BNP Paribas braces for $9 billion fine: reports

BNP Paribas CEO Jean-Laurent Bonnafe.

LONDON (CNNMoney)

The punishment for helping clients dodge sanctions on Iran, Sudan and Cuba will also include a temporary ban on BNP Paribas (BNPQF) clearing payments in dollars, starting in January, the Financial Times reported Monday.

"I want to say it clearly here: we will receive a heavy penalty," BNP Chief Executive Officer Jean-Laurent Bonnafe was quoted as saying by Reuters in an internal email to staff.

BNP Paribas declined to comment.

U.S. authorities are expected to reveal details of the settlement later Monday, concluding a long-running criminal investigation.

The settlement between the bank and prosecutors had been expected for months. Shares in the bank edged about 0.5% higher in Paris, having fallen more than 12% so far this year in anticipation.

BNP Paribas had previously set aside $1.1 billion to cover the costs of any penalties arising from the U.S. investigation, but warned in late April that the fines could far exceed that amount.

The Wall Street Journal said the bank would have to slash its dividend and raise billions of euros by issuing bonds.

The fine dwarfs HSBC (HSBC)'s $1.9 billion penalty in 2012 for similar offenses, and the $2.6 billion Credit Suisse (CS) paid in May to settle tax evasion claims.

The settlement comes at a sensitive time for European banks, which are under pressure to increase lending to get the economy moving, while shoring up their finances ahead of region-wide stress tests due later this year.

Earlier this month, Jean Claude Trichet, former president of the European Central Bank, told CNN that a penalty in the range of $10 billion could carry risks for the global banking system. He said this kind of fine was neither fair, just, nor proportionate.

Standard and Poor's has warned it could cut the bank's long term credit rating once it reviewed the size of the fine and the nature of any additional penalties.

First Published: June 30, 2014: 5:58 AM ET

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Stocks: 6 things to know before the open

Click chart for in-depth premarket data.

LONDON (CNNMoney)

Here are the six things you need to know before the opening bell rings in New York:

1. Record fine for BNP Paribas?: The U.S. Department of Justice is expected to announce a multi-billion dollar settlement with French banking giant BNP Paribas (BNPQY) on Monday. The bank has been subject to a long running criminal investigation over accusations that it breached U.S. sanctions on Iran, Sudan and other countries. Shares in BNP were edging up in Paris by about 0.3%.

Related: Fear & Greed Index

2. GM details compensation: Kenneth Feinberg, a consultant who worked on payouts after the 9/11 terrorist attacks and the BP oil spill, will announce a victim compensation plan for General Motors (GM) at 10 a.m. ET. At least 13 people have died and many more were injured as a result of a defect in GM cars. GM shares were little changed premarket.

3. Will Facebook fury hit stock?: Facebook (FB, Tech30) is in hot water after people learned the company conducted a 'mood' experiment on users without their knowledge or explicit consent. The study found that users who were shown more negative content in their News Feeds were slightly more likely to produce negative posts. Facebook's terms of service give the company permission to conduct this kind of research, but many users have reacted with anger. Facebook shares were stable ahead of the bell.

Related: The 2014 half-time report

4. Premarket moves: U.S. stock futures were calm ahead of the trading day. The main stock making waves was Yahoo. (YHOO, Tech30) Shares in the tech giant were rising by about 1.5%. The company owns a large stake in the highly successful Chinese e-retailer Alibaba, which is preparing to go public.

5. Market recap: U.S. stocks ended last week on a positive note. However, the S&P 500 and Dow Jones Industrial Average ended the week down overall.

Tech stocks had a strong week, with GoPro (GPRO)'s IPO creating buzz in the markets.

6. International markets mostly positive: European markets were generally moving higher in early trading, though the gains were small. Asian markets were mixed. The main loser of the day was Australia's ASX All Ordinaries index, which dropped by 0.9%.

It's also worth keeping an eye on Argentina's markets. The country faces a Monday deadline to pay two groups of bondholders. The way things unfold from here will determine Argentina's ability to move past its 2001 default and regain access to foreign funds.

First Published: June 30, 2014: 5:08 AM ET

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Why you don't need to buy extra car rental insurance

NEW YORK (CNNMoney)

Often times, people end up buying supplemental insurance protection that they really don't need, said Odysseas Papadimitriou, CEO of credit card comparison site, CardHub.com. That can add anywhere from $15 to $30 a day to the cost of a rental.

Related: Best travel site rewards programs

"The majority of consumers are covered by their own auto insurance, but they may not know it," he said. "They may be spending extra money when they don't have to."

And those who aren't covered by their own insurance, are likely covered by their credit card, he said. All four major credit card issuers, Visa (V), American Express (AXP), MasterCard (MA) and Discover (DFS), provide some form of rental car insurance coverage. Although, MasterCard issues a few cards that don't offer coverage.

Related: For sale: Dream beach homes

CardHub rated the card issuers based on the extent and length of the coverage they provide, how clearly they state what's covered and how easy it is to get claims paid. American Express (AXP) received the highest rating of 90% for its car rental insurance; Discover (DFS) was second at 88%; MasterCard (MA) third at 79%; and Visa (V) ranked last at 74%.

To make sure you get covered, you must charge your entire car rental on your credit card and decline the supplemental collision damage coverage offered by the rental company. If you sign up for that insurance, you won't be covered by the credit card company.

Coverage from your credit card comes with restrictions, though, said Papadimitriou. Several types of vehicles aren't covered, including trucks with open beds and off-road vehicles, as well as exotic or expensive cars like Ferraris or Jaguars. And American Express doesn't cover certain popular SUVs, such as Chevy Suburbans, Ford Expeditions and Range Rovers.

Related: The riskiest spots for natural disasters in the U.S.

Visa and MasterCard may not cover damages that occur on dirt or gravel roads and other cards don't cover wheels and rims. Some card issuers cap rental periods at 15 days, after which the insurance lapses. None of the card issuers will insure a rental car for more than 30 days straight.

Rental cars in some countries are not eligible for credit card insurance. The ones most often named include Ireland, Israel, Italy, Jamaica and Australia.

One other important note: Unless your personal auto insurance also covers business use, your personal policy won't cover damage caused when you're renting a car for a business trip.

Drivers who aren't sure about their coverage should call their credit card company before they leave for their trip.

First Published: June 30, 2014: 6:04 AM ET

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When will Alibaba go public? Ask a fortune teller

Jack Ma is taking Alibaba public in what could be the biggest IPO in U.S. history.

HONG KONG (CNNMoney)

Just one big question remains: What date will co-founder Jack Ma choose for Alibaba's market debut?

This is no small matter -- especially in China, where traditional beliefs, from numerology to cosmology, inform all kinds of major decisions.

Getting married? Better choose a lucky date. Looking for a new job? Best to consult a fortune teller. Renting an apartment? Avoid the fourth floor at all costs.

The business world is no different. Companies in China often hire feng shui masters -- trained in Chinese beliefs about how to organize space -- to determine office layouts or brochure designs.

By this way of thinking, picking the wrong debut date could be the difference between a GoPro-style first day bump for Alibaba shares -- or the kind of embarrassing price slide suffered by King (KING), maker of Candy Crush.

"If [Alibaba] knows that there are certain dates on the calendar that are going to be lucky dates, they would be foolish not to take advantage of that," said Joseph Bosco, associate professor of anthropology at the Chinese University of Hong Kong. "Chinese investors are going to be thinking of these kinds of issues."

Related: Meet four kings of Alibaba's online retail empire

To get a better sense of Alibaba's lucky dates, CNNMoney consulted a handful of Hong Kong fortune tellers, bringing along a photo of Jack Ma for a face reading. The entrepreneur's hands are visible, at just the right angle for an accurate palm reading.

Flipping through a fat fortune almanac by the Temple Street night market, Mary Li jabbed her finger at Aug. 14 and 15. Those days are "big lucky dates this year," she said.

Surprisingly, Aug. 8 doesn't look great, said Li, who charged 200 Hong Kong dollars ($26) for her predictions. (Eight is typically considered a very auspicious number -- in Chinese, eight is a homophone for prosperity. The number four, meanwhile, sounds like the Chinese word for death.)

Fortune almanacs were used for centuries by farmers to predict the weather. Now, they're often consulted over dates for buying a home -- or even getting a divorce.

Another fortune teller, who gave her name as Ally, said Ma ought to pick October, based on the "bazi" belief that a person's destiny can be determined by when they were born. Still, without Ma's exact birth hour, she was unable to be more specific.

Related: Five things to know about Alibaba

Most of the fortune tellers didn't recognize Ma, and many that did refused to speak on the record. One was too nervous to be interviewed without talking to Ma himself for fear of making an incorrect prediction.

Some Chinese believe it's bad luck to issue a wrong forecast and for amateurs to dabble in the dark arts. (In fact, this reporter's grandfather warned against writing this article as it could unleash a bout of misfortune.)

Dates aside, fortune teller Li said it's likely that Ma will do well even if he doesn't pick the most ideal moment for Alibaba's IPO. After all, just look at the guy.

Ma's face has all the most prosperous features, according to Chinese face reading beliefs.

His nostrils aren't very prominent, which indicates good financial prospects. Ears placed higher on his head point to a strong character, his cheeks show that he's someone who will easily find fame, and reddish palms reveal he has a lot of power. Plus, his wide forehead and structured chin indicate that he "will earn tons of money his whole life," Li said.

Asked if it would be a good investment to buy Alibaba shares, she said, "Absolutely, you should make sure to befriend him and buy his stock!"

"Even better," Li said. "He's got big money -- if he's not married, you should marry him right away!"

