Related News:
Offshore Drilling, UBS, Vivendi, Chrysler, Blagojevich, Icahn: Court News
Opponents of a U.S. ban on deepwater drilling asked a federal appeals court to block a bid by regulators to throw out a judge’s ruling that scrapped the moratorium.
Interior Secretary Kenneth Salazar previously asked the U.S. appellate court and a lower-court judge, both located in New Orleans, to dismiss the lawsuit by Hornbeck Offshore Services Inc. and other oil-service companies. The U.S. claims the lawsuit was rendered irrelevant by newer drilling suspension rules announced July 12.
The industry suit remains necessary because drilling hasn’t resumed in the Gulf of Mexico in the wake of the second moratorium, lawyers for Hornbeck said yesterday. Drill ban opponents including Louisiana Governor Bobby Jindal claim the moratorium is turning an environmental disaster into an economic catastrophe.
“The July 12 order reimposes the same basic blanket, one- size-fits-all prohibition as the original moratorium,” Carl Rosenblum, Hornbeck’s attorney, said in a filing yesterday. “It prevents all deep-water drilling, treating the industry leader and the industry laggard exactly the same.”
U.S. District Judge Martin Feldman in New Orleans on June 22 threw out the six-month ban imposed by federal regulators on oil and gas drilling in waters deeper than 500 feet, finding it was too broad. A three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans on July 8 refused a request by regulators’ to put Feldman’s order on hold while the government appeals.
Salazar issued a revised ban on July 12 that may allow new wells if the industry shows it has strengthened safety standards. The government asked both courts to dismiss the Hornbeck lawsuit and asked the appeals court to vacate, or erase, Feldman’s decision.
Trials/Appeals
UBS’s Igor Poteroba Pleads Not Guilty to Insider Trading Scheme
UBS AG investment banker Igor Poteroba, charged with taking in almost $1 million for tipping friends to potential mergers, pleaded not guilty to insider trading charges.
Poteroba, a former investment banker at UBS Securities LLC’s Global Healthcare Group in New York, was charged and arrested in March along with Alexi Koval, a Chicago man who allegedly traded on the information. Poteroba is accused of leaking merger tips to potential mergers and acquisitions involving six public companies to Koval and an unnamed third person.
Poteroba pleaded not guilty yesterday in a hearing before U.S. Magistrate Judge Andrew Peck in Manhattan and waived his right to be charged in an indictment. At his bail hearing in March, prosecutors said Poteroba had admitted he was trading on inside information as late as that month.
Assistant U.S. Attorney Marissa Mole told Peck she expects that both sides will “discuss possible resolution of this case.”
A federal judge in New York on March 25 set Poteroba’s bail at $5 million. He remains in custody.
Prosecutors said the participants in the scheme with Poteroba, an executive director at UBS, used code words such as “frequent flyer miles” and references to a Macy’s wedding registry. The inside information, according to prosecutors, was connected to mergers or acquisitions involving Guilford Pharmaceuticals, Inc., Molecular Devices Corporation, PharmaNet Development Group, Inc., Via Cell, Inc., Millennium Pharmaceuticals, Inc., and Indevus Pharmaceuticals.
The SEC has filed a civil suit against Poteroba, Koval and Alexander Vorobiev who now lives in Russia. All three are Russian citizens, according to the SEC.
For more, click here.
Rambus Wins Patent Fight Against Nvidia in ITC Ruling
Rambus Inc., a seller of technology used in computer memory, won its patent-infringement fight against Nvidia Corp. over imports of computer-graphics chips.
Nvidia violated Rambus’s patent rights, the U.S. International Trade Commission in Washington said in a decision on its website yesterday. The ITC said an order should be issued to ban imports of some products containing Nvidia chips, a move that would be subject to review by U.S. President Barack Obama.
Rambus jumped as much as 18 percent to $23.19 in extended trading in New York. Nvidia rose about 1 percent.
