The city of Cincinnati is suspending its relationship with SoMoLend, the local startup that the city partnered with in December to connect small businesses and startups to $400,000 in loans.
The broken partnership comes in response to accusations of fraud from the Ohio Division of Securities that have forced SoMoLend to stop giving out loans in the state and could lead to the business’s shutdown.
City spokesperson Meg Olberding told CityBeat in an email that although the city partnered with SoMoLend in December, it has yet to give out any loans through the crowdfunding incubator.
The Ohio Division of Securities says SoMoLend failed to gather the proper federal and state licenses for a peer-to-peer lending business and falsely inflated its performance and financing figures.
SoMoLend gained local and national recognition for supposedly helping foster startup and small businesses by linking them to loans through crowdfunding — a particularly promising proposition given the state of the economy and research from the National Bureau of Economic Research that shows startups are the best drivers for economic and job growth.
But with the extent of the charges, it’s questionable whether SoMoLend had any success to begin with.
Candace Klein, CEO of SoMoLend, told The Cincinnati Enquirer on Sunday that the company is currently in talks with the state. She stressed that the Ohio Division of Securities won’t issue a final order against SoMoLend until after a hearing scheduled for October.
SoMoLend, which stands for Social Mobile Local Lending, was founded in 2011. The business’s specialty is using crowdfunding tactics to connect small businesses and startups with lenders. It then packages the loans to sell them as notes and charges a fee or commission for its services.
Journalism-related Web sites have been abuzz this week with rumors that Editor Tom Callinan is about to leave his job at The Enquirer. Callinan is keeping mum for now, but one of his rumored replacements says he will remain in California and not return to Cincinnati.
A labor impasse between managers of Greater Cincinnati's Metro bus system and its transit workers appears to be near an end.
Members of the Amalgamated Transit Union (ATU) Local 627 voted Tuesday to accept a new three-year labor contract with the Southwest Ohio Regional Transit Authority (SORTA). The final tally was 409-49.
According to emails and phone calls received by WWVA-AM West
Virginia talk show host David Blomquist, miners said they were told that
attendance at the Romney event would be mandatory and unpaid.
As first reported by The Plain Dealer in Cleveland on Tuesday, mine owner Murray Energy Chief Financial Officer Rob Moore told Blomquist that managers “communicated to our workforce that the attendance at the Romney event was mandatory, but no one was forced to attend.” He said that people who did now show up to the event, which organizers say drew 1,500 miners and family members, were not penalized for their absence.
Blomquist said during the radio show that current and former
employees had called and emailed him saying they feel they were forced to go,
had to take off a day without pay and a roll call was taken, which caused some
employees to believe they would lose their jobs if they didn’t show up.
“Just for the record, if we did not go, we knew what would happen,” Blomquist read from an email he had received. “It is wrong what we were made to do because of the outcome if we don’t.”
The Columbus Dispatch reported that Murray Energy Corp.
founder Robert Murray attended the Tuesday breakfast hosted by the Ohio delegation to the Republican National Convention. Murray told the newspaper that the decision to
close the mine was made at the request of the Secret Service.
Murray disputed the report that miners weren’t paid for the day, saying they were compensated for the hours they spend underground, from 6 a.m. to 11 a.m. The mine was re-opened for a second shift at 4 p.m.
“They were all there voluntarily,” Murray said of the miners
who attended the Romney event, which was also attended by Republican U.S.
Senator Rob Portman and Ohio Treasurer and Senate candidate Josh Mandel.
“You don’t pay people to go voluntarily to a political event. If I would’ve paid them you would be saying you want it the other way. This is all a bunch of nonsense,” Murray told The Dispatch. Federal law prohibits the paying of private employees to attend a political event.
Murray blames layoffs at some of his mines on Obama’s
policies. His companies have had a history of environmental and safety violations,
and its Political Action Committee has held fundraisers for and donated to
Romney’s Ohio campaign spokesman disputed that the Secret Service had the mine shut down, telling The Dispatch in an email that “It was Murray Energy’s decision to close the Century Mine, not the campaign’s or the Secret Services.” His comment echoes what Murray CFO Moore said on the radio show, that management wanted to attend the event and they couldn’t have miners underground without management present.
For his part, radio host Blomquist took issue with the fact that
the miners lost out on a full eight hours of pay because of a political event.
“My whole point is that nobody should be pressured into attending anyone’s political event,” he told The Plain Dealer. “If they shut the mine down, why should they lose a day’s pay? There are some guys that just want to go to work, feed their family and go home.”
At the time of the announcement that the park would not be opening, The Beach had already sold 8,800 season passes. But rather than offering full refunds to the thousands of consumers who had purchased waterpark passes, the Beach offered a collection of day passes and various discounts to other local attractions, such as Kings Island and the Cincinnati Zoo, that it said was valued at "close to $200." Season passes to The Beach had most recently been sold for $89.99.
In response, 427 people filed complaints with the Ohio Attorney General’s office, resulting in the May 25 filing of a lawsuit against The Beach by Attorney General Mike DeWine. The lawsuit charges the business with failure to deliver, a violation of Ohio’s Consumer Sales Practices Act.