First Published: June 29, 2014: 9:45 PM ET

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Obama's pick to fix veterans affairs tried to fix Procter & Gamble, too

Bob McDonald, a former CEO of Procter & Gamble, is President Obama's nominee for Veterans Affairs secretary.

NEW YORK (CNNMoney)

Bob McDonald has been in the hot seat before. He took the helm of global consumer products giant Procter & Gamble (PG) in 2009 amid the throes of the Great Recession. His task was to restructure and streamline the company, no easy task for a company with recognizable brands as diverse as Bounty paper towels, Duracell batteries, Pampers diapers and Tide detergent.

Although he was ousted from the top job four years later, his legacy at the company includes growing sales and profits in rough economic waters.

His critics argued the company wasn't moving fast enough to improve efficiency. Chief among them was hedge fund investor Bill Ackman, who charged that McDonald served on the boards of too many other organizations to focus properly on P&G's needs; the company said Ackman's claims were overstated.

McDonald will be announced on Monday as Obama's nominee to lead the troubled Veterans Affairs department, a White House official told CNN's Jim Acosta. Secretary Eric Shinseki stepped down in late May amid allegations of shortcomings in medical care for veterans. To land the job, McDonald must be confirmed by the Senate.

Related: Obama taps CEO to lead VA

McDonald began his rise to the corner office in 1980, when he joined P&G as an entry-level employee in 1980 after five years in the Army. In his final year as CEO, he was paid nearly $16 million, according to documents filed with the SEC .

By the time he took over in 2009, the company was in need of cost-cutting. McDonald responded with a plan that would save about $10 billion over four years, including a significant cut to the marketing budget and a 10% workforce reduction.

That wasn't enough for Ackman, who bought nearly $2 billion in P&G stock. The board eventually let McDonald go. He was replaced by A.G. Lafley, who was also his predecessor. Ackman told CNNMoney at the time that Lafley's only mistake "was who he picked to succeed him, and now he's going to fix that."

The company won several awards under McDonald's tenure: it was twice named best company for leaders by Chief Executive Magazine, and ranked first among over 2,000 companies in a leadership study by the management consultants at Hay Group.

McDonald currently serves on the board of the Xerox Corporation (a post he held while CEO of P&G) as well as U.S. Steel and several advisory groups.

He has donated to the political campaigns of several prominent Republicans, including 2012 presidential nominee Mitt Romney and House Speaker John Boehner.

McDonald was first named to the Advanced Manufacturing Partnership Steering Committee by President George W. Bush, an appointment that was renewed by Obama.

--CNNMoney's Zain Asher and CNN's Erin McPike contributed to this report

First Published: June 29, 2014: 7:17 PM ET

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Internet outraged by Facebook's 'creepy' mood experiment

HONG KONG (CNNMoney)

Internet users have reacted angrily to news that Facebook researchers manipulated the content some users were shown in an attempt to gauge their emotional response.

For one week in early 2012, Facebook (FB, Tech30) changed the content mix in the News Feeds of almost 690,000 users. Some people were shown a higher number of positive posts, while others were shown more negative posts.

The results of the experiment, conducted by researchers from Cornell, the University of California, San Francisco and Facebook, were published this month in the prestigious academic journal Proceedings of the National Academy of Science.

The study found that users that were shown more negative content were slightly more likely to produce negative posts. Users in the positive group responded with more upbeat posts.

So it worked! Facebook was able to successfully change the emotional state of its users. While the mood changes were small, the researchers argued that the findings have major implications given the size and scale of the social network.

Facebook's term of service gives the company permission to conduct this kind of research, but many users have reacted with anger at what they say is a dangerous social experiment. There is no indication that the 690,000 subjects were asked if they would like to take part in the study.

"I wonder if Facebook KILLED anyone with their emotion manipulation stunt," privacy activist Lauren Weinstein said on Twitter. "At their scale and with depressed people out there, it's possible."

Facebook uses an algorithm to determine which of roughly 1,500 available posts will show up in a user's News Feed. The company frequently changes this program to modify the mix of news, personal stories and advertisements seen by users.

Related: Facebook's new face recognition knows you from the side

The Facebook researcher who designed the experiment, Adam D. I. Kramer, said in a post Sunday that the research was part of an effort to improve the service -- not upset users.

"I can understand why some people have concerns about it, and my coauthors and I are very sorry for the way the paper described the research and any anxiety it caused," Kramer wrote. "In hindsight, the research benefits of the paper may not have justified all of this anxiety."

A Facebook spokesman said the company frequently does research to "improve our services and to make the content people see on Facebook as relevant and engaging as possible."

"We carefully consider what research we do and have a strong internal review process," the spokesman said in a statement. "There is no unnecessary collection of people's data in connection with these research initiatives and all data is stored securely."

Given the company's terms of service, it does not appear that Facebook faces any legal implications. But the guinea pig nature of the experiment -- and the decision to execute it without the explicit consent of participants, raises ethical questions.

Susan Fiske, the Princeton professor who edited the research, said that while the research was "inventive and useful," the outcry suggests that maybe it shouldn't have been carried out.

"I was concerned," she told The Atlantic, "until I queried the authors and they said their local institutional review board had approved it -- and apparently on the grounds that Facebook apparently manipulates people's News Feeds all the time... I understand why people have concerns. I think their beef is with Facebook, really, not the research."

First Published: June 30, 2014: 1:45 AM ET

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Aereo suspends TV service...but not 'shutting down'

NEW YORK (CNNMoney)

The court ruling found that Aereo violates copyright law by picking up the signals of local television stations and retransmitting them via the Internet to paying subscribers.

"As a result of that decision, our case has been returned to the lower Court," Aereo founder Chet Kanojia said in an email message to subscribers on Saturday morning.

Related: The future of media

"We have decided to pause our operations temporarily as we consult with the court and map out our next steps."

The "pause" will take place at 11:30 a.m. Eastern on Saturday.

Kanojia said all subscribers (the company has never specified how many it has) will be refunded "their last paid month."

Kanojia ended his email by saying "our journey is far from done." And in a subsequent email message to reporters, an Aereo representative said "We want to emphasize that this is a pause, and that the company is not shutting down."

However, conventional wisdom following Wednesday's ruling held that Aereo would either have to close up shop or radically change its business model.

Related: 6 cool innovations we're still waiting for

"For broadcasters, this is a huge relief, and lifts a cloud of uncertainty," Needham & Co. analyst Laura Martin wrote in an investors' note on Wednesday. "Although there was a low probability the Supreme Court would decide against them, the cost would have been billions of dollars of lost revenue through lower retransmission fees."

In the wake of the court ruling, "the only option that remains available to Aereo would be to change its model and pay the broadcasters to distribute the content," just like cable and satellite distributors do, Nomura analyst Anthony DiClemente wrote in a research note. He said Aereo could essentially offer "a slimmed-down content package delivered over the Internet."

First Published: June 28, 2014: 10:27 AM ET

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American Apparel adopts plan to prevent a takeover

NEW YORK (CNNMoney)

On Saturday, the company announced that it has adopted a one-year shareholders rights plan in an effort to prevent Charney, or any other person or group, from seizing a controlling interest in the company.

The company's "poison pill" provision kicks in once anyone purchases 15% or more of the company's outstanding stock. At that point, shareholders will be granted the right to purchase shares at $2.75 each in an effort to dilute any potential acquirer's interest.

Related: American Apparel's ousted CEO fights back!

American Apparel (APP) said the plan is in response to documents Charney filed with the Securities and Exchange Commission that expressed his "intent to acquire control or influence over the Company."

On Friday, Charney submitted a regulatory filing with the SEC announcing that he's partnering with investment firm Standard General in an effort to buy large amounts of American Apparel stock.

Charney currently owns 27.2% of the company's stock, according to the filing.

Charney was ousted as chairman earlier this month. An American Apparel director told CNNMoney the decision came after the board learned of "disturbing" information that suggested "misconduct" by Charney.

Allegations of misconduct are not new for Charney, who has faced several lawsuits claiming everything from sexual harassment to assault and battery.

Related: 6 endangered brands

Charney's lawyer Patricia Glaser sent a letter to the company's board of directors last week saying the company acted in "a manner that was not merely unconscionable but illegal."

Charney founded the company in 1998 and took the company public in 2005 at $8 per share. The shares eventually rose to nearly $17. But in recent years, American Apparel has been fighting to stave off bankruptcy.

American Apparel's stock closed Friday at 97 cents a share.

First Published: June 28, 2014: 11:42 AM ET

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GM's 'culture' blamed for current crisis

NEW YORK (CNNMoney)

In an exclusive interview that aired Saturday on CNN's "Smerconish," former GM manager Bill McAleer told host Michael Smerconish that employees who work at GM were "faced with a culture where you get fired if you do talk about quality and safety issues, and you get fired if you don't talk about them."

GM (GM) is dealing with a backlash for delaying the recall of 2.6 million vehicles for an ignition switch defect that's been tied to at least 13 deaths. Some GM employees knew the part was causing trouble more than a decade before the recall was issued in February.

McAleer, who started on the assembly line in 1968, says he was in charge of the Global Delivery Survey from 1988 to 1998 that GM used to help assess the quality of its cars before they were delivered to dealers.

Related: Two died in 2006 Cobalt crash. But GM counts only one

He says he found a "wide variety" of what he called "catastrophic defects" beginning in 1995, when GM added a routine obstacle course drive to its quality checklist. Problems ranged from gasoline leaks to steering linkage issues that pointed to overall quality defects.

McAleer said that while the company seemed responsive to fixing problems in the mid '90's, that changed.

"In 1997 something happened internally in GM where no problem could be admitted. Whether it was safety or any kind of problem. We couldn't have a problem," he said.