Rambus, which got about 96 percent of its $113 million in revenue last year from patent licensing royalties, filed the complaint against Nvidia after the two were unable to reach a licensing agreement. Rambus, based in Los Altos, California, has spent more than a decade suing computer-memory chipmakers who refused licensing deals, including Samsung Electronics Co.
“It puts Rambus in the dominant bargaining position,” Jeff Schreiner, an analyst for Capstone Investments Inc. in San Diego, said in an interview. “A whole bunch of other companies that were watching this will now likely sign licensing deals.”
Schreiner has a “strong buy” rating on Rambus stock, which he said he doesn’t own.
Nvidia Corp agreed to license Rambus Inc.’s technology while it appeals the ruling by the U.S. International Trade Commission.The ITC ruling will have no impact on customers, Nvidia said in a statement yesterday.
Samsung in January agreed to pay $900 million to end its legal dispute with Rambus and sign a new licensing deal. The commission said in a May 27 order that it wanted to determine if Nvidia was protected by the Samsung settlement or if Rambus exhausted its rights on the technology. Rambus also has disputes pending with Korea’s Hynix Semiconductor Inc. and Micron Technology Inc., based in Boise, Idaho, over patented technology related to dynamic-random access memory, or DRAM, which acts as the main type of memory in personal computers.
The ITC case is In The Matter of Semiconductor Chips Having Synchronous Dynamic Random Access Memory Controllers and Products Containing Same, 337-661, U.S. International Trade Commission (Washington).
For more, click here.
Carlos Slim Barred From Acquiring Televisa Unit’s Debt
JPMorgan Chase & Co. can’t transfer a loan obligation of Grupo Televisa SA’s cable unit to a bank controlled by billionaire Carlos Slim, a federal judge said.
A federal judge in New York in February initially halted the transfer after Empresas Cablevision SA complained that assigning the loan to Slim’s Banco Inbursa SA might reveal Cablevision’s confidential information to a rival cable company owned by Slim. JPMorgan then complained Empresas Cablevision breached a credit agreement.
The parties agreed to the order after JPMorgan said it would repurchase from Inbursa the 90 percent interest in the loan, Televisa said yesterday in a statement. U.S. District Judge Jed Rakoff, in the order dated July 23, also barred JPMorgan from sharing information with Inbursa regarding private information received from Cablevision related to the loan.
“It is an important decision both for the enforcement of borrower’s veto rights under credit agreements and for requiring financial services institutions to act responsibly on behalf of their customers,” Salvi Folch, chief financial officer of Televisa, said in a statement.
A spokeswoman for Slim didn’t immediately return phone and e-mail messages. Justin Perras, a spokesman for JPMorgan, declined to comment.
The case is Empresas Cablevision v. JPMorgan, 09-9972, U.S. District Court, Southern District of New York (Manhattan).
For more, click here.
UBS’s Igor Poteroba Pleads Not Guilty to Insider Trading Scheme
UBS AG investment banker Igor Poteroba, charged with taking in almost $1 million for tipping friends to potential mergers, pleaded not guilty to insider trading charges.
Poteroba, a former investment banker at UBS Securities LLC’s Global Healthcare Group in New York, was charged and arrested in March along with Alexi Koval, a Chicago man who allegedly traded on the information. Poteroba is accused of leaking merger tips to potential mergers and acquisitions involving six public companies to Koval and an unnamed third person.
Poteroba pleaded not guilty yesterday in a hearing before U.S. Magistrate Judge Andrew Peck in Manhattan and waived his right to be charged in an indictment. At his bail hearing in March, prosecutors said Poteroba had admitted he was trading on inside information as late as that month.
Assistant U.S. Attorney Marissa Mole told Peck she expects that both sides will “discuss possible resolution of this case.”
A federal judge in New York on March 25 set Poteroba’s bail at $5 million. He remains in custody.
