Goldman Sued, Air France-KLM Fine, Jarcho on SEC: Compliance

Goldman Sachs Group Inc. was sued for sex discrimination by a research analyst who said the bank and its managers deprived her of a promotion, pay and bonuses.

Sonia Pereiro-Mendez, an executive director still employed by the bank, was given permission by a judge in London Friday to pursue some of her claims against the company over a bonus for

2010. Judge Alison Lewzey dismissed parts of the suit over allegations that managers gave better opportunities to men.

While some of the allegations predate the birth of her first child, Pereiro-Mendez said some claims related to the period after she took six months of maternity leave in 2012, followed by a month of vacation and two months of sick leave for treatment of a “pre-cancerous condition.”

Pereiro-Mendez, who made $700,000 in 2010 in salary and bonuses, said in the lawsuit that she was excluded from meetings and client dinners and “publicly undermined,” while male colleagues were paid more for similar work and one was promoted to managing director.

The judge didn’t rule on additional aspects of Pereiro-Mendez’s suit, including compensation in other years.

In court papers responding to the suit, Goldman Sachs denied Pereiro-Mendez’s claims. It said her performance in 2010 was ranked in the lowest 25 percent of employees at the firm and the lowest 10 percent in 2011 and 2013 and didn’t merit the rewards she is seeking.

A spokesman for the bank holding company, Sebastian Howell, declined to comment on the London case. A lawyer for Pereiro-Mendez also to comment.

The case is Pereiro-Mendez v Goldman Sachs Services Ltd. & Others, 14-22-00892, London Central Employment Tribunal.

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Compliance Action

Air France-KLM Fined 1 Million Euros by Markets Regulator

France’s financial regulator, Autorite des Marches Financieres, known as AMF, fined Air France-KLM 1 million euros ($1.1 million) saying the airline provided vague, incomplete or delayed disclosures on three occasions from 2010 to 2011.

The period included “a series of exceptional and unforeseeable events that made financial communication particularly difficult,” Air France-KLM said in a statement. The conditions included the disruption of airspace by an Icelandic volcano eruption and rapidly rising oil prices, the airline said.

Several other complaints were dismissed, according to Air France. The airline said it doesn’t plan to appeal.

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Deutsche Boerse Loses EU Court Fight Over NYSE Merger Veto

Deutsche Boerse AG lost a European Union court challenge against the veto by EU regulators of its merger with NYSE Euronext, which would have created the world’s biggest exchange.

The European Commission did not make any errors of law, the EU General Court in Luxembourg ruled on Monday.

The commission, the EU regulator in Brussels, in February 2012 blocked the $9.5 billion deal it said would have created a ‘near-monopoly’’ in European exchange-traded derivatives. The commission later cleared IntercontinentalExchange Inc.’s bid for NYSE Euronext.

Appealing a merger decision is a challenge to the commission’s legal reasoning and doesn’t say anything about whether companies intend to resurrect a deal.

The court’s decision can be appealed one last time.

The case is: T-175/12, Deutsche Boerse v. Commission.


SEC Plans Special Exam Sweep of Fixed-Income Funds, Jarcho Says

The U.S. Securities and Exchange Commission is conducting a special exam sweep of fixed-income mutual funds to determine how they are preparing for the impact of rising interest rates, Associate Director Jane Jarcho said Friday.

“Our main focus is going to be liquidity risk, so we’re interested in how funds will meet any sort of expected redemption requests and what happens with an unexpected surge in requests during a stress period,” Jarcho said at the Investment Adviser Association Compliance Conference in Arlington, Virginia.

“We will be looking at related disclosures to investors,” she said.

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Separately, the SEC plans to require money managers to have contingency plans for the departure of key personnel, Dave Grim, SEC acting investment management director, said at the conference.

“Pimco is part of the dialogue around transitioning assets,” Grim says in an interview following his speech, referring to the fund that experienced a surprise departure of a co-founder and former chief investment officer.

The SEC’s push is part of its broader work requiring “transition plans” for asset managers that close and need to move client assets to another adviser, Grim said.

Transition plans could be better designed “to limit the risks associated with major disruptions in the unique operation of an adviser’s business, such as the departure of key personnel,” Grim said.

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