Keurig to pay $1.5M fine to SEC over K-Cup recyclability claims
(NEW YORK) — Keurig, the company behind the popular home brewing and single-serving coffee maker systems, will pay the SEC a $1.5 million civil penalty after it failed to disclose concerns from two major recycling companies about the K-Cup pods in its annual reports.
The Securities and Exchange Commission announced Tuesday that Keurig Dr Pepper Inc. will settle with the agency for the hefty fine after it was “charged with making inaccurate statements regarding the recyclability of its K-Cup single use beverage pods.”
“Public companies must ensure that the reports they file with the SEC are complete and accurate,” John T. Dugan, Associate Director for the regional Boston office of the SEC said in a press release. “When a company speaks to an issue in its annual report, they are required to provide information necessary for investors to get the full picture on that issue so that investors can make educated investment decisions.”
A spokesperson at Keurig Dr Pepper told ABC News that the company was “pleased to have reached an agreement that fully resolves this matter.”
“Our K-Cup pods are made from recyclable polypropylene plastic (also known as #5 plastic), which is widely accepted in curbside recycling systems across North America. We continue to encourage consumers to check with their local recycling program to verify acceptance of pods, as they are not recycled in many communities. We remain committed to a better, more standardized recycling system for all packaging materials through KDP actions, collaboration and smart policy solutions,” the statement continued.
In consecutive annual reports for the company’s fiscal years 2019 and 2020, the SEC found that “Keurig stated that its testing with recycling facilities ‘validated that [K-Cup pods] can be effectively recycled.’ But Keurig did not disclose that two of the largest recycling companies in the United States had expressed significant concerns to Keurig regarding the commercial feasibility of curbside recycling of K-Cup pods at that time and indicated that they did not presently intend to accept them for recycling.”
According to the government agency’s review of the 2019 report, “sales of K-Cup pods comprised a significant percentage of net sales of Keurig’s coffee systems business segment, and research earlier conducted by a Keurig subsidiary indicated that environmental concerns were a significant factor that certain consumers considered, among others, when deciding whether to purchase a Keurig brewing system.”
The SEC order found that “Keurig violated Section 13(a) of the Securities Exchange Act of 1934 and Rule 13a-1 thereunder.
Keurig agreed to a cease-and-desist order, according to the SEC, without admitting or denying the findings in the order.
The SEC investigation was conducted by Michael Franck, Cassandra H. Arriaza, Susan Cooke, and Michele T. Perillo of the Boston Regional Office.
(WASHINGTON) — Vice President Kamala Harris has unveiled a comprehensive agenda focused on cooling inflation, but many economists consider the fight against price increases to be nearly finished.
Inflation stands below 3% for the first time since 2021, U.S. government data earlier this month showed. The Federal Reserve is widely expected to cut interest rates at a meeting in September, suggesting that the central bank could retreat from its yearslong battle to slow prices.
Still, consumer prices have climbed more than 20% over the last three years, demoralizing shoppers and straining household budgets. Inflation continues to top lists of voter concerns.
Economists who spoke with ABC News described current price levels as an unfortunate reality that would be nearly impossible to undo, since an outright lowering of prices typically accompanies economic hardship that would require medicine more painful than the ailment.
However, some economists said Harris’ proposals could reduce prices for some essential goods, like food, while slowing inflation for items such as housing that are still seeing rapid price increases. Other economists said the measures amount to a solution for a problem that no longer exists, saying the tardy legislative fixes could stunt economic activity.
“We can’t unwind prices back to a certain place,” Catherine Pakaluk, a professor of economics at the Busch School of Business at Catholic University, told ABC News.
Since overall prices depend on a worldwide tug of war between supply and demand, general cost reductions would demand a significant economic shock to send that balance askew, Pakaluk added.
“All prices are linked together,” Pakaluk said. “We all have a sense, ‘If only we could reset prices back to where they were three years ago.’ But there’s no mechanism for that.”
In response to ABC News’ request for comment, the Harris campaign pointed to a speech that she delivered on Friday.
“When I am elected president, I will make it a top priority to bring down costs and increase economic security for all Americans. As president, I will take on the high costs that matter most to most Americans, like the cost of food,” Harris said.
“We all know that prices went up during the pandemic when the supply chains shut down and failed, but our supply chains have now improved and prices are still too high,” Harris added.
While acknowledging the difficulty of achieving overall price decreases, some economists noted a potential for price reductions in certain industries, especially the food and grocery sector targeted by Harris’ proposals.
Harris points to the market power of large corporations in the grocery industry as a key cause of rapid price increases for food, saying companies use their outsized role to raise prices without fear of a competitor offering a comparable product at a more affordable price. Consumers, the Harris campaign says, are left with nowhere to turn.
“Extreme consolidation in the food industry has led to higher prices that account for a large part of higher grocery bills,” the campaign said in a statement on Friday.
Dan Scheitrum, a professor of agribusiness at California Polytechnic State University, San Luis Obispo, said Harris’ plan to crack down on potential anti-competitive practices within the food sector could end up lowering prices for some household staples.