Prosecutors said the participants in the scheme with Poteroba, an executive director at UBS, used code words such as “frequent flyer miles” and references to a Macy’s wedding registry. The inside information, according to prosecutors, was connected to mergers or acquisitions involving Guilford Pharmaceuticals, Inc., Molecular Devices Corporation, PharmaNet Development Group, Inc., Via Cell, Inc., Millennium Pharmaceuticals, Inc., and Indevus Pharmaceuticals.
The SEC has filed a civil suit against Poteroba, Koval and Alexander Vorobiev who now lives in Russia. All three are Russian citizens, according to the SEC.
The case is U.S. v. Poteroba, 10-mag-00562, U.S. District Court, Southern District of New York (Manhattan).
For more, click here.
Judge Upholds $26 Million Verdict Over Tire Copyright
A federal judge in Virginia confirmed a $26 million jury award to an inventor who alleged that companies in China and Dubai infringed his copyright for designs of rubber tires used on underground mining vehicles.
U.S. District Judge T.S. Ellis confirmed the jury’s award to inventor Jordan Fishman and his companies against Shandong Linglong Rubber Co. Ltd. of China and Dubai-based Al Dobowi Tyre Co. LLC, according to a document filed in Alexandria, Virginia, July 21.
“It appears that the jury reduced the award by over 25 percent from plaintiffs’ request, and this reduction appears to correlate to the percentage of infringing sales that likely occurred outside the copyright infringement limitations period,” Ellis said in his ruling.
Fishman charged that the companies infringed his blueprints for the asymmetrical tires used in mines after the prints had been stolen by a former employee. He was represented by Washington-based Gilbert LLP.
Cantor and Drummond in Talks to Settle U.K. CantorCO2e Lawsuit
Cantor Fitzgerald LP and the former head of its carbon credits brokerage are in discussions to settle a lawsuit involving a $2 million loan and an unfair dismissal claim.
Judge Michael Burton agreed to a request from the parties to halt the week-old trial in London until today, according to a court official.
Cantor is suing Stephen Drummond, a former executive at CantorCO2e, in London for the return of the money it says it loaned him while he was running the unit. Drummond countersued, claiming he was wrongfully dismissed in 2009 for failing to tell the company he was in talks with a competitor about a job.
Cantor will give “an appropriate statement at the appropriate time,” the company said in an e-mail. Both Drummond and his law firm, Fladgate LLP, declined to comment.
Vivendi Says High Court Ruling Limits Fraud Damages
Vivendi SA, the Paris-based owner of the world’s largest music company, told a federal judge in New York yesterday that the $9.3 billion damages sought by shareholders must be cut because of a U.S. Supreme Court ruling.
A Manhattan federal court jury sided with investors in January after a fraud trial, concluding that Vivendi acted recklessly and inflated its shares. The jury found that Paris- based Vivendi misled shareholders 57 times from 2000 to 2002 with upbeat statements that hid a liquidity crisis. The judge must eventually determine the amount to be awarded.
The U.S. Supreme Court ruled June 24 in an unrelated case that federal securities laws don’t protect foreign investors who buy stocks of non-U.S. companies on overseas exchanges. Vivendi argued that the Manhattan trial judge should apply that ruling and limit the size of the class of plaintiffs. From 2000 to 2002, Americans held only 25 percent of Vivendi’s ordinary shares, according to the company.
For more, click here.
Chrysler Wins 70% of Cases as Dealer Arbitration Ends
Chrysler Group LLC, the U.S. automaker run by Fiat SpA, said arbitrators ruled in its favor in 70 percent of cases brought by dealers who sought reinstatement after the company cut them from its network.
The arbitration process has concluded, and the company prevailed in 76 of 108 of the decisions, Auburn Hills, Michigan- based Chrysler said yesterday on its website. Under a law enacted in December, Chrysler was required to offer binding arbitration to dealers that were terminated in its bankruptcy reorganization.
“The decisions of a great majority of the arbitrators reflect the belief that the company’s dealer network decisions were not only appropriate, but essential to its future success,” the company said in a statement.