"That's what happened with the ignition switch," he added. "People knew there was a problem, but problems were not acceptable. They just ignored it."

McAleer eventually was laid off from GM in 2004. He tried to sue the company under a whistleblower law but said he was unsuccessful.

Related: GM's recall nightmare

McAleer said he sent a letter to the GM board of directors to tell them about the overall quality problems and the lack of action by management, but he thinks that the letter might have been intentionally misdirected once it got there.

GM issued a statement saying,"If McAleer's concerns were submitted by an employee today, they would be thoroughly investigated within the safety organization, however that is not to imply that in this particular case, his issues weren't."

The company also said that while McAleer lost his case against GM, it will still look at his allegations to see what "we can learn."

First Published: June 28, 2014: 9:13 AM ET

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GM's 'culture' blamed for current crisis

NEW YORK (CNNMoney)

In an exclusive interview that aired Saturday on CNN's "Smerconish," former GM manager Bill McAleer told host Michael Smerconish that employees who work at GM were "faced with a culture where you get fired if you do talk about quality and safety issues, and you get fired if you don't talk about them."

GM (GM) is dealing with a backlash for delaying the recall of 2.6 million vehicles for an ignition switch defect that's been tied to at least 13 deaths. Some GM employees knew the part was causing trouble more than a decade before the recall was issued in February.

McAleer, who started on the assembly line in 1968, says he was in charge of the Global Delivery Survey from 1988 to 1998 that GM used to help assess the quality of its cars before they were delivered to dealers.

Related: Two died in 2006 Cobalt crash. But GM counts only one

He says he found a "wide variety" of what he called "catastrophic defects" beginning in 1995, when GM added a routine obstacle course drive to its quality checklist. Problems ranged from gasoline leaks to steering linkage issues that pointed to overall quality defects.

McAleer said that while the company seemed responsive to fixing problems in the mid '90's, that changed.

"In 1997 something happened internally in GM where no problem could be admitted. Whether it was safety or any kind of problem. We couldn't have a problem," he said.

"That's what happened with the ignition switch," he added. "People knew there was a problem, but problems were not acceptable. They just ignored it."

McAleer eventually was laid off from GM in 2004. He tried to sue the company under a whistleblower law but said he was unsuccessful.

Related: GM's recall nightmare

McAleer said he sent a letter to the GM board of directors to tell them about the overall quality problems and the lack of action by management, but he thinks that the letter might have been intentionally misdirected once it got there.

GM issued a statement saying,"If McAleer's concerns were submitted by an employee today, they would be thoroughly investigated within the safety organization, however that is not to imply that in this particular case, his issues weren't."

The company also said that while McAleer lost his case against GM, it will still look at his allegations to see what "we can learn."

First Published: June 28, 2014: 9:13 AM ET

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Aereo suspends TV service...but not 'shutting down'

NEW YORK (CNNMoney)

The court ruling found that Aereo violates copyright law by picking up the signals of local television stations and retransmitting them via the Internet to paying subscribers.

"As a result of that decision, our case has been returned to the lower Court," Aereo founder Chet Kanojia said in an email message to subscribers on Saturday morning.

Related: The future of media

"We have decided to pause our operations temporarily as we consult with the court and map out our next steps."

The "pause" will take place at 11:30 a.m. Eastern on Saturday.

Kanojia said all subscribers (the company has never specified how many it has) will be refunded "their last paid month."

Kanojia ended his email by saying "our journey is far from done." And in a subsequent email message to reporters, an Aereo representative said "We want to emphasize that this is a pause, and that the company is not shutting down."

However, conventional wisdom following Wednesday's ruling held that Aereo would either have to close up shop or radically change its business model.

Related: 6 cool innovations we're still waiting for

"For broadcasters, this is a huge relief, and lifts a cloud of uncertainty," Needham & Co. analyst Laura Martin wrote in an investors' note on Wednesday. "Although there was a low probability the Supreme Court would decide against them, the cost would have been billions of dollars of lost revenue through lower retransmission fees."

In the wake of the court ruling, "the only option that remains available to Aereo would be to change its model and pay the broadcasters to distribute the content," just like cable and satellite distributors do, Nomura analyst Anthony DiClemente wrote in a research note. He said Aereo could essentially offer "a slimmed-down content package delivered over the Internet."

First Published: June 28, 2014: 10:27 AM ET

15.30 | 0 komentar | Read More

American Apparel adopts plan to prevent a takeover

NEW YORK (CNNMoney)

On Saturday, the company announced that it has adopted a one-year shareholders rights plan in an effort to prevent Charney, or any other person or group, from seizing a controlling interest in the company.

The company's "poison pill" provision kicks in once anyone purchases 15% or more of the company's outstanding stock. At that point, shareholders will be granted the right to purchase shares at $2.75 each in an effort to dilute any potential acquirer's interest.

Related: American Apparel's ousted CEO fights back!

American Apparel (APP) said the plan is in response to documents Charney filed with the Securities and Exchange Commission that expressed his "intent to acquire control or influence over the Company."

On Friday, Charney submitted a regulatory filing with the SEC announcing that he's partnering with investment firm Standard General in an effort to buy large amounts of American Apparel stock.

Charney currently owns 27.2% of the company's stock, according to the filing.

Charney was ousted as chairman earlier this month. An American Apparel director told CNNMoney the decision came after the board learned of "disturbing" information that suggested "misconduct" by Charney.

Allegations of misconduct are not new for Charney, who has faced several lawsuits claiming everything from sexual harassment to assault and battery.

Related: 6 endangered brands

Charney's lawyer Patricia Glaser sent a letter to the company's board of directors last week saying the company acted in "a manner that was not merely unconscionable but illegal."

Charney founded the company in 1998 and took the company public in 2005 at $8 per share. The shares eventually rose to nearly $17. But in recent years, American Apparel has been fighting to stave off bankruptcy.

American Apparel's stock closed Friday at 97 cents a share.

First Published: June 28, 2014: 11:42 AM ET

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Aaron Swartz's father: He'd be alive today if he was never arrested

NEW YORK (CNNMoney)

Swartz faced multiple charges for breaking and entering into an MIT wiring closet and downloading academic journals, including two counts of wire fraud and 11 counts of violating the Computer Fraud and Abuse Act. Swartz, who was battling the court, also battled with depression. Prosecutors dropped the charges after his death.

I first met Swartz's father, Robert, last year as he explained his mission to fight for his son's memory by helping to change outdated laws. He wanted answers about why he lost his son.

His son's story is now the subject of a new documentary called "The Internet's Own Boy: The story of Aaron Swartz."

More than a year after his death, Robert Swartz still seeks answers, which he discussed with me this week.

How would you describe your son's impact?

Robert Swartz: He was someone who tried to understand technology and use it as a force for good. He came up with the notion of Wikipedia before Wikipedia started. It was very clear that he felt that putting academic research behind a pay wall was wrong and that it limited the diffusion of knowledge.

11 out of the 13 charges against your son were violations of the Computer Fraud and Abuse Act. Do you believe the law is outdated?

There's no question the law is outdated. At the moment, that law makes it a felony for you to give your password to HBO to a friend. That has to be changed.

You believe the criminal justice system failed your son. If it weren't for the charges, do you believe Aaron would still be alive?

Without question.

How does that make you feel?

Like one who's gone into the abyss.

Describe what Aaron went through.

I remember after he was arrested, he got a call from MIT saying could he come back and get his backpack and bicycle, which they had seized. I was in Cambridge [Massachusetts] and he asked if I would accompany him. We waited there for a long period of time and finally a policeman came out and went into a room and retrieved his bicycle and said to us, 'The rest of this is in the hands of the Secret Service.' And we looked at each other and realized at that point that this was much more serious than we'd imagined, and we couldn't make any sense of it. We were just devastated.

How did this affect him?

It was overwhelming. He was afraid, he was concerned. [The police] went to his apartment, went through all his personal effects. He was worried about his phone being tapped. He couldn't go to MIT, he couldn't go to Harvard. He couldn't leave the country because they took his passport. The prosecutor was cruel and vindictive and bordered ... on sadism. They strip-searched him and they left him in solitary confinement for hours and after he met his bond, they kept him in solitary confinement for three or four hours with absolutely no explanation -- all with the goal of attempting to break him. This is not a system in which people are treated fairly or reasonably. They're bullied and destroyed.

What is your message to the judicial system?

We need to do a better job. Rather than trying to prosecute someone who's trying to make the world a better place, there are immense amounts of cybercrime going on where people are exploiting credit cards and doing things that are really bad. Even if you argue, which i think is completely false, that Aaron was guilty of something, there was no proportionality in the way that they acted.

[Apple founders] Steve Jobs and Steve Wozniak started a business by selling a box that allowed criminal fraud against the phone company. Bill Gates started in business at Harvard without paying for the computer time to write BASIC. Edwin Land who invented the Land camera broke into Columbia University to do experiments.. Mark Zuckerberg, in a similar way to Aaron, scraped the data off of Harvard's computer system to start Facebook. These people are lionized for their accomplishments despite the fact that they did things that weren't exactly legal.

In Aaron's case, he did things that were not illegal and he was destroyed for it. And he was trying to make the world a better place. We need to celebrate people who do this . We need more Aaron Swartzes.

First Published: June 27, 2014: 4:13 PM ET

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Red Bull settles with U.S. on Cuba violations claims

Red Bull North America has settled with the U.S. over alleged Cuba sanction violations

NEW YORK (CNNMoney)

The Treasury Department said Friday that the company has agreed to pay $89,775 over allegations it failed to get authorization from the Treasury to travel to Cuba in 2009.

The more than half-century old U.S. boycott of Cuba strictly prohibits businesses from visiting the island without first obtaining a license.

