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BP Gulf Oil Bar Lifted, UBS-HIBOR: Compliance

March 17 (Bloomberg) -- BP Plc won the right to compete again for U.S. federal contracts and new leases in the Gulf of Mexico, where its massive 2010 oil spill prompted regulators to bar it from new government business.

The oil company reached an agreement with the Environmental Protection Agency will allow BP, which had been the Pentagon’s biggest fuel supplier. An auction for the right to drill in the Gulf, where the London-based company is the second-largest producer, is set for this week.

The end of the suspension is a milestone in BP’s recovery from the worst U.S. oil spill. A trial to establish the company’s degree of responsibility and impose fines under the Clean Water Act is still under way in New Orleans.

Tyson Slocum, director of the Public Citizen’s Energy Program in Washington, said the decision was premature.

The company declined to comment March 13 on whether it will participate in this week’s auction.

For more, click here.

Compliance Policy

Senate Draft Bill Seeks to Wind Down Fannie Mae in Five Years

Bipartisan Senate legislation would wind down Fannie Mae and Freddie Mac in five years and in the interim would maintain the current arrangement in which the mortgage financiers pay all of their profits to the Treasury.

A draft of the measure, released yesterday by Senate Banking Committee Chairman Tim Johnson and Republican Mike Crapo, would ensure the U.S. maximizes its return on the 2008 taxpayer bailout of the two companies before junior preferred and common shareholders receive any proceeds.

The bill, announced in principal March 11, would sell off the companies’ assets and replace them with government bond insurance that would kick in only after private capital suffered significant losses.

The five-year wind down of the two companies would be extended if necessary to prevent market disruptions or spikes in borrowing costs, according to details released yesterday.

Senator Elizabeth Warren, a Massachusetts Democrat, said on March 13 that the issue is “too important to rush.”

Investors including Perry Capital LLC and Fairholme Capital Management LLC are suing the U.S. to challenge the arrangement in which all the companies’ profits go to the Treasury. The measure released yesterday says that arrangement would only be changed if needed to facilitate sales of the companies’ assets. Crapo said last week that courts should decide how the companies’ investors are treated.

EU to Propose Plans This Month to Spur Long-Term Financing

The European Commission on March 27 will propose an action plan for long-term financing in the 28-nation bloc.

Plans in the European Union focus on “improving the effectiveness of capital markets to foster long-term financing” as well as boosting private sources of financing including “banks, insurers, pension funds, private savings.”

The regulator will also adopt proposals to support occupational pension funds and for so-called crowd-funding, according to a March 14 statement on the EU website.

Compliance Action

UBS Traders Found to Have Tried Rigging Hong Kong Hibor Rate

UBS AG traders tried to rig Hong Kong’s benchmark interest rate from 2006 to 2009, the city’s central bank said after an investigation.

The Hong Kong Monetary Authority found about 100 internal chat messages containing “change requests” by traders for the bank’s submissions to set the Hong Kong Interbank Offered Rate, according to a statement March 14. The regulator asked UBS to take disciplinary action against the employees responsible and to prepare a plan to address governance issues. No fines will be imposed.

The investigation found no evidence of collusion between the banks to manipulate the Hibor fixing and no evidence of misconduct at the other firms, the HKMA said.

“We are pleased that the investigation of the HKMA returned the same results as our own internal investigation -- no collusion among banks and no noticeable impact on the fixing of Hibor,” a UBS spokesman said in an e-mail.

Courts

Ex-SAC Analyst Settles With SEC Over Insider-Trading Claims

Former SAC Capital Advisors LP analyst Ron Dennis settled a lawsuit brought by the U.S. Securities and Exchange Commission accusing him of involvement in an insider-trading scheme that included Michael Steinberg, a former SAC manager convicted in December.

He will pay $200,000 to settle the claim, without admitting or denying liability, the SEC said March 13 in a statement.

Jonathan Gasthalter, an outside spokesman for SAC founder Steven Cohen at Sard Verbinnen & Co., declined to comment on the settlement. Cohen has previously denied wrongdoing in a series of cases alleging insider-trading by SAC and its current and former employees.

Lawrence Gerschwer, Dennis’s lawyer, didn’t immediately respond to a voice-mail message seeking comment on the lawsuit.

The case is Securities and Exchange Commission v. Dennis, 14-cv-01746, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Carla Main in New York at cmain2@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Charles Carter, Stephen Farr

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