“I, The Jury” – The Prologue [Part 0] [An Original Online Series]

Underworld Awakening Publicity Still

“Whoever we are … Wherever we reside … We exist on the whim of murderers …”— Miles Davis, “The Rock”

***

An original online series based on characters and situations from the Vampire trilogy “The Endless Night” by H. P. Lovelace; dedicated to Mickey Spillane, his Mike Hammer, and the original, his “I, The Jury”. So, if you’re looking for Sherlock Holmes, Perry Mason, Nero Wolf, et al, you’d best look elsewhere. Mickey Spillane … dead … but not forgotten … never …

***

Series starts January 08, 2011

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The Endless Night, The First 16 Pages – [an excerpt from IUP, Book 01]

Poisen Elves
Be careful what you wish for … sometimes you get it

Click on the image of Jenny Miller, Mondo’s BFF, to read the pages … Enjoy … :)

 

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I, The Jury – “Velvet Love. Girl on Girl.” [Part 54]

Mondo emerges from the room, closing the door behind her.

To Special Agents Eunice Bloom and Bernie Mack, Mondo is a different person—looks the same, but is different, nonetheless. A hunch. A feeling. The gut instincts of two trained, experienced investigators.

To Mondo, she is finally herself again. No more Mondo mind-fucking herself, so that this game of cat and mouse could be drawn out for her own amusement. No more Mondo being a caricature of the real her. Cold, callous, loathsome bitch—comes to mind in spades.

The Secret Service dutifully moves back into the hotel suite. The Senator has more auditions of promising perspectives tonight to be entertained by.

Mondo, Eunice, and Bernie move back down the hallway toward the bank of elevators. Only this time around, Mondo and Bernie are the twosome, and it’s Eunice’s turn to be the third wheel. In a word, Eunice follows them a few steps back and still in earshot and keeps her trap shut.

Based upon another one of those hunches, Bernie discreetly slips his hand in and out his pocket. In the cycle he flicked the switch on a small device. He’s activated a jammer for any “casual” listening devices that might be in their proximity. For two minutes, they will have complete privacy from any broadband electronic intrusion.

He coughs two times, and wipes his mouth briefly. A known tell, for any experienced operator. He, Eunice, and Mondo all qualify as that.

Ergo … The implication of what he has done and why is not lost on the two girls with him.

“Time to spring the trap. Bernie, let’s take a gander at that love nest of yours,” commands the Vampire.

Mondo’s voice is appropriately harsh and disdainful. Bernie’s reaction to the tone of her voice is telling.

Bernie is simultaneously taken back and turned on. It’s as if she’s his dominatrix and he’s her submissive.

“It’s room 356.”

Right under the Senator’s. No doubt that it’s not a coincidence.

They grab an elevator. The back wall of the elevator is glass. Eunice positions herself to block anyone from lip reading remotely the conversation that ensues between her partner and the bloodsucker.

“Show me how smart you are, Bernie. Was it Sina Weibo, a Twitter-like service?”

“Nothing like that. Only the wives of Liberal Democrats or moderate Republicans in the Senate. No spouse of anyone who is allied with the Director or who might even be remotely considered of like political leanings … of like mind … of the Director.”

“And only the dishy ones, of course.”

“Yes, the younger, attractive ones. The sole exception to that is in her fifties and she’s quite nice piece of … even at that vintage.”

No need to guess who the exception that he’s referring to is.

“The ones married to much older, less attentive [i.e. sexually unfulfilling] husbands.”

“Yes.”

“You personally always … i.e. you serviced them yourself … or did you also employ a doppelganger?”

“Sometimes him … it … sometimes me …”

“One you grew yourself. Or one you purchased?”

“I grew it myself.”

“From raw chemicals or from a blank purchased either wholesale or retail?”

“Raw chemicals.”

“Where was the cooking done?” Bernie gives her a look. She smiles. That was evidently the answer she wanted. “Whatever or whomever we find in the room, we will report this incident immediately to the authorities.”

Anger flushes Bernie’s cheeks.

“This bitch means to hang me out to dry!”

But, this isn’t Bernie’s first rodeo. The moment of feeling betrayed just as quickly passes as it appeared.

