

Most impact measures developed to date focus on an organization's direct service — meals for people who are homeless, say, or surgeries for individuals who are blind. There's no widely used and accepted means to estimate the impact of less tangible work, such as in the arts or advocacy.

"Collectively, we're doing better and learning," says Katherina Rosqueta, founding executive director of the Center for High

Impact Philanthropy at the University of Pennsylvania.

"But there will always be limitations. The search for the Holy Grail never ends."

As Causeway expands, its system of evaluations will likely be imperfect, particularly in the early days, says George Mitchell, a City University of New York scholar who studies charity evaluation and ratings.

But the promise that nonprofits in the fund are high performing "may create a belief — an unwarranted belief — that they found the best charities through some kind of comprehensive process."

Nonprofits may also be worried to learn that Causeway has borrowed elements of donor-advised funds. Like DAF users, donors can direct Causeway to withhold their name and personal details from

nonprofits in their cause funds. Indeed, Horwitz said that nearly everyone in last year's test declined to share that information. Some complained about previously receiving hundreds of email gift solicitations or being asked for an additional donation immediately after contributing. The introduction of a new gatekeeper to donors may frustrate charities. Giving dropped 10.5% after inflation in 2022, marking only the fourth time that donations have fallen since at least 1956. In response, charities are working hard to forge tighter connections with their supporters. Yet conceivably, Causeway's three-clicks-to-give approach means some donors might give to a fund without even visiting the websites of its nonprofits.

John Warnock, who helped invent the PDF and co-founded Adobe Systems, dies at age 82

By LINDSAY WHITEHURST Associated Press

JOHN Warnock, who helped invent the PDF and co-founded Adobe Systems, has died. He was 82.

The Silicon Valley entrepreneur and computer scientist died Saturday

surrounded by family after a nearly two-year battle with pancreatic cancer, the company said.

"John's brilliance and innovations left an indelible mark on Adobe, the technology industry and the world," Adobe said in a statement.

Warnock worked for Xerox before he and colleague Charles Geschke created a company around a rejected idea in 1982. Nearly a decade later, Warnock outlined an early version of the Portable Document Format, or PDF, transforming the way documents are exchanged.

Originally from the Salt Lake City suburb of Holladay, Warnock described himself as an average student who later flourished in mathematics.

He earned an undergraduate in math and doctorate in electrical engineering, or computer science, from the University of Utah and maintained close ties with his home state after he retired as CEO of Adobe.

Warnock was the son of a prominent local attorney but was an average student until a teacher at Olympus High School took an interest in him, he told the University of Utah's alumni magazine, Continuum, in 2013.

"I had an amazing teacher in high school who, essentially, completely turned me around," Warnock said. "He was really good at getting you to love mathematics, and that's when I got into it."

He continued to be a self-described "mediocre" student as he earned his bachelor's degree in mathematics and philosophy, but he made a mark while working on his master's degree.

In 1964, he solved the Jacobson radical, an abstract algebra problem that had been a mystery since it was posed eight years before. The following

year he met his wife, Marva Mullins, and married her five weeks later.

After a summer spent working at a tire shop, he decided the low-paying field of academia wasn't for him and applied to work at IBM, starting his training in computer science. He earned a doctorate at the University of Utah, where he joined a group of cutting-edge researchers working on a Department of Defense-funded precursor to the internet in the 1960s. Even then, Warnock was working on rendering images on computers.

In the late 1970s, Warnock moved to Palo Alto, California, to work for Xerox on interactive computer graphics. There, he met Geschke and went to work developing InterPress, a printing and graphics protocol that they were convinced would be the wave of the future. When Xerox balked, they decided to create their own company.

They founded Adobe in 1982 and created PostScript, a program that helped make small-scale printing feasible for the first time. The company later created the PDF, which let people create electronic versions of documents that could be preserved and sent

it to other users, who could search and review them.

With that, Adobe took off, and PDF eventually replaced many paper copies in legal, business and personal communication.

Other iconic programs, such as Adobe Illustrator and Photoshop, followed before Warnock stepped down as CEO in 2000. He and Geschke remained as co-chairs of the company's board of directors until 2017, and Warnock remained a board member until his death.

