Ex-Madoff aide: 'I created fake books and records'

Former Madoff employee Frank DiPascali testified for the government in a trial of five other former Madoff employees.

NEW YORK (CNNMoney)

"We were lying," said DiPascali, referring to former Madoff colleagues on trial for allegedly helping Madoff pull off his massive Ponzi scheme. "I'm talking about trades that ... actually didn't exist."

DiPascali, now a government witness, said he "created fake books and records" during his 33 years at Madoff's firm. "It was pretty extensive."

Fake trading went on "for as long as I can remember," he testified.

Related: Prison exclusive with Bernie Madoff

DiPascali, who rose from clerk to account manager, has pleaded guilty to charges that include securities fraud, investment advising fraud, perjury, international money laundering, income tax evasion, wire fraud and mail fraud. He has yet to be sentenced.

During testimony in U.S. District Court in Manhattan, DiPascali said he hopes his cooperation will cause the sentence to be "something substantially less than" 125 years.

In using DiPascali as their star witness, prosecutors are trying to destroy the myth that his ex-boss acted alone.

On trial are five former Madoff employees who were in the courtroom as DiPascali testified. They are accused of helping Madoff trick thousands of victims out of their money. All have pleaded not guilty.

In October, attorney Andrew Frisch, who is representing one of the defendants now on trial, attacked DiPascali's credibility in court, calling him "a pathological liar [and] a shredder of documents ... whose first instinct was to run and hide."

The trial began in October and is expected to last five months.

Meanwhile, Madoff is languishing in a federal prison in North Carolina, where he is serving a 150-year sentence. He was arrested nearly five years ago, on Dec. 11, 2008, and pleaded guilty three months later.

Madoff's brother, Peter Madoff, who also worked at the firm, pleaded guilty last year and was sentenced to 10 years in prison.

First Published: December 3, 2013: 6:40 AM ET

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PlayStation 4 sales top 2 million

Demand for Sony's first new game console in seven years is outstripping supply.

LONDON (CNNMoney)

Worldwide sales of the game console topped 2.1 million as of Dec.1, just two weeks after it was launched in the U.S. and Canada and three days after it was made available in other markets.

Sony (SNE) said it had sold 700,000 units in Europe, Australasia and Latin America since Nov. 29. That followed sales of over one million during the first 24 hours in North America, which Sony says was a record for a PlayStation launch.

"Demand remains incredibly strong and continues to overwhelm the supply worldwide," said Andrew House, president and group CEO, Sony Computer Entertainment Inc.

The game system is Sony's first in seven years and includes new social features, streaming video apps and a touch pad on the controller. It is compatible with about 20 games, but the catalog is expected to expand by the end of the year.

Related: PlayStation 4: For gamers only

Sony is going head-to-head with Microsoft's (MSFT, Fortune 500) new Xbox One in the battle for gamers' dollars this holiday season. The PS4 sells for $100 less than the Xbox One.

The Japanese company disappointed investors early November by posting an unexpected loss for the most recent quarter and warning that annual profit would be 40% lower than forecast just three months earlier.

Sony expects to sell 5 million PlayStation 4's by the end of March. Analysts expect demand will outpace supply through Christmas.

First Published: December 3, 2013: 7:04 AM ET

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Stocks: Momentum fading after record run

Click on chart to track premarkets

NEW YORK (CNNMoney)

It's just the second trading day of December and investors already look wary of letting the rampage run to the end of the year.

U.S. stock futures were modestly lower ahead of the opening bell Tuesday.

The S&P has managed gains in December for 24 of the past 30 years, but with the index up 27% so far in 2013 investors are ready to take a break.

"It's likely that markets will be in a holding pattern as we head into the business end of the week that starts with ADP employment tomorrow, the ECB on Thursday and ending with payrolls on Friday," wrote Deutsche Bank analyst Jim Reid, in a market report.

U.S. stocks slipped Monday as disappointing Black Friday sales weighed on retailers, and an upbeat manufacturing report revived talk that the Federal Reserve could begin scaling back its massive stimulus program as early as this month.

Related: Fear & Greed Index gets greedy

Friday brings the publication of the monthly jobs report which investors hope will send a much clearer signal as to the likely next move by the Fed.