“She’s telling me to activate whatever appropriate contingency I’d better have in place based upon whatever or whomever we find in that hotel suite, and she will back me to the hilt.”

The two minutes expires. They exit the elevator and make a beeline for room 356. The door is ajar. Inside is a nude, dead body: Bernie’s doppelganger. It’s been brutally murdered—bludgeoned to death with a heavy paperweight—its skull smashed to mush. The bloody murder weapon is in the hands of Kate Upton-Jeffords, the wife of Senator James Merrill “Jim” Jeffords. A disoriented Kate is naked and standing over the body. It’s a textbook frame. And verbatim from the latest of Catherine’s salacious, bestselling novels.

Eunice takes care of disarming Mrs. Jeffords and getting her to sit down in a chair. The pupils of the Senator’s comely wife are extremely dilated and she’s exhibiting other classic symptoms of being drugged—probably, some type of potent hallucinogen.

Extremely dilated pupils, warm skin, excessive perspiration, and body odor. Distorted sense of sight, hearing, touch; distorted image of self and time perception. Synesthesia: the “seeing” of sounds, and the “hearing” of colors. Depersonalization, acute anxiety, and acute depression.

Jeffords, a moderate Republican U.S. Senator from Vermont, is notorious for two things: caucusing with Independents and Liberal Democrats in the Senate, and his outspoken opposition to J. Edgar Hoover. He tried on three separate occasions to have legislation passed which would have retired Hoover.

Bernie shows his expected mettle. He invokes a contingency plan for just such a situation. Calmly, he in calls in the murder scene.

“This is Special Agent Bernie Mack. I’m reporting a murder. Location particulars are as follows—grid two-four-ninety—room 356. We have a VIP involved, the wife of tango delta five. My partner and I, along with a neutral observer, while on an unrelated investigation came here in response to an anonymous tip. Further details will be given upon your arrival at the crime scene.”

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WWE WWF Divas Calendar 2002 Lita Trish Terri Debra Ivory [June]

June Wilkinson Charles Keane Lisa Barrie Career Girl Press Publicity Film Photo WWE WWF Divas Calendar 2002 Lita Trish Terri Debra Ivory #1 WWE WWF Divas Calendar 2002 Lita Trish Terri Debra Ivory #2

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China stole the F35 stealth but did not make a compromised fighter [they made a better one]!!!

by | nextBigFuture | Coverage of Disruptive Science and Technology

<Original Source>

At least twice since 2007 Chinese hackers have stolen data on the F-35 from the developers’ poorly-guarded computer servers.

China’s J-31 jet lacks many of the features that were included in the F-35 that were made for the US Marines obsession with jumpjets.

Compromised fighters are not built for maximum speed, acceleration, and maneuverability

The J-31 does not have a lift fan or even a space for a lift fan. This allowed Chinese engineers to optimize the new plane for speed, acceleration, maneuverability and flying range — and to add good pilot visibility and a second rearward engine — instead of having to build the plane around a pretty much useless vertical-takeoff capability that slows it down, limits it to one motor and blocks the pilot’s view.

The F35 fighter is the aerodynamic equivalent of a lobbed brick, totally outclassed by the latest Russian- and Chinese-made jets.

The F35 has failed in a 2008 RAND battle simulation.

Fighter bombers were a dumb compromise but the Marine jump jet obsession is nuts

The trend toward merging functions began with fighter bombers. This might make some sense in rare missions or for some small air forces. Dedicated fighters are better in dog fights than fighter bombers. Pure bombers are better for bombing than fighter bombers.

Don’t mix functions and requirements just because it can barely work. Specialization and a fleet of pure fighters and pure bombers allows for superior optimization

Why the Marines want their own jets and amphibious landing craft – which are half sized aircraft carriers

The US marines want their own air support because the US navy abandoned the marines at Guadalcanal in WW2.

Prediction of cancellation

Pierre Sprey was a designer of the F16 and A10. He predicts that the F35 will be cancelled before 500 planes are made.

Sprey says the US should fund a series of inexpensive head-to-head competitions with mock dogfights between rival prototypes. Small design teams should be used with short timelines.

