Bankrupt Banker

CFTC accuses Royal Bank of Canada of sham trades

<p>U.S. regulators are accusing one of Canada's largest banks of engaging in hundreds of millions of dollars in illegal futures trades to reap tax benefits on its holdings of company stocks. The Commodity Futures Trading Commission filed civil charges Monday against Royal Bank of Canada, saying the bank made the sham trades with itself. The agency said it is the largest case it has brought against so-called wash trades, which cancel each other out. Royal Bank of Canada engaged in "a wash-trading scheme of massive proportion," the CFTC said. In addition, the agency alleged that the bank concealed the true nature of the trades and made false statements to a futures trading exchange, OneChicago. The CFTC alleged that Royal Bank of Canada made the trades in stock futures contracts from June 2007 to May 2010 at non-competitive prices with two foreign subsidiaries. The transactions weren't "at arm's length," as required by law, and as reported by the bank to the exchange, the agency said. An arm's length transaction either is one in which the buyer and seller aren't directly related or one done at a price that would prevail if they were unrelated. The federal rules allow futures trades between companies and subsidiaries, but only if they are done on an arm's length basis. Toronto-based Royal Bank of Canada called the CFTC's allegations "baseless" and said it will contest them in court. The bank said the trades had been vetted in advance by the CFTC and futures exchanges back in 2005 with no objections being lodged against them, and they were monitored for several years. The CFTC is seeking a permanent injunction against the bank committing further violations of the federal commodities laws and rules, and unspecified monetary penalties in its civil lawsuit filed in federal court in Manhattan. The CFTC said the bank's trading strategy was devised to gain Canadian tax credits on its holdings of U.S. and Canadian company stocks. The strategy was created and carried out by a group of executives at the bank. However, the agency's suit didn't name any individuals. "Today's action should make clear that the CFTC will not hesitate to bring charges against even the most sophisticated market participants who unlawfully exploit the futures markets for their own gain," SEC Enforcement Director David Meister said in a statement. Meister, questioned by reporters, wouldn't say whether related suits could be filed against individuals in the future or if the alleged misconduct by Royal Bank of Canada also occurred at other banks. The buyer or seller of a futures contract commits to purchase or sell something at a specified date and price. There were two types of futures trades the bank engaged in that corresponded to two different Canadian tax benefits, the CFTC said. One benefit allows Canadian companies that hold U.S. stocks that pay dividends to get a tax credit for the U.S. dividend tax they pay. The bank bought stocks in U.S. companies that it expected to pay dividends on certain dates. As a hedge against risk, the CFTC said, the bank also sold single-stock futures contracts at the same time to a foreign subsidiary. The subsidiary sold the stock short, meaning it bet against the stock — borrowing shares, selling them and then buying them when the stock price falls and returning them to the lender, while pocketing the difference. The net effect was a "wash," but the bank got a tax credit as a result, the CFTC said. Another Canadian tax benefit allows Canadian companies that hold shares of other Canadian companies for more than a year to receive dividends tax-free for a year. In that case, Royal Bank of Canada bought baskets of Canadian stocks that it held for more than a year and also sold stock-index futures contracts as a hedge to another foreign subsidiary, the CFTC said. "Before we made a single trade, we proactively contacted the exchange to seek its guidance," Royal Bank of Canada said in a statement. "These trades were fully documented, transparent and reviewed by both the CFTC and the exchanges, and for the next several years were monitored by them. RBC's trading was permissible in 2005, and it is permissible today under the CFTC's published guidance." The bank said that since there was no objection in 2005, it is "absurd" for the CFTC to claim now that the trades were fictitious or wash sales. The trades were engaged in by independent RBC entities with the intention of taking genuine market positions, in accordance with CFTC guidelines, the bank said. "They were executed at competitive market pricing and no market participants suffered any negative impact."</p>

CFTC accuses Royal Bank of Canada of sham trades

U.S. regulators are accusing one of Canada's largest banks of engaging in hundreds of millions of dollars in illegal futures trades to r...

Visa, MasterCard alert banks to security breach

<p> </p><p>Security blogger Brian Krebs this morning broke a story that Visa and MasterCard have begun sending alerts to banks about a major breach at an unnamed payment card processing firm.   By Mark Lennihan, AP A sign for MasterCard in New York on March 19, 2012. Enlarge By Mark Lennihan, AP A sign for MasterCard in New York on March 19, 2012. Ads by Google Global EMBA at INSEAD Learn & work in synergy Global, yet convenient format global.emba.insead.edu Experian® ID Protection Get Powerful Identity Protection For £6.99 Per Month. Join Today! www.protectmyid.co.uk/id_theft Rise Visa Credit Card No Interest Charges, Affordable. Simple Monthly Fee, Credit to £300. www.risecredit.co.uk Visa and MasterCard have acknowledged the breach, and The Wall Street Journal is now reporting that the processor is Atlanta-based Global Payments. Krebs told Technology Live that Global Payments is expected to issue a statement today. "Law enforcement asked everyone to keep it quiet so as not to disturb investigations," Krebs says. " I'm hearing now from two sources that investigators suspect Dominican street gangs may be involved and that the fraud is focusing mostly on commercial credit and debit card accounts." Credit card processors have been breached before. Heartland Payment Systems lost 130 million payment card records generated by 250,000 merchants and restaurants in 2008. But the stakes are much higher this time around, especially for retailers. Some 46 states have now enacted data breach disclosure laws that require merchants and payment card issuing banks and credit unions to notify customers whose card numbers are stolen. Many of these data loss disclosure laws impose stiff fines if notifications are not done in a timely manner. Massachusetts recently showed that such fines can generate much-needed revenue, while also championing consumer privacy and security, says Ted Julian, of Co3, a Cambridge, Mass.-based start-up that helps retailers manage the repercussions of credit card theft. Depending on the scale of the Global Payments breach, which has not been disclosed, states could see a windfall in fines levied against merchants and card-issuing banks and credit unions who are slow to notify consumers that their credit or debit card number is in criminals' hands. Co3 has just sent out analysis conveying the hypothetical case of one merchant losing the payment card numbers of 1 million customers dispersed in 10 states. If that company failed to meet all 10 disclosure requirements, it would face $1.6 million in fines, Julian says. "Merchants are definitely on the hook for these state disclosures, because they are the ones who have the consumer relationship," Julian says. Gartner banking security analyst Avivah Litan says her sources "are seeing signs of this breach mushrooming. From what I hear, the breach involves a taxi and parking garage company in the New York City area, so if you've paid a NYC cab in the last few months with your credit or debit card be sure to check your card statements for possible fraud." Litan also is hearing about a Central American connection. Unverified reports, she says, point to a "Central American gang that broke into the company's system by answering the application's knowledge-based authentication questions correctly. Looks like the hackers took over an administrative account that was not protected sufficiently."</p>

Visa, MasterCard alert banks to security breach

Security blogger Brian Krebs this morning broke a story that Visa and MasterCard have begun sending alerts to banks about a major breach a...

