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Twinkies Out of Business, Hostess Brands Shuts Down Following Strike

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Hostess Closing

Hostess Brands, maker of the popular products such as Twinkies and Ho Hos, announced Friday that the 82-year old company will begin winding down operations and begin liquidating its assets. The decision comes a week after the labor unions went on strike in protest to a new labor contract.

Most of Hostess’ 18,500 employees will be laid off as the company moves to shut down its 33 bakeries and 565 distribution centers.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Gregory F. Rayburn, Hostess’ chief executive, said in a statement.

In an interview with CNBC on Friday Rayburn said that the financial impact of the strike was too severe and that even if the workers had a change of heart now, it would be too late to save the company. Though the striking union only represented a third of Hostess’ employees, the cumulative effect on production made some retailers decide not to carry the product due to unstable supply.

The company had warned employees that if a deal could not be reached by Thursday at 5 p.m. the company would file a motion in shutter its operations and sell its brands.

“I don’t know if they thought that was a bluff,” Rayburn said on CNBC.

In a statement released by The Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, the union blamed the company’s woes on an unreasonable agreement with management. The statement was released before Friday’s announcement of the shutdown, but since Hostess had given the union a deadline, the statement was written knowing the shutdown decision was impeding.

“The crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement that resulted in two bankruptcies, mountains of debt, declining sales and lost market share,” said union President Frank Hurt. “The Wall Street investors who took over the company after the last bankruptcy attempted to resolve the mess by attacking the company’s most valuable asset – its workers.”

Hostess Brands filed for Chapter 11 back in January 2012. Since then, the company has tried to cut costs by making cuts in labor and reducing payments to pension holders. The strike was in response to a contract that union claimed would have cut wage and benefits by 27-32%, while increasing compensation to top executives.

It is unlikely that today’s announcement means the end of Twinkies and other iconic products. As part of the liquidation process, Hostess will auction off its factory and bakery assets as well as auction off its brand names.

Despite the ray of hope, Rayburn stated that the union was misleading workers when they suggested that a buyer for the operations was already waiting in the wings.

No More Twinkies as Hostess Closes Operation and lays off 18,000 workers

Hostess Brands, baker of iconic Twinkies cakes, said Friday it asked a court’s permission to shut down the entire company after a strike crippled its operations.

The move shuts down one of the nation’s oldest and largest producers of baked goods. Founded in 1930, it produces such well-known brands, aside from Twinkies, as Ding-Dongs, Ho Ho’s, Sno Balls and Donettes, not to mention Wonder bread, which the company says is the best-selling white bread in the United States.

Hostess threatening to shut down operations

Hostess is threatening to liquidate operations if striking workers don’t come back to work by Thursday.

Hostess Brands closing for good

Hostess Brands — the maker of such iconic baked goods as Twinkies, Drake’s Devil Dogs and Wonder Bread — announced Friday that it is asking a federal bankruptcy court for permission to close its operations, blaming a strike by bakers protesting a new contract imposed on them.

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Treasury Chief Says Crypto Is A “National Security Risk”

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Secretary of the Treasury Steven Mnuchin | 7/25/17 (Official White House Photo by Ricky Harris)

A new jab was thrown against Bitcoin and cryptocurrencies from the US government after statements from the U.S. Treasury Secretary branded the industry as a “national security threat.”

Facebook’s announcement of Libra has brought crypto and blockchain technology in the center stage, as governments around the world have heightened their scrutiny on the alternative financial system that the industry is offering.

Government executives and high ranking officials have raised concerns on the volatility of the technology, and how it is being used by malicious actors to facilitate illegal transactions such as money laundering and illegal drugs.

Now, US Treasury Secretary Steven Mnuchin chimed in the conversation and echoed earlier apprehensions versus Bitcoin and cryptocurrencies. The Secretary warns that Bitcoin, as well as, Facebook’s plans for Libra, pose a “national security issue” for the United States.

“This is indeed a national security issue,” Mnuchin told reporters at a press conference yesterday. “Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking,” adding that Facebook’s Libra “could be misused by money launderers and terrorist financiers.”

Mnuchin echoed other politicians stance on Facebook’s Libra venture and said that he was “not comfortable” by the idea of it.

Trump vs. Crypto

In a series of tweets on last week, the POTUS said that he is not a “fan” of cryptocurrencies, asserted that America has only one currency, criticized bitcoin, as well as told Facebook that they need a banking charter if they want to launch their newly announced crypto-based money called Libra.

Trump said cryptocurrencies are not money, and “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”

“If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations,” said the president.