Complexity with thousands of engineers and thousand of managers and auditors does not make good planes.

Stealth not certain, especially with stolen stealth secrets

Col Michael W. Pietrucha, USAF, wrote a 24 page article in Air and Space Power Journal,”The Comanche and the Albatross: About Our Neck Was Hung”. He argues why the F35 must be cancelled now.

The F35 is based on a belief that radar low observability will remain effective against future air defense threats. Although true for the F-117 against Iraq’s Kari system in 1991, stealthiness is unlikely to remain so against an adversary that has two decades to prepare for US stealth fighters, which have much higher infrared, visual, and emitter signatures than did the F-117.

Outside China and Russia, no massive threat from an advanced integrated air defense system exists. Moreover, China is a poor example of a threat to cite if someone is trying to justify a short-ranged fighter with limited payload flown from island bases within range of overwhelming missile attack.

Only Russia and China can pose the kind of antiaccess, area denial (A2AD) environment that justifies a massive investment in stealth.

These facts make the risk calculation involved with prioritizing stealth over performance, range, and weapons loadout inherently suspect—and the F-35 might well be the first modern fighter to have substantially less performance than its predecessors.

Col Michael W. Pietrucha Proposal
• maintain a limited number of F-35As (those already purchased) as a replacement for the capabilities lost upon retirement of the F-117;
• create a modernized Tactical Air Force fleet consisting of a high-low mix of modernized legacy fighters, light attack aircraft, and multipurpose jet trainer / attack aircraft;
• recover some “sunk cost” of the F-35 program by using advanced systems to modernize older fighters, in effect fielding fifth-generation systems in fourth-generation airframes;
• restore the Air Force’s SEAD/EW (Suppression of Enemy Air. Defences – Electronic warfare) fighters and crews;
• expand the service’s global reach capabilities by providing deployable Tactical Air Force assets that can operate from short, rough airstrips on a logistical shoestring
• increase the number of absorbable cockpits to the point where the Air Force can augment the inventory of fighter/attack aviators to meet requirements;
• invest in affordable, exportable “light combat aircraft” derived from Air Education and Training Command’s T-X program;
• allow the Air Guard to maintain its position as the operational reserve and “relief valve” for experienced fighter/attack aviators while recapitalizing its portion of the CAF; and
• build a Tactical Air force that can meet the nation’s demands for air-power capabilities even in the face of increasing fuel costs and decreasing budget

SOURCES- David Axe at War is Boring, Washington Post, Col Michael W. Pietrucha in Air and Space Power Journal

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The 18 Sexiest Sports Broadcasters That Have Ever Been On Television Are Ranked Here — [4. Kristen Berset]

Cloture Club

Kristen is a former Miss Florida winner and Miss USA contestant, so it is no wonder she makes such a sexy sports reporter. ( You can catch her on the local stations in Florida and Baltimore.)

<Original Source>

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New Rules in China Upset Western Tech Companies

| Technology | The New York Times

<Original Source>

HONG KONG — The Chinese government has adopted new regulations requiring companies that sell computer equipment to Chinese banks to turn over secret source code, submit to invasive audits and build so-called back doors into hardware and software, according to a copy of the rules obtained by foreign technology companies that do billions of dollars’ worth of business in China.

The new rules, laid out in a 22-page document approved at the end of last year, are the first in a series of policies expected to be unveiled in the coming months that Beijing says are intended to strengthen cybersecurity in critical Chinese industries. As copies have spread in the past month, the regulations have heightened concern among foreign companies that the authorities are trying to force them out of one of the largest and fastest-growing markets.

In a letter sent Wednesday to a top-level Communist Party committee on cybersecurity, led by President Xi Jinping, foreign business groups objected to the new policies and complained that they amounted to protectionism.

The Chinese prime minister, Li Keqiang, with Tamara Lundgren and Thomas Donohue from the U.S. Chamber of Commerce before a meeting last July in Beijing. The chamber is seeking urgent talks over new rules. Credit Pool photo by Ng Han Guan

The groups, which include the U.S. Chamber of Commerce, called for “urgent discussion and dialogue” about what they said was a “growing trend” toward policies that cite cybersecurity in requiring companies to use only technology products and services that are developed and controlled by Chinese companies.