The Treasury says that between June 8 and June 18, 2009, seven representatives of Red Bull North America traveled to Cuba in order to film a documentary, without first obtaining approval.

In a statement, Treasury said Red Bull had prior knowledge of U.S. sanctions on Cuba and took steps to conceal the visits. It also said that Red Bull's management had approved of the film and the travel involved.

The penalties could have been worse. The government says the maximum penalty could have been $455,000.

Red Bull North America did not respond to a request for comment.

First Published: June 27, 2014: 4:03 PM ET

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GM: Four more safety recalls, 430,000 cars

GM's recalls continue as the automaker announces four more, affecting nearly 430,000 vehicles in the U.S.

NEW YORK (CNNMoney)

The recall covers nearly 30,000 air bag inflators in 2013-2014 model year Chevrolet Cruze sedans. GM (GM) says the inflators could fail or rupture, which could propel metal pieces that could injure the driver. GM says its aware of one injury related to the issue.

The automaker told dealerships to stop selling those Cruze models on Tuesday, but lifted that stop-sale order late Wednesday, after identifying all the affected vehicles.

Related: Steps to a recall nightmare

The part in question was manufactured by Japanese company Takata, a supplier tied to airbag problems in millions of cars that other automakers recalled earlier this week. The Cruze problem stems from a defective part instead of a chemical issue that affected other recalled vehicles, said GM spokesman Jim Cain.

The Cruze is GM's best-selling car in the United States. It sold 248,000 of them last year.

Also covered in today's announcement: Transmission software in nearly 400,000 trucks and SUV's that needs updating so that the vehicles don't slip into neutral on their own. Vehicles covered are four wheel drive versions of the 2014-2015 Silverado and GMC Sierra models; 2015 Tahoes and Suburbans; and the 2015 GMC Yukon and Yukon XL.

In addition, GM says it will inspect, and replace if necessary, the windshield wiper assemblies in about 5,000 2013-2014 Caprice police cars and SS sport sedans. The company says if gears get stripped the motors may fail and the wipers might not operate.

Finally, GM says it will replace the two rear shock absorbers in nearly 2,000 2014 model year Corvettes to repair a weld that could potentially lead to failure of the shock absorbers.

The news comes as the automaker is already in damage control mode for delaying the recall of 2.6 million vehicles for an ignition switch defect that's been tied to at least 13 deaths. Some GM employees knew the part was causing trouble more than a decade before the recall was issued in February.

Now, GM is facing dozens of lawsuits and a number of investigations concerning how it handled that recall.

The company has also issued a number of additional recalls this year for problems unrelated to the faulty ignition switch. It has recalled more than 20 million vehicles worldwide since January.

On Monday, the automaker and Kenneth Feinberg will unveil a compensation plan to victims and their families. Feinberg is a consultant who also determined payouts after the 9/11 terrorist attacks, the BP oil spill, and the Boston Marathon bombing.

First Published: June 27, 2014: 6:54 PM ET

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GM: Four more safety recalls, 430,000 cars

GM's recalls continue as the automaker announces four more, affecting nearly 430,000 vehicles in the U.S.

NEW YORK (CNNMoney)

The recall covers nearly 30,000 air bag inflators in 2013-2014 model year Chevrolet Cruze sedans. GM (GM) says the inflators could fail or rupture, which could propel metal pieces that could injure the driver. GM says its aware of one injury related to the issue.

The automaker told dealerships to stop selling those Cruze models on Tuesday, but lifted that stop-sale order late Wednesday, after identifying all the affected vehicles.

Related: Steps to a recall nightmare

The part in question was manufactured by Japanese company Takata, a supplier tied to airbag problems in millions of cars that other automakers recalled earlier this week. The Cruze problem stems from a defective part instead of a chemical issue that affected other recalled vehicles, said GM spokesman Jim Cain.

The Cruze is GM's best-selling car in the United States. It sold 248,000 of them last year.

Also covered in today's announcement: Transmission software in nearly 400,000 trucks and SUV's that needs updating so that the vehicles don't slip into neutral on their own. Vehicles covered are four wheel drive versions of the 2014-2015 Silverado and GMC Sierra models; 2015 Tahoes and Suburbans; and the 2015 GMC Yukon and Yukon XL.

In addition, GM says it will inspect, and replace if necessary, the windshield wiper assemblies in about 5,000 2013-2014 Caprice police cars and SS sport sedans. The company says if gears get stripped the motors may fail and the wipers might not operate.

Finally, GM says it will replace the two rear shock absorbers in nearly 2,000 2014 model year Corvettes to repair a weld that could potentially lead to failure of the shock absorbers.

The news comes as the automaker is already in damage control mode for delaying the recall of 2.6 million vehicles for an ignition switch defect that's been tied to at least 13 deaths. Some GM employees knew the part was causing trouble more than a decade before the recall was issued in February.

Now, GM is facing dozens of lawsuits and a number of investigations concerning how it handled that recall.

The company has also issued a number of additional recalls this year for problems unrelated to the faulty ignition switch. It has recalled more than 20 million vehicles worldwide since January.

On Monday, the automaker and Kenneth Feinberg will unveil a compensation plan to victims and their families. Feinberg is a consultant who also determined payouts after the 9/11 terrorist attacks, the BP oil spill, and the Boston Marathon bombing.

First Published: June 27, 2014: 6:54 PM ET

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Red Bull settles with U.S. on Cuba violations claims

Red Bull North America has settled with the U.S. over alleged Cuba sanction violations

NEW YORK (CNNMoney)

The Treasury Department said Friday that the company has agreed to pay $89,775 over allegations it failed to get authorization from the Treasury to travel to Cuba in 2009.

The more than half-century old U.S. boycott of Cuba strictly prohibits businesses from visiting the island without first obtaining a license.

The Treasury says that between June 8 and June 18, 2009, seven representatives of Red Bull North America traveled to Cuba in order to film a documentary, without first obtaining approval.

In a statement, Treasury said Red Bull had prior knowledge of U.S. sanctions on Cuba and took steps to conceal the visits. It also said that Red Bull's management had approved of the film and the travel involved.

The penalties could have been worse. The government says the maximum penalty could have been $455,000.

Red Bull North America did not respond to a request for comment.

First Published: June 27, 2014: 4:03 PM ET

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Aaron Swartz's father: He'd be alive today if he was never arrested

NEW YORK (CNNMoney)

Swartz faced multiple charges for breaking and entering into an MIT wiring closet and downloading academic journals, including two counts of wire fraud and 11 counts of violating the Computer Fraud and Abuse Act. Swartz, who was battling the court, also battled with depression. Prosecutors dropped the charges after his death.

I first met Swartz's father, Robert, last year as he explained his mission to fight for his son's memory by helping to change outdated laws. He wanted answers about why he lost his son.

His son's story is now the subject of a new documentary called "The Internet's Own Boy: The story of Aaron Swartz."

More than a year after his death, Robert Swartz still seeks answers, which he discussed with me this week.

How would you describe your son's impact?

Robert Swartz: He was someone who tried to understand technology and use it as a force for good. He came up with the notion of Wikipedia before Wikipedia started. It was very clear that he felt that putting academic research behind a pay wall was wrong and that it limited the diffusion of knowledge.

11 out of the 13 charges against your son were violations of the Computer Fraud and Abuse Act. Do you believe the law is outdated?

There's no question the law is outdated. At the moment, that law makes it a felony for you to give your password to HBO to a friend. That has to be changed.

You believe the criminal justice system failed your son. If it weren't for the charges, do you believe Aaron would still be alive?

Without question.

How does that make you feel?

Like one who's gone into the abyss.

Describe what Aaron went through.

I remember after he was arrested, he got a call from MIT saying could he come back and get his backpack and bicycle, which they had seized. I was in Cambridge [Massachusetts] and he asked if I would accompany him. We waited there for a long period of time and finally a policeman came out and went into a room and retrieved his bicycle and said to us, 'The rest of this is in the hands of the Secret Service.' And we looked at each other and realized at that point that this was much more serious than we'd imagined, and we couldn't make any sense of it. We were just devastated.

How did this affect him?

It was overwhelming. He was afraid, he was concerned. [The police] went to his apartment, went through all his personal effects. He was worried about his phone being tapped. He couldn't go to MIT, he couldn't go to Harvard. He couldn't leave the country because they took his passport. The prosecutor was cruel and vindictive and bordered ... on sadism. They strip-searched him and they left him in solitary confinement for hours and after he met his bond, they kept him in solitary confinement for three or four hours with absolutely no explanation -- all with the goal of attempting to break him. This is not a system in which people are treated fairly or reasonably. They're bullied and destroyed.

What is your message to the judicial system?

We need to do a better job. Rather than trying to prosecute someone who's trying to make the world a better place, there are immense amounts of cybercrime going on where people are exploiting credit cards and doing things that are really bad. Even if you argue, which i think is completely false, that Aaron was guilty of something, there was no proportionality in the way that they acted.

[Apple founders] Steve Jobs and Steve Wozniak started a business by selling a box that allowed criminal fraud against the phone company. Bill Gates started in business at Harvard without paying for the computer time to write BASIC. Edwin Land who invented the Land camera broke into Columbia University to do experiments.. Mark Zuckerberg, in a similar way to Aaron, scraped the data off of Harvard's computer system to start Facebook. These people are lionized for their accomplishments despite the fact that they did things that weren't exactly legal.

In Aaron's case, he did things that were not illegal and he was destroyed for it. And he was trying to make the world a better place. We need to celebrate people who do this . We need more Aaron Swartzes.

