Howard Trauger's $80 million-asset Schuylkill Capital Management has joined $1 billion-asset Carnegie Investment Counsel, a Cleveland-based money manager. Trauger and his partner Scott Inglis will continue to run the business as Carnegie's local output from their Center City offices.
Trauger, who started in securities as a runner with the old Auchincloss firm in 1967 and went on to work in the Girard, First Pennsylvania and Provident trust departments, was a pioneer among the old-guard trust officers who started and ran their own credit analysis-research-portfolio management firms through the bull market of the 1990s and the industry consolidation and dispersion that followed.
He has headed the Financial Analysts of Philadelphia, Philadelphia Securities Association and the Bond Club of Philadelphia. Richard Alt, boss at Carnegie, tells me his firm's expanding office network and centralized administration will support Schuylkill customers and new business.
A pioneering California online wine-sales firm, NakedWines.com, has signed up nearly 3,000 "Angel"-class customers in Pennsylvania, who are buying wine, via online orders, by the case, for direct delivery avoiding state-owned Pa. Liquor Control Board stores, founder Ryan O'Connell tells me.
"PLCB charges a flat fee of $4.50 per order," which isn't so much when you split it per bottle over one or more 12-bottle cases, O'Connell notes.
The firm says Pennsylvania is among its fastest-growing states. O'Connell expects that more and larger firms will be entering the market and selling directly to thirsty Pennsylvanians, now that his firm and a few others have gotten their feet in the door.
"Our industry needs to consolidate. We were an awkward size," says Jim Smart, cofounder with Richard Devine of Smart, Devine & Co., an "accounting-oriented consulting firm" which includes 17 partners and 63 support staff at offices in Center City and King of Prussia as it plans to combine with 1,400-staff audit-and-tax accounting firm Marcum LLP of Melville, N.Y.
Five years after Smart, Devine opened -- seven years after Smart sold his larger Smart & Co. firm to private-equity investors, who broke it up -- the founders and their partners approved the Marcum deal. (These guys are used to joining forces: Marcum includes Philadelphia's former Margolis & Co.; Smart, Devine included Hanna McGlone and Nihill & Riedley.)
Jeff Zudeck, boss of Marcum's Bala Cynwyd outpost, will run the combined Philadelphia practice for Marcum. "They have a few industry expertises that locally we didn't have: in higher ed, in insurance, in litigation support service," he told me. "As a larger player we get more visibility." Plus, "we were clearly looking for a Center City presence."
At the former eBay Enterprise/GSI Commerce headquarters in King of Prussia -- the company, under new private-equity owners, will be renamed soon -- Michael Graff's Fraud Technology Lab is measuring online ripoffs that drive online-sales losses higher -- not to scare off buyers but to show merchants how to cut the risk of loss.
The busiest days for online fraudsters? New Year's, when digital gift-card fraud jumps to $6 for every $100 ordered, from the usual sub-1 percent; Christmas Eve, when overnight-delivery fraud jumps from the usual 1 in 100 packages to 1 in 20, "as criminals take advantage of procastinators" to steal boxes off porches; and any Wednesday, so deliveries can be timed for Fridays and stolen merchandise enjoyed "over the weekend," Graff says.
One of the most striking things Graff has used eBay analytics for is mapping fraud -- which is concentrated, not just in entry ports like New York, Seattle, Miami and the Texas border -- but also in the Portland, Ore. and Wilmington, Del. area, states with no retail sales taxes, home to busy concentrations of "freight forwarders," or warehouse-based middlemen, favored both by consumers who hope to avoid home-state sales taxes, and by fraudsters who direct jewelry and electronics purchases through the fraudsters to their mail-drops, then skip on the bills.
Charles Michael Cawley was the old-fashioned kind of corporate boss who used his power as if he cared about making an impact on people and the world around him, alongside the usual CEO responsibility to make himself and his shareholders rich; he did that, too.