The letter is the latest salvo in an intensifying tit-for-tat between China and the United States over online security and technology policy. While the United States has accused Chinese military personnel of hacking and stealing from American companies, China has pointed to recent disclosures of United States snooping in foreign countries as a reason to get rid of American technology as quickly as possible.

Although it is unclear to what extent the new rules result from security concerns, and to what extent they are cover for building up the Chinese tech industry, the Chinese regulations go far beyond measures taken by most other countries, lending some credibility to industry claims that they are protectionist. Beijing also has long used the Internet to keep tabs on its citizens and ensure the Communist Party’s hold on power.

Chinese companies must also follow the new regulations, though they will find it easier since for most, their core customers are in China.

China’s Internet filters have increasingly created a world with two Internets, a Chinese one and a global one. The new policies could further split the tech world, forcing hardware and software makers to sell either to China or the United States, or to create significantly different products for the two countries.

While the Obama administration will almost certainly complain that the new rules are protectionist in nature, the Chinese will be able to make a case that they differ only in degree from Washington’s own requirements.

The United States has made it virtually impossible for Huawei, a major Chinese maker of computer servers and cellphones, to sell its products in the United States, arguing that its equipment could have “back doors” for the Chinese government.

The documents released by Edward J. Snowden, the former National Security Agency contractor, revealed a major effort by the agency to enter Huawei’s systems, both to figure out who controls the company and to create back doors that the United States could exploit.

Recent calls by the director of the Federal Bureau of Investigation, James B. Comey, to assure that the United States has a key to decrypt information stored on iPhones and other devices will doubtless be used by the Chinese to argue that all governments need access to sensitive computer systems.

For multinationals, the Chinese market is simply too big to ignore. China is expected to spend $465 billion in 2015 on information and communications technology, according to the research firm IDC, which says the expansion of China’s tech market will account for 43 percent of worldwide tech sector growth.

Analysts said new Chinese policies like the bank rules and an antiterrorism law that is still in draft form would make doing business increasingly difficult in China for foreign hardware and software companies.

“I think they’re obviously targeting foreign vendors that are operating in China,” said Matthew Cheung, a researcher at the analytics firm Gartner. “They are promoting the local technologies so that local providers who have the capabilities to provide systems to these enterprises can get more market share.”

For instance, the bank rules say 75 percent of technology products used by Chinese institutions must be classified as “secure and controllable” by 2019.

Though analysts say “secure and controllable” — a phrase that peppers several new Chinese technology policies — may be open to interpretation, a chart attached to the banking regulations shows the troubles foreign companies could have in winning that classification for their products.

For most computing and networking equipment, the chart says, source code must be turned over to Chinese officials. But many foreign companies would be unwilling to disclose code because of concerns about intellectual property, security and, in some cases, United States export law.

The chart also calls for companies that want to sell to banks to set up research and development centers in China, obtain permits for workers servicing technology equipment and build “ports” to allow Chinese officials to manage and monitor data processed by their hardware.

The draft antiterrorism law pushes even further, calling for companies to store all data related to Chinese users on servers in China, create methods for monitoring content for terror threats and provide keys to encryption to public security authorities.

“Banking is the first industry where we are aware a black-and-white regulatory document was issued,” said Jeffrey Yao, a vice president for enterprise research at IDC. “In some other industries, if you talk to the customers, many of them get the pressure to adopt the local brands, but in most of the cases they are via internal communications from the top officers.”

Some of America’s largest tech companies could be hurt by the rules, including Apple, which is making a big push into the country. Apple has used new encryption methods in the iPhone 6 that are based on a complicated mathematical algorithm tied to a code unique to each phone. Apple says it has no access to the codes, but under the proposed antiterrorism law, it would be required to provide a key so that the Chinese government could decrypt data stored on iPhones.

A growing number of American technology executives have complained about new barriers to access to the Chinese market. John T. Chambers, the chief executive of the network equipment maker Cisco Systems, has raised the issue, as have executives at the chip maker Qualcomm. This week, Microsoft’s chief executive, Satya Nadella, said his company was working through “geopolitical issues” regarding China.