Baggage handlers to strike at Easter

<p> </p><p>Baggage handlers at Stansted Airport are to strike over Easter in a row over pay, the GMB union announced today.  The move follows an overwhelming vote in favour of industrial action by 150 GMB members employed by Swissport after the union claimed that shift changes would lead to wage cuts of up to £1,000.  The GMB said strikes will be held on Good Friday, Easter Saturday and Easter Monday, threatening disruption to passengers flying on holiday for the holiday break.  GMB official Gary Pearce said: "GMB members have voted overwhelmingly for strike action and for action short of a strike.  "Up to now the company has been intent on imposing these changes without agreement and this is completely unacceptable, as this vote shows.  "GMB has offered several alternative shift patterns and working arrangements but the company refuses to listen so far.  "I have notified Swissport of the ballot result and I have asked them for more talks to try to avert action over these pay cuts.  "GMB members consider that Swissport is attempting to make savings at their expense and they are not willing to agree to this.  "Unless there is urgent talks and a settlement, this vote for action this will result in disruption over the Easter Bank Holiday weekend.  "The travelling public need to be aware that it has been this aggressive move by Swissport to cut our members pay at a time of high inflation that has led to this strike vote.  "If the strike goes ahead, Swissport is entirely to blame for the disruption."</p>

Baggage handlers to strike at Easter

Baggage handlers at Stansted Airport are to strike over Easter in a row over pay, the GMB union announced today. The move follows an over...

Lloyd's of London posts $820-million loss in 2011

<p> </p><p>Lloyd's of London on Wednesday reported a big loss for 2011, which proved to be the second-costliest year ever in terms of natural catastrophe claims for the global insurance industry.  Lloyd's, a society of corporate underwriters and wealthy individuals that make insurance transactions through 88 syndicates, said it lost £516-million ($820-million) on net claims of £12.9-billion.  The claims included £4.6-billion for catastrophes, the largest amount in that category in Lloyd's 324-year history. Total claims from natural catastrophes for the global insurance industry in 2011 were $107-billion, second only to $120-billion in 2005, the year of Hurricane Katrina in the United States, Lloyd's said.  Major catastrophe claims followed flooding in Australia in January, the second earthquake in New Zealand in February, the Japanese earthquake and tsunami in March, a deadly series of tornadoes in the U.S. in April and May, and the floods in Thailand from July.  John Nelson, chairman of Lloyd's, said the market's capital position was unchanged and it recorded a profit in the second half of the year.  “We know that market conditions are likely to remain tough in 2012,” Mr. Nelson said.  Lloyd's said fears of a double-dip recession had made investors very cautious, particularly in Europe, and the euro zone crisis has slowed insurance growth in the region. However, Lloyd's said demand for insurance was growing in Asia and Latin America.  Lloyd's said it was confident of meeting the European Union's Solvency II regulations on the insurance industry in 2013. Uncertainty about the cost of the new regulations has led one major British insurer, Prudential, to say it was examining the possibility of moving its headquarters out of London.</p>

Lloyd's of London posts $820-million loss in 2011

Lloyd's of London on Wednesday reported a big loss for 2011, which proved to be the second-costliest year ever in terms of natural cat...

UK facing an interest only crisis

<p> </p><p>a million and a half UK homeowners could be facing an interest only crisis.  New figures have revealed that of the 11.2 million households in the UK with a mortgage, a sizeable one in seven – the equivalent of 1.6 million homes – are simply paying off the interest on their home loans each month.  The scenario of well over 1.5 million homes only paying interest each month and not repaying capital or putting anything towards their overall mortgage debt has been described as a 'ticking timebomb'.  Even more worrying is that almost a third of this group (32%) are either in or coming up to retirement age (55+) while more than half are between the ages of 35 and 55 (53%).  "Many will be forced to downsize or continue to pay large mortgages well into retirement, when income is tighter than ever," said Karen Barrett, chief executive at unbiased.co.uk.  "The goal of becoming 'mortgage free' is becoming ever more elusive for some."  In addition, with lenders now clamping down on interest only mortgages, and slashing loan-to-value requirements to around 50% - 60%, many people currently on interest only deals could easily find that no similar options will be available to them when they come to remortgage in the future.  In recent weeks Santander, Halifax and Nationwide have been amongst the providers to change their interest only deals.  It means that hundreds of thousands of people could well struggle to boost their payments when their interest only period comes to an end.  On some mortgage deals, when homeowners revert back to repaying capital they also have to make up the funds lost during their interest only period.  It means that their new payments could become unaffordable, leaving them in danger of having their homes repossessed.  "With incomes squeezed, it's not surprising that many people are trying to save money by sticking to interest only mortgages, but this is a potential ticking time bomb," said Ms Barrett.</p>

UK facing an interest only crisis

a million and a half UK homeowners could be facing an interest only crisis. New figures have revealed that of the 11.2 million households...

Bank complaints reach an all-time high as more than £2bn is handed back to customers in just six months

Banks have had to hand back more than £2billion to wronged customers in just six months as complaints against financial institutions have ...

