Credit Suisse, Mexico Networks, Fraud Appeal: ComplianceCarla Main
Thousands of Credit Suisse Group AG’s U.S. clients still don’t know whether tax authorities will learn their identities as prosecutors work to conclude a three-year probe of how the bank helped them evade taxes.
U.S. senators last month faulted the Justice Department for securing names for only 238 of 22,000 Americans with Credit Suisse accounts, saying the bank helped them hide as much as $10 billion from the Internal Revenue Service. Credit Suisse is the largest of 14 Swiss banks under criminal investigation for helping Americans cheat the IRS.
At the Feb. 26 Senate hearing, Chief Executive Officer Brady Dougan apologized, saying a small group of Swiss-based bankers appear to have broken U.S. law and fooled top managers. The bank began slashing its U.S. client list in 2008, and the 3,500 remaining comply with U.S. tax laws, General Counsel Romeo Cerutti said.
Senator Carl Levin, the Michigan Democrat who led the hearing, said that wasn’t enough. He criticized the Justice Department for failing to enforce grand jury subpoenas or file civil actions to identify account holders, drawing a comparison to the case five years ago against UBS AG, which ultimately resulted in the release of data on 4,450 accounts.
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Mexico Forces Network-Sharing to Rein in America Movil, Televisa
Mexico’s telecommunications regulator unveiled network-sharing requirements and price restrictions for its top phone and media companies, part of a bid to cut the market share of America Movil SAB and Grupo Televisa SAB.
Televisa will be required to let competitors use its broadcast towers for a set fee and must publish its advertising prices publicly, the company said March 7 in a statement. While America Movil had yet to confirm it has received instructions from the Federal Telecommunications Institute, the agency said it would require the dominant telecommunications company to share its network.
The measures are the culmination of President Enrique Pena Nieto’s work with lawmakers from all three major parties to tackle the lack of competition in industries that economists say are essential for growth.
SEC Said to Probe Whether FX Rigging Distorted Options, ETFs
The U.S. Securities and Exchange Commission is investigating whether currency traders at the world’s biggest banks distorted prices for options and exchange-traded funds by rigging benchmark foreign-exchange rates, according to two people with knowledge of the matter.
The SEC’s inquiry adds to European and U.S. regulatory probes of possible manipulation in currency markets. The SEC’s investigation is in the early stages, said the people, who asked not to be named because the matter isn’t public. The Commodity Futures Trading Commission is also investigating possible manipulation, another person said.
Authorities from London to New York have contacted at least a dozen banks as they investigate allegations first reported by Bloomberg News in June that dealers said they shared information about client orders to manipulate benchmark spot rates for currencies.
John Nester, a spokesman at the SEC, and Steve Adamske, a CFTC spokesman, declined to comment.
The SEC joins the CFTC and other U.S. authorities including the Justice Department, Federal Reserve, Office of the Comptroller of the Currency and New York’s top banking regulator in probing the matter.
Bank of England Governor Mark Carney will appear before Parliament’s Treasury Committee tomorrow to testify after minutes released by the central bank last week showed senior traders had discussed their concerns that currency benchmarks were being manipulated as early as July 2006. The British investigation is being led by the Financial Conduct Authority.
BP Says Japan, Korea Seek Information on Oil-Price Manipulation
BP Plc said regulators in Japan and Korea sought information regarding potential manipulation of oil prices, amid probes in Europe and the U.S.
The U.S. Commodity Futures Trading Commission requested price-reporting documents from BP in January, BP said.
Spokesmen for the Fair Trade Commissions of Japan and Korea declined to comment when reached by phone.
JPMorgan, UBS Convictions Overturned in Swaps Fraud Appeal
JPMorgan Chase & Co., Deutsche Bank AG, UBS AG and Depfa Bank Plc won a bid to overturn a conviction for overseeing fraud by their bankers in the sale of derivatives to the city of Milan.
An appeals court in Milan cleared the banks and individuals at the firms because “the alleged crimes didn’t take place,” Judge Luigi Martino said as he read out the verdict March 7.
In the appeals trial, prosecutor Piero de Petris had argued that the banks, in their roles as advisers to the municipality, should have disclosed how much the derivatives were costing the borrower.
Defense lawyers cited testimony by municipal officials during the lower-court trial as proof the city was aware the four banks were making money on the trades and of the magnitude of those commissions.