There's little corporate or economic news expected Tuesday but the world's major automakers will release their monthly sales figures over the course of the day.

Sony (SNE) said that it sold 2.1 million Playstation 4s worldwide as of Dec. 1.

European markets were outpacing Wall Street losses with dismal morning trading. France's CAC 40 down 1.7%.

Asian markets ended mixed, with Japan's Nikkei advancing 0.6% as the yen weakened. Shares in Shanghai joined the rally, adding 0.6% while Hong Kong's Hang Seng declined by 0.5%.

First Published: December 3, 2013: 5:23 AM ET

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Pay $2,000 to be homeless

Mike Momany is offering a "crash" course in homelessness ... for $2,000.

NEW YORK (CNNMoney)

That's what 62-year-old Mike Momany, who himself is homeless in Seattle, hopes people will do.

After working as a contract programmer for years, he got into financial trouble when business slowed, and he has been experimenting with new ways of making money ever since. One plan is to launch a marijuana tour that would show people around local pot-growing operations, which have recently become legal in Washington state.

But for now, he is offering a three-day tour that he calls a "private course in Applied Homelessness."

Upset by the growing homeless population in Seattle, which has shot up by 15% since 2007, to more than 9,000 people this year who are living in shelters or on the streets, Momany claims he wants to get people thinking about new ways to solve homelessness. But he wants to make a business of it, too.

Each tour costs $2,000. Momany says his take is $1,500 (for an hourly rate of $19.76). The rest -- about $500 -- will be donated to shelters and pay for expenses, like the clothes his clients will wear to blend in.

No one has signed up for a tour yet, but he says he's in talks with a few interested parties.

Related: Student homelessness hits record high

Momany said he'll disguise his customers as homeless people, give them a new name and "a simple life script" to use. Tour-goers would stay at a $15-per-night hostel, in the same building as a homeless shelter and only one notch above shelter conditions. (Since it's divided by gender, the tour isn't available to women).

They will visit several popular homeless hangouts, like the Seattle Public Library, talk to other homeless people, panhandle, nap on benches and roam the streets at 3 a.m. on one of the nights.

Not surprisingly, Momany's venture has sparked debate.

"Homeless people are not tourist attractions. They have enough issues without this company profiting off exploiting them as well," one commenter on a Seattle Post-Intelligencer story about the tour recently wrote.

Related: Poverty level doesn't budge - 50 million and counting

MJ Kiser, program director at Compass Housing Alliance in Seattle, said Momany's tour would use up much-needed resources like housing and food, and that his $2,000 fee "could help a homeless family for two months or provide meals for all [220] of the folks in Compass shelters one night."

Michael Stoops, director of community organizing at the National Coalition for the Homeless, said he thinks Momany's intentions are in the right place, but he doesn't think it's right to charge $2,000 or for Momany to pay himself such a big fee.

If the experience is really about giving people an inside look at homelessness, then it shouldn't be about turning a profit, Stoops said.

Related: Boomtown charity buys homeless one-way ticket out

The nonprofit coalition offers a similar program, called the Homeless Challenge: People can spend 48 hours living on the streets of Washington, D.C., with a guide who is either currently or formerly homeless. The organization asks people for a $50 nightly donation to local shelters if they can afford it.

"It's not a moneymaker," Stoops said. "We do it to give [people] the experience and to let them interact with other homeless folks."

That's where Stoops and Momany agree. "Everyone could benefit from spending some time on the streets as long as it's done in an ethical, safe manner and homeless people are involved," said Stoops.

First Published: December 2, 2013: 6:01 AM ET

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Why some states pay less for Obamacare

Click on map to see Obamacare premiums in your state

NEW YORK (CNNMoney)

In Oregon and Maryland, state regulators challenged the premiums that insurers wanted to charge for Obamacare policies, forcing the companies to lower their rates.

But in states like Florida and Texas, regulators took a hands-off approach, allowing the premiums insurers filed to sail through.

Like most things Obamacare, the treatment was laced with politics.

Several states run by Democrats were active and public about negotiating with insurers.

Some Republican-led states disassociated themselves from the process, sending the filings to the federal government, which does not have the authority to disapprove of rates.