"John has been widely acknowledged as one of the greatest inventors in our generation with significant impact on how we communicate in words, images and videos," Adobe chair and CEO Shantanu Narayen said in an email to company employees.

After his retirement, Warnock and his wife devoted more time to hobbies such as collecting rare books, many of which he's scanned and put online at rarebookroom.org. They also collected Native American art, including moccasins, shirts, and beadwork that has toured the country in exhibitions.

Warnock is survived by his wife and their three children.

Democrats want to ban sham lawsuits as GOP senator continues

fight against local news site

By HARM VENHUIZEN Associated Press

WISCONSIN Democrats on Tuesday proposed barring the use of expensive, sham lawsuits to silence criticism after a Republican state senator was accused of trying to bankrupt a local news outlet for reporting on his alleged use of a homophobic slur.

The Wausau Pilot & Review reported in 2021 that local businessman Cory Tomczyk, who became a state senator in January, called a 13-yearold boy a homophobic slur during a city meeting where the boy testified in support of a diversity and inclusion measure that had sparked divides in the northern Wisconsin community.

Tomczyk denied using the slur and sued the newspaper for defamation. In the course of that lawsuit, three people who were present at the meeting swore that they heard Tomczyk use the word. In a deposition, Tomczyk also admitted to having used the word on other occasions, The New York Times reported. A judge ultimately dismissed the case in April, saying Tomczyk had not proven that the paper defamed him.

The legal proceedings have cost the small, nonprofit news site close to $200,000 so far, its founder and editor Shereen Siewert told The Associated Press on Wednesday. When Tomczyk filed to appeal the case

in June, Siewert's worries grew. "He knows we're a small news organization. He knows we don't have deep pockets and that continuing to fight this lawsuit is very damaging to us financially and could shut us down," she said.

Tomczyk's office declined to comment on the bill or the lawsuit, and his attorney Matthew Fernholz did not immediately return a phone call on Wednesday.

The Wausau Pilot & Review's four-person newsroom has an annual budget of roughly $185,000, according to Siewert. Mounting legal expenses have already forced the news site to put off plans to hire an additional reporter. The burden has only begun to ease in the past week after the news site's story gained national attention and a GoFundMe page brought in roughly $100,000 in contributions.

The bill Democrats unveiled Tuesday would allow people to ask a judge to dismiss a lawsuit against them if they believe the suit is a baseless challenge over their exercise of free speech. If the judge finds that the case doesn't have a probability of succeeding, they can dismiss the lawsuit and order the person that filed it to pay the opposing party's attorney's fees.

"It takes a lot of stamina to stand up against this type of political coercion," bill sponsor Senate Minority Leader Melissa Agard said. "Even if the suit is not viable, which is the

case with Sen. Tomczyk's lawsuit, the cost and the stress associated with these frivolous, lengthy litigation processes are oftentimes enough to create chilling effects."

The kinds of meritless lawsuits targeted by the bill are commonly referred to as strategic lawsuits against public participation, or SLAPP. At least 31 states and the District of Columbia already have anti-SLAPP laws on the books, according to the Reporters Committee for Freedom of the Press.

"This is long overdue," Siewert said. "I'm incredibly grateful that this legislation is being proposed to protect journalists and small news organizations like ours in the future."

In the GOP-controlled state Legislature, however, the bill is unlikely to pass. At a Democratic news conference announcing the measure, Bill Lueders, president of the non-partisan Wisconsin Freedom of Information Council, called on Republicans to support it.

"The defense of transparency is not a partisan issue," he said. "Local news outlets are absolutely vital to the important business of having an informed electorate, and yet the challenges that news outlets face have never been greater."

ADOBE co-founder John Warnock smiles in the lobby at Adobe headquarters in San Jose, Calif., on May 9, 2001. Warnock, the inventor of the PDF and Adobe Systems co-founder died Saturday, Aug. 19, 2023, the software company said.

