ADM’s FCPA Probe, Citigroup, EU Winegrowers: Compliance
Archer-Daniels-Midland Co. (ADM), the world’s biggest corn processor, said in a filing with the U.S. Securities and Exchange Commission that it is talking to the SEC and the U.S. Justice Department about possible violations of the Foreign Corrupt Practices Act.
In its quarterly filing on Nov. 5, ADM said that since August 2008, it has been “conducting an internal review of its policies, procedures and internal controls pertaining to the adequacy of its anti-corruption compliance program and of certain transactions” that may have violated U.S. and foreign laws. The transactions, the company said, “primarily related” to grain and feed exports.
The Decatur, Illinois-based company previously disclosed its review to federal regulators in 2009 and has provided periodic updates, according to the filing. ADM said it may face criminal fines, civil penalties and be forced to give up profits derived from contracts involving inappropriate payments.
ADM has “implemented comprehensive internal-control enhancements recommended” by an independent auditor and has “taken disciplinary action up to and including termination of employees,” Jackie Anderson, a company spokeswoman, said in an e-mail yesterday.
John Nester, an SEC spokesman, declined to comment on the company filing.
ADM said in its filing that any penalties are unlikely to be material.
Citigroup Says Singapore Authority Sought Data in Rate Probe
Citigroup Inc., the third-biggest U.S. bank by assets, received requests for information from the Monetary Authority of Singapore related to probes into the rigging of benchmarks used to set interbank loan rates.
“Certain Citigroup subsidiaries have received additional requests for information and documents from various domestic and overseas regulators and enforcement agencies, including the Monetary Authority of Singapore,” the New York-based company said yesterday in a regulatory filing.
Regulators worldwide are probing lenders about their roles in setting the London interbank offered rate, or Libor, after Barclays Plc was fined a record 290 million pounds ($463 million) for manipulating the rate for profit. Banks including UBS AG (UBSN) and Royal Bank of Scotland Group Plc have suspended some traders in Singapore, where the central bank has broadened its probe to include products tied to foreign exchange.
Citigroup said it continues to cooperate with all of the investigations. Mark Costiglio, a spokesman for the New York-based company, declined to comment on the Singapore request. The bank has been in Singapore since 1902 and employs more than 9,500 people there, according to Citigroup’s website.
RBS, Britain’s biggest taxpayer-owned lender, said last week it expects to pay a fine in coming months to settle Libor probes.
Japanese regulators in December banned Citigroup for two weeks from trading in products tied to Libor and the Tokyo interbank offered rate, or Tibor, after bank staff attempted to influence the rates. Citigroup also said it has received requests for information from a “consortium of state Attorneys General” in the U.S. The bank previously disclosed that it received data requests from the New York and Connecticut attorneys general.
EU Winegrowers to Lobby Against More Plantings, Decanter Says
Winegrower associations from 15 European Union member states are meeting in Brussels this week to lobby against a planned reform by the European Commission which would permit increased vineyard plantings, Decanter.com said.
The commission is considering introducing greater freedom to plant vines starting in January 2016, and the proposals are meeting resistance from growers in leading wine-producing nations including France, Spain, Italy, Germany and Portugal, Decanter magazine’s website said. Winegrowers are organizing meetings with elected officials representing more than 50 wine regions to resist the proposal, according to the website.
Bats Said to Seek U.K. Exchange License in Challenge to LSE
Bats Chi-X Europe plans to become the region’s first alternative trading system to register as an exchange in a renewed challenge to traditional bourses such as London Stock Exchange Group Plc. (LSE)
The European unit of Lenexa, Kansas-based Bats Global Markets Inc. has filed a proposal to become a Registered Investment Exchange with the Financial Services Authority, the U.K. regulator, according to two people familiar with the situation. They declined to be identified as the information isn’t public.