Watchdog slaps ban on former Cattles’ directors

<p> </p><p>GOVERNMENT watchdog has fined and banned two former directors of Yorkshire sub-prime lender Cattles for publishing misleading information to investors and “acting without integrity in discharging their responsibilities”.  The Financial Services Authority has also publicly censured Batley-based Cattles and its subsidiary Welcome Financial Services.  The group lent money to cash-strapped households. It was brought to its knees by a long-running accountancy scandal, which saw its proportion of bad debts understated for years.  James Corr, Cattles’ finance director, has been fined £400,000 and Peter Miller, Welcome’s finance director has been fined £200,000, and both have been banned from performing any functions in areas the FSA regulates.  The authority has also banned John Blake, Welcome’s managing director, and fined him £100,000. He has referred his case to the Upper Tribunal. The FSA said all three fines had been reduced “on account of the directors’ current personal financial circumstances”.  Cattles was a member of the FTSE 250 but delisted last year. Most of its business was conducted through its subsidiary, Welcome. According to the FSA, Cattles’ 2007 annual report contained “highly misleading arrears, impairment and profit figures”.  It stated that only £900,000 of Welcome’s approximately £3bn loan book was in arrears, when if, accounting standards had been properly applied, the figure would have been around £1.5bn. Cattles also announced a pre-tax profit of £165.2m for 2007, but if the correct accounting standards had been used, Cattles would have suffered a pre-tax loss of £96.5m.  The FSA continued: “The misleading figures from the annual report were also included in a rights issue prospectus that Cattles released to potential investors in April 2008. It gave misleading impressions of the firm’s financial health. It is likely that investors would have regarded this as highly material when subscribing under the rights issue. The rights issue was subsequently fully subscribed and raised £200m. When the true state of Cattles’ loan book emerged in 2009, trading in Cattles’ shares was suspended.”  In March 2011 Cattles announced a scheme of arrangement under which its shareholders would receive only 1p for each share, compared with a rights issue price of £1.28.  In a statement, Mr Corr said he was “deeply disappointed that the FSA, concluding there was no dishonesty or deliberate wrongdoing on my part, has nevertheless decided to take action against me.  “I firmly believe that criticisms levelled against me remain unfair, specifically the challenge to my integrity. This is particularly the case where any shortcomings found by the FSA in relation to Cattles’ financial statements were not found to be the result of any deliberate misconduct on my part and were not identified by others in Cattles’ senior team or its internal or external auditors.”  Mr Corr said he cooperated fully with the FSA investigation at all times. He added: “As a result of the regulatory decision committee’s consideration of the matter, the FSA’s proposed fine in relation to me was materially reduced, and a further reduction was then made to take into account the severe financial hardship that a significant fine would cause me.  “I remain deeply saddened by the impact that Cattles’ financial problems have had on the various stakeholders in the Cattles’ business.”  A Cattles spokesman said: “Cattles’ questioning played a significant role in bringing the impairment issue to light in February 2009 and it immediately informed the market and the regulator. Since then, the companies have cooperated fully with the FSA’s investigation, and we are pleased that the FSA has expressly acknowledged this in its own press release. Over the last three years, new management teams have been put in place at both Cattles and Welcome, to stabilise the companies and restructure their operations and finances.”  The spokesman said Nottingham-based Welcome was continuing to collect out its loan book. While Cattles is no longer trading, its Shopacheck and TLG businesses continue to be developed.  Shopacheck is based in Batley, while TLG’s head office is in Cleckheaton. Welcome, Shopacheck and TLG employ 1,700 staff altogether.</p>

Watchdog slaps ban on former Cattles’ directors

GOVERNMENT watchdog has fined and banned two former directors of Yorkshire sub-prime lender Cattles for publishing misleading information ...

RBS is a 'disgrace', says 'swap victim' London & Westcountry Estates

<p> </p><p>London & Westcountry Estates (LWE), a family-owned operator of 28 business parks in southern England, blamed its collapse on a complex derivative RBS sold it in July 2008 – just before rates were cut to historic lows. As administrators from Ernst & Young were on Tuesday sent to LWE's Plymouth offices, the company's chairman, Michael Hockin, branded state-backed RBS a "disgrace". He claimed the lender's 10-year swap against a £57m three-year loan had cost his business at least £5m in extra payments over the past three years. "We were given 24 hours to sign and told interest rates were about to shoot up, only for them to collapse," he said. "It's absolutely disgraceful what RBS has done to our business." He said when he bought the product he was under the impression the swap could be terminated after three years through a break clause. However, last year he was informed the clause only allowed RBS to cancel the product – and not the other way round. Gary Streeter MP, who has been following the case, said he had been shocked by the behaviour of the bank, which is 82pc owned by the taxpayer. "They have been utterly inflexible and are accountable to no one. This should not have been allowed to happen to what was a good and profitable business," he said. Mr Streeter called for a parliamentary debate on banks' alleged mis-selling of interest swaps. He has written to Chancellor George Osborne and Business Secretary Vince Cable to ask them to look into the matter. Andrew Tyrie, chairman of the Treasury Select Committee, has already called on the Financial Services Authority (FSA) to investigate claims, after a Telegraph investigation, that thousands of small businesses could have been sold inappropriate interest rate swap products. Speaking on Tuesday he said: "This appears to be just the sort of case the FSA should be getting its teeth into." Administrators to LWE were appointed by US private equity firm Blackstone, which last year signed a joint venture deal with RBS to manage a £1.4bn property portfolio. RBS sold the portfolio, including LWE's debt, for about £975m, with the bank retaining a 75pc stake and Blackstone taking a 25pc holding and acting as the asset manager. A spokesman for RBS said the bank had spent a "considerable amount of time and effort" to reach an agreement with LWE and that the administration process was the only "viable option remaining". RBS has always denied allegations that it mis-sold interest-rate swaps. Blackstone said its attempts to reach a constructive solution had been "rebuffed" and the administration was necessary to "safeguard our investors' interests and indeed those of LWE's tenants". Barclays has apologised to "a small number" of business customers for telling them to keep their loan and interest rate swap complaints secret from the FSA. Acting after a Telegraph investigation of mis-selling complaints, Barclays' head of compliance Mike Walters wrote: "Nothing in this letter shall prevent the parties discussing the complaint, the settlement or any other related matter with the Financial Services Authority [or any relevant regulator] or their professional advisors."</p>

RBS is a 'disgrace', says 'swap victim' London & Westcountry Estates

London & Westcountry Estates (LWE), a family-owned operator of 28 business parks in southern England, blamed its collapse on a complex...

George Soros 'offers ex-girlfriend Adriana Ferreyr $250k to drop $50m lawsuit'

Billionaire George Soros has offered his Brazilian soap star ex-girlfriend $250,000 to 'persuade her' to drop a $50million lawsuit...

Russian banker shot six times had testified over murder plot

The banker was left for dead by a lone gunman as he returned to his home in Canary Wharf on Tuesday evening. Scotland Yard detectives are in...

Russian banker shooting: 'It looks like a contract hit'

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Spain may be euro zone's next source of contagion