Photo:Paul Sakuma/AP

Wisconsin

Nvidia's rising star gets even brighter with another stellar quarter propelled by sales of AI chips

By MICHAEL LIEDTKE AND MATT O'BRIEN AP Technology Writers

COMPUTER chip maker Nvidia has rocketed into the constellation of Big Tech's brightest stars while riding the artificial intelligence craze that's fueling red-hot demand for its technology.

The latest evidence of Nvidia's ascendance emerged with Wednesday's release of the company's quarterly earnings report.

The results covering the May-July period exceeded Nvidia's projections for astronomical sales growth propelled by the company's specialized chips — key components that help power different forms of artificial intelligence, such as Open AI's popular ChatGPT and Google's Bard chatbots.

"This is a new computing platform, if you will, a new computing transition that is happening," Nvidia CEO Jensen Huang said Wednesday during a conference call with analysts.

Nvidia's revenue for its fiscal second quarter doubled from the same time last year to $13.51 billion, culminating in a profit of $6.2 billion, or $2.48 per share, more than nine times more than the company made a year ago. Both figures were well above the projections of analysts polled by FactSet Research.

And the momentum is still building. The Santa Clara, California, company predicted its revenue for its August-October quarter will total $16 billion, nearly tripling its sales from the same time last year. Analysts had been anticipating

$12.6 billion in revenue for that period encompassing Nvidia's fiscal third quarter, according to FactSet.

Nvidia's stock price surged 6% in extended trading after the numbers came out. The shares already have more than tripled so far this year, a run-up that has boosted Nvidia's market value to $1.2 trillion — a threshold that thrust the company into the tech industry's elite. If stock rises similarly during Thursday's regular trading session, it will mark yet another record high for Nvidia's shares and boost the company's market value by another $75 billion or so. Other stalwarts that are currently or have been recently valued at $1 trillion or above are Apple, Microsoft, Amazon and Google's corporate parent Alphabet.

Now all those tech giants as well as a long line of other firms are snapping up Nvidia chips as they wade deeper into AI — a movement that's enabling cars to drive by themselves, and automating the creation of stories, art and music.

Nvidia has carved out an early lead in the hardware and software needed in the AI-focused shift, partly because Huang began to nudge the company into what was then seen as a still half-baked technology more than a decade ago. While others were still debating the merits of AI, Huang already was looking at ways that Nvidia chipsets known as graphics processing units might be tweaked for AI-related applications to expand beyond their early inroads in video gaming.

NVIDIA CO-FOUNDER, President, and CEO Jensen Huang speaks at the Taiwan Semiconductor Manufacturing Company in Phoenix on Dec. 6, 2022. Computer chip maker Nvidia has turned the artificial intelligence craze into a springboard that has catapulted the company into the constellation of Big Tech’s brightest stars. The company reports earnings on Wednesday.

By 2018, Huang was convinced that AI would trigger a tectonic shift in technology similar to Apple's 2007 introduction of the iPhone igniting a mobile computing revolution. That

conclusion led Huang into what resulted in what he calls a "bet-the-company moment." At the time Huang doubled down on AI, Nvidia's market value stood at about $120 billion.

"I think it's safe to say it was worth it to bet the company" on AI, Huang, 60, said during a presentation earlier this month.

Huang's foresight gave Nvidia a head start in designing software to complement its chips tailored for AI applications, creating "a moat" that other major chipmakers such as Intel and AMD are having trouble getting around during a period of intense demand that is expected to continue into next year, said Bernstein analyst Stacy Rasgon. Nvidia is increasingly pitching a Lego-like combination of GPUs, memory chips and more conventional processing chips enclosed in a big package. In a demonstration earlier this month, Huang showed one such room-sized structure, joking about how it might look if delivered to a doorstep by Amazon.

"Everybody else is trying to catch them now that they see the opportunity is there." Rasgon said.

Huang's vision has prompted Wedbush Securities analyst Dan Ives to hail him as "the Godfather of AI," and established him as one of the world's wealthiest people with an estimated fortune of $42 billion.

While Ives still sees plenty of upside in Nvidia's future growth and stock price, other market observers believe investors are getting carried away.

