A New York law firm has filed a class action suit against NextCard and its investment banks over the “laddering” of NextCard’s stock price in its 1999 IPO. Lovell & Stewart alleges that NextCard violated securities laws by issuing and selling stock without disclosing to investors that several of the underwriters of the NextCard IPO had solicited and received excessive and undisclosed commissions from certain investors. To receive the allocations at $20.00 per share, the lawsuit says NextCard’s underwriters’ brokerage customers agreed to purchase additional shares in the aftermarket at progressively higher prices to drive NextCard’s share price to as high as $40.75 during its first day of trading and then dump the shares. The complaint also alleges the defendant underwriters required their customers to return some of their profits in the form of secret commissions. The complaint also alleges that NextCard was able to price its secondary offering at an artificially high $36.9375 per share due to the continued effects of the alleged violations. One month ago, NextCard announced a decision to explore opportunities for the sale of the Company following a clamp down by federal regulators. NextCard’s stock is currently trading around 75 cents per share and has plunged to as low as 62 cents since its 3Q/01 earnings report. (CF Library 10/31/01)Details
American Express announced Friday it will return to the Three World Financial Center building in April. The decision to return followed a spat last week with New York’s mayor over security demands by AmEx. The security issues were resolved with NYC to provide more police protection. More than 3,000 employees will return as soon as repairs are made to the facade and the office cleaning has been completed. AmEx relocated its employees to other offices elsewhere in New York, Connecticut, and New Jersey following the Sept. 11th terrorist attacks.Details
A six-month test of a new universal transit smart card will begin in January in the San Francisco Bay Area. ‘TransLink’ will enable about 4,000 riders on six transit systems to pay with a contactless smart card. In 1999, BART hired Motorola to create and install the system, which it will also operate. ‘TransLink’ cost $61.4 million to build, and will cost $3.5 million a year to operate. ‘TransLink’ readers and ticket machines have been installed on select routes on AC Transit, BART, Caltrain, Golden Gate Transit, the San Francisco Municipal Railway and the Santa Clara Valley Transportation Authority for the test program.Details
Universal Air Travel Plan, Inc. announced that the emerging flag carrier of
Switzerland, Crossair, will
work to maintain UATP as the dominant corporate form of payment for air
tickets in Switzerland. As the basis to build and track corporate loyalty
agreements, Crossair has formed a partnership with AirPlus International.
AirPlus operates the largest portfolio of UATP accounts.
Dr. Michael Peine, Managing Director of AirPlus International, said, “The
partnership we have built with Crossair will allow its corporate customers to
receive detailed data and robust reporting via our various UATP enhanced
Stefan Gutknecht, Vice-President Sales & Marketing for Crossair, said, “We
feel UATP’s role in the Switzerland corporate marketplace is important to
preserve. We will continue to embrace UATP as a partner in establishing
ourselves as the flag carrier of Switzerland.”
Richard Crum, UATP President and Chairman, said, “Crossair has been a
member of the UATP global acceptance network for years. We are pleased with
their renewed commitment and increased recognition of UATP’s benefits to the
airlines and corporations which use the card as a preferred form of payment.”
