JPMorgan, EU Bank Supervisor, Barclays, Vivendi: Compliance

JPMorgan Chase & Co. and the U.S. Federal Energy Regulatory Commission agreed to let a magistrate judge handle their dispute over the production of e-mails sought by the agency in a probe of possible manipulation of energy markets.

In a one-sentence joint filing yesterday in federal court in Washington, JPMorgan and the agency accepted a judge’s suggestion that the case be assigned to a magistrate judge “for all purposes” with any appeal going directly to the U.S. Court of Appeals in Washington.

Shortly after the filing was submitted, U.S. District Judge Colleen Kollar-Kotelly ordered that the case be assigned to a magistrate judge, noting in her order that one would be selected at random by the court clerk.

FERC sued JPMorgan on July 2 to release the e-mails in an investigation of possible manipulation of power markets in California and the Midwest by J.P. Morgan Ventures Energy Corp. FERC opened the probe in August after complaints from California and Midwest grid operators that JPMorgan’s bidding practices were abusive, according to the agency’s initial court filing.

The case is Federal Energy Regulatory Commission v. J.P. Morgan Ventures Energy Corp., 12-mc-352, U.S. District Court, District of Columbia (Washington).

Compliance Policy

EU to Propose Single Supervisor for All Banks, Barnier Says

A single supervisor for banks called for by euro-area leaders last month should oversee all lenders in the bloc, not only those deemed to be systemically important, Michel Barnier said.

The new supervisory mechanism should be in place by the end of the year as part of plans for a banking union to help tame the euro debt crisis, Barnier, the EU’s internal market commissioner, said at a hearing in Brussels yesterday. The body should, at a minimum, supervise banks in all 17 countries that use the single currency, he said.

“I think it will need to cover all banks, of course,” Barnier told lawmakers in the European Parliament’s economic and monetary affairs committee. Responsibilities could be delegated to national regulators through decentralization, he said.

Euro leaders said on June 29 that it’s “imperative to break the vicious circle between banks and sovereigns.” To this end, they said that once a single supervisor, involving the European Central Bank, is established, the euro area’s permanent bailout fund, the European Stability Mechanism, could recapitalize banks directly.

Leaders called on the European Commission to present proposals for a single bank supervisor “shortly.” Barnier said the commission will unveil its plan in September.

European Banks Able to Meet Capital Targets, Bank Watchdog Says

European banks reached a target of raising 114.7 billion euros ($141 billion) in fresh capital by the end of June, according to a European Union document.

The “capital shortfall” has “been largely raised from private sources and where necessary public backstops were activated,” according to a memorandum prepared for EU finance ministers for a Brussels meeting today that was obtained by Bloomberg News.

The European Banking Authority told lenders to meet a core Tier-1 capital ratio of 9 percent by the end of June, and hold additional reserves, called a sovereign buffer, against the debt of weaker euro-area countries, based upon the market price of the bonds. The measures were part of a response to the sharp fall in the value of securities issued by euro-area governments.

“The EBA exercise was a necessary step on the road to repair banks’ balance sheets and strengthen their capital base,” the document said. “The recommendation will remain in force until the normalization of risks.”

A preliminary report will be released tomorrow, according to the document, with more detailed results to be published in September.

Franca Rosa Congiu, a spokeswoman for the EBA in London, didn’t immediately return a telephone voice-mail message seeking comment.

Tucker Says No Public Official Told Him to Lean on Barclays

Bank of England Deputy Governor Paul Tucker said no government minister or official pressured him to instruct Barclays Plc or any other U.K. commercial bank to lowball its Libor submissions during the financial crisis.

“Absolutely not,” Tucker told lawmakers in London yesterday, when asked if anybody from the civil service or the then Labour government leaned on him to ask banks to lower their Libor submissions. He also said some of a memo written by former Barclays Chief Executive Officer Robert Diamond after an October 2008 phone call between the two gave “the wrong impression.”

Tucker’s two-hour testimony followed the record 290 million-pound ($449 million) fine imposed on Barclays last month for manipulation of the London interbank offered rate. The scandal, which Tucker described as a “cesspit,” has jeopardized his position as the front-runner to replace Mervyn King as governor of the Bank of England.

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Compliance Action

Vivendi Reviews Due as Agency Toughens Policing of Mergers

France’s Antitrust Authority will decide by July 24 whether to approve the revised union of Vivendi SA’s Canal Plus pay-television unit with Television Par Satellite, its chief said yesterday.