THE NVIDIA office building is shown in Santa Clara, Calif., Wednesday, May 31, 2023. Computer chip maker Nvidia has turned the artificial intelligence craze into a springboard that has catapulted the company into the constellation of Big Tech’s brightest stars. The company reports earnings on Wednesday.

Photo:Jeff Chiu /AP

Photo:Ross D. Franklin/AP

Rail union wants new rules to improve conductor training in the wake of 2 trainee deaths

By JOSH FUNK AP Business Writer

THE nation's largest railroad union wants federal regulators to do more to ensure conductors are properly trained in the wake of two recent trainee deaths.

The Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers union that represents conductors wants the Federal Railroad Administration to establish clear standards for how long new employees are trained and who mentors them to teach them the craft after they finish their formal training.

The union said the recent deaths of two CSX trainees on different occasions in Maryland over the past two months highlight the need for better training. The FRA did put out a safety advisory earlier this month about conductor training after the latest death, but the union wants regulators to take firm action. Earlier this year, a third conductor — this time one with 18 years experience on Norfolk Southern — was killed

in an accident at a steel plant in Ohio.

FRA officials didn't immediately respond to the union's statement Wednesday, but the head of the agency sent a letter to all the CEOs of the major freight railroads earlier this week expressing similar concerns.

Administrator Amit Bose is urging the railroads to improve their training but the agency isn't requiring changes with formal rules.

"FRA believes that correcting the underlying deficiencies in railroads' training, qualification and operational testing programs is critical to reducing the risk associated with the conduct of certain tasks," Bose wrote.

In the most recent death, Travis Bradley died Aug. 6 after he was crushed between the train he was riding on the side of several parked locomotives. Earlier this summer, Derek Scott "D.S." Little died in late June after he fell off a railcar and was struck by a train. Both deaths happened in railyards.

Railroad safety has been a key focus this year ever since a Norfolk Southern

train derailed near the Ohio-Pennsylvania border on Feb. 3. Thousands of people had to evacuate their homes after authorities released hazardous chemicals and set fire to

them to keep five tank cars from exploding. Congress and regulators called for reforms after that derailment and railroads announced some plans to improve safety. But little

has changed in the industry and a bill requiring railroads to make changes has stalled in the Senate.

The SMART-TD union said the trainings issues are especially important now

THE WEATHER REPORT

because the major freight railroads have been hiring new conductors as quick as possible and rushing them out to work on the rails. And generally there is little training for the experienced conductors who serve as mentors.

"In a work environment as dangerous as our country's railroads have proven to be historically, it is unthinkable that there is not a program in place to train the trainers. It is in most scenarios still the luck of the draw," the union said.

CSX and Norfolk Southern both announced agreements with SMARTTD last month to enhance conductor training. CSX said it planned to extend its classroom training by a week to five weeks while Norfolk Southern announced a more comprehensive list of reforms.

A CSX spokesperson said the safety of the railroad's workers is a priority, and CSX responded to the recent deaths with intensive training about safety rules and the hazards of riding on trains as well as extending training for new hires.

Shown is today’s weather. Temperatures are today’s highs and tonight’s lows.

A CSX freight train passes through Homestead, Pa., Feb. 12, 2018. The nation’s largest railroad union wants federal regulators to do more to ensure conductors are properly trained in the wake of two recent trainee deaths, according to a statement issued Wednesday, Aug. 23, 2023. The union said the recent deaths of two CSX trainees on different occasions in Maryland over the past two months highlight the need for better training.

Photo:Gene J. Puskar/AP

Wall Street rallies as pressure from the bond market eases

By STAN CHOE AP Business Writer

WALL Street rallied to its best day since June on Wednesday after pressure that's built up on stocks from the bond market relaxed a bit.

The S&P 500 climbed 1.1% to trim its loss for what's been a dismal August so far. The Dow Jones Industrial Average rose 184 points, or 0.5%, and the Nasdaq composite jumped 1.6%.

Big Tech stocks and others that benefit from easier interest rates led the way. They got some relief as the 10-year Treasury yield eased back further from its highest level since 2007 after a report suggested the U.S. economy may be cooling.

A 2.2% gain for Apple's stock and 1.4% climb for Microsoft shares were two of the strongest forces pushing the S&P 500 upward.

