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  • đŸ„·đŸ» Zelle... Gold Mine For Fraudsters?

đŸ„·đŸ» Zelle... Gold Mine For Fraudsters?

+ Qualcomm’s Legal Win Against Arm Holdings

December 20, 2024

Good afternoon! A Google Street View car, during a rare visit to Tajueco, Spain, captured an image of a man allegedly loading a body into the trunk of a car. The snapshot coincides with the disappearance of a 33-year-old Cuban man, whose remains were recently found in a cemetery. While authorities emphasize the image wasn’t a breakthrough in the case, it certainly adds a bizarre twist to the investigation.

The suspects—a woman and her ex-partner—have been arrested and remain in custody. The victim’s mysterious disappearance began with suspicious text messages claiming he was leaving Spain. Police suspect the messages were meant to mislead.

MARKETS

*Stock data as of market close*

  • Stocks closed out Friday with solid gains, as the Dow climbed 1.2%, the S&P 500 rose 1.1%, and the Nasdaq added 1%. The upbeat session came on the back of a cooler-than-expected PCE inflation reading that nudged investor sentiment in the right direction.

  • Despite the bounce, the week as a whole was a losing one. The Dow dropped 2.3%, marking its third-straight weekly decline, while the Nasdaq and S&P weren’t far behind. Investors are now eyeing 2025, hoping inflation and the Fed’s stance won’t keep playing Grinch.

STOCKS
Winners & Losers

What’s up 📈

  • BlackBerry surged 23.83% after beating Wall Street’s expectations, thanks to the sale of its AI cybersecurity platform Cylance, even as it lowered its fiscal guidance. ($BB)

  • Mission Produce jumped 17.29% after the avocado producer reported earnings that far exceeded expectations. ($AVO)

  • Sirius XM gained 12.15% after Berkshire Hathaway disclosed an increased stake, giving the radio operator a significant boost. ($SIRI)

  • Carnival climbed 6.43% following strong fiscal fourth-quarter earnings and a forecast of robust demand through 2025 and 2026. ($CCL)

  • Occidental Petroleum rose 3.90% after Berkshire Hathaway’s regulatory filings showed the firm added to its position. ($OXY)

  • Verisign advanced 2.79% as part of Berkshire Hathaway’s increased stake announcement. ($VRSN)

  • Dexcom popped 5.57% after Novo Nordisk’s weight-loss drug trial results disappointed, redirecting focus toward diabetes management devices. ($DXCM)

What’s down 📉

  • Novo Nordisk tumbled 17.83% after weaker-than-expected late-stage trial results for its weight-loss drug CagriSema. ($NVO)

  • U.S. Steel dropped 4.98% following disappointing fourth-quarter guidance that fell short of analysts' profit expectations. ($X)

  • Trump Media & Technology Group declined 1.98% after regulatory filings revealed President-elect Donald Trump transferred his entire stake into a revocable trust. ($DJT)

BANKING
CFPB Hits Zelle with Fraud Claims

Zelle might help you pay your friends for pizza, but according to the CFPB, it’s also helping fraudsters cash in.

The agency filed a lawsuit against JPMorgan Chase, Bank of America, and Wells Fargo, accusing the trio of rushing Zelle to market without safeguards, turning it into a “gold mine for fraudsters.” Since its 2017 launch, consumers have reportedly lost $870 million to fraud on the platform.

The big banks? Allegedly slow to act, reimbursing only 38% of disputed claims while fraud complaints piled up. Unsurprisingly, Zelle’s parent company, Early Warning Services, isn’t taking this lightly, calling the suit “meritless” and insisting that nearly all transactions go through without a hitch.

Fraud, Fast and Furious

Zelle's appeal lies in its speed—instant transfers, no questions asked. But that’s also why scammers love it. According to the CFPB, limited identity verification allowed bad actors to run wild, and the banks didn’t do much to stop it. Worse, when victims tried to recover funds, they were often left hanging—or told to contact the scammers themselves. Ouch.

But Zelle’s defenders argue the numbers are misleading. They claim only a small fraction of transactions are fraudulent, and fraud reports have dropped nearly 50% in recent years. Still, that’s little consolation for consumers who’ve already been burned.

A Big Fight with Big Stakes

This lawsuit is more than just a battle over bank practices—it’s a warning shot for the entire peer-to-peer payments industry. As Zelle continues to dominate the market, outpacing competitors like Venmo and Cash App, its banking backers are under fire for prioritizing growth over security.