The company, currently deemed a Multilateral Trading Facility, is seeking the license to attract business from retail investors and fund managers who may be legally restricted to trading on an exchange, the people said. It would also mean firms could choose to list their shares on Bats Chi-X Europe. Julia Streets, a spokeswoman for Bats Europe in London, declined to comment.
The move would make Bats Europe the third exchange in the U.K., after LSE, Europe’s oldest independent bourse, and ICAP Plc (IAP)’s Securities & Derivatives Exchange. Bats Europe is one of a wave of alternative trading systems that opened after European Union regulations introduced in 2007 opened the door to competition with incumbent bourses.
Bats, the third-largest U.S. equity-exchange operator, canceled its initial public offering on March 23 after errors on its computer systems kept its own stock from trading and forced a halt in Apple Inc. shares.
The firm, whose name stands for Better Alternative Trading System, rose to prominence in tandem with the proliferation of electronic firms that now dominate the buying and selling of equities in the U.S. Bats’s owners include Morgan Stanley, Credit Suisse Group AG, Citigroup Inc. (C) and Chicago-based Getco LLC.
In the Courts
EU Regulator Can Seek Damages in Elevator Cartel, Court Says
The European Union’s antitrust regulator can seek damages from elevator makers it fined for illegal price-fixing including United Technologies Corp. (UTX)’s Otis unit and ThyssenKrupp AG (TKA), the EU’s highest court ruled.
EU law “does not prevent the commission from bringing an action, on behalf of the EU, before a national court for compensation for loss caused,” by a cartel, the EU Court of Justice in Luxembourg, said in a ruling. The decision is final and can’t be appealed.
The European Commission sued Otis and ThyssenKrupp along with rivals Schindler Holding AG (SCHP) and Kone Oyj (KNEBV) for 7.1 million euros ($9.1 million) in Belgium because it said it purchased elevators and escalators for EU buildings at increased prices. The lawsuit is based on the EU’s own antitrust ruling that found the companies colluded to raise prices.
The Brussels Commercial Court examining the commission’s claim asked the EU tribunal whether regulators could represent other EU institutions in a lawsuit and whether it could sue companies it fined for cartel behavior.
The commission’s buildings -- including the Berlaymont, its headquarters in Brussels with 45 elevators and 12 escalators, and the European Union court buildings in Luxembourg -- had equipment installed at “bloated” prices because of the companies’ illegal price-fixing, the commission said in 2007.
ThyssenKrupp, Germany’s biggest steelmaker was fined 479.7 million euros, reduced last year to 320 million euros on appeal. Otis was fined 224.9 million euros, Schindler 143.7 million euros and Kone 142 million euros in 2007.
Karla Lindahl, a spokeswoman for Kone in Espoo, Finland, declined to comment citing the pending litigation. Barbara Schmidhauser, a spokeswoman for Hergiswil, Switzerland-based Schindler, declined to comment because the company was still analyzing the ruling.
Otis and ThyssenKrupp didn’t respond to e-mails and calls seeking comment.
Antony Gravili, a spokesman for the commission, said regulators welcomed the ruling.
The case is T-199/11, European Union, represented by the European Commission v. Otis NV and Others.
Ex-UBS Banker Bagios Pleads Guilty in Tax Conspiracy Case
Christos Bagios, a former banker at UBS AG and Credit Suisse Group AG (CSGN) arrested amid a U.S. crackdown on offshore tax evasion, pleaded guilty yesterday to helping Americans cheat on taxes from 1993 to 2009.
Bagios admitted in federal court in West Palm Beach, Florida, that he conspired with five Swiss bankers when he worked at Zurich-based UBS, where he spent 15 years before joining Credit Suisse in 2009. Bagios, a Greek citizen who lived in Switzerland, was sentenced to time served. He spent 37 days in custody after his arrest on Jan. 26, 2011, in New York.
“He’s relieved,” Bagios’s attorney, Matthew Menchel, said after the hearing. “He’s excited to go home to be with his wife and family.”