Universal Air Travel Plan Inc., formerly known as Air Travel Card(R), is
the world’s first business travel payment system. Founded in 1936, UATP was
an innovator in the charge card industry, developing such standards as the
magnetic strip and lodged accounts. With annual global billings over USD 8
billion, UATP is owned and operated by each card-issuing airline and accepted
by virtually every airline in the world. UATP offers the most complete data
and lowest administrative cost of any charge product and is the industry’s own
solution to combat rising credit card costs. Multi-national corporations,
including 73 percent of the Top 100 Global, utilize UATP to better manage
travel expenses. Airlines currently issuing UATP accounts include Aer Lingus,
Air New Zealand, Alitalia, American Airlines (NYSE: AMR), Austrian Airlines,
British Airways (NYSE: BAB), Continental (NYSE: CAL), Delta Air Lines (NYSE:
DAL), Japan Airlines (Nasdaq: JAPNY), KLM Royal Dutch Airlines (NYSE: KLM),
Lufthansa German Airlines, QANTAS, Scandinavian Airlines System, United
Airlines (NYSE: UAL) and US Airways (NYSE: U). For more information, visit
Sony Corp this week announced plans to introduce a new credit card next year in Japan. Sony Finance aims to issue two million cards in three years with a targeted volume of 450 billion yen, according to ‘The RAM Report’. It hopes to sign up 20,000 participating online merchants by 2004. The company will begin issuing cards to Sony employees in early 2002 with plans to take the program to the general public during the second calendar quarter. Sony currently has a number of co-branding relationships with bank issued credit cards. The Nihon Keizai Shimbun reported that in addition to the normal credit functions, the new cards will likely adopt ‘Edy’, the electronic money standard that the company has been promoting. The new credit cards will be accepted at all locations currently accepting cards issued by Sumitomo Mitsui Card Co. For international acceptance Sony is expected to sign a deal with VISA in association with Sumitomo.Details
While the 2001 International Card Manufacturers Association Expo was cancelled in Athens, Greece, ICMA nevertheless issued the ‘Fifth Annual Elan Awards’. For the ‘Best Non-Secure Card Design’, the winner was ‘Nordstrom Coffee Bean Card’ by QualTeq. The ‘Best Secure Card Design’ was the ‘President’s Choice MasterCard’ by Giesecke & Devrient. The ‘Best Phone Card Design’ was submitted by Marimpex for the ‘Hacelia Attenuata’ card. The ‘Technical Achievement Award’ was entered by ORGA Kartensysteme GmbH for the ‘CD SIM Promotional Card’.Details
eConnect began delivering eCashPad USB terminals to participants in a 30-day tryout of the high-security devices designed to make Internet commerce safer for consumers.
The eCashPad USB units are the first commercially ready devices that support MSR, secure PIN and Smartcard features for home Internet financial transactions.
eConnect, which plans to distribute thousands of eCashPad USBs over the next few weeks for the trial, expects to generate revenues from sales of eCashPad USBs to consumers and from revenues from eCashPad USB usage at a growing list of sites using its Bank Eyes Only system.
The $59.95 eCashPad USB is a full-service credit card, ATM card and Smartcard hardware device that can be attached to a laptop or desktop computer with a USB port and enables Internet users to avoid giving their credit card data to web merchants. Instead, consumers’ credit card data is processed by eConnect’s Bank Eyes Only system.
When consumers swipe their credit card in the reader, the transaction is received by eConnect and the VeriSign gateway for credit card authorization.
Because the Bank Eyes Only transactions are considered as credit card-present payments by participating banks, they result in reduced charge-backs because they result in fewer disputed purchases. Such transactions also are fast and safe both for the consumer who originates a transaction and for the web merchant who receives the payment.
Sygenics.com provides web merchants with a quick and easy integration of the Bank Eyes Only system at the merchants’ web site.
eConnect has been in ongoing discussions with an ATM card network to begin a PIN pilot in early first quarter 2002. It also has engaged a member bank to sponsor merchants to participate in a pilot of online debit with ATM card and PIN payments using the eCashPad USB system.
eConnect expects to launch a Smartcard loyalty program with participating brick-and-mortar merchants who also operate e-commerce web sites. Under the program, consumers will receive loyalty points from web merchants to use their eCashPad USB at the merchants’ web site to effect a safe and efficient credit card-present Bank Eyes Only transaction.
The goal of the Smartcard loyalty program is to encourage Internet consumers to use their loyalty points at the merchants’ walk-in stores and to continue to shop at the merchants’ web sites using eCashPad USB-originated payments.Details
Gemplus S.A., the world’s number one
provider of solutions empowered by smart cards, has signed a Memorandum of
Understanding with K-Laboratory Co., Inc., the
leader in mobile Java development and mobile platform technologies in
Japan, to jointly study and develop a secure architecture for the provisioning
of applications in Java enabled handsets. So far e-commerce on the Wired
Internet has failed to ignite due to the lack of two things: security and
reliable revenue models. With the arrival of 2.5 and 3G services in Japan the
Wireless Internet infrastructure is now in place. In Japan, Java is the
language of choice for mobile services with millions of subscribers already
taking advantage of the creativity and flexibility of Java-based applications.