Of the 789 dealers terminated, 418 applied for arbitration, Mike Palese, a Chrysler spokesman, said yesterday. The cases that didn’t go to final arbitration were either settled, dismissed, withdrawn or abandoned, he said.
Chrysler had 2,315 dealers as of June 30, and 29 previously rejected locations have accepted company offers to become dealers, Palese said. He said more offer letters have been issued and declined to comment on how many outlets the company expects to add back.
“We’re definitely within the network size that we’re looking for,” he said. Chrysler expects a total U.S. dealer network of 2,300 by the end of next year because of attrition and further consolidation, he said.
Ex-AremisSoft CEO Poyiadjis Avoids Prison After Fraud
Roys Poyiadjis, the ex-chief executive officer of AremisSoft Corp., a maker of business-management software, was sentenced to probation for a $254 million fraud that a judge said was “of almost unthinkable magnitude.”
Poyiadjis, 45, was ordered to serve six months of home confinement for his role in a decade-old crime on July 22 in a proceeding that was not publicized by U.S. prosecutors. U.S. District Judge Laura Swain in Manhattan handed down the sentence -- which also requires 600 hours of community service and a $200 million restitution payment -- because of Poyiadjis’s cooperation with the government.
“You committed a terrible crime, a crime of almost unthinkable magnitude,” Swain told Poyiadjis at the sentencing, according to a transcript of the proceeding. The “sophisticated” AremisSoft fraud “shows that you’re capable of causing great harm” and “making that very hard to detect.”
Poyiadjis and Lycourgos Kyprianou, AremisSoft’s former chairman, were indicted in 2001 by a U.S. grand jury and charged with securities fraud, insider trading and money laundering. In addition to fabricating $90 million in revenue, Poyiadjis was accused of making fraudulent representations about his sale of millions of shares in the company.
Argentina Wins Decision Blocking Bond Seizure
Argentina won a court decision that keeps so-called vulture funds with judgments against the country on defaulted debt from getting possession of a group of bonds held in a Buenos Aires government trust account.
U.S. District Judge Thomas Griesa in Manhattan ruled against Aurelius Capital Partners LP and Blue Angel Capital I LLC’s claim that the bonds in the trust were subject to U.S. law because of the trust’s controlling documents. Griesa ruled July 23 that the bonds and the interest in them belonged to Argentina and he had no jurisdiction over them.
“Because the Trust Bonds are not property ‘in the United States’ of a foreign state, they are immune from attachment and execution” under the Foreign Sovereign Immunities Act, Griesa ruled.
The plaintiffs’ were seeking the bonds in the trust as they try to collect on judgments against Argentina awarded by Griesa since the country defaulted on its debt in December 2001.
The bonds in the account stemmed from a $42 billion exchange in November 2001. Bondholders turned over their securities in a swap for local Argentine loans, guaranteed by the government and to be paid from dedicated tax revenue. Griesa said Argentina met its obligations in that swap, so the contracts remained in force and the U.S. courts had no jurisdiction over the securities.
In his opinion, Griesa said he will consider a request to lift injunctions the court issued in November 2009 preventing Argentina from transferring the bonds until his decision on the motion resolved in the July 23 opinion.
The case is Aurelius Capital Partners LP v. Argentina 07- cv-2715, U.S. District Court, Southern District of New York (Manhattan).
Blagojevich Tried to ‘Shake Down’ Obama, Jury Told
Rod Blagojevich is guilty of crimes that included plotting to sell President Barack Obama’s former senate seat, a prosecutor told a Chicago jury as closing arguments started in the Illinois ex-governor’s trial.
“He tried to shake down President-elect Barack Obama,” Assistant U.S. Attorney Christopher Niewoehner said, referring to an alleged scheme to gain something of value in exchange for naming presidential adviser Valerie Jarrett to the seat.
U.S. District Judge James B. Zagel is to rule after the closings on a defense motion for dismissal of the charges. Blagojevich lawyers argued that the case was too weak to send to the jury.
Blagojevich conspired with his brother and co-defendant Robert Blagojevich and members of his inner circle to profit from his office, Niewoehner said.