"It's unfortunate when a long-standing Ohio business closes," DeWine said in a press release. "But The Beach Waterpark took money from thousands of consumers and never delivered promised services. That's unacceptable."
The Beach in recent years has seen increased competition from such nearby attractions as Kings Island’s Soak City waterpark and the Great Wolf Lodge, which opened an indoor waterpark in Mason in 2006. In response to The Beach’s closing, Kings Island offered discounted rates for upgrades to its season passes and a complimentary visit to its amusement park and waterpark for Beach pass holders.
Dan Tierney, spokesman for DeWine, says companies that go out of business often refund money or provide a different product or service in place of that which was previously purchased, but it must be of equal or greater value and meet the consumer’s satisfaction.
“That has not occurred in this case,” Tierney says.
The lawsuit alleges that The Beach’s ownership partners have committed unfair or deceptive acts and practices in violation of the Failure to Deliver Rule and Consumer Sales Practices Act. Each violation of the Consumer Sales and Practices Act is punishable by a $25,000 fine. The lawsuit asks for reimbursements for all consumers, legal and court costs, an injunction and civil penalties.
“There’s a possible penalty on the punitive side of $25,000,” Tierney says. “That being said, the goal of this, because there is no bankruptcy protection, is to help affected consumers get refunds.”
According to Tierney, if The Beach had filed bankruptcy protection, the company would be protected and each individual consumer would need to file failure to deliver lawsuits.
“During a bankruptcy consumers can become creditors for not being delivered products,” Tierney says. “In absence of that they would have to each individually file failure to deliver lawsuits, but the attorney general is doing it on behalf of Ohio consumers.”
The lawsuit was filed in the Hamilton County Court of Common Please against the park’s owners and operators: The Beach at Mason Limited Partnership and Dayton-based Water Parks, Inc., and Cabana Equities, Inc.
According to the lawsuit, the Beach’s operators decided to close the waterpark on March 7, two days before announcing the canceled season and lack of refunds.
The attorney general’s office is encouraging other consumers who purchased passes to The Beach Waterpark to file a complaint a www.ohioattorneygeneral.gov.
Two proposals by institutional shareholders designed to increase independent oversight at Cintas Corp. failed to gain a majority of votes Tuesday at the company’s annual meeting.
The proposals included one by the North Carolina Retirement Systems, which represents the pension investments of unionized North Carolina state government workers. It sought to have an independent chairman — unconnected to the Farmer family — appointed to the board of directors to enhance oversight and improve the company’s abysmal safety record.
The other proposal sought an advisory shareholder vote on executive pay.
As the meeting was conducted, more than 300 protesters comprised of Cintas workers from across the nation and their local supporters rallied outside of the company’s Mason headquarters (pictured above), demanding an end to what they described as egregiously unsafe working conditions at the uniform supplier’s industrial laundries.
A proposal by another institutional shareholder — CtW Investment Group — was also defeated that would have blocked the appointment of David Phillips to the Cintas board due to what it described as an undisclosed conflict of interest and weak leadership in his role as the company’s Nominating and Corporate Governance Committee chairman.
(See my recent news article "Cintas Under a Microscope" for background on these shareholder proposals.)
Cintas didn’t reveal the vote totals for board appointments. CtW representatives said about 35 percent of outside shareholders opposed Phillips’ appointment, which amounted to a “vote of no confidence.”
CtW had alleged that in his role as committee chairman, “Mr. Phillips bears responsibility for many of the company’s questionable governance practices, which include … inadequate response to legitimate governance concerns."
Further, CtW disliked that Phillips serves as trustee of Cincinnati Works, which received more than $200,000 in charitable contributions from foundations controlled by Cintas insiders and affiliates.
Each of the proposals had been endorsed by the Union of Needletrades, Industrial and Textile Employees (UNITE), an organization trying to unionize Cintas workers for more than five years.
Some Cintas employees who were given proxies by shareholders were denied access to the annual meeting, according to UNITE.
The U.S. Occupational Safety and Health Administration (OSHA) has cited at least 10 Cintas facilities nationwide in just over a year for safety violations, including one that resulted in the death of a worker. Since 2003 Cintas has been cited for more than 170 OSHA violations in its facilities, including more than 70 citations that OSHA deemed could cause “death or serious physical harm."
(Photo of protest outside Cintas annual meeting on Oct. 15 by Cameron Knight. See more photos here)
Just as the White House is criticizing one Republican lawmaker for apologizing to BP, it's been revealed that a local GOP leader has extensive stock holdings in BP and other oil companies.
The Associated Press is reporting that U.S. Rep. John Boehner (R-West Chester), the House minority leader, bought dozens of stocks in December including shares in BP, Exxon, Chevron, ConocoPhilips and Occidental. Each of the stocks is valued between $15,001 and $50,000, according to annual financial disclosure reports released Wednesday.
A Cincinnati-area legislator is calling for an Ohio House committee to hold a public hearing about the alleged link between fracking and ground tremors.
State Rep. Denise Driehaus (D-Price Hill) wrote a letter today asking that a public hearing be held during the next meeting of the House Agriculture and Natural Resources Committee. The meeting isn’t currently scheduled but likely will occur sometime later this month or in early February.