Rate reviews by states have proved effective in lowering premiums, according to a study last year by the Kaiser Family Foundation. The average rate allowed after a review was 2.6 percentage points lower than the average rate initially requested in the individual market, though there was a wide variation between states.

"If states were more aggressive in reviewing rates, you saw more of a decrease," said Cynthia Cox, policy analyst at Kaiser.

Share your story: Are you signing up for Obamacare?

Oregon fell into this category. While reviewing rate filings submitted for its state exchange earlier this year, Oregon's insurance commissioner peppered the 14 insurers with questions in writing and at public hearings to justify their proposed premiums. In some cases, regulators contested the assumptions the insurers used for allowing everyone to apply for coverage regardless of pre-existing conditions. At least one insurer made a mathematical error, and others didn't adequately document their projections for the rise in medical costs.

Ultimately, the commissioner lowered rates for individual plans up to 30%. The average premium for a mid-range plan for a 40-year-old in Portland is $201 before federal subsidies, according to Kaiser.

"It's important that there is someone really looking at these rates to see that they are justified and reasonable," said Laura Cali, the state's commissioner.

Florida, meanwhile, took the opposite approach. Legislators, who defied the governor and refused to extend Medicaid to all poor adults, passed a bill that suspended the insurance commissioner's power to approve rates for two years. So the insurers pretty much got to charge whatever they wanted since the federal government can't argue about the premiums either. The average mid-range plan premium is $269 for a 40-year-old Miami resident.

State regulators said that Florida has a very competitive insurance market and that the rates came in close to one another and in line with national figures. And because insurers had to create new products that met Obamacare standards, the insurance department had little experience to go on.

"It would have been very hard for us to challenge a company's rate filings," said Wences Troncoso, deputy commissioner in the state's Office of Insurance Regulation.

But other experts said that the state missed a chance to secure a better deal for its residents.

"Florida consumers could conceivably end up paying unreasonable rates that may have been reduced or withdrawn had they been reviewed by Florida's own OIR," wrote Sally McCarty, senior research fellow at Georgetown University Health Policy Institute, in a blog post.

First Published: December 2, 2013: 6:06 AM ET

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Stocks start December in cautious mood

Click on chart to track premarkets

NEW YORK (CNNMoney)

U.S. stock futures were little changed ahead of the opening bell, while world markets were mixed despite encouraging manufacturing data from China and Europe.

After an underwhelming Black Friday, investors will be watching Cyber Monday shopping figures for further clues as to the health of the U.S. consumer. The National Retail Federation reported that shoppers spent an average of 4% less over the holiday weekend, the first decline in spending since 2009.

Related: Bulls look for new market highs

At 10 a.m. ET, the Census Bureau will release data on construction spending, while the Institute for Supply Management will release its monthly manufacturing index .

Those reports will kick off "a bumper week of U.S. data over the next five days, in part making up for two days of blackout last week for Thanksgiving," said Deutsche Bank analyst Jim Reid

The November jobs report is due Friday and that could give investors a better sense of how much longer the Federal Reserve will maintain its massive stimulus program at current levels.

Other reports this week include auto sales, non-manufacturing ISM, the second estimate of third quarter GDP and weekly jobless claims.

In corporate news, doughnut maker Krispy Kreme (KKD) is scheduled to report quarterly results after the closing bell.

Related: Fear & Greed Index, extreme greed

U.S. stocks finished a strong November Friday on a trading day that was shortened for the holiday weekend.

European markets were weak in morning trading, despite surveys showing manufacturing activity at its highest level since June 2011.

Asian markets ended mixed after manufacturing data out of China exceeded analyst expectations and state regulators signaled they would soon lift a moratorium on IPOs. The Hang Seng gained 1%, while the Shanghai Composite closed down 0.5% as investors eyed the opportunity to move cash into new listings.

The Nikkei was flat as markets shrugged off the latest confrontation between Beijing and Tokyo over a set of contested islands in the East China Sea.

First Published: December 2, 2013: 5:38 AM ET

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Wal-Mart protesters arrested at Black Friday rallies

Demonstrators protesting outside a Walmart in Paramount, Calif. are arrested during a 2012 Black Friday protest. Protesters took to the streets near a number of Walmart locations again this year.