In the letter, the Western companies voiced concerns about a broader “cybersecurity review regime” under which the Chinese government would assess the “security and controllability” of hardware, software and technology services sold in China, through audits and other checks. More details about the checks will be sent in February to the Central Leading Group for Cyberspace Affairs, the committee led by the Chinese president, according to a recent report by Xinhua, the state-run news agency.

The committee, which was created after the disclosures by Mr. Snowden, is leading the charge in consolidating and streamlining online security efforts in China. Analysts said it had most likely presided over or given tacit support to the new policies.

The leadership committee is said to be also trying to wean the country from its reliance on foreign technology, a longstanding goal that has gained urgency after Mr. Snowden’s revelations.

Zuo Xiaodong, vice president of the China Information Security Research Institute, said the new policies and the broader push for indigenous innovation were not intended to eliminate foreign companies from the market.

“We’re under the yoke of others. If the others stop services, what do we do?” he said, noting that many Chinese companies and local governments had to scramble when Microsoft discontinued its support of Windows XP. “From a security perspective, that simply wasn’t acceptable. We’re breaking away from these types of circumstances.”

Even if Beijing wants it to, the banking industry cannot immediately do away with all foreign hardware makers, Mr. Yao of IDC said. Banks purchase billions of dollars’ worth of hardware and software to manage transactions, and Chinese companies cannot yet produce some of the higher-end servers and mainframes they rely on.

Mr. Yao said 90 percent of high-end servers and mainframes in China were still produced by multinationals. Still, Chinese companies are catching up at the lower end.

“For all enterprise hardware, local brands represented 21.3 percent revenue share in 2010 in P.R.C. market and we expect in 2014 that number will reach 43.1 percent,” he said, using the abbreviation for the People’s Republic of China. “That’s a huge jump.”

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Confirmation that China stole F35, F22, and B2 stealth bomber secrets as early as 2007

by | nextBigFuture | Coverage of Disruptive Science and Technology

<Original Source>

Der Spiegel published a new tranche of documents provided to the German weekly magazine by the former U.S. National Security Agency contractor, Edward Snowden. The documents are the first public confirmation that Chinese hackers have been able to extrapolate top secret data on the F-35 Lightning II joint strike fighter jet. According to sources, the data breach already took place in 2007 at the prime subcontractor Lockheed Martin

The fifth generation F-35 Lightning II is the most advanced fighter jet currently in production in the world. Experts have long argued that the design of China’s newest stealth fighter, the J-31, as well as the Chengdu J-20 fighter jet, are in parts influenced by the F-35.

Chinese F-35 espionage effortsfocused on acquiring the radar design (the number and types of modules), detailed engine schematics (methods for cooling gases, leading and trailing edge treatments, and aft deck heating contour maps) among other things. 50 terabytes of data specific to the F-35 joint strike fighter program were stolen.

The Chinese hackers were also successful in obtaining data on the B-2 stealth bomber, the F-22 jet, space-based lasers, missile navigation and tracking systems, as well as nuclear submarine/anti-air missile designs.

Nextbigfuture has long agreed with the aviation experts who say that J31 copied the F35

China has also reverse engineered Russian plane technology

China has long been accused of industrial espionage and possibly reverse-engineered an old F-117 — shot down over Serbia in 1999 — to get them where they are in stealth technology today.

China Defense showed the similarities for the cockpit of the J20 and the F22.

The J15

The prototype J-20 is said to be using the Saturn AL-31 turbofan engine developed by the Russians for their Su-27 air superiority fighter.

China reverse engineered the Shenyang J-15 carrier-based fighter from the Russian Sukhoi Su-33 Flanker. China says the J-15 is more advanced than the Su-33. China used more advanced computers, avionics and radar in the J15. China probably used the US avionics and radar that was hacked and off the shelf computer and electronics that China has developed for commercial industry.

The Washington Times reported China would take until about 2022 to produce an original stealth engine for the J20 and J31.

The F-22 Raptor may be more agile but the J20 carries more fuel and weapons.