First Published: June 27, 2014: 4:13 PM ET

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Millennial-driven housing boom seen on the horizon

NEW YORK (CNNMoney)

According to a report released Thursday by Harvard's Joint Center for Housing Studies, as the economy shows signs of improvement, by 2025 Millennials could form 24 million new households and spur a huge comeback in the U.S. real estate market.

The report also found that, traditionally, the number of young people who buy homes increases as their incomes grow. Recently, hiring of Millennials has improved as the economy heals. If the trend continues, parents of Milennials could soon become empty-nesters.

Weak job prospects, tight lending standards and student debt, have left the 86 million members of the Millennial generation -- defined by the study as those born between 1985 and 2004 -- with few options for achieving independence. Nonetheless, like previous generations, Millennials crave it and this pent-up demand will give a big boost to the housing sector, the report's authors said.

"We really have not seen any cultural shift yet in anyone's desire to be independent," said JCHS Research Director Christopher Herbert in a panel discussion that followed the release. "When the job market recovers and their income recovers, they are going make their mark on this housing market."

Related story: Millennials 'overwhelmed' by debt

Nearly 22 million people in the U.S. age 18 to 31, lived in the home of a parent in 2012, according to Pew Research. The homeownership rate for those under age 35 was 36.2% in the first quarter of 2014, down from a historical high of 43.1% at the end of 2005, according to the Census.

Getting those rates back up will require the economy to keep improving, but if it does, those new households could mean a virtuous cycle. Booming demand for starter homes (as well as apartments) would stoke the housing sector, which accounts for about 18% of GDP, according to the National Association of Home Builders. It would also get a sluggish market moving by providing trade-up opportunities.

"If somebody wants to move up from a starter house to a larger house, they need someone to sell the starter house to," Mike Calhoun, the president of the Center for Responsible Lending, said on the panel.

Calhoun estimated U.S. building activity of about 1 million building permits issued per year could easily increase by two-thirds to meet demand without risking an unsustainable boom.

The report pointed out that some factors could restrain household formation. Despite economic news improving, Millennials face only slow economic gains. Unemployment is falling, but wage growth has been persistently stagnant. Plus, Millennials must confront increasing student debt burdens and tight lending standards.

Instead of a mass exodus from their parents' homes, the authors said Millenials' might just trickle out, mirroring what Herbert called the economy's "steady, slow recovery."

The report also pointed out that borrowers of color, who are expected to see demographic growth that could help drive household formation and building, face mortgage denials at far higher rates than white counterparts, which might well imperil a housing surge.

First Published: June 26, 2014: 6:32 PM ET

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Walmart cuts iPhone prices

Walmart will cut the price of the iPhone on Friday at 9 a.m.

NEW YORK (CNNMoney)

Walmart said it is cutting the price for both the iPhone 5s and 5c beginning 9 a.m. Friday.

With a two-year contract, a 16-gigabyte iPhone 5S will cost $99, coming down from $149. The 16-gigabyte iPhone 5c will be $29, down from $49.

The deal is only for purchases made at Walmart stores, not online.

The move may fuel speculation that Apple (AAPL, Tech30) is planning a new iPhone release before its usual fall launch. Retailers often slash prices ahead of new releases to clear out inventory.

Related: Excited for iPhone 6? Check out this stock

But a Walmart (WMT)spokeswoman said the retailer is simply sticking with its mantra, aiming to offer great prices to its customers.

Walmart rolled back the price of these smartphones in March, but only for a limited time. Now, the price cut is permanent.

First Published: June 26, 2014: 7:43 PM ET

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Stocks: 5 things to know before the open

Click chart to track premarket data.

LONDON (CNNMoney)

Here are the five things you need to know before the opening bell rings in New York:

1. Potential market movers -- Nike, GE: Shares in Nike (NKE) were rising by about 3% premarket after the company's earning beat Wall Street's expectations.

General Electric (GE) was another premarket mover Friday, with shares down by about 1%. The company recently agreed to buy Alstom (ALSMY)'s power generation business.

2. Economic announcements: The University of Michigan will report its consumer sentiment index at 9:55 a.m. ET.

3. Calm before the weekend: U.S. stock futures were very slightly lower ahead of the open, continuing the recent trend of modest moves. U.S. stocks closed slightly lower Thursday. The Dow Jones Industrial Average and S&P 500 ended the day in the red, while the Nasdaq finished flat.

Oil and gold were little changed too.

CNNMoney's Fear & Greed index shows investors are still feeling very greedy.

Related: Fear & Greed Index

4. Mid-year report: So far this year, stock market performance has been impressive.

After a significant drop in January, all three major U.S. indexes have gone on to new record highs. The S&P 500 has surged by nearly 6%, the Nasdaq is up by almost 5% and the Dow has risen by 1.6%.

Related: CNNMoney's Tech30

5. International markets in positive territory: European markets were edging up in early trading.

In Asian markets, the Nikkei in Tokyo was a standout performer as it fell by 1.4% Friday. The other key indexes were mixed.

First Published: June 27, 2014: 4:59 AM ET

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Millennial-driven housing boom seen on the horizon

NEW YORK (CNNMoney)

According to a report released Thursday by Harvard's Joint Center for Housing Studies, as the economy shows signs of improvement, by 2025 Millennials could form 24 million new households and spur a huge comeback in the U.S. real estate market.

The report also found that, traditionally, the number of young people who buy homes increases as their incomes grow. Recently, hiring of Millennials has improved as the economy heals. If the trend continues, parents of Milennials could soon become empty-nesters.

Weak job prospects, tight lending standards and student debt, have left the 86 million members of the Millennial generation -- defined by the study as those born between 1985 and 2004 -- with few options for achieving independence. Nonetheless, like previous generations, Millennials crave it and this pent-up demand will give a big boost to the housing sector, the report's authors said.

"We really have not seen any cultural shift yet in anyone's desire to be independent," said JCHS Research Director Christopher Herbert in a panel discussion that followed the release. "When the job market recovers and their income recovers, they are going make their mark on this housing market."

Related story: Millennials 'overwhelmed' by debt

Nearly 22 million people in the U.S. age 18 to 31, lived in the home of a parent in 2012, according to Pew Research. The homeownership rate for those under age 35 was 36.2% in the first quarter of 2014, down from a historical high of 43.1% at the end of 2005, according to the Census.

Getting those rates back up will require the economy to keep improving, but if it does, those new households could mean a virtuous cycle. Booming demand for starter homes (as well as apartments) would stoke the housing sector, which accounts for about 18% of GDP, according to the National Association of Home Builders. It would also get a sluggish market moving by providing trade-up opportunities.

"If somebody wants to move up from a starter house to a larger house, they need someone to sell the starter house to," Mike Calhoun, the president of the Center for Responsible Lending, said on the panel.

Calhoun estimated U.S. building activity of about 1 million building permits issued per year could easily increase by two-thirds to meet demand without risking an unsustainable boom.

The report pointed out that some factors could restrain household formation. Despite economic news improving, Millennials face only slow economic gains. Unemployment is falling, but wage growth has been persistently stagnant. Plus, Millennials must confront increasing student debt burdens and tight lending standards.

Instead of a mass exodus from their parents' homes, the authors said Millenials' might just trickle out, mirroring what Herbert called the economy's "steady, slow recovery."

The report also pointed out that borrowers of color, who are expected to see demographic growth that could help drive household formation and building, face mortgage denials at far higher rates than white counterparts, which might well imperil a housing surge.

First Published: June 26, 2014: 6:32 PM ET

15.30 | 0 komentar | Read More

Walmart cuts iPhone prices

Walmart will cut the price of the iPhone on Friday at 9 a.m.

NEW YORK (CNNMoney)

Walmart said it is cutting the price for both the iPhone 5s and 5c beginning 9 a.m. Friday.

With a two-year contract, a 16-gigabyte iPhone 5S will cost $99, coming down from $149. The 16-gigabyte iPhone 5c will be $29, down from $49.

The deal is only for purchases made at Walmart stores, not online.

The move may fuel speculation that Apple (AAPL, Tech30) is planning a new iPhone release before its usual fall launch. Retailers often slash prices ahead of new releases to clear out inventory.

Related: Excited for iPhone 6? Check out this stock

But a Walmart (WMT)spokeswoman said the retailer is simply sticking with its mantra, aiming to offer great prices to its customers.

Walmart rolled back the price of these smartphones in March, but only for a limited time. Now, the price cut is permanent.

First Published: June 26, 2014: 7:43 PM ET

15.30 | 0 komentar | Read More

How much will GM victims get? We'll find out Monday

Feinberg's plan is expected to disclose details about who is eligible for compensation and how much money they could receive.

NEW YORK (CNNMoney)

The compensation plan will be unveiled by Kenneth Feinberg, a consultant who also determined payouts after the 9/11 terrorist attacks, the BP oil spill, and the Boston Marathon bombing.

Some employees at GM first learned of a problem with the ignition switch in 2004, but a recall wasn't announced until February of this year.

The faulty switch allows the car key to sometimes fall into the off position while someone is driving, shutting off the power and disabling power steering and airbags.

Related: Doing the right thing for GM victims

The compensation is being offered as an alternative to victims or their families suing GM, and is expected to be available for accidents both before and after the 2009 bankruptcy. In court, GM may not be liable for accidents that occurred before the bankruptcy.

The total amount GM is setting aside for payouts could be unveiled Monday.

In the case of BP, the energy company set aside $20 billion. Congress allocated $7 billion for 9/11 victims. The fund for those killed and injured by bombs at the Boston Marathon totaled $61 million, which came solely from donations.

We could also learn Monday about who will be eligible for compensation and how much money they might receive. One issue is whether someone who died while sitting in the backseat of a car is considered a victim. GM does not include someone in that case on its official list of 13 because the death is not tied to an unactivated airbag.