<p><br />Spain risks triggering a fresh eruption of the euro zone debt crisis if it fails to match Italy's success in winning investors' confidence in its reform drive.  An injection of European Central Bank funds into the bloc's banking system eased financial stress late last year after Italy's bond yields surged above 7 percent, beyond which debt costs are widely deemed unaffordable.  Early in 2012, Spanish and Italian borrowing costs fell steadily, with investors flush with ECB cash and increasingly confident new governments in both countries would enact reforms to tackle their financial problems.  But Spain shocked markets last month when it said it had missed its 2011 budget deficit target and a few days later set itself a softer goal for 2012.  Investors seeking the high yields on offer in the euro zone periphery have since been ditching Spanish bonds for Italian, in a sign that the epicentre of the crisis is shifting.  "The whole Spanish situation has just deteriorated so quickly. We're pretty much looking at Spain as the next point of stress, the next point of weakness," said Peter Allwright, head of absolute rates and currency at RWC Partners, which manages assets worth $4 billion.  If investors keep selling Spanish debt, contagion to the rest of the euro zone risks being more damaging than that triggered recently by Greece and Portugal, economies much smaller than Spain. Italian yields could re-test last year's highs as a result, Allwright said.  Spanish 10-year bonds yield about 5.4 percent, 40 basis points more than their Italian counterparts , and 80 bps above last month's lows. In November, before the ECB's first massive cash injection, they yielded almost 2 percentage points less than Italy at 6.7 percent.  While Italy's outperformance reflects the country's perceived willingness to reform under technocrat Prime Minister Mario Monti, the renewed pressure on Spain shows investors are impatient for results.  Spanish unemployment is at a record high, the private sector is trying to cut its debts and domestic banks' exposure to bad loans is at its highest since August 1994.  These problems could push Spain even deeper into recession, making the 2012 budget deficit target of 5.3 percent of output agreed with the European Union even harder to achieve.  Madrid will present its detailed budget plans by the end of the month and their credibility will be crucial to fending off selling pressure in bond markets.  Worries the EU's rigid stance on austerity is making it more difficult for Spain to grow have raised doubts about the recently signed fiscal pact, which was intended to fix one of euro zone's major flaws - a lack of fiscal unity - and boosted investors' confidence in efforts to tackle the crisis.  That could speed up contagion, analysts said.  "If they (the EU) make too many concessions they lose credibility, if they are too straight with Spain they will stop growth so they don't want one or the other and this is what's been weighing on Spain," said Viola Stork, fixed income analyst at Helaba Landesbank Hesse-Thueringen.  MAKE-OR-BREAK  The surge in Italian yields above 7 percent last year was widely seen as a make-or-break moment for the euro zone, given Italy's size and banks' widespread exposure to its debt.  The sell-off was triggered by former Prime Minister Silvio Berlusconi's reluctance to reform. Even though he was replaced by the more credible Monti, it took ECB cash to calm markets.  Spain is also seen as "too big to fail" and if its reform efforts are deemed insufficient, the risk is that the euro zone institutions would again need to step in.  "The ECB actions show that there was a lot at stake, there is a lot at stake and a lot will be done to avoid another make-or-break moment," said Michiel de Bruin, who manages 25 billion euros as head of euro government bonds at F&C Netherlands.  "Reforms have to kick in" for the euro zone to avoid another such moment, he said.  Some investors say even the glut of ECB cash may not be enough to prevent Italian or Spanish yields reaching new highs.  The fact that domestic banks used the money they borrowed from the ECB to increase their exposure to Italian and Spanish debt could result in a negative feedback loop if those bonds come under selling pressure again.  "If we see another spike in yields it will be much harsher than it was last year," RWC Partners' Allwright said.</p>

Spain may be euro zone's next source of contagion

Spain risks triggering a fresh eruption of the euro zone debt crisis if it fails to match Italy's success in winning investors' conf...

South Korea's fair trade watchdog Thursday slapped fines totalling 135.4 billion won (S$151 million) on the four major noodle makers for price-fixing.

<div style="background-color: white; border-bottom-width: 0px; border-color: initial; border-image: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #333333; font-family: Helvetica, Arial, 'Trebuchet MS', sans-serif; font-size: 14px; line-height: 1.3em; margin-bottom: 1.35em; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;"><br />
</div><div style="background-color: white; border-bottom-width: 0px; border-color: initial; border-image: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #333333; font-family: Helvetica, Arial, 'Trebuchet MS', sans-serif; font-size: 14px; line-height: 1.3em; margin-bottom: 1.35em; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">Nongshim, Samyang Foods, Ottogi and Korea Yakult fixed prices of instant noodles on six different occasions from 2001 through 2010, the Fair Trade Commission said in a statement.</div><div style="background-color: white; border-bottom-width: 0px; border-color: initial; border-image: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #333333; font-family: Helvetica, Arial, 'Trebuchet MS', sans-serif; font-size: 14px; line-height: 1.3em; margin-bottom: 1.35em; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">The companies systematically exchanged information for price-fixing in a market where their combined market share is almost 100 per cent, it said.</div><div style="background-color: white; border-bottom-width: 0px; border-color: initial; border-image: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #333333; font-family: Helvetica, Arial, 'Trebuchet MS', sans-serif; font-size: 14px; line-height: 1.3em; margin-bottom: 1.35em; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">Nongshim incurred most of the fine for its alleged key role in the price-rigging.</div><div style="background-color: white; border-bottom-width: 0px; border-color: initial; border-image: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #333333; font-family: Helvetica, Arial, 'Trebuchet MS', sans-serif; font-size: 14px; line-height: 1.3em; margin-bottom: 1.35em; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">The company, which accounts for some 70 per cent of the country's instant noodle market valued at some two trillion won last year, was fined 107.8 billion won (S$120.6 million).</div><div style="background-color: white; border-bottom-width: 0px; border-color: initial; border-image: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #333333; font-family: Helvetica, Arial, 'Trebuchet MS', sans-serif; font-size: 14px; line-height: 1.3em; margin-bottom: 1.35em; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">Nongshim denied the allegation. "Because of our dominant market share, there is no need for us to collude with others," a spokesman said.</div><div style="background-color: white; border-bottom-width: 0px; border-color: initial; border-image: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #333333; font-family: Helvetica, Arial, 'Trebuchet MS', sans-serif; font-size: 14px; line-height: 1.3em; margin-bottom: 1.35em; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">He said the company did not accept the regulator's verdict and might consider a legal battle.</div>

South Korea's fair trade watchdog Thursday slapped fines totalling 135.4 billion won (S$151 million) on the four major noodle makers for price-fixing.

Nongshim, Samyang Foods, Ottogi and Korea Yakult fixed prices of instant noodles on six different occasions from 2001 through 2010, the Fai...

