The latest salvo has been fired in the war between U.S. communications providers and the federal government regarding restrictions on how companies may disclose information about big brother’s surveillance of their customers.
#Transparency: Twitter’s Fight to Disclose Information about Federal Surveillance Activities
FOREX Market Scandal: Is “Too Big to Fail” Also “Too Big to Prosecute?”
The first LIBOR scandal caused severe commotion in the banking industry after it unveiled the lack of scrutiny banks exercised with respect to the determination of daily interest rates. However, the international banking industry is now facing a potentially bigger scandal than the first LIBOR interest rate catastrophe. This time, the epicenter of the scandal is the FOREX market.
DOJ Launches Forex Probe
In a recent announcement, the Department of Justice, along with the FBI have begun investing the alleged rigging and manipulation of the foreign exchange (“FX”) market. The FBI is already “looking into alleged rigging of interest rates associated with the London interbank offered rate, or Libor.”
SunTrust Agrees to Mortgage Settlement with the Department of Justice
On Thursday, July 3, SunTrust agreed to pay $320 million in a settlement with the Department of Justice (“DOJ”) after an investigation of alleged violations of the Home Affordable Modification Program (“HAMP”). The settlement funds intend to provide relief to borrowers who were adversely affected by SunTrust’s actions; a prevention fund will also be established as a result of the settlement.
French Global Bank BNP Paribas Admits Guilt and Agrees to Pay $8.9 Billion Fine to U.S.
On Monday U.S. state and federal authorities announced a criminal case against France’s BNP Paribas, which has pleaded guilty to several U.S. sanction violations. According to the Justice Department, BNP concealed billions of dollars in transactions for clients in Cuba, Iran, and Sudan and has agreed to pay $8.9 billion in fines.
The agreement by the French bank to plead guilty is the first time that a global bank has agreed to plead guilty to large-scale violations of U.S. economic sanctions. Along with the monetary penalty that BNP must pay, the settlement includes a temporary ban on dollar-clearing transactions and the cutting of ties with some employees.
Is the DOJ FCPA Enforcement Hegemony Dead?
For nearly 15 years, the United States has had the worldwide corruption enforcement stage to itself, reaping billions of dollars in fines and settlement payments from companies that have acknowledged engaging in bribery in foreign countries. That monopoly, however, may soon end. In a report entitled Left Out of the Bargain, the World Bank recently observed that “the country of enforcement was different from the country where the official was bribed or allegedly bribed” and that the country of enforcement has rarely shared its financial recoveries with the countries where the corruption occurred. Motivated by the potential financial recovery in a time where governments are struggling financially and aware of the financial benefit the U.S. has gained from corruption abroad, we believe that countries that have largely ignored corruption enforcement may become more active. As a result, companies may face additional punishment as multiple sovereigns pursue penalties for the same conduct.
Court Approves Department of Justice Fraud Case Against Bank of America
Flash Boys–Concerns Over High Frequency Trading
High frequency trading is gaining significant media attention recently as Michael Lewis published his book, Flash Boys: A Wall Street Revolt, on the subject. While high frequency trading (HFT) was introduced into the markets in 1999, this platform for conducting rapid electronic trades of securities has been gaining significant attention by federal regulators including the Securities and Exchange Commission (“SEC”), the Commodity Futures Trading Commission (“CFTC”), and most recently, the Senate.
Comcast and TWC Take Next Step in Proposed Merger
In February, the number one and number two cable providers in the US (Comcast and Time Warner Cable respectively) announced a proposed merger whereby Comcast would acquire TWC. The cable giants have already filed the Hart-Scott-Rodino notification with the DOJ, and on Tuesday, 8 April, they took another step towards completion of the merger by filing Applications and Public Interest Statement with the FCC. The merger must receive approval from both the DOJ and the FCC to proceed. The DOJ’s primary inquiry will be related to anti-trust concerns, whereas the FCC will seek to find that the merger achieves benefits that can only be reached by the combination of the two companies.
DOJ Secures First-Ever Successful Extradition on Antitrust Charge
On Friday, April 4, 2014, the Antitrust Division of the United States Department of Justice (DOJ) announced that Romano Pisciotti, an Italian national, was extradited from Germany for his alleged role in a marine hose bid-rigging conspiracy. It was reported that Mr. Pisciotti was returning to Italy from Nigeria and was arrested during a layover at Frankfurt Airport. This is the first successful extradition by the DOJ on antitrust charges.