Generic Drug Probes, SEC Committee, HSBC Hire: Compliance

U.S. regulators, armed with a year-old Supreme Court decision, are stepping up investigations of pharmaceutical deals that delay the sale of generic drugs, arrangements they view as illegally hurting competition.

The Federal Trade Commission has opened new probes into agreements between generic and brand-name drugmakers that may lead the agency to sue for disgorgement of revenue, said Markus Meier, head of the agency’s health-care division. Companies under scrutiny include Forest Laboratories Inc. and Endo International Plc, according to regulatory filings this year.

The agency says its enforcement efforts gained firepower last June when the Supreme Court ruled antitrust law may bar deals in which brand-name drugmakers compensate generics producers to delay sales of low-cost medicines. Until then, judges had found the so-called pay-for-delay settlements legal.

The agency estimates the agreements cost consumers $3.5 billion a year.

Representatives of the companies didn’t respond to requests for comment on the FTC’s scrutiny.

Compliance Policy

Basel Group Seeks Views on Bank Disclosure Requirements

The Basel Committee on Banking Supervision is seeking views on bank disclosure requirements.

The proposed revisions “aim to enhance comparability across banks by ensuring greater consistency in the way they disclose information about risk exposures,” the committee said in a statement.

It will accept views on proposals until Sept. 26, the group said.

Compliance Action

U.S. House Committee Ordered to Court in Insider-Trading Probe

The House Ways and Means Committee and a top staff member of the panel were given until July 4 to explain why they haven’t responded to subpoenas in an insider-trading probe by the U.S. Securities and Exchange Commission.

U.S. District Judge Paul Gardephe in New York previously ordered the committee and aide Brian Sutter, a possible source of a leak, according to the SEC, to appear before him July 1 to justify their failure to turn over records and e-mail sought by regulators.

The committee and Sutter were ordered to explain to Gardephe why they shouldn’t provide documents to regulators investigating possible insider trading in health-care stocks as part of an investigation of a spike in trading of health-insurance companies.

Kerry W. Kircher, general counsel in the House Office of the General Counsel, said in an e-mailed statement that the subpoenas run afoul of the Constitution’s protection of speech and debate in Congress. Kircher sought more time, past July 1, for Sutter to respond to the SEC in a request filed to the judge June 20.

The regulator said in court filings it has evidence that Sutter “may have been a source” used by a lobbyist at Greenberg Traurig LLP. The SEC said in the filing that it “wasn’t at liberty” to give details of the evidence it obtained against Sutter and the lobbyist.

A spokeswoman for Greenberg Traurig said in an e-mail that the firm is cooperating with the inquiry.

The case is SEC v. Committee on Ways and Means of the U.S. House of Representatives, 14-mc-00193, U.S. District Court, Southern District of New York (Manhattan).


Schaeuble Pushes to Shield Small Banks From EU Fund Levy

German Finance Minister Wolfgang Schaeuble pushed the European Union to shield smaller banks from paying too much into a euro-area resolution fund.

Schaeuble urged his fellow EU finance ministers during a debate June 20 in Luxembourg to focus on banks’ size and systemic importance as the key measure for determining how much individual lenders should contribute to the fund. Nations are divided on the right formula.

Banks that present a minimal risk to financial stability “should pay no or very little levies,” Schaeuble said.

The joint fund will be one tool available to regulators for stabilizing a crisis-hit bank or covering the costs of winding it down.

Comings and Goings

HSBC Hires Lloyds Compliance Executive for Top European Position

HSBC Holdings Plc, Europe’s biggest bank, hired Alison Hewitt from Lloyds Banking Group Plc as European head of regulatory compliance.

Hewitt reports to the global head of regulatory compliance, Ruth Horgan, a spokesman for HSBC in London, said yesterday by phone.

HSBC is bolstering its regulatory oversight after paying $1.9 billion to close a money-laundering probe by the U.S. Justice Department and other banking regulators in 2012.