18 Best Places to Retire Overseas

<p>When choosing a place to spend your retirement years, the cost of living is important. But it is only one consideration. The ideal retirement spot is a place where you can live a rich life filled with friends, travel, discovery, physical and intellectual distractions, and opportunities for growth. A super-low cost of living is great, but more important is the quality of life your retirement budget is buying you.  Many of the best options for enjoying an enormously enriched retirement lifestyle on even a very modest budget can be found overseas. Here are the world’s 18 top retirement havens, where an interesting, adventure-filled lifestyle is available for a better-than-reasonable cost.  The Americas  1. Panama. Panama is the world's top retirement haven. Panama City no longer qualifies as cheap, but other spots in this country certainly do. Panama continues to offer the world's gold standard program of special benefits for retirees. The currency is the U.S. dollar, so there is no exchange rate risk if your retirement savings and income is in dollars. The climate in Panama City and on the coasts is tropical, hot, and humid. However, the climate in the highlands can be temperate and tempting. Panama is the hub of the Americas, meaning it's easily accessible from anywhere in North and South America and Europe.  2. Belize. Belize is a great place for reinventing your life in retirement. This tiny, under-developed, sparsely populated country offers two distinct lifestyle options: Ambergris Caye is the best of the Caribbean at a discount, while the Cayo is a frontier where independent-minded pioneers can make their own way and do their own thing, peacefully and privately. The climate is tropical, warmer on the coast, and cooler in the mountainous interior. The official language is English, so there’s no foreign language barrier for Americans. You’ll find a well-established and welcoming community of expats in San Pedro and on Ambergris Caye, and an emerging community of expats in the Cayo around San Ignacio.  3. Colombia. Medellin, a city of springtime and flowers, is the unsung jewel of Colombia. This city is pretty, sophisticated, cosmopolitan, safe, and affordable. Perhaps the most appealing advantage in Medellin is the cost of real estate. It's an absolute global bargain. You can buy property in a good neighborhood for as little as $1,000 per meter.  Medellin’s second biggest appeal is its climate, which is spring-like year-round, thanks to the high elevation. Medellin is a more developed city than you might imagine, with five of the best hospitals in Latin America, universities, museums, art galleries, and an efficient and reliable metro system. It also has international-standard shopping and many interesting nightlife options. If you fancy Paris or other Continental city choices, but don't want or can't afford Europe, I strongly recommend you take a look at Medellin. This city is one of the best places in the world to hang your hat.  4. Uruguay. It seems that the more troubled the rest of the world becomes, the more people are finding appeal in Uruguay, a stable commodity-based economy with a sound banking system. Uruguay is neither an aggressor nor a target of aggression in the world arena, and it's not a high-stakes player in world politics. Costs have risen in recent years thanks to the strength of the Uruguayan peso and the sinking value of the dollar. But, even as the cost of living and of real estate rose, Uruguay has become even more popular as a lifestyle and retirement destination. Accordingly, people are coming to Uruguay in record numbers, with residency applications up over 300 percent since 2007, many of these coming from the United States.  5. Ecuador. Ecuador is perhaps the best choice in the Americas for a retiree looking to enjoy a rich and interesting quality of life on a limited budget. I recommend Cuenca, the former Inca and Spanish capital, a current UNESCO World Heritage Site, and the intellectual heart of Ecuador. Cuenca is home to about 1,500 full-time residents from North America. This is not a big number compared with some more recognized Mexican retirement choices, but Cuenca clearly qualifies as an expat-friendly city, offering one of the most interesting retirement lifestyles available anywhere. Amenities include theater, orchestra, shows, restaurants, broadband Internet service, reliable electricity and telephone, and drinkable tap water.  Cuenca’s appeal as a retirement haven is expanding in important ways, thanks to a recently developed program promoting the city as a medical tourism destination. The city's five top hospitals have joined together to offer bundled programs of medical tests, procedures, and services available for from $66 to $401. Costs for comparable services in the United States would be multiples of these amounts. In addition, Cuenca is now offering nursing care of a standard suitable for and appealing to the expat retiree at a cost of just $450 per month, including 24-hour doctor and nurse attendance, food, laundry, personal care, and occupational and rehabilitative therapy.  6. Nicaragua. Another top choice for a retiree with a very limited budget is Nicaragua. This country’s Pacific coastline is every bit as dramatically beautiful as that of neighboring Costa Rica. Infrastructure is under-developed in both countries, but the cost of living and especially real estate are noticeably lower in Nicaragua, making the pot-holed roads easier to bear. Nicaragua also boasts two of the top Spanish-colonial cities in the Americas: Granada, a pretty and romantic city that everyone should see once, and Leon. Both places were founded in the early 16th century by Cordoba.  7. Roatan, Honduras. I’m not a big fan of mainland Honduras, which is under-developed and, in some places, unsafe. However, the Bay Island of Roatan is a world apart and one of my two top picks for affordable retirement in the Caribbean (the other is Ambergris Caye, Belize).  8. Argentina. Argentina is a dynamic and charming nation that rides perpetually between crisis and boom. This rich country boasts abundant natural resources and offers many appealing retirement lifestyle choices, including the eclectic and cosmopolitan neighborhoods of Buenos Aires, the provincial capitals, a finca in the countryside, and a boutique vineyard in Mendoza. Retirement life in Argentina could be many things, but never dull. The downside is a rising cost of living, thanks to local inflation and the falling value of the U.S. dollar versus the Argentine peso.  9. Mexico. This is historically one of the most recognized retirement havens for Americans. But Mexico today is suffering from a lot of bad press thanks to its drug wars. However, Mexico is a big country, and the drug goons haven’t overtaken it entirely. It continues to offer some of the best coastal lifestyle and retirement options in the Americas, including Puerto Vallarta, my number-one choice for an affordable life of luxury on the Pacific. A couple could enjoy a a five-star retirement in this beautiful and romantic coastal town of marinas, golf courses, yacht clubs, and fine dining on a budget of as little as $2,500 per month.  10. Chile. Chile is a developed, First World destination that is also quiet, safe, and stable. Unlike its more scandalous neighbor, Argentina, Chile offers a cultured, comfortable lifestyle that is relatively calm. Santiago is a city of classic-style architecture, cobblestoned streets, and cafes with outdoor seating, in many ways reminiscent of Paris or Barcelona. This city of 7 million is also remarkably clean and friendly and boasts a diverse and expanding property market that is affordable on a global scale. You could own property at some of the city’s best addresses for less than $2,000 a meter. One important downside to retirement in Santiago is the air pollution, which is a serious problem, especially during the winter months. A better option could be the country’s beautiful Lake District to the south of Santiago, which is a favorite retirement choice among Chileans themselves.  Europe  11. France. France is a land of superlatives. Its capital has been called the most beautiful, most romantic, and most touristed city on earth. It also boasts some of the world’s best wines, cheeses, restaurants, shopping, castles, gardens, parks, beaches, museums, cafes, galleries, vineyards, and architecture. The typical concern for anyone who has ever dreamed of a new life in France is that it's too expensive for the average retiree to consider seriously. Not so. Paris isn't cheap. But elsewhere in France you can find realistic options, even if your retirement budget is modest. Perhaps the most retirement friendly region in this country is in the southwest, north of Spain, where small country towns offer a way of life that is quintessentially French and also very affordable.  12. Italy. The cost of living in Rome, Florence, Venice, and Tuscany might be beyond the limits of your retirement budget. But that doesn't mean you should take Italy off your list entirely if this is the country that stirs your imagination and speaks to your soul. A retiree on a budget interested in Italy could look at Abruzzo. From this beautiful Old World base, within a half-day's drive of both the coast and the mountains, you could plan excursions to Italy's better-known and more expensive outposts as often as you liked.  13. Ireland. Americans have long dreamed of retirement on the Emerald Isle and with good reason. Ireland is safe, peaceful, relaxed, welcoming, friendly, hospitable, and English-speaking, making it an ideal retirement choice for many. Ireland today is also more affordable than it has been in more than a decade, and its property market has fallen off a cliff. Real estate prices are down 50 percent or more in many markets and are still falling. If you, like so many others, have dreamed of wiling away your retirement years on your own little piece of the Auld Sod, this could be the best time in your lifetime to think about making that purchase.  14. Spain. Spain is known among expats for its Atlantic and Mediterranean coastlines, especially its infamous (and unfortunately over-developed) Costa del Sol. But there's more to this country than its costas. Barcelona, for example, is a world-class city on the ocean, perfect if you're looking for a cosmopolitan life near the water. Real estate prices in this country have fallen tremendously since the highs of four or five years ago. If retirement in Spain appeals to you, this could be the time to search for a great deal on Spanish retirement digs.  15. Croatia. Croatia, a country with an extraordinarily complicated history and an extremely open-minded, forward-looking population, is at another turning point in its long history. Countries at turning points are interesting places to be. I recommend the country’s Istrian Peninsula, which serves up some of the most delightful scenery on the planet. The land seems to rise up to embrace you, and everywhere you look, something nice is growing like olives, grapes, figs, tomatoes, pumpkins, blackberries, and wildflowers. Even the buildings seem to be part of the earth, built of its white stone and red clay. This sun-soaked region offers one of the most appealing lifestyle options in Europe today.  Asia  16. Thailand. Thailand boasts both really cheap and developed and comfortable lifestyle choices. It is also noteworthy as being one of the few countries in this part of the world that offers formal options for long-term and retirement visas. Hua Hin is one of the few classic retirement havens in Southeast Asia, complete with golf courses, factory outlets, and gated communities. Foreigners make up approximately 15 percent of that population, and most of them are retired. With 12 golf courses in operation and another 3 under construction, this is definitely the place to go if you're a golfing enthusiast. Hua Hin is a place where, if you were so inclined, you could live a North American lifestyle and never have to involve yourself more than superficially with the local Thai culture. This could be a plus or a minus for you, but it is worth noting when discussing options in this typically exotic part of the world.  17. Vietnam. While Thailand is well-established as an interesting option for expats and foreign retirees, Vietnam is an emerging choice, which could get a lot more attention in the coming few years. Nha Trang offers an interesting coastal retirement option for adventuresome retirees. Nha Trang’s total population of more than 200,000 includes an expat population of about 1,000 people, meaning foreigners here are still pioneers. You'll find no organized activities for foreigners, such as expat clubs or softball leagues. The lack of a big foreign population makes it easier to have meaningful interactions with the locals. The major attraction in Nha Trang is its cost of living, which can amount to much less than $1,000 per month for a retired couple. If you're a budget-minded retiree with an interest in Asia, this town should be on top on your list.  18. Malaysia. After Thailand, Malaysia is the easiest country to navigate in this part of the world. The country's capital, Kuala Lumpur, is a city of contrasts. The shining stainless steel Petronas Towers, two of the tallest skyscrapers in the world, anchor a startlingly beautiful skyline that is truly unique to this city. Modern, air-conditioned malls flourish, selling everything from beautifully handcrafted batik clothing to genuine Rolex watches and Tiffany jewelry. In the shadows of these ultra-modern buildings, the ancient Malay village of Kampung Baru still thrives, with free-roaming roosters and a slow pace of life generally found in rural villages. Less than a 20-minute walk from the city center, you can find yourself conversing with monkeys in the city-jungle surrounding one of the highest telecommunications towers in the world. A walk of less than 30 minutes leads you to Chinatown and Little India, where merchants offer their wares, foods, and culture in happy neighborhoods that showcase the amazing diversity of the city.  Unlike some places in Asia, foreigners are genuinely welcomed in Kuala Lumpur. Language isn't a problem, as almost everyone speaks adequate English. Immigration is easy, and it is possible to stay for an extended period with a simple tourist visa. Although Kuala Lumpur is more expensive than rural Malaysia, it can be marvelously inexpensive by Western standards. You can realistically expect to cut your living expenses by a third and still enjoy a lifestyle comparable to what you are accustomed to now.</p>