NEW YORK (CNNMoney)

Ten people were arrested on misdemeanor charges Friday at a protest near a Wal-Mart in Ontario, Calif., after they moved into an intersection and failed to disperse, Ontario Police Department Sgt. David McBride said.

McBride called the incident "peaceful," and estimated that between 100 and 150 people had attended the rally. It was unclear how many of those were actual Wal-Mart (WMT, Fortune 500) workers.

Another 10 people were issued citations at a protest near a Wal-Mart in Chicago for blocking a roadway. Protests also occurred in cities including Alexandria, Va.; Quincey, Mass.; Orlando, Fla.; Bellevue, Wash; Lakeside, Colo.; and Hyattsville, Md.

Wal-Mart's U.S. CEO defends early Thanksgiving Day opening

The protesters are calling for Wal-Mart to pay full-time employees at least $25,000 per year, and to increase opportunities for full-time work.

Wal-Mart currently employs 1.2 million hourly associates who earn an average of about $12 an hour and are also eligible for up to $2,500 a year in quarterly bonuses, spokesman David Tovar said. Of that 1.2 million, "over 50%" are full-time employees working an average of 37 hours per week, Tovar said.

Workers are considered full-time at Wal-Mart if they work 34 hours or more per week. The company's part-time workers average about 27 hours a week.

Over 475,000 of the company's associates earned $25,000 or more last year, according to a Wal-Mart presentation from September.

Protest organizers claimed rallies took place at 1500 locations Friday. Tovar said that number was hugely inflated, and that very few demonstrators were actual Wal-Mart employees.

Holiday shopping season kicks off with fights, arrests

Friday's protests were organized by OUR Walmart, a group backed by the United Food and Commercial Workers Union. OUR Walmart and the UFCW do not represent Wal-Mart workers, and say their goal is only "helping Wal-Mart employees as individuals or groups in their dealings with Wal-Mart over labor rights and standards."

OUR Walmart held similar protests last year. Last week, the National Labor Relations Board said it was ready to bring a case against Wal-Mart for allegedly retaliating against workers who took part in those protests.

The NLRB, which protects the rights of workers who organize for better working conditions, alleged that Wal-Mart stores in more than a dozen states "unlawfully threatened, disciplined, and/or terminated employees" who participated in legal strikes and protests.

Speaking to CNN Friday, Wal-Mart U.S. CEO Bill Simon denied the NLRB accusations and defended the company's labor practices, saying its pay is above the median for the retail sector.

"Black Friday...is the big stage and Wal-Mart is a big player on the big stage. Those who want to try to change an industry like retail, it's not unexpected that they would be out on Black Friday at Wal-Mart with something to say about it," Simon said.

First Published: November 29, 2013: 3:52 PM ET

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Thanksgiving eats into Black Friday sales

NEW YORK (CNNMoney)

Overall brick-and-mortar store sales for Thursday and Friday rose 2.3% from last year, to $12.3 billion, according to a report released Saturday by ShopperTrak, a retail industry research firm. But the earlier opening of stores on Thanksgiving cut into sales on Black Friday itself, which were down 13.2% from 2012.

"The Black Friday shopping experience is changing, with more shoppers choosing to go out on Thanksgiving Day," says Bill Martin, ShopperTrak founder, in a statement.

Sales were higher in all regions of the nation except the Northeast, according to the firm. The Northeast dealt with a storm on Wednesday, and the cold and windy aftermath the two days afterward.

While sales in stores edged up, online sales rose -- particularly on mobile devices.

Related: Thanksgiving openings are the new normal

IBM's survey of 800 retail websites showed sales on mobile devices grew by more than 40% from Black Friday last year, accounting for more than one in five online sales transactions Friday and more than one in four on Thanksgiving Day.

While more people browse at merchandise on their smartphones, the report shows they're more likely to touch "checkout" on their tablets. Tablet sales accounted for more than 14% of online sales on Black Friday, about twice the sales of smartphones. Tablet users also spend nearly $133 per order, 15% more than smartphone shoppers.

IBM says year-over-year total online sales grew 19.7% on Thanksgiving Day and nearly 19% on Black Friday.

Related: 2013 Fortune holiday gift guide

More reports on holiday weekend sales are expected in coming days.