This phenomenon is set to recreate itself worldwide with 30 million Java
handsets already sold this year, rising to 400 million in 2003 and 1100
In order for mobile business to take off it needs to come with the right level
of security to create an environment of confidence between suppliers and
customers. In such an environment end-users and handset manufacturers can rest
assured that they do not download malicious applications onto the phone while
operators and content providers can identify and bill users for the services
they use and manage copyright issues.
Equifax Consumer Services, the leader in empowering consumers with credit information solutions and Intersections Inc., a premier provider of credit monitoring and fraud prevention services to consumers, announced a multi-year strategic partnership. The partnership will create a comprehensive suite of information services to meet the growing demand of consumers who wish to better manage their information privacy and credit health.
The partnership leverages the strong market positions of both companies while expanding both online and offline information services. In addition to direct marketing to consumers, the companies will broaden distribution channels for co-branded and private labeled services targeted to financial institutions, large employers and large consumer associations.
“Intersections is recognized for their excellent customer service process, consumer- friendly culture, strong product development skills and fulfillment platform which supports both online and offline consumer services,” stated Virgil Gardaya, general manager, Equifax Consumer Services, “They are a premier company and will add substantial new opportunities for our consumer services business.”
“Equifax was the pioneer in empowering consumers with online credit management services,” stated Michael Stanfield, Intersections’ CEO, “By forging a partnership with Equifax, Intersections will be able to leverage their world-class technology and data management capability. Our combined strengths will substantially increase the distribution networks for our products and services.”
Equifax enables and secures global commerce through its information management, consumer credit, marketing services, business information, authentication and e-commerce businesses. As the leader in information services, Equifax adds value wherever customers do business, including the financial services, retail, telecommunications/utilities, information technology and healthcare industries, brokerage, insurance and business lending industries and government. Equifax also enlightens, enables and empowers consumers to manage and protect their financial health with services offered at [www.equifax.com]. The company ranked in the top five in return on equity among Business Week’s Best Performers for 2001. Equifax employs 5,600 in 13 countries and has $1.1 billion in annual revenue.
About Intersections Inc.
Intersections is a leader in providing consumers with comprehensive credit and privacy solutions. Founded in 1996, the company has served over 2.8 million consumers and has active service relationships with seven of the top ten credit and charge card financial institutions in the US. The company’s services include: daily fraud alert notifications, complete quarterly credit report updates, tracking and analysis of personal credit scores, theft of identity insurance, and fraud victim assistance. Learn more about Intersections at Intersections.com.
While retailers are losing billions of dollars to fraudulent credit card activity, the figure pales in comparison to losses from theft. According to new report from the ‘National Retail Security Survey’, retailers are facing growing inventory shrinkage, which is a combination of employee theft, shoplifting, vendor fraud and administrative error. The net result is retailers lost $32.3 billion last year. Based on the 2000 survey results, retailers lost 1.75% of their total annual sales to these problems, up from 1.69% in 1999. Retail security managers attributed more than 46% of their losses to the thefts of disgruntled workers. By comparison, 31% of retail losses were the result of shoplifters. The remainder of annual retail losses are due to paperwork errors (17.6%) and theft by vendors (5.8%). Translated into U.S. dollars, retail employee theft costs retailers $14.9 billion annually, while shoplifting costs $10 billion.Details
Compaq Computer Corporation announced it has been awarded a five-year, multi- million dollar contract to provide technology, services, and support to American Express operations worldwide.
Under the terms of the agreement, Compaq Global Services professionals will architect, deliver, and manage a server-based computing infrastructure for American Express. The contract calls for Compaq to deploy 25,000 Thin Clients — supported by 400 Compaq ProLiant industry-standard servers — mostly in the U.S., as well as in Europe, Asia, and South America. The server-based and Thin Client computing solutions are anticipated to provide a cost-effective approach for American Express employees who perform task- oriented, transactional functions, such as customer service representatives.
Compaq Global Services will provide design, deployment, and ongoing management services for the infrastructure. These services include infrastructure and application test labs, monitoring and management of the server environments, and help desk and desk-side support for users of the Thin Client devices.