“I’ve got this thing, and it’s effing golden, and I’m not giving it up for effing nothing,” Niewoehner said, quoting the governor’s words from a wiretap recording played at the trial. “This thing” referred to the Senate appointment.
“It was about him, the defendant, Rod Blagojevich, and not the people of Illinois,” Niewoehner told the 12 jurors and five alternates.
The ex-governor, 53, was arrested in December 2008 and later indicted for linking official acts, including selecting the president’s Senate successor, to campaign contributions and personal favors. He was removed from office for abuse of power in January 2009 by the Illinois Senate after House impeachment.
The brothers might be sentenced to as much as 20 years in prison if they’re found guilty of the most serious charges, including racketeering conspiracy, attempted extortion and wire fraud.
Defense attorney Sam Adam Jr. will deliver the governor’s closing arguments.
For more, click here.
New Suits
Apple Sued Over Claims IPad Tablet Overheats in Warm Conditions
Apple Inc., the world’s most valuable technology company, was sued over claims its iPad tablet overheats and fails to operate properly in warm conditions.
The complaint, filed July 23 in federal court in Oakland, California, seeks unspecified damages and class action, or group, status. It claims the iPad “does not live up to the reasonable consumer’s expectations created by Apple” because it “overheats so quickly under common weather conditions.”
The iPad has a 9.7-inch touch-screen display that lets users read books and magazines, view videos, play games and surf the Internet. In direct sunlight, the tablet “turns off, sometimes after just a few minutes of use,” according to the complaint.
Apple said July 20 that customers bought 3.27 million iPads last quarter. Introduced April 3, the iPad outsold the almost decade-old iPod music player, revenue-wise, Apple said: $2.17 billion in the quarter ended June 10 compared with $1.54 billion for the iPod.
Apple representatives Susan Lundgren and Steve Dowling didn’t immediately return calls seeking comment.
The case is Baltazar v. Apple Inc., 10-03231, U.S. District Court, Northern District of California (Oakland).
Icahn Sues Lions Gate, Rachesky in Canada Over Swap
Carl Icahn sued Lions Gate Entertainment Corp. in Canada and is threatening legal action in New York to reverse a debt- for-equity swap between the Vancouver-based movie studio and board member Mark Rachesky.
The billionaire investor is seeking an order to prevent Rachesky from selling the shares or exercising voting rights attached to them, according to the lawsuit, filed July 23 in the Supreme Court of British Columbia.
Icahn, 74, is trying to reverse the swap that hinders his hostile bid for the studio by putting more shares in the hands of opponents. The swap boosted Rachesky’s stake, the second- largest after Icahn’s, to 28.9 percent. Icahn has 33 percent.
Peter Wilkes, a Lions Gate spokesman, didn’t immediately return a call seeking comment.
For more, click here.
Texas Appeals EPA Ruling That Air-Pollution Laws Are Inadequate
Texas’s air pollution-permitting laws meet federal emissions standards and shouldn’t be overruled by the U.S. Environmental Protection Agency, Texas Attorney General Greg Abbott said yesterday.
Abbott filed suit asking the U.S. Court of Appeals in New Orleans to overturn a July 15 EPA finding that rejected Texas’s 10-year-old flexible permitting program as inadequate for regulating industrial air pollution.
For more, click here.
----With assistance from Andrew M. Harris in Chicago; Michael White in Los Angeles; Margaret Cronin Fisk and Tim Higgins in Southfield, Michigan; Laurel Brubaker Calkins in Houston; David Glovin, Patricia Hurtado, Don Jeffrey and Bob Van Voris in New York; Ian King and Joel Rosenblatt in San Francisco; Susan Decker and William McQuillen in Washington; James Lumley in London; and Crayton Harrison in Mexico City. Editors: Peter Blumberg, Glenn Holdcraft.
To contact the reporter on this story: Ellen Rosen in New York at erosen14@bloomberg.net.
Rate These Stories
Rate this Page