On January 17, 2017, the U.S. Department of Labor filed a complaint against Oracle America, Inc. (Oracle), alleging discrimination in the company’s compensation, recruiting, and hiring practices.
Several big banks are fighting crisis-era financial lawsuits worth tens of billions of dollars. These banks recently asked the Supreme Court to review a decision from the Court of Appeals for the Second Circuit, arguing that the regulators took too long to file their claims. The case relates to the failure of Colonial Bank. In August 2009, Colonial collapsed as a result of Residential Mortgage-Backed Securities (“RMBS”) purchases. As a result, the Federal Deposit Insurance Co. (“FDIC”) was appointed as a receiver. In August 2012, the FDIC sued the banks that issued and underwrote these RMBS in 2007, arguing that they issued a series of false and misleading statements in the offering documents relating to the RMBS’s liquidity and investment quality, which constituted a violation of Sections 11 and 15 of the Securities Act of 1933.
On November 17, 2016, the SEC announced that JPMorgan Chase agreed to pay $130 million to the SEC, $72 million to the Justice Department, and $61.9 million to the Federal Reserve Board of Governors, in order to settle the charges that it “won business from clients and corruptly influenced government officials in the Asia-Pacific region by giving jobs and internships to their relatives and friends in violation of the Foreign Corrupt Practices Act (FCPA).”
Worldwide, 2016 has been a politically impactful year. In the United States, a controversial presidential election resulted in the unexpected election of Donald Trump. Across the pond, the United Kingdom voted to separate itself from the European Union , resulting in Brexit. Europe saw its own political battlegrounds with the Italian referendum and the French and German national elections. Furthermore, Central and South America faced falling oil prices and changes in U.S. monetary policy. These events had a huge impact on the M&A market by reducing investors’ confidence, which resulted in a decline in the volume and value of deals, compared with the huge numbers in global mergers obtained in 2015.
On November 28, the South-Korean tech giant Samsung Electronics Co. announced that for the following six months it will work with external advisors in order to assess restructuring alternatives. Such alternatives might include splitting their electronic business into a holding company listed on an American exchange and an operating company. These moves would be the most important reorganization of the Asian company in its history.
Takata, one of the world’s top automotive parts producers, faces potential liabilities of billions of dollars to cover the cost of the biggest automotive recall in history, arising from its defected air bags. The company is considering a U.S. bankruptcy filing and is seeking a financial backer. But all bidders interested in Takata’s car parts business want Takata to file bankruptcy in the U.S. first.
The election of Donald Trump has shone a new light on healthcare insurance mega-mergers currently being challenged by the Obama administration. With the Anthem-Cigna trial in motion, and Aetna-Humana soon to follow, the future of health care insurance is up in the air. If successful, these two mergers will significantly reshape the market, reducing the five major health insurers to just three.