The United States Commodity Futures Trading Commission (CFTC) has announced the Federal Court imposition of over US$57 million in sanctions against a Mexico-based company and its foreign currency (forex) division after they were found to have "defrauded their customers, in part, by misrepresenting their historical trading results" when they "accepted at least [US]$28 million from more than 800 US customers to trade forex transactions in pooled accounts".
The United States (US) Securities and Exchange Commission (SEC) has announced that it has received a court order to freeze the assets of Massachusetts-based investment adviser Insight Onsite Strategic Management (IOSM), following the SEC's Complaint (15 March 2013) that IOSM "raised at least [US]$1.1 million from clients that was used for purposes other than investing in the hedge fund they purported to manage".
Citigroup Inc (Citigroup) has announced that it has agreed, subject to approval by the United States (US) District Court for the Southern District of New York, to pay US$730 million to settle "a class action lawsuit brought on behalf of investors who purchased Citigroup debt and preferred stock [during the period immediately before the global financial crisis (GFC) and who contend], among other things, that they were misled by misstatements and omissions in the company's disclosures during this period". According to Reuters, investors specifically claimed that Citigroup had understated how much it actually needed to put aside in order to cover for its high-risk residential mortgage loans, and further misrepresented risky assets as having high credit quality.
Credit Suisse Group AG (Credit Suisse) has announced that it has entered agreements to end litigation against the bank by paying a total of US$400 million to "noteholders of affiliates of National Century Financial Enterprises (NCFE) [which was] an [Ohio, United States (US) based] healthcare finance company that went bankrupt in 2002".
The United Kingdom Financial Services Authority (FSA) has announced that it has fined Lamprell plc (Lamprell) £2,428,300 for "failings in its systems and controls resulting in [Listing Rules (March 2013)] and related breaches". According to the FSA, "operating issues" at Lamprell saw the company's financial performance lag from early 2012, which was not reported to investors until May 2012, after which Lamprell's share price fell 57%.
Canada's largest airline, Air Canada, will ban certain bonuses, and freeze executive pay at the rate of inflation under a revised solvency plan imposed by the Canadian government. Reportedly, the company faces a large pension solvency deficit that was figured at CA$4.2 billion in January 2012, and, in addition to the remuneration and bonus controls, the revised plan provides the carrier with extra time to pay off its deficit.
The Australian Securities and Investments Commission (ASIC) has announced the permanent ban of a former Astarra Asset Management Pty Ltd director Eugene Liu from the financial services industry. ASIC stated that the ban has been imposed for Mr Liu's misleading conduct as an investment manager of assets comprising hedge funds associated with the now collapsed Trio Capital Ltd (Trio).
The Cayman Islands Monetary Authority (CIMA) has made available a decision notice (4 March 2013) announcing that it has revoked the licence of the HSBC Mexico SA Cayman Islands branch. The decision follows an investigation to determine whether the Cayman Islands branch had violated local money laundering laws and regulations. The investigation found that the bank "is conducting business in a manner detrimental to the public interest, the interest of its depositors or of the beneficiaries of any trust or other creditors and that the direction and management of its business has not been conducted in a fit and proper manner."
The British government's contrary stance on proposals to limit bonuses in the banking sector within the European Union (EU) has been rejected by all other EU member states at a meeting on 5 March 2013. According to the New York Times, the proposed bonus caps aim to regulate the high-incentive and high-risk conduct that was observed prior the global financial crisis, although British representatives have expressed concern that such regulation could damage the financial competitiveness of Europe and especially London in the global arena.
The office of the United States (US) Attorney for the Southern District of New York (US Attorney's Office) has announced that Swiss private bank Wegelin & Co (Wegelin) has been ordered to pay a total US$74 million in penalties for conspiring with US taxpayers and others in tax evasion by secretly holding approximately US$1.5 billion and associated income in Wegelin accounts. The US Attorney's Office stated that the case marked the "the first time that a foreign bank has been indicted for facilitating tax evasion by US taxpayers and the first guilty plea and sentencing of such a bank".
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