EU Tax Inquiry, BNP, Ma on Counterfeits: Compliance

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The leaders of France’s two biggest banks and Germany’s biggest engineering company may be quizzed by European Union lawmakers as part of an inquiry into how EU nations give special tax treatment to “national champions.”

BNP Paribas SA, Societe Generale SA and Siemens AG top the wish list to give evidence, said Philippe Lamberts, a Belgian member of the EU parliament’s Greens group, who has led calls for a special committee in the wake of revelations about hundreds of sweetheart deals for companies in Luxembourg.

None of the companies Lamberts cited is accused of wrongdoing.

The call for a parliament inquiry comes as the European Commission cracks down on special tax deals for multinationals. EU regulators announced a probe last year into agreements struck by Inc., Apple Inc. and Starbucks Corp. in three EU countries.

Demands for EU action reached a fever pitch when a group of investigative journalists revealed thousands of pages of secret tax accords between Luxembourg and companies from around the world, including PepsiCo Inc. and Walt Disney Co.

The parliament’s intention to look beyond Luxembourg may take some of the heat off former prime minister Jean-Claude Juncker, who faced an uncomfortable first few months after he took over as president of the European Commission on Nov. 1.

Lamberts said Guy Verhofstadt, Belgium’s prime minister from 1999 to 2008, and former Belgian Finance Minister Didier Reynders are also on his invitee list for the inquiry that “could be off the ground” within a month.

Representatives of the French banks and Reynders didn’t immediately respond to requests for comment. Siemens declined to comment.

The Greens plan to push for legislation at a European level to force multinationals to disclose in their annual report the essential elements of the tax rulings they get, country by country, Lamberts said.


SEC Suit Delayed While Rule Limiting Insider Cases Challenged

A U.S. Securities and Exchange Commission lawsuit against two former hedge fund managers was put on hold while the government fights a sweeping appeals court ruling limiting insider trading prosecutions.

Last week, the SEC joined the Justice Department in urging the U.S. Court of Appeals in New York to reconsider its ruling. A three judge panel held that in order to be found guilty of insider trading, prosecutors must prove defendants knew their tips came from someone who had a duty to keep it secret, and got a personal benefit for leaking it.

As part of its decision, the court threw out the convictions of Level Global Investors LP co-founder Anthony Chiasson and ex-Diamondback Capital Management LLC portfolio manager Todd Newman. The SEC had filed a parallel lawsuit against the men, which U.S. District Judge Shira Scheindlin Monday suspended until the appeals court decides whether to revisit its Dec. 10 decision.

The government argued that the ruling was “deeply confounding” and weakens regulators’ ability to police illicit activity, and that it conflicts with the court’s prior insider-trading decisions.

The appeals court Monday told Chiasson and Newman they can file a response to the government’s request to reconsider their case. If the court rejects the government bid, the Justice Department can seek review by the U.S. Supreme Court.

BNP Sentence Delayed Again to Give Time for Waiver Decision

BNP Paribas SA was granted another delay of its sentencing, until May 1, for violating U.S. sanctions by processing almost $9 billion in banned transactions involving Sudan, Iran and Cuba.

BNP, France’s largest bank, won the third postponement of its sentencing because it hasn’t yet heard whether the U.S. Labor Department will grant a waiver to allow it to continue serving U.S. clients. Karen Patton Seymour, a lawyer for the bank, said the waiver is necessary to allow BNP and affiliates to continue to be qualified to operate as an asset manager in the U.S.

BNP admitted in July that it engaged in a long-running conspiracy to violate U.S. embargoes against the three nations by processing billions of dollars in banned transactions from 2004 to 2012. It was previously set to be sentenced Tuesday.

U.S. District Judge Lorna Schofield in Manhattan, who is presiding over the case, granted the latest request Jan. 30. The government didn’t object, Seymour said.

The case is U.S. v. BNP Paribas 14-cr-00460, U.S. District Court, Southern District of New York (Manhattan).


Alibaba Resolves Conflict With China’s SAIC, Jack Ma Says

Alibaba Group Holding Ltd. resolved its differences with China’s State Administration of Industry and Commerce over the alleged sale of counterfeit goods “at the first stage,” billionaire founder Jack Ma said Monday in a speech in Hong Kong.

The SAIC’s actions weren’t supported by “certain government officials,” Ma said, without elaborating. Alibaba has 2,000 full-time employees to help monitor counterfeits and has helped send 400 people to prison for violations, he said.

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