Compaq’s Thin Client devices process keyboard, mouse, and display enabling input/output offloading of application processing and data storage to centralized servers. The solution is designed to simplify administration and support for the user desktop, resulting in lower overall operational and ownership costs.
“Adopting Compaq’s server-based computing and Thin Client solution supports our overall strategy of using technology that can reduce infrastructure costs, re-engineer our computing environment, and bring operational savings to the bottom line,” said Glen Salow, executive vice president and chief information officer, American Express. “As we set our sights on becoming the world’s most respected service brand, we will seek and deploy cost-effective, flexible technology solutions like Compaq’s that allow us to better align our technology resources with the demands of our internal and external customers.”
“Compaq has all the elements for IT success to offer American Express — leading-edge enterprise products, integrated solutions, and one of the largest and most experienced global services organization in the world,” said Peter Blackmore, Compaq’s executive vice president of worldwide sales and services. Blackmore noted that the agreement is a continuation of a long and productive business relationship with American Express that dates back more than a decade.
Compaq accelerated the delivery of approximately 2,000 of its T1010 Microsoft Windows-based Thin Clients to American Express offices in New York, New Jersey, and Connecticut to support employees relocated following the September 11th damage to the company’s headquarters in lower Manhattan.
Computing on Demand
“This contract with American Express reflects Compaq’s overall strategy that is focused on providing integrated solutions that create real value for our customers,” Blackmore said. “Compaq’s Computing on Demand approach to managed services, which offers customers the ability to acquire IT at a fixed price per user per month, was an especially attractive financial model for American Express.”
Introduced in July, Compaq’s Computing on Demand initiative provides a set of new solutions that give customers a broad range of computing resources when they need them, where they need them, and at a predictable price and performance level — similar to buying IT as a utility. With Computing on Demand, enterprise customers have greater flexibility and control over the design, deployment and management, and cost of their IT infrastructure.
Founded in 1982, Compaq Computer Corporation (“Compaq”) is a leading global provider of enterprise technology and solutions. Compaq designs, develops, manufactures, and markets hardware, software, solutions, and services, including industry-leading enterprise storage and computing solutions, fault-tolerant business-critical solutions, communication products, and desktop and portable personal computers that are sold in more than 200 countries.
Information on Compaq and its products and services is available at [http://www.compaq.com]. Information on Compaq’s Thin Client and Server Computing solutions is available at .
Cash Systems, Inc., an established provider of cash access solutions and systems for the gaming industry, announced that it has been awarded contracts to provide its proprietary Credit Card Cash Advance System in four additional casinos which will bring its total casino client base to 43 gaming establishments in 19 states and the Bahamas.
The new Credit Card Cash Advance System installations are in the Catfish Bend Casino in Fort Madison, Iowa; the Camel Rock Casino in Santa Fe, N.M.; the Double Eagle Casino in Cripple Creek, Colo., and Hickock’s Casino in Deadwood, S.D. Based on historical numbers, these properties should increase annual revenue 5 to 10 percent.
Additionally, the company announced that its contract to provide cash access services at Lac Vieux Desert Casino in Watersmeet, Mich. has been renewed for a three-year period. Cash Systems provides complete cash access solutions to the Lac Vieux Desert Casino, including Credit Card Cash Advance, ATM’s, and full-service check cashing operations.
Craig Potts, chief executive officer of Cash Systems, said, “We are very pleased to announce this new business, which is further evidence of the solid progress we are making toward expanding Cash Systems’ share of the casino cash access industry. And we are gratified with the continuing development of our national presence as an established, reputable and high quality provider of cash access solutions to the gaming industry.”
About Cash Systems, Inc.
Minneapolis-based Cash Systems, Inc., founded in 1997, has grown from a regional ATM provider to one of four cash access companies serving the gaming industry. Cash Systems’ products include its proprietary cash advance systems, ATMs and check cashing solutions. These products are currently utilized by over 160 retail and gaming locations in 19 states and the Bahamas. Cash Systems gaming clients are comprised of both Native American and commercial entities. Such clients include Argosy Gaming Company, Inc., Autotote Enterprises, Inc., Crystal Palace Marriott and the Frontier Hotel & Casino. Please visit [http://www.cashsystemsinc.com] for more information.