Related: Trump Vs. Crypto: Dollar Is The Only Currency Of The USA

According to the President, the dollar is the only currency in America, and Libra, among other cryptocurrencies, are not “real money.”

“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!” Trump said in a tweet.

Trump’s anti-crypto stand was agreed upon by Mnuchin saying that “the president does have concerns as it relates to bitcoin and cryptocurrencies—those are legitimate concerns that we have been working on for a long period of time.”

Democrats vs. Crypto

Joining Trump’s army against cryptocurrencies and Facebook’s Libra plans are Democrats from the Senate who recently circulated a draft proposal that bans big tech companies from issuing digital money.

The bill, which was bluntly named as “Keep Big Tech Out Of Finance Act,” circulates among Democrats majority that leads the U.S. House Financial Services Committee, proves that the US government is not joking about its position against Libra and other similar ventures in the future.

Read More: Democrats Move To Ban Big Techs From Issuing Digital Money

According to the proposed bill, no tech company should be allowed to issue any form of financial services. “A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as a medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System,” reads a copy of the bill obtained by Z6Mag.

Furthermore, while the bill does not specify any company, it clearly refers to Facebook, and it’s planned blockchain-based currency, Libra. The “large platform utility” is defined as a technology company with “[an] annual global revenue of $25,000,000,000 or more” and one that is “predominately engaged in the business of offering to the public an online marketplace, an exchange, or a platform for connecting third parties.” This definition seems to be crafted to include Facebook rather than exclude other companies.

It is also worth noting that the proposed legislation also prohibits “large platform utilities” from affiliation with “persons who are a financial institution.” This further includes Facebook’s proactive workaround against possible future laws that may prohibit them from owning Libra.

Nonetheless, the bill is still in its earliest phase yet, and many could happen to move forward. For it to become a law, it still has to withstand the possible opposition by Republicans in both the House and the Senate.

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Senator To Facebook’s Libra: ‘Can People Trust You?’

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Photo: BTC Keychain | Flickr | CC BY 2.0

When it comes to Facebook’s Libra, the US government has made one thing clear: they don’t trust the tech giant and its plan to release an alternative financial system based on the highly debated blockchain technology.

In a Senate hearing today, a Facebook executive was grilled by lawmakers in the Senate Banking Committee over the plan to issue its digital currency and its possible effect on the global banking and financial ecosystem.

Facebook announced a month ago that it would roll out a new form of digital money, called Libra, which the tech superpower claims to be a stable coin. Unlike its predecessor, Bitcoin, the Silicon Valley giant claims that Libra is a cryptocurrency backed by real-world money and government certificates, and is also supported by a group of corporations such as Mastercard, Paypal, and VISA.

Libra is set to be available for circulation early next year, but a few weeks following Facebook’s announcement, staunch government opposition has proved difficult for Libra to push through with its most ambitious plan.

“Facebook has said ‘just trust us’” Senator Sherrod Brown, Democrat of Ohio, said at the hearing. “And every time Americans trust you, they seem to get burned.”

Many governments around the world have echoed concerns on how Facebook will handle such an ambitious feat. Many claims that because of the company’s reputation in data security, it is hard to trust Facebook in handling people’s money.

“Trust is primordial”

“Do you really think people should trust Facebook with their hard-earned money?” Senator Brown asked Facebook’s exec, David Marcus.

As a response, Marcus said that the company would do its best to protect people’s money, as well as, prevent fraud and other illegal activities that malicious actors may carry out using Facebook’s Libra.

One of the significant critiques against Facebook’s digital money comes from the fact that cryptocurrencies are not well regulated and criminal element can leverage the technology and use Libra for money laundering and other forms of illegal payments.

“We’ve made mistakes in the past,” Mr. Marcus said. “We have been working, and are working hard to get better.”

“Trust is primordial,” he added.

Keep Big Tech Out Of Finance Act

The Senate hearing comes a day after a copy of a draft proposal in the Senate penned by Democrat senators surfaced that practically bans major tech companies from issuing digital currencies.

Read: [Breaking] Democrats Move To Ban Big Techs From Issuing Digital Money

A new draft proposal for the bill, bluntly named as “Keep Big Tech Out Of Finance Act,” that circulates among Democrats majority that leads the U.S. House Financial Services Committee, proves that the US government is serious about its position against Libra and other similar ventures in the future.

According to the proposed bill, no tech company should be allowed to issue any form of financial services. “A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as a medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System,” reads a copy of the bill obtained by Z6Mag.

