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.
DOJ Secures First-Ever Successful Extradition on Antitrust Charge
An “Icahn-ic” Move: Mike Ashley’s Attempt to Block a Private Buy-Out of House of Fraser PLC, the 165 year old UK Department Store
Does Mike Ashley, the UK billionaire businessman and owner of Sports Direct International PLC (and perhaps more famously Newcastle United soccer team), aspire to become the UK protégé of Carl Icahn, the US activist shareholder? Increasingly so, if recent events are anything to go by, but there remain differences between the two as wide as the Atlantic ocean itself, not least their comparative net worth.
Malaysia Considers New Retirement Fund Structure
Reuters Arabic Service is reporting that the Malaysian government’s retirement fund, the sixth largest in the world controlling assets exceeding $160 billion, is considering establishing an independent fund to concentrate on investments in Islamic finance.
U.S. Chapter 15: a Tool for Implementing Foreign Reorganization Plans in the United States – the Elpida Experience
The Chapter 15 case of Elpida, which was filed in the U.S. in connection with Elpida’s debtor-in-possession proceeding pending in Tokyo, Japan under the Japanese Corporate Reorganization Act (the “JCRA”), has attracted broad attention in Japan and elsewhere. Although not sought in most Chapter 15 cases, and successfully obtained in even fewer cases, U.S. recognition of a foreign plan of reorganization is an important tool available to a Chapter 15 debtor, as such recognition implements the foreign plan in the U.S. and prevents U.S. actions that are inconsistent with the foreign plan.
SEC Judge Bans Big Four China Affiliates for Six Months Over Audit
Recently, Cameron Eliot, Security and Exchange Commission (SEC) administrative trial judge, ruled that the four global auditing firms (with Chinese affiliates), Ernst & Young Hua Ming, KPMG Huazhen, Deloitte Touche Tohmatsu, and PricewaterhouseCoopers Zhong Tian, violated the Sarbanes-Oxley Act for refusal to release the audit documents of companies investigated for accounting fraud.
China’s GlaxoSmithKline Investigation
GlaxoSmithKline’s (GSK) investigation serves as a cautionary tale to American companies, particularly health-focused companies, interested in operating in China. GSK’s pharmaceutical sales plummeted sixty percent in the third quarter due to a Chinese anti-corruption investigation. In July 2013, the Chinese government accused the pharmaceutical giant of funneling approximately $500 million to government officials, medical associations, hospitals, and doctors in order to boost sales of their products. China has arrested several GSK officials and will likely require the company to pay a fine above $2 billion. The investigation is part of China’s efforts to curb business corruption and clean up its health industry, which is undergoing a massive expansion.
Recent Developments in the LIBOR Scandal
In the last two weeks there have been important developments in what is commonly referred to as the “LIBOR Scandal,” a scam concerning the manipulation of the London Interbank Offered Rate (LIBOR). Britain’s Serious Fraud Office has notified twenty-two people at various banks of potential prosecution.
IPO Alert: Chinese Internet Behemoth Alibaba plans IPO in the U.S.
After a period of breathtaking growth, China’s biggest e-commerce company, Alibaba, has recently planned its initial public offering. Now the two major U.S. stock exchanges are ready to fight for the right to host. Though it has not been announced yet, Alibaba’s plan to raise $10 to $15 billion will likely overshadow Twitter’s highly anticipated Nov. 15 listing on the New York Stock Exchange. Relatively loose regulations in the United States, in contrast to Hong Kong’s stringent regulations, may be the fundamental factor that contributes to the biggest IPO since Facebook’s rocky debut last year.
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.
Basel Committee and IOSCO Publish Policy Framework
[Editor’s note: The following post is authored by Goodwin Procter LLP.]
The Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (“IOSCO”) jointly issued a final policy framework (the “Policy Framework”) establishing minimum standards for margin requirements for non-centrally cleared derivatives. The Policy Framework is a result of a 2011 G20 agreement calling upon BCBS and IOSCO to develop, for consultation, global standards for margin requirements for non-centrally cleared derivatives; BCBS and IOSCO released two consultative versions prior to releasing the current final version of the Policy Framework.
The Policy Framework requires the exchange of both initial and variation margin between so-called “covered entities” that engage in non-centrally cleared derivatives. The document explains that margin requirements for such derivatives “would be expected” to reduce systematic risk by ensuring the availability of collateral to offset losses caused by a counterparty default, and would also promote central clearing by reducing the perceived cost benefits of engaging in uncleared derivatives transactions. The Policy Framework further explains that margin requirements have certain benefits over capital requirements, such as being allocated to individual transactions rather than being shared across an entity’s full range of activities. Margin is also, in the words of the document, “defaulter-pay” in the sense that the margin provided by the defaulting party is used to absorb the losses caused by the default, as opposed to capital’s “survivor-pay” model in which the non-defaulting party bears losses out of its own assets.