Bagios cooperated with prosecutors probing his former UBS colleagues and customers. He pleaded guilty to a document known as a criminal information, admitting he helped nine clients who didn’t declare accounts to the Internal Revenue Service. One married couple from California had an undeclared “black” account and a declared “white” account.
Bagios is one of about two dozen foreign bankers, lawyers or advisers charged since 2008 in the U.S. crackdown on offshore tax evasion. Seven current or former Credit Suisse bankers were indicted last year. Prosecutors also have charged about 50 U.S. taxpayers. UBS, the largest Swiss bank, avoided prosecution by paying $780 million, admitting it helped Americans cheat on taxes, and turning over data on secret accounts.
At least 11 other banks are under criminal investigation.
The case is U.S. v. Bagios, 12-cr-60260, U.S. District Court, Southern District of Florida (Fort Lauderdale).
NML Capital Asks for Expedited Ruling on Argentine Bonds
Elliott Management Corp.’s NML Capital Fund asked a court for an expedited ruling in a bid by creditors to collect on defaulted Argentine bonds, claiming Argentina’s leaders “have stated their intention never to comply” with a recent court decision in the case.
A federal appeals court in New York ruled Oct. 26 that Argentina can’t make payments on restructured sovereign debt while refusing to pay holders of its defaulted bonds. The decision caused Argentine bonds to drop the most in four months. The appeals court sent the case back to a lower-court judge to clarify how a payment formula is intended to work and to determine how the court’s orders apply to intermediary banks and other third parties.
In a letter to U.S. District Judge Thomas Griesa yesterday, NML asked for an expedited decision, citing press statements by Argentine President Cristina Fernandez de Kirchner and members of her cabinet that, according to NML, show the country is trying to evade the appeals court ruling.
“It is clear that Argentina now is in the process of trying to render the equal treatment orders ineffective and will employ and exploit any delay tactics necessary to evade this court,” NML lawyer Robert A. Cohen said.
Jonathan Blackman, a lawyer for Argentina, declined to comment on the letter.
The case is NML Capital Ltd. v. Republic of Argentina, 12-105, U.S. Court of Appeals for the Second Circuit (Manhattan).
Fairfield Greenwich Settles Claims of Madoff Investors
Fairfield Greenwich Group, the biggest operator of “feeder funds” that channeled money into Bernard Madoff’s Ponzi scheme, agreed to a settlement that may pay defrauded investors as much as $80.3 million.
The deal, to be funded by Fairfield Greenwich founder Walter Noel and other individuals associated with the firm, resolves claims by a class of investors who lost money to Madoff’s fraud, according to documents filed yesterday in federal court in Manhattan. Fairfield Greenwich placed about $7 billion with Madoff’s firm, Bernard L. Madoff Investment Securities Securities LLC.
The settlement, which needs a judge’s approval before taking effect, provides $50.3 million to the class, which will get an additional $30 million if that money isn’t used to resolve other legal claims. A provision in the agreement allows Fairfield Greenwich to cancel the settlement if too many investors opt out of the deal to pursue individual claims.
Last year, a bankruptcy judge approved a $212 million settlement between the trustee liquidating Madoff’s defunct firm and Greenwich Sentry LP and Greenwich Sentry Partners LP, two bankrupt funds related to Fairfield Greenwich.
The case is Anwar v. Fairfield Greenwich Group Ltd., 09-cv-118, U.S. District Court, Southern District of New York (Manhattan).
Madoff Firm Liquidation Costs Rise to Almost $682 Million
The cost of liquidating the Bernard Madoff brokerage has climbed to almost $682 million, including about $27 million for the six months through Sept. 30, the trustee said in a federal court filing in Manhattan.
Fees and expenses for trustee Irving Picard’s firm and other lawyers and consultants since the confidence man’s December 2008 arrest were about $646 million of the total.
Picard has paid the Ponzi scheme’s customers about $2.9 billion and the Securities Investor Protection Corp., which also pays fees, has distributed almost $804 million, according to the filing. Picard has estimated customer losses of principal at about $20 billion.
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