18 Best Places to Retire Overseas

When choosing a place to spend your retirement years, the cost of living is important. But it is only one consideration. The ideal retiremen...

5 Top Ways Stars Lose All Their Cash

<p>Last week Gary Busey passed a mandatory online financial management course in an attempt to convince a U.S. Bankruptcy court he'll start sensibly managing his money.   The veteran actor recently filed for Chapter 7 bankruptcy. But in Hollywood, going broke is just about as as common as a leaked nude photos; just ask Toni Braxton, Larry Wilcox, Vince Neil, Mike Tyson, and Stephen Baldwin, all of whom have recently filed for bankruptcy.   Not to mention Zsa Zsa Gabor’s husband, who was forced to put their Bel Air mansion on the market last year to pay the ailing star’s medical bills; Wesley Snipes, who was imprisoned for three tax-related misdemeanor convictions; and Nicolas Cage, who lost one of his homes to foreclosure and has been plagued by IRS issues.  So how is it that some of the most well-paid people on the planet can end up with next to nothing? We talked to financial management experts and they ticked off the top five ways rich celebs lose it all (or close to it).  5. They have no idea how money management works.   “Most celebrities have extremely creative minds. But in my experience, the most creative folks tend not to want to spend time dealing with business issues,” tax and business expert Joseph M. Doloboff, Partner at Blank Rome LLP in Los Angeles told FOX411’s Pop Tarts column.  But don’t famous folks hire financial planners and business managers to take good care of their millions?  “Most of them do, but at the end of the day, these accounts are still in a celebrities’ name, which gives them ultimate control over their wealth,” said Certified Financial Counselor for Financial Advice for the Artist, Erin Elizabeth Burns.  Which can mean big spending, big mistakes and…  4. Bad advice.   Pete Krainik, Founder and CEO of The CMO Club, a networking resource for top marketing executives, noted that some celebrities do not have the skill sets to identify and determine the right business/financial managers for their needs.  “Because they don’t think of themselves as brands, they don’t put the efforts or plans in place to maximize their value for endorsement deals,” he explained. “They should have themselves significant additional revenue streams – it is not just about getting the next role, but getting the next deal.”  But some such "additional revenue streams" can also run in the red..  Last year, the Las Vegas rendition of Beso – the restaurant/nightclub co-owned by Eva Longoria – filed for bankruptcy to restructure nearly $5.7 million in debt and other liabilities. Prior to that, the Jay-Z owned 40/40 sports bar in Sin City shut its doors a mere eight months after opening. Britney Spears’s southern-inspired Nyla Restaurant reportedly hit monetary blows before she also severed ties, and both Jennifer Lopez’s “Sweetface” clothing line and restaurant Madres went dark.  3. Theft and fraud.   Hollywood's highest profile people are actually human, which means they too are susceptible to being screwed by business managers, badly worded deals and corrupt advisors. Just ask Kevin Bacon and wife Kyra Sedgwick, who were taken to the cleaners by Ponzi schemer Bernie Maddoff.  Doloboff also said prominent factors in a celeb’s financial crumbling is their tendency to bring "friends" -- or family -- into the fray as business partners or employees.  “Many professional athletes and entertainers want to help their friends while simultaneously helping themselves,” he said. “The best advice is to refrain from doing business with friends. True friends don’t condition their friendship upon doing business together.”  Comedian Dan Cook will probably adhere to that – in 2010, his half-brother Darryl McCauley was ordered to pay the comic $12 million in restitution after pleading guilty to embezzling funds from him. McCauley allegedly stole $12,500 a month as Cook’s business manager.  Friends and fraud – double whammy!  2. Drugs, booze, and bad habits.  Stars are known to fall when the temptations of drugs/alcohol/hard partying turns into a dangerous addiction. It can also be more than an expensive habit, as addiction often impacts other areas.  “You are far more likely to make poor decisions when under the influence of drugs or alcohol. When you’re dealing with celebrities, the problem is that their support groups, (friends, family, entourages, et al), often consist of enablers,” explained Richard Taite, the Founder and CEO of rehab center Cliffside Malibu. “It comes as no surprise that a successful celebrity can face financial destitution if they are abusing drugs or alcohol and are left to their own devices.”  1. Ridiculous overspending.  Last but not least, some beautiful yet broke folks just lead foolishly fabulous lives (we're talking to you, MC Hammer) and refuse to accept that fame (and its fortune) can be fleeting.  “Most celebrities have luxuries such as a cook, a driver, a personal stylist, a personal assistant etc.,” said Burns. “They become accustomed to this lifestyle, but when their contract isn’t renewed, or when the films offers stop coming in, they are still living this life of luxury with the expectation that they will always be in demand.”  Yes, sadly, not every Hollywood tale has a happy ending. But with some good financial advise, the ending doesn't have to be tragic.</p>