“If price fixing is taking place and it gets addressed, I expect that could undo some of the price increases,” Scheitrum said.
While general inflation has moderated, price increases for housing remain highly elevated. Housing prices climbed 5.1% over the year ending in July, soaring at a pace more than twice as fast as the overall inflation rate.
The Harris campaign proposed restoring affordability through a combination of boosting home supply and easing the price pressures for some homebuyers.
Economists who spoke with ABC News largely applauded Harris’ efforts to boost the housing supply but offered mixed opinions about a potential $25,000 subsidy for first-time homebuyers.
“We as economists commonly disagree, but the question of housing supply is something we kind of all agree about,” Pakaluk said
On the other hand, a $25,000 subsidy for some homebuyers could allow them to increase their bids and send prices higher, Pakaluk added. “It might have the opposite effect on price than they want,” Pakaluk said.
Peter Morici, a professor emeritus at the University of Maryland’s School of Business, warned against the economic consequences of any attempt to cool prices when they’re well on their way to normal levels.
“The price increases that we’ve seen are very difficult to reverse,” Morici told ABC News. “It can’t be solved, except with draconian measures.”
Other economists indicated that a wide-ranging effort to address inflation could play an important preventative role, safeguarding the economy against a price spike in the event of an emergency, such as another pandemic.
“Even if you’re back to being on budget rather than on edge, you’re still scared. You’ve had a really terrible experience from no fault of your own,” Isabella Weber, an economics professor at the University of Massachusetts Amherst who studies price controls, told ABC News.
“We have to prepare for the next shock,” Weber added.
(LOS ANGELES) — Waymo, the self-driving car division of Alphabet, first began offering its autonomous rideshare service on the streets of San Francisco earlier this year. Now the company is expanding, recently launching in Los Angeles.
Waymo’s electric Jaguar I-Pace SUVs operate as taxis, except there’s nobody in the driver’s seat. Using cameras, sensors and even microphones, it ferries riders to their destinations – if all goes according to plan – just as a human driver would.
“There is nobody behind the driver’s seat at all — in fact, often there’s nobody in the car at all, and it’s driving to pick somebody up,” says Andrew Chatham, senior director of commercialization, scale, and infrastructure at Waymo. He spoke with ABC Audio in LA for a new exhibit at the famed Petersen Automotive Museum highlighting the story of Waymo.
“So we use a variety of sensors on the car. There’s cameras, there’s radars and lidar — which is a laser range finding system. We take all that information, we look 360 degrees around us, multiple times a second, and we drive,” says Chatham.
And Waymo claims driving in one of their cars with the computers doing the work – accelerating, braking, stopping, and changing lanes – is actually safer than driving with a human behind the wheel.
“It’s very clear that it is ready for the streets — we’ve seen from statistics that it is safer than human drivers, so if you’re comfortable with those, you should be pretty comfortable with Waymo,” says Chatham. “Even more comfortable.”
But not everyone is comfortable.
“We’ve heard of these cars shutting down when they lose cell service, traffic being backed up, they don’t know how to maneuver through more, you know, winding roads. Blocking emergency vehicles. And also there’s an aspect of jobs being lost,” says Los Angeles City Councilman Hugo Soto-Martinez.
“So as far as I can tell, there’s some things where we just have to put our foot down and this is one of them,” he says.
This summer, police in Phoenix, where the company also operates, pulled over a Waymo vehicle for driving into oncoming traffic while trying to navigate around a construction area. That maneuver is why Councilmember Soto-Martinez says he doesn’t want them on his streets.
“We are elected to provide safety, to deal with transportation issues, and so many other things for our residents, that’s what we are voted for,” says Soto-Martinez.
Waymo said the incident in Phoenix happened due to “inconsistent construction signage.”
But like it or not, self-driving cars are the future, according to Rahul Jain, a professor at the University of Southern California who specializes in electrical and computer engineering and works with Google.
“This is really inevitable, it’s going to happen,” says Jain, though he adds that wide-scale adoption of self-driving technology is likely a long way off.
“Twenty years might be the right timespan, when we see this technology reduce in cost enough, and also advanced sufficiently that it will be in passenger vehicles that people can buy,” he says.
Even still, Jain says the technology is currently safe for passengers, so much so that the next step for autonomous vehicle companies could be removing the vehicle’s steering wheel.
“There’s definitely going to be some transition as this technology evolves, you know, then it will be awhile before people become comfortable, and then we can feel comfortable with the steering wheel also missing. But I don’t think we’re there yet,” says Jain.
Chatham says, in general, his company’s technology is always learning. Already, the cars know to pull over when they detect the sound of a siren or flashing emergency lights. Next, he says, Waymo is tackling how autonomous vehicles behave in inclement weather conditions.
“Sure, on the map the lane is over here, but according to how everybody else is driving and where the divots are in the snow, it looks like the lane is really over here,” says Chatham. “And that’s something that the car starts to reason about and it’s getting more intelligent with AI about exactly where we want to drive to be like a human.”