Feinberg could decide that the families of those who died all get the same amount of money.

After the Boston Marathon bombing, they each got $2.2 million, while $208,000 was given to families of those who died at Virginia Tech.

The amount given to families who died on 9/11 depended on the victim's earning potential. So a stock broker's family would have received more than the family of a restaurant worker. In his book, "Who Gets What," Feinberg said this was a "critical flaw" of the 9/11 program that sometimes invoked anger among those who needed help.

Feinberg could also detail how much money goes to those who survived the crashes, but were severely injured. After the Virginia Tech massacre and the Boston Marathon bombings, these awards have been based on the severity of the injury and the amount of time spent in the hospital.

First Published: June 26, 2014: 4:22 PM ET

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Chinese millionaire throws totally insane lunch for the homeless

NEW YORK (CNNMoney)

Mills was one of hundreds of homeless New Yorkers who showed up at Central Park's Loeb Boathouse -- a popular venue for high-end weddings and banquets -- at the invitation of Chinese multimillionaire Chen Guangbiao.

Chen took out a full-page advertisement in The New York Times last week, seeking 250 homeless people for his event. The lunch, according to Chen, was meant to encourage other wealthy people to give to the needy.

What ensued was a splashy media display that included parading around burn victims, handing bills to some confused homeless people, and serenading the diners with an over-the-top version of "We are the World."

Related: New scam targets homeless

The day before, Mills had met Chen as he handed out $100 on the street to passersby. He had run out of bills, so he told her to come to the Boathouse the next day.

But she was denied entry to the event.

"They said something about registering," said Mills, saying she needed the the $300 Chen was promising to participants to get off the street. "I need help," she said.

The homeless were registered by the New York City Rescue Mission, which worked with Chen to organize an event that included a three-course meal served by white-gloved waiters.

But the mission had pulled their support a few days before the lunch, after Chen announced he would be handing out cash.

"We help the poor and homeless by addressing their needs directly, not with money," said Craig Mayes, executive director for the mission.

The compromise was a $90,000 donation to the mission, which they said would feed 500 people every day for three months. Chen agreed not to hand out any cash.

Related: From broke to billionaire

The eccentric Chinese millionaire put on quite a show for the media.

During lunch, Chen touted his own altruism by bringing out two badly burned women, reportedly the result of self-immolation. One of the women said Chen had paid for her reconstructive surgery, saying through a translator, "I am a beneficiary of his work."

He also presented several homeless people with $100 bills, in a move referred to as a "symbolic gesture" -- much to the confusion of the other diners.

Throughout the event, Chen reminded the lunch crowd that he was a modern-day Lei Feng, a Chinese historical figure revered for his generosity and charity.

"I see there are so many people in need of help," Chen said at the event. "We are all one big family in the world." He drove that point home by singing "We Are The World," joined by a backup singer and a violinist.

Chen, who is widely criticized in China, handed out business cards to the media which defined him as China's moral leader, the most influential person of China, and a Chinese earthquake rescue hero, among other grandiose titles. He also handed out self-promotional CDs with his picture on the front.

Three flat-screen TVs set up in the center of the room played a video celebrating Chen's philanthropy.

Chen, who made his fortune building a recycling company, is worth roughly $720 million, according to Forbes.

Related: Chinese struggle to give away their riches

Near the end of the event, Chen invited participants back to the mission for the cash handouts. "I will give $300 to every participant today. I hope you will put that money to good use," he said. The crowd gave its biggest cheer of the afternoon, and some gave a standing ovation.

But many of the homeless were left confused on whether any cash would actually materialize, and the mission was not pleased with Chen's "bait-and-switch" move.

Chen was asked not to return to the mission, and said if he wanted to hand out cash, he could do it elsewhere.

"I would still advise against it, but it is his money," Mayes said.

As the homeless returned to their buses, they were handed crocheted pink and white flowers.

One man in line, Quin Shabazz, said that if he didn't end up getting the money he would feel exploited.

"All these pictures were taken of me," he said.

First Published: June 26, 2014: 6:04 AM ET

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How to vacation like an aristocrat

The Gardener's Cottage on the Chatsworth Estate in England is opening up to guests this week, offering a luxury vacation option to those who want 'the royal treatment'.

LONDON (CNNMoney)

Visitors can seek out the royal treatment with a vacation on the 35,000-acre estate of the Duke and Duchess of Devonshire, who have opened up their land and their home to the public.

The estate, located about 150 miles north of London, attracts tourists from around the world seeking a stroll through history. And starting this week, the newly renovated Gardener's Cottage can be rented to visitors for £1,197 to £2,391 per week ($2,035 to $4,065), depending on the season.

The cottage, built in the early 19th century, is considered the most luxurious on the estate and will officially open to guests on Thursday. It sleeps six and offers a four-poster bed, two free-standing clawfoot bathtubs and antique furniture.

Related: 10 vacation experiences of a lifetime

The estate itself includes the 500-year-old Chatsworth House, where the Duke and Duchess reside. The historic home draws in over 700,000 tourists annually who come to marvel at the dozens of rooms that are open to the public.

While Chatsworth House is not available to rent, visitors may opt to stay in the Gardener's Cottage -- the closest cottage to the stately Chatsworth House -- or one of the estate's 23 other vacation cottages that are dotted along the property and designed to provide a taste of historic England. Many cottages date back to the 17th century.

American history buffs are also drawn to the estate because the late president John F. Kennedy's sister is buried there. Kathleen "Kick" Kennedy married into the Duke's family during World War II, and her grave site sits next to that of the Duke's father.

Related: Most stressed out cities in America

Also catering to visitors on the estate are pubs, a hotel, a brewery, a pool, a golf course and a farm shop. The rest of the estate includes farms, quarry interests and 500 cottages that are leased by local villagers.

The Gardener's Cottage was designed and decorated by the Duchess herself, with much of the furniture taken from the attic in her own home. She told CNNMoney the interior design was inspired by the English novelist Jane Austen.

"We really want people to relax and enjoy themselves," said the Duchess of Devonshire, noting that she wants people to kick back and have a cup of tea.

Related: Tiffany stock is better than diamonds

The estate is run as both a for-profit business under the name of the Devonshire Group, and a not-for-profit charity called the Chatsworth House Trust.

The not-for-profit side, which encompasses the stately Chatsworth House and manicured gardens, brings in over £10 million ($17 million) per year through paying tourists who come to take in the sights. The money is used to pay staff and keep the property in good condition.

The Devonshire Group controls the remaining parts of the estate. The company would not reveal information about its revenue and profit, though it's worth noting that the farm shop alone can make well over £6 million ($10.2 million) a year.

"It is our home, but it is also our business," said the Duke. "We employ over 600 people here. We're expanding steadily away with new projects, businesses and new ideas .... It's not just a game. But it is great fun and when the sun shines [on the property] there's nothing like it."

Branding is also taken seriously on the estate -- all the cottages and fences are painted with the same vibrant Chatsworth blue color.

First Published: June 26, 2014: 5:33 AM ET

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Fewer parents helping to pay for college

NEW YORK (CNNMoney)

About 77% of parents say they plan to help their child pay for college -- down from 81% last year, according to a Discover Student Loans survey of 1,000 adults.

Many of these parents say they would like to help but are worried about their own finances and simply don't have enough money to put toward college costs. About three in four families surveyed said they are "very" or "somewhat" concerned about having enough money to help pay for college.

Related: Yes, a college degree is still worth it

Instead, a growing number of college-bound kids are taking out loans to cover the costs or are being asked to pay for these expenses out of their own pockets.

In fact, 15% of parents said they believe their children should pay for every cent of college on their own -- up from 12% in 2012. Another 32% said their children should pay for most costs, compared to 27% in 2012.

The trend has been similar when it comes to repaying loans, with fewer parents saying they plan to help their kids make loan payments -- despite the fact that the vast majority of respondents said they are "very" or "somewhat" worried that student loan debt will make it harder for their children to make important purchases in the future, like buying a home.

"As students prepare to enter college this fall, it's important for parents to have clear and honest discussions with their children about how they'll pay for college," Danny Ray, president of Discover Student Loans, said in a statement. "Students need to understand the financial responsibilities they take on and, more importantly, who is responsible for repayment of loans upon graduation."

Related: Millennials 'overwhelmed' by debt

The majority of parents are still helping out with at least some college costs, however. And while some of them -- about 33% -- said they plan to limit their aid based on the major their child chooses, more than half said they will help out no matter what their child decides to study.

And nearly every respondent, or 96%, said they continue to view a college education as valuable -- explaining why 48% of parents say cost won't have an impact on the college decision-making process, up from 40% in 2013.

"It is promising to see families recognize the investment in a college education and are considering their children's long-term financial health beyond graduation," said Ray.

First Published: June 26, 2014: 6:09 AM ET

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Google's cardboard virtual-reality goggles

Google gave out a set of cardboard goggles that work with your smartphone to create a basic virtual reality experience at its developer conference on Wednesday.

SAN FRANCISCO (CNNMoney)

Google (GOOGL, Tech30) revealed a number of big updates to its Android software at its annual developer conference on Wednesday, but the project that generated the most smiles among those in attendance was a set of cardboard goggles that work with Android phones to create a basic virtual reality experience.

Virtual reality has been a hot topic in the tech world in recent months since Facebook paid $2 billion to acquire VR firm Oculus. The "Cardboard" project, Google says, grew out of a desire "to make VR accessible to more people."

All those in attendance Wednesday received a set of the Cardboard goggles, which were designed by a pair of Googlers in Paris in their "20% time," the company's term for the time it allots employees to work on their own projects.