5 Top Ways Stars Lose All Their Cash

Last week Gary Busey passed a mandatory online financial management course in an attempt to convince a U.S. Bankruptcy court he'll start...

The former chief reporter of the News of the World was arrested yesterday by police investigating the phone hacking scandal, on suspicion of intimidating a witness.

<p>Neville Thurlbeck, 50, who was also news editor on the defunct Sunday tabloid, was detained by appointment at a central London police station by officers from Operation Weeting a day after his former editor, Rebekah Brooks, was arrested with five others on suspicion of conspiring to pervert the course of justice. He was later released on bail.  Yesterday's arrest came as James Murdoch used a letter to the House of Commons media select committee to distance himself once more from any wrongdoing inside News International (NI). He blamed two former trusted lieutenants, Colin Myler and Tom Crone, claiming there were "inconsistencies" in their evidence to MPs.  Mr Thurlbeck has been a central figure in the unfolding phone-hacking saga since being named in the so-called "for Neville" email. This showed voicemail interception went beyond a single "rogue" reporter at the NOTW. He was arrested last year on suspicion of conspiring to hack phones and eavesdropping voicemail messages.  During recent months, he has adopted a higher media profile, with broadcast appearances and the launch of a blog commenting on developments in the crisis enveloping NI. In a blog entry last week, Mr Thurlbeck revealed how Will Lewis, a key member of News Corp's Management and Standards Committee, which has been marshalling millions of internal NI emails to Scotland Yard, had hired a private security company to provide security at his home.  Mr Thurlbeck published the name of the security company, noting that it had spent several hours at Mr Lewis's home, and gave the name of the street where the NI executive lives.  In a subsequent blog, Mr Thurlbeck, who is suing his former employer for unfair dismissal, said his story had prompted approaches from lawyers and a public relations company representing Mr Lewis, asking for the removal of his posting. He claimed it was suggested to him that the details he had provided about the security company "somehow implied I had put [Mr Lewis's] home under surveillance. Bonkers!".  He added: "I accepted their point that printing the name of his street was distressing to his family and took this down immediately as I have absolutely no wish to do this. Although I have not been asked to do so, I would like to apologise to Mrs Lewis for any distress."  A spokesman for the Management and Standards Committee declined to comment last night on Mr Thurlbeck's arrest. Meanwhile Mr Murdoch has sought to influence the parliamentary report into phone hacking, which is expected to be published before the Easter recess, by telling the committee that he did not mislead them, that he never tried to hide wrongdoing at the NOTW, and that when he did ask questions about what was going on, he was given "false assurances" by senior executives at Wapping.  In a personal letter to John Whittingdale, chair of the media select committee, the former executive chairman of NI initially takes responsibility "for not uncovering wrongdoing earlier".  However, the limited apologetic tone of his seven page letter, in which he accepts that it "would have been better if I had asked more questions", also contains evidence of anger directed at former trusted lieutenants inside NI. He says he relied too much on people who assured him that investigations had been carried out and who claimed that further inquiries were unnecessary.  The former NOTW editor, Colin Myler, and News Group Newspaper's former legal manager, Tom Crone, are named repeatedly and described as offering "inconsistencies" to Parliament, while Mr Murdoch says his own evidence "has always been consistent".  The letter states: "The truth is that incomplete answers and what now appears to be false assurances were given to the questions that I asked." In summaries of earlier evidence to the committee, he says he was "never intimately involved with the workings of the NOTW"; and on key meetings that discussed how senior executives were dealing with the emerging hacking culture, he says: "I was given a narrower set of facts than I should have been given..."  He also says that if "Messrs Crone and Myler" had given him the highly critical private opinion offered in 2008 by NI's leading counsel, Michael Silverleaf QC, which described "widespread wrongdoing", then he would have "acted differently". He ends his letter by repeating that he neither knew about, nor attempted to hide, wrongdoing, and tells MPs: "The evidence does not support any other conclusion."  James Murdoch: What he wrote  "I take my share of responsibility for not uncovering wrongdoing earlier. However, I have not misled Parliament. I did not know about, nor did I try to hide, wrongdoing. I do not believe the evidence before you supports any other conclusion..."  "It has been said I did not ask enough questions. However, the truth is that incomplete answers and what now appears to be false assurances were given to the questions that I asked."</p>

The former chief reporter of the News of the World was arrested yesterday by police investigating the phone hacking scandal, on suspicion of intimidating a witness.

Neville Thurlbeck, 50, who was also news editor on the defunct Sunday tabloid, was detained by appointment at a central London police statio...

