Last fall, talks circulated within the cable industry about a potential buyout of Time Warner Cable (TWC). Last week, Comcast proposed a $45.2 billion dollar, all-stock, friendly bid for TWC. This merger would combine the two largest cable service providers in the country, which immediately raises antitrust concerns.
Update: Comcast Announces Cable Industry Megamerger
The Current State of the LIBOR Scandal Investigation
The Financial Stability Board stated, in an email to Reuters on January 24, 2014, that it is “is in the process of defining the work it will do on issues around FX benchmarks.”
Proposed Law Aims to Shed Light on Settlement Deals
The Truth in Settlements Act introduced by Senators Elizabeth Warren (D-MA) and Tom Coburn (R-OK) on January 8, 2014, pushes for greater transparency of settlement agreements reached by federal agencies and corporate wrongdoers. The proposed legislation would compel federal agencies to disclose specific terms of negotiated settlements larger than $1 million and provide sufficient justification for any nondisclosure.
JP Morgan’s $13 billion settlement with DOJ
JP Morgan will pay $13 billion, the largest settlement any private firm has ever paid to the Justice Department, to settle civil claims about the sale of mortgage backed securities. The firm admitted misrepresenting to investors that mortgage loans complied with underwriting guidelines when, in actuality, these loans were not suitable for securitization. Because the sale of these securities contributed to the 2007 financial crisis, prosecutors sought accountability for the banks that sold such securities. U.S. Attorney General Eric Holder said, “without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown.”
SEC & DOJ: Friends Or Foes In Civil Securities Litigation?
The U.S. Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”), have found themselves fighting in the same arena this year as the DOJ aggressively tackled two high profile civil cases. The overlap has sparked speculation as to why the DOJ is poaching territory that is usually under the SEC’s purview.
Potential Cable Industry Megamerger?
News has been spreading in the cable industry about a potential merger or buyout of Time Warner Cable (TWC). Speculation surrounding the possible buyout has been fueled by interest from companies like Comcast, Charter Communications, and Cox.
Antitrust Lessons Drawn from the Challenges Contacts of the AMR/US Air Merger
Introduction
The proposed merger of the bankrupt AMR Corporation (parent company of American Airlines – hereinafter American) with US Airways Group, Inc. (parent company of US Airways – hereinafter US Airways) to create the new American Airlines was announced in February 2013. Despite the European Commission’s (EC) August 5 clearance of the merger with minimal commitments, the Antitrust Division of the U.S. Department of Justice (DOJ), joined by seven states and the District of Columbia, brought suit to permanently enjoin the merger on August 13. United States v. US Airways Group, Inc., 1:13-cv-01236 (D.D.C. Filed Aug. 13, 2013). The content of the DOJ’s complaint (Complaint) demonstrate the DOJ’s modus operandi for litigating a merger.
International Business: Airline Regulatory Woes on Both Sides of the Atlantic
The past few weeks have seen the airline industry suffer from regulatory issues both in the U.S. and abroad.
In the United States, the proposed merger of American Airlines and U.S. Airways is causing a headache. Officially bankrupt since 2011, American Airlines’ bankruptcy exit plan was approved by a federal judge in late September of this year, such plan being contingent upon its merger with U.S. Airways going ahead successfully.
Week in Review: JPMorgan Returns to the Hot Seat
Once again, JPMorgan found itself discussing yet another settlement and facing bad publicity linked to excessive risk-taking. Last week, news broke that the bank had agreed to a $920 million settlement in the “London Whale” derivatives trading case; plus, the Consumer Financial Protection Bureau ordered JPMorgan to refund over $300 million to customers based on alleged wrongdoing in its credit card and debt collection procedures.
Another settlement deal surfaced this week—and its numbers are much larger. The U.S. Department of Justice is seeking $11 billion (with a ‘B’) in compensation for JPMorgan’s actions leading up to the Financial Crisis, including selling mortgage backed securities the bank knew were essentially worthless. According to the Washington Post, it would be “the biggest settlement a single company has ever undertaken.” On Thursday, the bank’s visible CEO Jamie Diamond flew to Washington, D.C., to meet with Attorney General Eric Holder for nearly an hour. Instead of lobbying for looser restrictions on Wall Street, Diamond was seeking an end to federal and state probes (which still represent a large liability to the bank) and, perhaps more importantly, attempting to avoid criminal charges.
All of the rhetoric and press releases notwithstanding, the Administration’s handling of numerous JPMorgan investigations has been properly criticized for missing an opportunity to charge top Executives. The S.E.C., D.O.J., and other regulators have thus far failed to press criminal charges, even when financial disclosures have misrepresented the bank’s business or mortgage-backed products. To be sure, the government has charged front-line traders in the London Whale case, but those tasked with overseeing the bank’s actions have escaped indictment—perhaps for the very reason that Mr. Diamond is willing to personally negotiate with the nation’s top law enforcement official on their behalf.
While the financial penalties being discussed are stiff, they represent only a small fraction of the damage done to the global economy, JPMorgan shareholders, and (ultimately) dinner tables across the country. Columbia Law School professor John C. Coffee Jr. provided some insight to the back-and-forth. He told the Post: “If I was in [Holder’s] position, I would be concerned about my legacy. . . . There’s been a lot of criticism of officials in Justice being much too soft, timid.”
Apple eBooks Price Fixing Case
The trial for United States v. Apple Inc. begins on June 3rd, with some saying that the case will “effectively set the rules for internet commerce.” The Government alleges that Apple conspired with five publishing companies to increase prices while simultaneously plotting to increase market share vis-à-vis Amazon. The five publishing companies originally named in the suit have since reached a settlement with the Justice Department in which they will pay a collective $164 million to recompense consumers harmed by the price-fixing scheme. (more…)