What’s next? The CFPB wants stricter safeguards and more reimbursements for victims, but the banks argue the lawsuit could set back innovation and embolden criminals. As the case unfolds, one thing’s clear: Zelle might move your money fast, but fixing its reputation could take a lot longer.

NEWS
Market Movements

  • 📉 Key Fed inflation measure eases in November: The PCE price index showed a 2.4% annual rate, slightly below expectations, while core inflation rose 2.8% year-over-year. The report reflects cooling housing inflation and steady service price increases.

  • 💉 FDA expands Zepbound approval for sleep apnea: Eli Lilly's Zepbound was approved as the first drug treatment for moderate-to-severe obstructive sleep apnea, a condition affecting 80M Americans, potentially broadening insurance coverage. ($LLY)

  • 🚹 US federal loans at risk from potential shutdown: Billions in federal loans to Rivian, Plug Power, PG&E, and others are in jeopardy due to a looming government shutdown. The Energy Department, with $400 billion in authority, may pause deal closures unless Congress acts promptly. ($RIVN, $PLUG, $PCG)

  • 💊 Novo Nordisk obesity drug misses trial target: Novo Nordisk shares fell 17% after its obesity drug CagriSema achieved 22.7% weight loss in trials, missing its 25% target and lowering expectations for the treatment. ($NVO)

  • ☕ Starbucks workers launch 5-day strike: Starbucks workers began a 5-day strike in major U.S. cities to protest stalled contract talks, potentially affecting hundreds of stores during the holiday season. ($SBUX)

  • ⚖ DOJ sues CVS over illegal opioid prescriptions: The DOJ filed a lawsuit against CVS, accusing the pharmacy chain of filling illegal opioid prescriptions and billing federal health programs, contributing to the opioid epidemic. ($CVS)

  • 🔍 U.K. launches probe into Synopsys-Ansys deal: The U.K.'s CMA will investigate Synopsys' $35B acquisition of Ansys over concerns it could reduce competition in chip design and simulation software. ($SNPS, $ANSS)

  • 🏬 Big Lots begins liquidation sales amid bankruptcy: Big Lots started going-out-of-business sales while seeking a buyer after a failed deal with Nexus Capital. The retailer aims to finalize a sale by January. ($BIG)

  • ✅ Eli Lilly’s weight-loss drug Zepbound no longer in shortage: The FDA declared that Eli Lilly's weight-loss drug Zepbound is no longer in shortage, ending allowances for compounded versions after a 60–90 day transition. ($LLY)

LEGAL
Qualcomm’s Legal Win Secures Chip Design Future

Qualcomm scored a key victory in its ongoing legal battle with Arm Holdings.

A Delaware jury ruled that Qualcomm did not breach its license agreement when it integrated technology from Nuvia, a startup it acquired in 2021 for $1.4 billion, into its chips. This decision removes the immediate threat of renegotiation, which could have handed Arm significant leverage over Qualcomm’s licensing terms.

The lawsuit revolved around whether Qualcomm's general license agreement with Arm covered the Nuvia-acquired technology. Arm argued that Qualcomm should have renegotiated the license after the acquisition and even demanded the destruction of certain chip designs. The jury sided with Qualcomm on this critical issue but deadlocked on whether Nuvia itself violated its original license with Arm, leaving the door open for a potential retrial.

A Rift Between Longtime Partners

The verdict highlights growing tensions between Qualcomm and Arm, two companies historically seen as partners but now increasingly viewed as competitors. Arm has taken a more aggressive stance recently, raising licensing prices and exploring direct competition with its customers by developing its own chips. The legal fight underscored the high stakes involved, as Qualcomm’s Nuvia technology underpins its push into markets like PCs and automotive processors.

For Qualcomm, the win not only secures its ability to sell Nuvia-designed chips but also shields its ambitious roadmap. Losing the case could have meant renegotiating terms under Arm's conditions—a costly and potentially restrictive scenario.

What's Next?

While Qualcomm’s stock gained 2% on the news, Arm’s shares dipped 2% in after-hours trading, reflecting uncertainty over its next steps. Arm has already indicated it will seek a retrial to address the unresolved claims. Meanwhile, Judge Maryellen Noreika urged both parties to consider mediation to avoid further courtroom battles.

This case is emblematic of broader shifts in the semiconductor industry, where licensing disputes and direct competition are becoming more common as companies navigate a landscape of growing interdependence and rivalry. For now, Qualcomm can move forward with its innovation plans, while Arm must reassess how to protect its intellectual property without alienating its customers.

NEWS
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