James Murdoch pleads innocence ahead of committee report

<p>James Murdoch has written to an influential parliamentary committee, investigating a phone hacking scandal at his company, to apologise and restate his innocence ahead of a potentially damaging report that could determine his future in Britain.  The 39-year-old son of Rupert wrote to the committee to accept responsibility for failing to uncover the criminal behaviour, which has damaged the reputation of the News Corp media empire, British politicians and police.  At stake is his role as chairman of British pay-TV group BSkyB and potentially his future at News Corp, where he had for years been marked out as the heir apparent to his father Rupert as chief executive.   "I did not know about, nor did I try to hide, wrongdoing," he said in the letter published by the committee on Wednesday.  "Whilst I accept my share of responsibility for not uncovering wrongdoing sooner, I did not mislead parliament and the evidence does not support any other conclusion."  Analysts and some shareholders believe Murdoch would struggle to remain at BSkyB if he is singled out for particular criticism as it could impact his ability to negotiate with the government and regulators on behalf of one of Britain's most powerful media firms.  The all-party committee summoned James and his father Rupert to a hearing at the height of the scandal last July, for a three-hour often testy grilling that was watched live by millions on television in both Britain and the United States.  Just four months later, the younger Murdoch had to return to answer further detailed questions over what he knew and when after two former colleagues publicly contradicted his evidence.  News Corp's British newspaper arm News International had long argued that the hacking of voicemails to generate stories was the work of a single rogue reporter and private investigator who had already gone to jail for the crime.  But as more people came forward to accuse the company of hacking their phones, that defence crumbled and attention turned to those at the top of the company and it was asked why they had not pushed further to discover the truth.  "Clearly, with the benefit of hindsight, I acknowledge that wrongdoing should have been uncovered earlier," Murdoch said in his letter.  The parliamentary committee had originally planned to publish its report before Christmas but due to the sensitivity of the material it is having to write the document by committee and is now aiming for the Easter holiday in April.</p>

James Murdoch pleads innocence ahead of committee report

James Murdoch has written to an influential parliamentary committee, investigating a phone hacking scandal at his company, to apologise and ...

Goldman Sachs director quits 'morally bankrupt' Wall Street bank

<p> </p><p>A Goldman Sachs director in London has resigned after publishing a devastating open letter accusing senior staff of being "morally bankrupt" and bent on extracting maximum fees from clients by offloading unsuitable investment products.  Greg Smith, who has left his post as executive director of the firm's equity derivatives business in Europe, claimed that chief executive Lloyd Blankfein and president Gary Cohn have "lost hold of the firm's culture on their watch". He added that "this decline in the firm's moral fibre represents the single most serious threat to its long-run survival"..  Smith's charges, which were swiftly denied by the bank, were published in Wednesday's New York Times and raised questions about the firm's relationship with existing clients, whom Smith claimed were referred to as "muppets".  Lord Oakeshott, the Liberal Democrat peer and his party's former Treasury spokesman in the Lords, said the matter raised questions about any relationship between the UK government and Goldman.  Smith, who joined Goldman as a summer intern and worked at the firm for 12 years, first in New York and then in London, claimed managing directors made their remarks about "muppets" in internal email.  "I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It's purely about how we can make the most possible money off them."  Selected as one of 10 people, out of a firm of 30,000, to appear in a Goldman recruiting video which is played on college campuses around the world, Smith has hired and mentored new recruits and managed a summer intern programme for the bank.  "I knew it was time to leave when I realised I could no longer look students in the eye and tell them what a great place this was to work," he wrote.  He said junior analysts are absorbing a culture in which the most important question is "how much money did we make off the client?", and that hearing talk of "muppets," "ripping eyeballs out" and "getting paid" will not turn them into "model citizens".  "Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an axe murderer) you will be promoted to a position of influence."  In response, Goldman Sachs denied that Smith was giving an accurate view of life at the company.  "We disagree with the views expressed, which we don't think reflect the way we run our business. In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves," the bank said.  Fast-track to promotion  Smith claims to have advised the five largest US asset managers, Middle East and Asian sovereign wealth funds, and the world's two largest hedge funds. His letter did not name them, but Bloomberg ranks Man Group and Bridgewater Associates as the biggest hedge funds.  The LibDem peer Oakeshott said: "We know in the City that Goldmans help themselves before their clients. Now here's the proof. Greg Smith says you get promoted there if you make enough money for the firm and you are not an axe murderer - and the people of Greece and the rest of the eurozone are paying the price after Goldmans cooked their books and Greece joined the euro at an unsustainably high exchange rate. Until this culture is stamped out, Goldmans are not fit and proper to receive a penny of British taxpayers' money or advise our government in any way."  Goldman is among the gilt-edged market makers which help to facilitate trading in UK government bonds.  Smith claims the fast-track to a Goldman promotion involves persuading clients to invest in stocks or other products "that we are trying to get rid of because they are not seen as having a lot of potential profit"; getting clients to trade "whatever will bring the biggest profit to Goldman" – referred to internally as "hunting elephants" and securing a job trading "any illiquid, opaque product with a three-letter acronym".  Goldman has lost the "secret sauce" that allowed it to endure for 143 years and is at risk of losing its clients' trust, wrote Smith: "Goldman Sachs is one of the world's largest and most important investment banks and it is too integral to global finance to continue to act in this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for."</p>

Goldman Sachs director quits 'morally bankrupt' Wall Street bank

A Goldman Sachs director in London has resigned after publishing a devastating open letter accusing senior staff of being "morally ba...

Rebekah Brooks and husband arrested in phone hacking inquiry

REBEKAH Brooks and her racehorse trainer husband are among six suspects arrested today by detectives investigating allegations of phone hack...

A4e faces new fraud investigation

<p> </p><p>The government has launched an investigation into an allegation of attempted fraud against the welfare-to-work company A4e.  The Department for Work and Pensions (DWP) said it had been made aware of an allegation of attempted fraud in relation to a mandatory work activity contract with the firm, which is already facing a police investigation in relation to previous allegations.  A statement said: "As a result of this new allegation, DWP has immediately commenced its own independent audit of all our commercial relationships with A4e.  "We have required A4e to make available all documentation which our auditors may require and provide full access to interview any A4e employees. This is separate from the independent review of internal controls which A4e has previously announced.  "The chief executive of A4e was informed of this at a meeting with a senior DWP official earlier today.  "We have made it absolutely clear to A4e that we take this matter very seriously, and that if, at any point during the audit or thereafter, we find evidence of systemic fraud in DWP's contracts with A4e, we will not hesitate to immediately terminate our commercial relationship."  A4e said: "The board has made consistently clear in all previous statements that we take any allegations of fraudulent or otherwise illegal activity extremely seriously. There is absolutely no place for this type of misconduct at A4e.  "We obviously acknowledge the concerns raised by DWP, and we welcome and will co-operate fully with their planned investigations.  "A4e has more than 3,500 staff and operates out of 200 offices in the UK. From December 2005 to date, nine cases relating to A4e have been referred to the Department of Work and Pensions to review claims submissions.  "Of these nine referrals, one, dating back to May 2008, resulted in the prosecution of an individual member of A4e staff, which was widely reported at the time.  "Another is the case now being handled by Thames Valley police. In each of the remaining, closed cases, the DWP's view was that these were not incidences of malpractice.  "The board has asked White & Case LLP to lead an independent and thorough review of A4e's controls and procedures. That process will be carried out concurrently, and all findings will be provided to DWP."</p>

A4e faces new fraud investigation

The government has launched an investigation into an allegation of attempted fraud against the welfare-to-work company A4e. The Departmen...

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