SOURCES – Australia NEws, China Defense, Business Insider, Washington Times, Der Spiegel

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Definitions of Internet Deception — excerpts from the Hacker’s Wiki

Social engineering is the art of gaining access to facilities, information systems or data by exploiting human psychology, rather than by breaking in or using technical hacking techniques. Social engineering is successful because most people innately want to trust other people and are naturally helpful.

Elicitation is the strategic use of conversation to extract information from people without them feeling interrogated.

Security Infractions is any incident of noncompliance that does not involve the loss, compromise, or suspected compromise of classified information.

Security Violations is any Loss, Compromise, or Suspected Compromise of Classified Information.

Spear phishing is an attack focused on a user, organization, or group. It is designed to look like a message from a friend or trusted source. This type of attack uses a link which, when opened, deploys spyware which steals information.

Malware is software designed to break into or damage a computer system.

Phishing is an attempt to trick people into giving up sensitive information. A phishing attack can be an e-mail, a Web site, a phone call, or contact via a social network.

APT is the Advanced Persistent Threat.

SCI is Sensitive Compartmented Information.

NISP is the National Industrial Security Program.

NISPOM is the National Industrial Security Program Operating Manual.

SAP is Special Access Program (SAP).

DD Form 254 is a contract security classification specification.

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The 18 Sexiest Sports Broadcasters That Have Ever Been On Television Are Ranked Here — [5. Melissa Stark]

Eric Fischer

This sexy blonde works as a reporter for ESPN. She is definitely one of the better looking reporters for ESPN.

<Original Source>

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China criticizes Alibaba in report withheld until after IPO

Associated Press  By JOE McDONALD |  <Original Source>

FILE - In this Sept. 19, 2014 file photo, the Alibaba logo is displayed during the company&#39;s IPO at the New York Stock Exchange in New York. Chinese regulators accused e-commerce giant Alibaba on Wednesday, Jan. 28, 2015 of permitting sales of fake goods and hurting consumers in a report that was withheld until now to avoid disrupting the company&#39;s U.S. stock market debut. (AP Photo/Mark Lennihan, File)FILE – In this Sept. 19, 2014 file photo, the Alibaba logo is displayed during the company’s IPO at the New York Stock Exchange in New York. Chinese regulators accused e-commerce giant Alibaba on Wednesday, Jan. 28, 2015 of permitting sales of fake goods and hurting consumers in a report that was withheld until now to avoid disrupting the company’s U.S. stock market debut. (AP Photo/Mark Lennihan, File)

BEIJING (AP) — Chinese regulators accused e-commerce giant Alibaba of permitting sales of fake goods and hurting consumers in a report that was withheld until now to avoid disrupting the company’s U.S. stock market debut.

Alibaba, one of China’s biggest private companies, responded Wednesday with a statement accusing the regulator of bias and misconduct in a rare break with the obedient public tone of Chinese businesses in dealings with authorities.

The sternly worded report by the State Administration of Industry and Commerce said Alibaba allowed unlicensed merchants to use its Taobao and Tmall platforms and failed to protect consumers’ rights.

The report was the result of a meeting in July between regulators and Alibaba Group Ltd. management but the regulator said its release was postponed to avoid affecting progress toward the company’s New York stock market listing. Alibaba went public in September after raising a record $25 billion in an initial public offering.

Alibaba accused the SAIC official in charge of Internet monitoring, Liu Hongliang, of unspecified “procedural misconduct.” It said the company will file a formal complaint with the agency.

Such public defiance is almost unheard of in a Chinese system in which companies nearly always respond to official criticism by promising to reform.

“We welcome fair and just supervision, and oppose selective omissions and malicious actions,” said the statement. “Obtaining a biased conclusion using the wrong methodology has inflicted irreparable and serious damage to Taobao and Chinese online businesses.”

Alibaba did not immediately respond to a request for details of what it believed to be misconduct.

The U.S. government and others have accused Alibaba of allowing sales of counterfeit goods but Wednesday’s report was the first time the Chinese government has criticized a company that is a leading star in an Internet industry communist leaders are eager to develop.