The contraption folds into place to create a viewfinder and a slot to insert a smartphone. Fire up the Cardboard Android app and you're ready for action.

The goggles stay together thanks to a few velcro straps, while the phone is secured with a rubber band. A pair of lenses are mounted within the cardboard to make the field of view more immersive.

Once you've got Cardboard up and running, you navigate through the app using a magnet slider on the side that gets picked up by the phone's magnetometer. You can watch videos on YouTube, float through space via Google Earth and do some virtual traveling with Google Street View.

Related: Google touts Android TV, smartwatches and cars

Google is opening up the software to developers, so more functions could soon be on the way. Turning your head up and down and left to right changes your view, while taking the device off your face and rotating it 90 degrees takes you back to the home screen.

Google says the device works with most "modern" Android phones, but cautions that it's still in the development stage. It's sharing the Cardboard toolkit with developers to give them "the chance to experiment with it as we do."

In the meantime, Google has also put the design files online so you can try your hand at building your own. If you're using a pizza box, the company advises that you make it an extra large.

First Published: June 25, 2014: 10:07 PM ET

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One year later: Same-sex marriage ruling's impact

NEW YORK (CNNMoney)

When the Defense of Marriage Act -- which limited the definition of marriage to a man and a woman -- was overturned last June, married same-sex couples were granted access to more than 1,000 spousal benefits.

The three most important benefits couples say they have received within the last year: the ability to make medical decisions for a spouse who is incapacitated, spousal health care and insurance coverage and inheritance rights, according to a new Wells Fargo survey of 875 lesbian, gay, bisexual and transgender investors.

Other new rights include the ability to receive survivor benefits and to qualify for the federal estate tax exemption when a spouse passes away.

Related: Same-sex marriage: 'Our financial lives one year later'

This is also the first year that married same-sex couples have been able to file their income taxes jointly at the federal level -- which has been one of the most immediately tangible changes for many couples. And while this has led to higher taxes for some, it has lowered tax bills for others.

About half of the same-sex couples surveyed by Wells Fargo who filed their taxes jointly this year reported paying less tax than in previous years -- with a median decline of $2,000. A quarter of respondents said their tax bill went up by a median of $3,000 after filing jointly.

Sean Liphard and Auntre Hamp, for example, owed an extra $2,000 when they filed jointly this year because their incomes are so similar. They saved about $1,500 because they no longer owe tax on the health insurance Liphard receives from Hamp's plan. Overall, they figure they paid $500 more in tax than they had in previous years.

Debra and Jennifer Abbott-Walker, meanwhile, saved more than $1,500 in tax by filing jointly because they had such different incomes -- with Jennifer picking up the duties as a stay-at-home mom and Debra working full-time.

And while the Supreme Court's ruling made the tax filing process a lot easier for couples living in states where same-sex marriage is legal, those in states that don't recognize it are having a much more difficult time. They are now forced to fill out two different sets of returns -- filing separately at the state level but jointly at the federal level.

Related: Same-sex marriage in the United States

Dave Greenbaum and Mike Silverman, who live in Kansas where same-sex marriage is not recognized, had to pay their accountant 50% more to do their taxes this year because of all the extra work involved.

In addition to extra costs, this divide between state and federal law has created a lot of confusion.

Even after a year, the vast majority, or 83%, of Wells Fargo survey respondents said they don't completely understand how the laws governing same-sex marriage in their state work -- including 67% of respondents who are in legal same-sex marriages.

That's not so surprising because the rules vary greatly: in some states, same-sex marriage is only legal for certain groups -- like for a handful of couples who got married during a stint of time when marriage was legal across the state. Other states allow couples to file jointly even if they don't recognize same-sex marriage. (Check out our map to see the rules for your state).

But overall, the excitement of being married has outweighed any negatives, said Nanette Miller, who works directly with same-sex clients as the head of the LGBT practice at accounting firm Marcum LLP.

"There's just a lot of relief," she said. "They're still trying to understand what it all means, but they're happy to be treated the same."

First Published: June 26, 2014: 1:28 AM ET

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Facebook is 69% male and mostly white

HONG KONG (CNNMoney)

Released on Wednesday, the report is the latest in a flurry of voluntary diversity disclosures by high-profile tech firms.

The facts show that 69% of Facebook's global staffers are male. A full 85% of the company's tech workers, and 77% of its management team, are also men.

The company's U.S. workforce is 57% white, 34% Asian, 4% Hispanic and 2% black.

"As these numbers show, we have more work to do -- a lot more," Maxine Williams, Facebook's global head of diversity, said in a statement.

The report shows that while Facebook (FB, Tech30) has women including "Lean In" author Sheryl Sandberg in prominent positions, diversity at the company is roughly in line with rivals including Google, Yahoo and LinkedIn.

Related: The women of Alibaba put Silicon Valley to shame

There has been renewed focus on the lack of diversity at companies in Silicon Valley in recent months. Civil rights activist Jesse Jackson has appeared at several annual meetings of tech companies this spring, including Google and Facebook, to urge them to do more to recruit African American and Hispanic workers.

The true scale of the industry's diversity problem is difficult to determine, largely because most major tech companies have closely guarded their data.

Starting in 2011, CNNMoney probed 20 of the most influential U.S. tech firms. Almost all refused to provide numbers on workplace diversity.

When Freedom of Information Act requests were filed by CNNMoney, Apple (AAPL, Tech30), Hewlett-Packard (HPQ, Tech30), Google (GOOG), IBM (IBM, Tech30) and Microsoft (MSFT, Tech30) all successfully petitioned the Department of Labor to exclude their data.

Data collected on five companies -- Cisco (CSCO, Tech30), Intel (INTC, Tech30), Dell, eBay (EBAY, Tech30) and Ingram Micro (IM) -- showed a significant gender imbalance in officer and management positions.

Related: Black, female, and a Silicon Valley 'trade secret'

At the end of May, Google released a diversity report that showed 70% of its staff is male and 61% is white, while 30% is Asian. Linkedin (LNKD, Tech30) has also released a diversity report which showed 61% of its staff is male, while 53% is white and 38% is Asian.

Yahoo (YHOO, Tech30), one of the most prominent Silicon Valley companies with a female CEO, has a U.S. workforce that is 50% white and 39% Asian. Only 6% are either black or Hispanic.

Williams said that a new "strategic diversity team" launched at Facebook last year has improved hiring and retention for underrepresented groups.

First Published: June 26, 2014: 1:07 AM ET

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Danger! American Apparel, Lululemon impale

NEW YORK (CNNMoney)

Just look at the controversy swirling around the founders of American Apparel (APP) and Lululemon (LULU).

Dov Charney, the ousted chairman of American Apparel, is known for walking around his factory in his underwear and talking openly about his sex life. The company's sales have plunged in recent years and its stock now trades for 70 cents, down 96% from its high of nearly $17.

Lululemon founder Dennis "Chip" Wilson imperiled his company's brand last year by making snide remarks about overweight customers. Wilson recently stepped down as chairman after Lululemon's share price plunged in half over the past year.

"Sadly in this day and age, some CEOs still think they can act like Ari Gold and get away with it," said Jeffrey Cohn, author of Why Are We Bad at Picking Good Leaders?, referring to the fictional "Entourage" character.

Related: American Apparel CEO hits back

American Apparel is known for its edgy advertising, but even Charney's behavior has become too steamy for that company's board.

Charney, who started American Apparel in 1998, was fired as chairman last week by the board, which is also moving to remove him as CEO.

An American Apparel director told CNNMoney the decision came after the board learned of "disturbing" information that suggested "misconduct" by Charney.

Allegations of misconduct are hardly new for Charney, who has faced countless lawsuits over the years that claimed everything from sexual harassment to assault, battery and even impersonation through the Internet.

While American Apparel rapidly expanded in the early 2000s by appealing to hipsters, the apparel maker struggled to keep the cool vibe. Charney took the company public in 2005 at $8 per share and Wall Street eventually bid it up to nearly $17. In recent years American Apparel has had to fight just to stave off bankruptcy.

Investors pay the price: Research into the costs of "managerial indiscretions" found that every time an incident involving Charney was disclosed to the public between 2008 and 2011, American Apparel's stock went down, suffering abnormal negative three-day return of -0.7% to -8.8%.

"He's one of the executives we have as a serial repeat offender," said Adam Yore, a professor at Northern Illinois University who co-wrote the research paper with Ralph Walkling at Drexel University and Brandon Cline at Mississippi State University.

Related: How Adidas plans to win the World Cup

Their research found that, on average, there is an immediate 3.8% loss in shareholder value following the disclosure of a CEO indiscretion as well as abnormal declines in the longer run. There also is a higher likelihood of shareholder lawsuits, even for things unrelated to the indiscretion.

The research found that indiscretion incidents are substantially more likely to occur at companies managed by families or founders.

Founders "may not make a distinction between their personal and professional lives," said Yore. "They grew the business themselves and in many cases they are the business."

Charney, who still controls a 27% stake, has signaled he's mounting an effort to keep control of American Apparel's C-Suite.

Related: Lululemon stock does the downward drop

Lululemon's volatile founder: The situation isn't nearly as dire at Lululemon, but the yoga apparel maker is also struggling to turn itself around and in the midst of an uncomfortable fight with founder Wilson. The company's Chief Financial Officer dubbed it akin to "our parents are fighting" on a recent call with investors.

The turning point came last year when Lululemon had to recall some of its yoga pants for being too sheer. That hurt the company's reputation and cost millions of dollars. Wilson exacerbated the situation by then seemingly placing the blame on overweight customers, saying: "Some women's bodies just don't actually work" for the pants.