But Councilmember Soto-Martinez has another issue: driverless taxis could mean a human is out of a job.
“It’s definitely taking jobs right now. I mean, there are autonomous vehicles driving folks around with the many issues,” he says. “In my community, those jobs are often done by people who just arrived in this country. … If that’s going to be outsourced to an autonomous vehicle that is gonna cause all these safety concerns, I have big issues with that.”
Jain says history would show technology always takes jobs, and that jobs change over time.
“Eventually there is some adjustment in the labor market. People find other kinds of jobs, and start to do more interesting jobs than I guess, driving cars around,” says Jain.
Chatham says while nobody is driving the cars, plenty of people are working at Waymo.
“Waymo’s provided a lot of jobs. We’ve do use several human beings to run the service, we have people operating the depots, we have people working in desk-based jobs. I’m employed by Waymo,” says Chatham.
“And I think it’s also easy to forget that people spend a lot of their time just sitting in traffic, beholden to the steering wheel that they’re sitting behind. And they can free up that time, and make people productive. That is time back in people’s lives,” he adds.
Waymo is already looking at what their next vehicle will look like, a custom built van-like vehicle designed by a Chinese firm called Zeekr.
“The base vehicle is really built as a versatile platform. This is really a vehicle that’s built to be a high thru-put taxi service. It’s very comfortable,” says Chatham.
Listen to this story and more on ABC Audio’s new special, On The Move:
(NEW YORK) — The Federal Reserve cut its benchmark interest rate a half of a percentage point on Wednesday in a landmark decision that dials back its years-long fight against inflation and could deliver relief for borrowers saddled with high costs.
The central bank’s first rate cut since 2020 came after a recent stretch of data had established the key conditions for a rate cut: falling inflation and slowing job gains.
In theory, lower interest rates help stimulate economic activity and boost employment. The Dow Jones Industrial Average surged 200 points in the immediate aftermath of the announcement on Wednesday afternoon.
The S&P 500 and the Nasdaq also climbed following the news.
Speaking at a press conference in Washington D.C. on Wednesday, Fed Chair Jerome Powell described the rate decision as a shift in policy at the central bank.
“This recalibration of our policy stance will help maintain the strength of the economy and the labor market, and enable further progress on inflation,” Powell said.
“The U.S. economy is in good shape,” Powell added. “We want to keep it there.”
The Federal Open Market Committee, a policymaking body at the Fed, on Wednesday forecast further interest rate cuts.
By the end of 2024, interest rates will fall nearly another half of a percentage point from their current level of between 4.75% and 5%, according to FOMC projections. Interest rates will drop another percentage point over the course of 2025, the projections indicated.
Over time, rate cuts ease the burden on borrowers for everything from home mortgages to credit cards to cars, making it cheaper to get a loan or refinance one. The cuts also boost company valuations, potentially helping fuel returns for stockholders.
Earlier this year, mortgage rates reached their highest level in more than two decades; while the average rate for credit card holders topped anything on record at the Fed. Interest rates for car loans have soared to levels last seen at the onset of the 2008 financial crisis, Edmunds found.
Interest rate cuts will bring many of those payments down, delivering gains for borrowers.
However, borrowers should not expect immediate relief from the Fed’s initial rate cut, Elizabeth Renter, senior economist at NerdWallet, told ABC News in a statement prior to the decision.
“This initial rate cut will have little immediate impact,” Renter said. “I anticipate many consumers and business owners will take the beginning of this change in monetary policy as a sign of hope.”
Inflation has slowed dramatically from a peak of about 9% in 2022, though it remains slightly higher than the Fed’s target of 2%.
Meanwhile, the job market has cooled. A weaker-than-expected jobs report in each of the last two months has stoked concern among some economists.
“We will do everything we can to support a strong labor market as we make further progress toward price stability,” Powell said last month.
Prior to the decision, the chances of a rate cut were are all but certain, according to the CME FedWatch Tool, a measure of market sentiment.
Market observers, however, had been divided over whether the Fed will impose its typical cut of a quarter of a percentage point, or opt for a larger half-point cut. The tool estimated the probability of a half-point cut at 65% and the odds of a quarter-point cut at 35%.
A half-point cut risked overstimulating the economy and rekindling elevated inflation, while a quarter-point cut threatened to delay the type of economic jumpstart that may be required to avert a recession, Seema Shah, chief global strategist at Principal Asset Management, told ABC News in a statement.
“Rarely have market expectations been so torn” on the eve of a rate decision, Shah added.
The rate cut on Wednesday went into effect less than 50 days before the November election.
The decision deviated from the policy approach taken by the Fed prior to many recent presidential elections, a Reuters analysis found. Policy rates were left unchanged for six to 12 months before the 2020, 2016, 2012 and 2000 U.S. presidential elections, according to Reuters.
To be sure, the Fed says it bases its decisions on economic conditions and operates as an independent government body.
When asked about the 2024 election at a press conference in Washington, D.C., in December, Powell said, “We don’t think about politics.”