Retail analysts are expecting lackluster holiday sales. Although the stock market is at record highs and gas prices have fallen, concern about the 2014 economy and the specter of another government fiscal crisis early in the year has "dampened confidence on the cusp of holiday shopping," Morgan Stanley analysts said.

-- CNNMoney's Hibah Yousuf contributed to this report

First Published: November 30, 2013: 7:08 PM ET

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Cyber Monday: Life imitating hype

Even Scott Silverman, one of the people who coined the term "Cyber Monday," is surprised it caught on the way it has.

NEW YORK (CNNMoney)

When it started in 2005, the first Monday after the Thanksgiving weekend was only the 10th busiest day of the year for online sales, according to comScore.

The following year, it actually fell to the 12th.

But the name was catchy enough to prompt retailers to offer Cyber Monday sales. And that prompted online shoppers to make more of their purchases on Cyber Monday. By 2010, it was the biggest day of the year for online sales.

"It became a self-fulfilling prophecy," said Andrew Lipman, vice president of marketing & insights at comScore.

Last year, there were $1.5 billion in online orders from desktop computers on Cyber Monday, and that is expected to hit $1.8 billion this year. Including mobile, online sales could reach $2 billion.

As much as those online sales have grown in the last eight years, it's still a fraction of traditional brick-and-mortar store sales. One estimate from ShopperTrak puts those in-store sales for Black Friday 2012 at $11.2 billion.

Related: We went shopping on Thanksgiving!

The name Cyber Monday was coined by Shop.org, a division of the National Retail Federation.

"It was pretty amazing the way it took off," said retail consultant Scott Silverman, who was the executive director of Shop.org at the time, and part of the two-person team that thought it up. The other is Ellen Davis, an official with NRF.

Lipman said he expects Cyber Monday will continue to hold onto its lead in online sales for the foreseeable future. But other days are seeing even greater growth in online sales.

Black Friday online sales were up 28% last year, topping $1 billion for the first time, compared to 17% growth for Cyber Monday.

And the more rapid growth of mobile online sales could give Black Friday even greater growth this year. Lipman said Black Friday could become Showrooming Friday, as shoppers look at an item in stores, then make the purchase for less online.

"Black Friday isn't going stop having huge offline sales," he said. "But people are out there bargain hunting. Mobile sales make that easier to do."

First Published: November 30, 2013: 10:43 PM ET

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Bitcoin worth $9M buried in garbage dump

A hard drive containing about $9 million in bitcoin is trapped under mounds of trash at a landfill site like this one in the U.K.

LONDON (CNNMoney)

The device is now buried under a mountain of garbage at a landfill site in Wales. It will be almost impossible to find.

James Howells got rid of the drive, which holds a digital store of 7,500 bitcoins, between June and August this year.

The IT worker mined the virtual currency four years ago when it was the exclusive domain of tech geeks.

Back then bitcoin was worth very little. On Friday, the cryptocurrency broke through $1,200, making the missing hard drive worth around $9 million.

Related: Bitcoin worth almost as much as gold

Howells had been hanging onto it for several years before deciding to clean up his home.

After discovering the mistake late last week, a "devastated" Howells began a frantic search through computer files and other drives for a backup. There isn't one.

A trip to the garbage dump was the only option.

"As soon as I saw the site, I thought you've got no chance. The area covered is huge," he told CNN.

A spokesperson for Newport City Council said an item thrown away in the summer months would now be buried under 25,000 cubic meters of waste and earth.

The council, which operates the dump, said it has helped retrieve items in some circumstances "but this would have to be done very quickly after it was thrown away."

Howells said he's had all sorts of suggestions emailed to him about how to get the drive back.

But well-meaning individuals shouldn't bother heading to the tip on his behalf - it's closed to the public for safety reasons.

Related: 8 things you can buy with bitcoin

Speculators have helped power bitcoin's dazzling rise this year.

A growing number of businesses now accept bitcoins, including some Subway sandwich shops and Richard Branson's Virgin Galactic space travel venture, though critics claim it's unlikely to become a legitimate currency.

The program behind bitcoin was created anonymously and introduced on the internet in 2010. Unlike traditional money, bitcoins are not managed by a central authority and exist only in cyberspace.

-- CNN's Adam Dunnakey contributed to this report.

First Published: November 29, 2013: 11:08 AM ET

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