Lululemon traded north of $82 last June before the controversy, but recently dipped below $37. Of course, even with the recent tumble Lululemon shares have surged over 560% over the past five years, creating enormous value for shareholders.

Can Wilson find a dance partner? After stepping down as chairman last month, Wilson has reportedly hired Goldman Sachs to help him weigh his options, including possibly teaming up with a private equity firm to acquire the rest of Lululemon.

"Based on his comments from last November, which we contend damaged the LULU brand, we believe potential partners may be warded off by Mr. Wilson's volatility," Sterne Agee analysts Sam Poser and Ben Shamsian wrote in a note this week.

Cowen & Co. analyst Faye Landes is less sold on the negative impact to Lululemon's brand, pointing to strong Black Friday sales after Wilson's comments.

"There is still a lot of cachet around the brand," she said.

Ironically, Wilson's chances of finding a dance partner to acquire Lululemon with may have been hurt by the American Apparel drama.

"Funders tend to be conservative individuals working at conservative firms, and, especially after the recent experience of some investment firms with retail founders (cf. American Apparel), we think that funders are likely to shy away from voluble founders," Landes wrote in a note to clients this week.

First Published: June 24, 2014: 3:43 PM ET

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Madoff's accountant pleads guilty

Paul Konigsberg, Bernie Madoff's former accountant, faces up to 30 years in prison.

NEW YORK (CNNMoney)

Paul Konigsberg, a tax lawyer and accountant, provided services to Madoff and a number of Madoff's clients. Now, he faces up to 30 years in prison.

Beginning at least in the early 1990s, Madoff steered several of his investors to Konigsberg, including long-time clients in whose accounts Madoff "executed the most glaringly fraudulent transactions," said a press release issued by the Manhattan U.S. Attorney Preet Bharara.

Related: 5 ex-Madoff employees found guilty

Konigsberg, 78, has agreed to cooperate with the government in its ongoing investigation of the fraud that occurred at Madoff Securities. The firm collapsed after Madoff was arrested in 2008 and pleaded guilty for running a Ponzi scheme that netted billions of dollars from thousands of victims.

Five of Madoff's former employees were found guilty in March of participating in the Ponzi scheme. Dan Bonventre, Annette Bongiorno, Joann Crupi, Jerome O'Hara and George Perez were hit with a litany of federal criminal charges, including conspiracy to commit securities fraud, after a six-month-long trial.

Konigsberg will also pay at least $4.4 million, which will be used to compensate victims of the fraud, and could be hit with additional fines. He will be sentenced on Sept. 19.

Konigsberg is the second accountant to plead guilty in connection to the Madoff case. David Friehling, another long-time accountant of Madoff, pleaded guilty in 2009.

First Published: June 24, 2014: 5:41 PM ET

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Stocks: 6 things to know before the open

Click chart for in-depth premarket data.

LONDON (CNNMoney)

Here are the six things you need to know to start the trading day:

1. Stocks in the red: U.S. stock futures were relatively weak following a day of steep losses on Tuesday.

During the previous session, the Dow Jones Industrial Average shed 119 points, its biggest one-day percentage drop in more than a month. The S&P 500 and the Nasdaq both fell as well.

All major European markets were lower by about 0.5% Wednesday. Asian markets ended in negative territory.

Related: Fear & Greed Index

2. Brace yourself for U.S. GDP figures: Market sentiment could be influenced ahead of the opening bell when the Commerce Department releases revised first quarter GDP numbers at 8:30 a.m. ET. The first estimate indicated that the U.S. economy shrank in the first quarter, and economists expect the revision to show an even deeper slump.

Briefing.com predicts the revision will indicate the economy contracted at a -1.8% annual rate. Any number worse than -1.3% will be the single worst quarter for the U.S. economy since the Great Recession.

3. Stocks to watch -- Vodafone, Blackberry, Tesla: Vodafone (VOD) and BlackBerry (BBRY, Tech30) shares were under a bit of pressure ahead of the open. Tesla (TSLA) shares were gaining some traction.

4. Earnings expectations: Investors will get quarterly results from Barnes and Noble (BKS), General Mills (GIS) and Monsanto (MON) ahead of the opening bell. Bed Bath and Beyond (BBBY) will report after the close.

Related: CNNMoney's Tech30

5. Dubai markets bounce back: Dubai stock markets suffered a sharp tumble to start the week, as concerns about continued turmoil in Iraq damaged investor confidence. However, the benchmark Dubai Financial General Market Index recovered about 5% on Wednesday.

6. Russian markets decline, again: Russia's main Micex index declined by nearly 1% on reports that the West might slap more sanctions on Russia.

The Micex has been on a wild ride this year, dropping by over 20% and then fully recovering as worries about the Ukraine crisis and sanctions intensified and then receded.

First Published: June 25, 2014: 5:17 AM ET

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In just six months, automakers pass recall record

NEW YORK (CNNMoney)

The total number of recalled vehicles crossed the previous record when several automakers announced recalls of 2.8 million cars for faulty airbags.

That brought the 2014 running total above 32 million.

The previous record of 30.8 million cars was set in 2004, according to federal records.

Related: Five most notorious auto recalls

With more than 17.7 million U.S. recalls, General Motors (GM) is responsible for around half of this year's total. It has recalled nearly 20 million cars worldwide for a variety of issues including an ignition switch defect it did not disclose for a decade.

First Published: June 24, 2014: 3:06 PM ET

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Danger! American Apparel, Lululemon impale

NEW YORK (CNNMoney)

Just look at the controversy swirling around the founders of American Apparel (APP) and Lululemon (LULU).

Dov Charney, the ousted chairman of American Apparel, is known for walking around his factory in his underwear and talking openly about his sex life. The company's sales have plunged in recent years and its stock now trades for 70 cents, down 96% from its high of nearly $17.

Lululemon founder Dennis "Chip" Wilson imperiled his company's brand last year by making snide remarks about overweight customers. Wilson recently stepped down as chairman after Lululemon's share price plunged in half over the past year.

"Sadly in this day and age, some CEOs still think they can act like Ari Gold and get away with it," said Jeffrey Cohn, author of Why Are We Bad at Picking Good Leaders?, referring to the fictional "Entourage" character.

Related: American Apparel CEO hits back

American Apparel is known for its edgy advertising, but even Charney's behavior has become too steamy for that company's board.

Charney, who started American Apparel in 1998, was fired as chairman last week by the board, which is also moving to remove him as CEO.

An American Apparel director told CNNMoney the decision came after the board learned of "disturbing" information that suggested "misconduct" by Charney.

Allegations of misconduct are hardly new for Charney, who has faced countless lawsuits over the years that claimed everything from sexual harassment to assault, battery and even impersonation through the Internet.

While American Apparel rapidly expanded in the early 2000s by appealing to hipsters, the apparel maker struggled to keep the cool vibe. Charney took the company public in 2005 at $8 per share and Wall Street eventually bid it up to nearly $17. In recent years American Apparel has had to fight just to stave off bankruptcy.

Investors pay the price: Research into the costs of "managerial indiscretions" found that every time an incident involving Charney was disclosed to the public between 2008 and 2011, American Apparel's stock went down, suffering abnormal negative three-day return of -0.7% to -8.8%.

"He's one of the executives we have as a serial repeat offender," said Adam Yore, a professor at Northern Illinois University who co-wrote the research paper with Ralph Walkling at Drexel University and Brandon Cline at Mississippi State University.

Related: How Adidas plans to win the World Cup

Their research found that, on average, there is an immediate 3.8% loss in shareholder value following the disclosure of a CEO indiscretion as well as abnormal declines in the longer run. There also is a higher likelihood of shareholder lawsuits, even for things unrelated to the indiscretion.

The research found that indiscretion incidents are substantially more likely to occur at companies managed by families or founders.

Founders "may not make a distinction between their personal and professional lives," said Yore. "They grew the business themselves and in many cases they are the business."

Charney, who still controls a 27% stake, has signaled he's mounting an effort to keep control of American Apparel's C-Suite.

Related: Lululemon stock does the downward drop

Lululemon's volatile founder: The situation isn't nearly as dire at Lululemon, but the yoga apparel maker is also struggling to turn itself around and in the midst of an uncomfortable fight with founder Wilson. The company's Chief Financial Officer dubbed it akin to "our parents are fighting" on a recent call with investors.

The turning point came last year when Lululemon had to recall some of its yoga pants for being too sheer. That hurt the company's reputation and cost millions of dollars. Wilson exacerbated the situation by then seemingly placing the blame on overweight customers, saying: "Some women's bodies just don't actually work" for the pants.

Lululemon traded north of $82 last June before the controversy, but recently dipped below $37. Of course, even with the recent tumble Lululemon shares have surged over 560% over the past five years, creating enormous value for shareholders.

Can Wilson find a dance partner? After stepping down as chairman last month, Wilson has reportedly hired Goldman Sachs to help him weigh his options, including possibly teaming up with a private equity firm to acquire the rest of Lululemon.

"Based on his comments from last November, which we contend damaged the LULU brand, we believe potential partners may be warded off by Mr. Wilson's volatility," Sterne Agee analysts Sam Poser and Ben Shamsian wrote in a note this week.

Cowen & Co. analyst Faye Landes is less sold on the negative impact to Lululemon's brand, pointing to strong Black Friday sales after Wilson's comments.

"There is still a lot of cachet around the brand," she said.

Ironically, Wilson's chances of finding a dance partner to acquire Lululemon with may have been hurt by the American Apparel drama.

"Funders tend to be conservative individuals working at conservative firms, and, especially after the recent experience of some investment firms with retail founders (cf. American Apparel), we think that funders are likely to shy away from voluble founders," Landes wrote in a note to clients this week.

First Published: June 24, 2014: 3:43 PM ET

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