The regulator in September canceled the 2006 deal after finding that Canal Plus hadn’t met all the conditions imposed to ensure the merger didn’t harm competition.

Regulators in the deal are seeking diversity in the pay-TV industry, a greater range of packages for consumers, and steps that don’t “destabilize” the film industry, Bruno Lasserre, the agency’s chief, said yesterday in Paris. The regulator won’t require the company to sell off its CanalSat distribution arm, he said.

The Authority has taken a tough stand on merger approval since 2009, when it took responsibility for authorizing deals from the finance ministry. So far this year, it has imposed conditions on seven deals, the same number as in 2011 and 2010 combined. The regulator has also fined companies for not living up to the conditions of merger authorizations.

Its cancellation of the Vivendi merger was the first time the Authority has done so for failure to comply with terms. The authority also imposed a 30 million-euro ($37 million) fine on Canal Plus.

Spokesmen for Vivendi, Canal Plus and Bigard didn’t immediately return calls seeking comment on the regulator’s actions.

Japan Checking Possible Insider Trading of ANA, Official Says

Japan’s securities watchdog is examining possible insider trading of All Nippon Airways Co. shares before last week’s announcement of a public offering, a government official with direct knowledge of the matter said.

The Securities and Exchange Surveillance Commission is studying share movements before the July 3 announcement and will conduct hearings to determine whether underwriters leaked information, said the official, who requested anonymity as the investigation is private.

Japanese regulators are cracking down on insider trading after finding that employees of firms including Nomura Holdings Inc. tipped off clients about share sales they managed in 2010. Moody’s Investors Service said such leaks may be “more than a rare occurrence” and the loss of confidence from the scandal will damage local securities firms.

Trading volume of All Nippon Airways shares reached a three-month high the day before news of the 211 billion yen ($2.6 billion) issuance became public, led by short-selling, according to data compiled by Bloomberg. The moves were “unnatural,” ANA spokesman Ryosei Nomura said on July 6.

ANA’s Nomura said the airline currently has no plan to take action after receiving assurances from the four underwriters -- Nomura Holdings, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Deutsche Bank AG -- that they didn’t leak information.

Spokesmen at the four banks declined to comment. An SESC spokesman who asked not to be named also declined to comment, saying he wasn’t authorized to discuss individual companies with the media. ANA spokeswoman Megumi Tezuka said the carrier is unaware of the regulator’s examination.

ANA, Japan’s biggest carrier, announced its share sale at 4 p.m. on July 3. Investors traded 24 million ANA shares on the previous day, the most since March 27, according to data compiled by Bloomberg. The stock declined as much as 2.7 percent on July 2 before closing 0.9 percent lower, while the benchmark Topix Index dropped 0.1 percent.

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Dendreon, Prostate Drug Maker, Sued Over 2011 Stock Drop

Dendreon Corp., the maker of the prostate-cancer medicine Provenge, was sued by an investor claiming the company withheld information about sales that led to a 2011 share price drop.

Company officers and directors misused proprietary information about Provenge, which costs $93,000 per therapy cycle, by not revealing that doctors were reluctant to prescribe it because they had to pay up front and may have trouble getting reimbursed from Medicaid or private insurers, Investor Herbert Silverberg claims.

The reimbursement issue was “a consistent topic of concern internally,” while officials “touted lofty goals” for the drug, according to the Delaware Chancery Court complaint filed yesterday in Wilmington.

Provenge was approved in the U.S. in 2010 as the first therapy designed to train the body’s immune system to attack cancer cells as if they were a virus.

The following year, the company “acknowledged that acceptance of Provenge would be a much more gradual process,” than first thought, according to the complaint. Dendreon shares fell 67 percent, from $35.84 on Aug. 3 to $11.69 the next day, plaintiff’s lawyers contend.

In the so-called derivative lawsuit, Silverberg asks a judge to award damages from officials to the company, “disgorgement of all profits” from wrongdoing and positive corporate governance provisions to protect shareholders in the future.

“While it is our practice not to comment on litigation, we believe this suit is baseless and without merit,” Lindsay Rocco, a spokeswoman for Dendreon, said in an e-mailed message.

The case is Silverberg v. Gold, CA7646, Delaware Chancery Court (Wilmington).

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