“Illegal business exists on Alibaba Group’s trading platforms, and for a long time the company has failed to pay adequate attention and failed to take measures to stop it,” the government report said. “This not only is the biggest crisis of integrity faced by the company since its founding, but also has hurt other Internet companies that try to operate legally.”

It said Alibaba allowed “illegal advertising” that misled consumers with false claims about low prices and other details. It said some Alibaba employees took bribes and the company failed to deal effectively with fraud.

The report said regulators and Alibaba would work together to improve management but gave no details of planned changes.

Alibaba, founded in 1999 by Jack Ma, a former English teacher, was one of China’s earliest Internet companies. Its IPO made Ma China’s richest entrepreneur with a net worth of $25 billion.

Alibaba earned $485 million in the three months ended in September, which was its first quarter as a publicly traded company, and generated revenue of $2.7 billion. It said the total amount of goods sold rose 49 percent and the number of active buyers rose 52 percent to 307 million.

The U.S. Commerce Department added Taobao in 2011 to a blacklist of “notorious markets” linked to sales of pirated and fake goods. The company was removed the following year.

In December, the company said it had removed 90 million listings for goods that might have violated intellectual property rights. The company said it spent $161 million from the start of 2013 through late 2014 on blocking counterfeit goods and improving consumer protection.

In January, Alibaba and the U.S. Consumer Product Safety Commission announced an initiative under which the Chinese company will prevent vendors from exporting to the United States goods that are the target of recall orders.

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Alibaba, Tencent’s eFinance Has Beijing’s Support, Worth Billions: CLSA

<Original Source>

China’s largest Internet conglomerates Alibaba Group (BABA) and Tencent Holdings (0700.HK/TCEHY) were assigned private banking licenses late last year. Tencent-backed WeBank began a trial operation two weeks ago, while Alibaba-backed MYBank is scheduled to open this May.

China’s eFinance is getting Beijing’s support and can provide a sizable boost to Alibaba and Tencent’s stocks. CLSA now value Alibaba and Tencent’s financial business at $17 billion and $12 billion respectively, or $7 and 10 Hong Kong dollars per share each. Alibaba and Tencent closed at $102.94 and HK$136.

One worry is that the vibrant eFinance can erode China’s largest banks’ profits – and Beijing would not like it because these banks are owned by the government. Yu’eBao, Alibaba’s online money market funds, took banks by a big surprise last year. By arbitraging the yield gap between money market and interbank rate, Alibaba was able to offer 7-8% yield initially. Investors can put in as little as just 1 yuan and withdraw within the same day. As a result, it quickly became one of the largest money market funds in the world and at least 1 trillion yuan from 81 million consumers left the banks. Not surprisingly, Beijing did some crackdown. Last March, the People’s Bank of China limited money transfers to online market funds.

But now Beijing has changed stance, noted analyst Elinor Leung, Man Ho Lam and Zoe Zhao. WeBank and MYBank will mostly provide financing to consumers and small-and-medium enterprises (SME), so they do not really directly compete with China’s largest banks, which mostly give loans to blue chips and state-owned enterprises.

The analysts also cited VIP politicians’ public remarks. Premier Li Keqiang visited Tencent’s WeBank this month and described WeBank’s 35,000 yuan loan to a truck driver as “one small step for WeBank, one giant leap for financial reforms.”  China’s central bank deputy governor Pan Gongsheng said the government would support eFinance with “moderate regulation.” Green light!

Here are the CLSA analysts’ bullish view:

Apart from the launch of new private banks, we will see a proliferation of e-financial products in 2015. There is a big opportunity in fee incomes with no regulatory ceiling. WeBank and MYbank are legal platforms to sell financial products online, including domestic & international clearing, bill financing, bonds, forex and issuing bank/credit cards.

Third-party payment has expanded beyond online shopping. Alipay and Tenpay have expanded their services to phone bill top-up, utilities bill payment, money transfer, purchasing financial products, O2O services, offline stores and overseas websites/markets. China online-payment market grew at a 74% Cagr to Rmb5.4tn last three years, representing ~10% of China’s Rmb40tn payment market. Alibaba and Tencent dominate with 50% and 20% shares, respectively. Transactions on Alipay transaction is nearly 4x that of Paypal.

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