Cawley, 75, was buried Nov. 21 from a Catholic church in Camden, Maine, the seaside former factory town where he'd spent summers as a kid, and where he had made his giant credit card bank, MBNA America, the region's dominant economic and social force, for a time. Maine was a sideshow to Cawley's larger enterprise; he based MBNA in Delaware, a banker's tax haven, pre-conditioned by the du Pont dynasty to eras of rapid job creation, corporate paternalism and well-polished surfaces, which Cawley delivered as if picking up the slack from "Uncle Dupie's" long decline from the time he moved there in 1981.
He deserves a place alongside John H. Patterson (of NCR), Tom Watson (IBM), AP Giannini (Bank of America) and even Steve Jobs of Apple in the Pantheon of full-throated (Charlie was a baritone, partial to Irish-American standards) practicioners of American corporate sales culture and fortune-building; though he's not likely to rest there, for reasons I'll get to.
Revzilla, the Navy Yard-based motorcycle-accessories digital retailer that employs 162 at its Navy Yard tech center, store and warehouse, has made Fortune's list of the 20 'best workplaces in retail,' alongside Wegman's and Whole Foods supermarkets, REI outdoor gear, Altoona-based Sheetz convenience stores, and Nordstrom department stores, among others.
The list is based on employees' own ratings on several scales, including 'great challenges' and boss relations, as told to survey firm Great Places to Work.
More objectively, Fortune says Revzilla perks include a 4%-of-salary, 1:1 401(k) match; 70% company-paid healthcare; college tuition reimbursement; free beverages; Septa subsidies; and a weekly catered lunch.
When Penn Liberty Bank's 400 or so Main Line shareholders got a $21.75 cash-and-stock offer from Wilmington-based WSFS Financial Corp. Monday, analysts like Matt Schultheis at Boenning & Scattergood and Joe Gladue at Merion Capital called it a high price and a coup for Penn Liberty founders Pat Ward and Brian Zwaan.
But then again: Seen from the hopes of the mid-2000s, when investors put down $12 for unlisted Penn Liberty shares in hopes of rich future profits, the modest 7% annual return "is not a good return for an investment that was illiquid" all that time, notes Ted Peters, the suburban-Philadelphia banker who skippered Bryn Mawr Trust Corp.'s enlargement-and-survival campaign, and now runs the $15 million Bluestone Financial Institutions Fund of bank stock investments.
It's a far cry from the 600%/7-year returns Peters' former National Bank of the Main Line delivered way back in the boom years, though also a big recovery from recession-year pricing. WSFS is a strong buyer, Peters agreed: "If I were a Penn Liberty shareholder I'd hold onto that stock." Bluestone is up 15% so far this year, as 3 of its 18 bank stocks have been sold at premium prices -- Naugatuck of CT, Cheviot of OH, C1 of FL. (Bluestone is not currently in WSFS.)
Mutual-fund giant Vanguard Group underpaid taxes on its income in Texas for 2010-14, according to records of the Texas Comptroller of Public Accounts. State-sponsored audits found payment "deficiency" for all four years in Vanguard's payments of the state's corporate franchise tax, which charged companies 1 percent percent of a company's sales, minus costs, in the Lone Star State.
The disclosure comes amid review of Vanguard's tax payments by state and federal agencies after allegations by former Vanguard tax attorney David Danon. Danon told agencies that the $3.4 trillion-asset, privately-held company's use of "at-cost" expenses in setting professional-service fees collected from Vanguard-brand mutual funds wrongly ignored federal tax rules, which call for market-rate prices on payments between affiliated companies. Danon alleges that Vanguard's well-known low fees were based on illegal tax avoidance, enabling the Malvern-based company to unfairly win business from rivals. The company has said it complies with the law.
Texas tax officials won't say how much Vanguard owed or repaid after it was caught. But state tax agency documents show Texas agreed in October to award $117,000 to ex-tax-lawyer Danon, who began reporting alleged Vanguard income tax underpayments to federal and state agencies before Vanguard fired him in early 2013. Applying Texas' 1 percent franchise income tax rate, and its 5 percent "informant's recovery payment" ceiling, Danon's award implies Vanguard failed to report a minimum of $234 million in Texas taxable income for 2010-14.