Global fiscal and legislative resistance vs. Libra

Furthermore, while the bill does not specify any company, it clearly refers to Facebook, and it’s planned blockchain-based currency, Libra. The “large platform utility” is defined as a technology company with “[an] annual global revenue of $25,000,000,000 or more” and one that is “predominately engaged in the business of offering to the public an online marketplace, an exchange, or a platform for connecting third parties.” This definition seems to be crafted to include Facebook rather than exclude other companies.

It is also worth noting that the proposed legislation also prohibits “large platform utilities” from affiliation with “persons who are a financial institution.” This further includes Facebook’s proactive workaround against possible future laws that may prohibit them from owning Libra.

European officials have also expressed concern regarding Libra, citing that the system, if widely adopted, could shake the global economy and rival national banks. French Finance Minister Bruno Le Maire sent a letter to officials from the G7 and International Monetary Fund calling for a group to examine Libra’s impact on the global financial system. Le Maire said that Libra must not become a “sovereign currency,” while a German politician noted Facebook’s potential to become a “shadow bank” to the global financial system.

Aside from European officials, Japanese lawmakers are also investigating the possible impact of Facebook’s Libra in global banking and financial systems ahead of the G-7 Meeting of the country’s finance ministry to be held in France this week.

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Low Sign Up Prompts Desjardins To Offer Identity Theft Protection To All Members After Data Breach

Only 13% of the affected members signed up for their earlier offer.

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Photo: Desjardins Website

A month following a data breach that has affected more than 2.9 million members of Montreal-based financial and credit union, Desjardins, the company said that they are extending the coverage of their credit and identity theft protection to all members. This time, the coverage is for life.

In a press release published July 15th, the company said that all Desjardins Caisse members are automatically qualified to avail a lifetime worth of protection against identity theft and are not only available to personal members, but also business members, who are currently not served by any industry solutions.

“Today, we’re sending a message to all of our members. Don’t worry–we’ve got you covered. If your identity has been stolen, give us a call. Desjardins is here for you. And we’re going to continue to support you like we always have. That’s what we’re here to tell you,” said Guy Cormier, President, and CEO of Desjardins Group. “Our teams have been working non-stop to put this coverage together for you. All Caisse members are automatically covered as of this morning. You don’t need to sign up, and you’ll only ever have to deal with Desjardins.”

Last month, the credit union from Canada experienced a data breach when one rogue employee advertently shared financial information of their members to a third party. Around 2.7 million personal members and 173,000 business members were affected by the data breach, according to the investigation conducted by the Laval police. The cause of the data compromise: “an ill-intentioned employee who acted illegally and betrayed the trust of their employer.”

The organization clarifies that the company was not in any form targeted by a cyberattack, and they have not seen a spike in fraud cases involving their members’ accounts in recent months. All of the data breaches were attributed to the recently fired employee who shared financial information of members to individuals outside the organization maliciously. Furthermore, they said that AccèsD passwords (for both personal and business accounts), security questions and PINs were not part of the compromised data.

As part of their efforts to help affected accounts secure their financial data and to mitigate the possible effects of the data breach, Desjardins also offered those who are concerned with a 5-year credit monitoring plan, paid for by the organization. The service includes daily access to your credit report, alerts of critical changes, and identity theft insurance.

They advised the affected members that the letter they received includes a personal activation code which they can use to activate their credit monitoring plan with Equifax before October 31, 2019.

However, it seems like registering to the protection plan with Equifax proved terribly difficult. As of Monday, only 13% of the affected account holders have signed up to the monitoring plan set up by Desjardins.

Reports reveal that this is because of the difficulty of the registration process with Equifax. The Equifax website has frequently crashed due to the demand, and some customers reaching the company by phone have waited for hours on hold. Customers have also reported having trouble getting service in French.

As an additional measure, Cornier said that instead of having their customers sign up, they are now offering them the protection by default because they don’t want the majority of their customers to be unprotected.

“People with money invested at Desjardins should be able to sleep easily,” he said.

The identity theft protection plan includes protection of assets and transactions, identity theft assistance and restoration, as well as monetary compensation in the event that one protected member becomes a victim of identity theft.

“Starting today, all Desjardins Caisse members have a new type of coverage that will reimburse them up to $50,000 for expenses related to identity theft. This could cover salary loss, document notarization, legal or accounting fees, and other types of related expenses,” the company said.

“Members don’t have to do a thing; they’re already covered. If they think their identity has been stolen, all they have to do is contact Desjardins.”

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