Nvidia, another one of the market's most influential stocks, rallied 3.2% ahead of its highly anticipated profit report. Expectations were immense for the report, which came out after trading ended for the day, and it still managed to blow past forecasts.

Nvidia stunned Wall Street three months ago by predicting a boom in artificial-intelligence technology would mean it would make roughly $11 billion in revenue during the three months through July.

The announcement set off a rush across Wall Street. Stocks of AI-related companies soared, and investors tried to count how many times a CEO could mention "AI" in an earnings call. Nvidia's

stock more than tripled this year so far, and it will need to meet the much higher expectations around it to justify its big move.

Nvidia's report on Wednesday appeared to pass the bar. Its revenue for the latest quarter ended up more than doubling to $13.51 billion from yearearlier levels. And its forecast for revenue in the current quarter also blew past Wall Street's expectations. Its stock rose in afterhours trading.

Nvidia and a just a handful of other companies were behind the majority of the S&P 500's gains earlier this year. Many of those "Magnificent Seven" stocks also benefited from the AI frenzy.

They've been under more pressure recently, as yields crank higher in the bond

market. When bonds are paying more in interest, investors feel less need to pay high prices for stocks and other investments that can swing sharply in price. Treasury yields eased Wednesday, taking off some of that pressure. The 10-year Treasury yield fell to 4.18% from 4.33% late Tuesday.

A preliminary reading of U.S. services and manufacturing businesses eased to a six-month low, sending yields down across the bond market. The measure of output from S&P Global Market Intelligence still indicated growth, but less as inflation and higher interest rates bite into activity.

"A near-stalling of business activity in August raises doubts over the strength of US economic growth in the third quarter,"

said Chris Williamson, chief business economist at S&P Global Market Intelligence. For now, softer-thanexpected data on the economy may be good for financial markets. That's because a string of surprisingly strong reports recently has raised expectations for the Federal Reserve to keep interest rates higher for longer. The Fed has already hiked its main interest rate to the highest level since 2001 in hopes of grinding down high inflation. High rates work by slowing the entire economy and hurting prices for investments, and they've helped inflation to ease since its peak above 9% last summer. But a still-solid job market and spending by U.S. households threaten to make it difficult for inflation to come down the last

percentage point to the Fed's target of 2%.

That's why the main event of the week for markets could be a speech on Friday by Fed Chair Jerome Powell. He will be speaking at a Jackson Hole, Wyoming, event that's been the setting for major policy announcements by the Fed in the past.

The hope among traders has been that the Fed has already hiked rates for the final time this cycle and that it will begin cutting rates early next year. But such hopes have been diminishing with each stronger-than-expected report on the economy that's come in recently.

The two-year Treasury yield, which closely tracks expectations for the Fed, has also jumped recently, though it eased back

SPECIALIST JOHN PARISI, left, and trader Fred DeMarco work on the floor of the New York Stock Exchange, Wednesday, Aug. 23, 2023. Wall Street is drifting Wednesday ahead of a profit report that could show whether the frenzy this year around artificial-intelligence technology is deserved or overdone.

like the 10-year yield on Wednesday. It fell to 4.94% from 5.05%.

On Wall Street, Toll Brothers rose 3.9% after the homebuilder reported stronger profit for the latest quarter than expected. It had earlier been struggling with the entire housing industry as high mortgage rates ground down activity.

Advance Auto Parts climbed 3.1% after it named a new CEO and reported stronger revenue for the spring than analysts expected. Its profit, though, fell short of forecasts.

Foot Locker tumbled 28.3% after reporting weaker profit for the latest quarter than expected. The company also paused its dividend and cut its financial forecasts for the full year, describing a "stilltough consumer backdrop."

Shares of companies that make products sold in Foot Locker stores were also weak. Nike fell 2.7%.

All told, the S&P 500 gained 48.46 points to 4,436.01. The Dow rose 184.15 to 34,472.98, and the Nasdaq climbed 215.16 to 13,721.03.

In markets abroad, stock indexes were modestly higher in Europe and mixed across Asia.

Photos:Richard Drew/AP