LONDON, Jan 30 (Reuters) - The former head of remuneration at Barclays said she clashed with the UK bank's board over the annual bonus of former boss Bob Diamond,and described the bonus culture in banking as"obscene".
Alison Carnwath, who quitin July at a time of turmoilfor the bank following its fine for rigging Libor interest rates, said Diamond had been reluctant to accept that pay at Barclays was high and was "overly protective of his investment banking franchise".
Carnwath, who cited personal reasons for her departure, said on Wednesday she thought Diamond shouldn't have got a bonus for 2011 because the bank's returns were weak.
"It was for this reason thatI disagreed with the board Chairman's recommendation on Mr Diamond's annual bonus for 2011. I recommendedzero.
"I was alone in my view both on the committee which I chaired and on the board," she said in a written submission prior toappearing before UK lawmakers.
She said Marcus Agius, then chairman, would be in a better position to explain how the bonus award had been reached.
Diamond was paid 6.3 million pounds for 2011, including a deferred share bonus of 2.7 millionpounds and a long-term incentive award of 2.25 million.
Carnwath joined the Barclays board in August 2010 and built a reputation for being an uncompromising boardroom presence.
"A culture of entitlement has emerged in banking for a variety of reasons ... this has resulted in the fear of losing good people, obscene levels of award in a minority of cases and excessive reward in many cases for the investment banking community and particularly those in the front office," she said.
Diamond and Agius quit after the Libor scandal erupted in June. Carnwath was criticised forallowing the final pay awards to them, but she denied at the time that there had been any tensions between her andAgius despite reports theyhad clashed.
"Barclays were demanding too much patience from their shareholders and were insufficiently sensitive to the political and economicenvironment and the hostile attitude to banks generally," Carnwath said.
Wednesday 30 January 2013
Top Causes of Credit Default
An adverse credit rating by receiving a credit default can impact you applications for credit for 5-7 years. Most people don't realize the impact of receiving a credit default until it's too late. A credit default can impact your applications for any credit such as obtaining phone or internet accounts, or even various other home or business services. A credit default is something that can be avoided by simply understanding why people have issues, and how they can be avoided. By being more informed about people who deal with a credit default, you can help to make sure that you do not find yourself in the same situation. While there are seemingly endless causes for a credit default, there are three major causes.Know these, as it can help you avoid a credit default.
Unknown Missed Payments
Many people only realize they have a Credit Default when they are declined for some form of credit. There has been a credit default listed on their Credit Reportand it has resulted in the decline. They may not even have any had any financial issues, but may have only mismanaged a bill or a service or phone contract. You may think your bill has been taken care of by closing the account; but if you cancel a contract early you may still have cancellation fees payable. It is quite common for the feesto canceled a telephone contract to be anywhere from $2000 to $3000. The Phone contract will at times include the cost of the mobile handset, which can run into thousands of dollars. Other instances where a credit default is listed can be where a person has moved house, and there is an outstanding amount owing from a phoneor service bill.
Known Missed Payments
Some people, however, are completely aware they are facing credit defaults, but they are facing financial hardship and struggling to make their commitments. People do not simply decide to not pay their bills,it is a result of some other circumstance that puts them into this situation. The various situations that may put you at risk are:
- Divorce
- Sickness or inability to work.
- Loss of a job
- Failed Business
In these situations there is usually a loss of an income, but in the case of divorce there is an emotionally devastating event that affects how a person operates in their everyday life. There may be a change in living situation for both parties with a breakdown in communication, a ripe situation to cause a credit default.
Over committed by high interest debts
Over the last few years many people have applied for and received loans they could barely afford. As first home buyers they may need to spend money on buying furniture and getting their house in order and hence get themselves into large amounts of unsecured, high interest debt. A combination of credit cards, personal loans and a loss of an income can be devastating for a dual income family. The loss of anincome in these circumstances can be from the birth of a baby, or a sickness, or loss of a job.
Being informed and knowing about the causes ofcredit defaults can help youto keep yourself from receiving a credit default.
Unknown Missed Payments
Many people only realize they have a Credit Default when they are declined for some form of credit. There has been a credit default listed on their Credit Reportand it has resulted in the decline. They may not even have any had any financial issues, but may have only mismanaged a bill or a service or phone contract. You may think your bill has been taken care of by closing the account; but if you cancel a contract early you may still have cancellation fees payable. It is quite common for the feesto canceled a telephone contract to be anywhere from $2000 to $3000. The Phone contract will at times include the cost of the mobile handset, which can run into thousands of dollars. Other instances where a credit default is listed can be where a person has moved house, and there is an outstanding amount owing from a phoneor service bill.
Known Missed Payments
Some people, however, are completely aware they are facing credit defaults, but they are facing financial hardship and struggling to make their commitments. People do not simply decide to not pay their bills,it is a result of some other circumstance that puts them into this situation. The various situations that may put you at risk are:
- Divorce
- Sickness or inability to work.
- Loss of a job
- Failed Business
In these situations there is usually a loss of an income, but in the case of divorce there is an emotionally devastating event that affects how a person operates in their everyday life. There may be a change in living situation for both parties with a breakdown in communication, a ripe situation to cause a credit default.
Over committed by high interest debts
Over the last few years many people have applied for and received loans they could barely afford. As first home buyers they may need to spend money on buying furniture and getting their house in order and hence get themselves into large amounts of unsecured, high interest debt. A combination of credit cards, personal loans and a loss of an income can be devastating for a dual income family. The loss of anincome in these circumstances can be from the birth of a baby, or a sickness, or loss of a job.
Being informed and knowing about the causes ofcredit defaults can help youto keep yourself from receiving a credit default.
Combanation of option
Call & Put Buying Combinations
Straddle
The straddle is an unlimited profit, limited risk option trading strategy that is employed when the options trader believes thatthe price of the underlyingasset will make a strong move in either direction in the near future. It can be constructed by buying an equal number of at-the-money call and put options with the same expiration date.
Strangle
Like the straddle, the strangle is also a strategy that has limited risk and unlimited profit potential. The difference between the two strategies is that out-of-the-money options are purchased to construct the strangle, lowering the cost to establish the position but at the same time, a much larger move in the price of the underlying is required for the strategy to be profitable.
Strip
The strip is a modified, more bearish version of thecommon straddle. Construction is similar to the straddle except that the ratio of puts to calls purchased is 2 to 1.
Strap
The strap is a more bullish variant of the straddle. Twice the number of call options are purchased to modify the straddle into a strap.
Synthetic Underlying
Combinations can be used to create options positions that have the same payoff pattern as the underlying. These positions are known as synthetic underlying positions . Using equity options as an example, a synthetic long stock position can be created by buying at-the-money call and selling an equal number of at-the-money put options.
Straddle
The straddle is an unlimited profit, limited risk option trading strategy that is employed when the options trader believes thatthe price of the underlyingasset will make a strong move in either direction in the near future. It can be constructed by buying an equal number of at-the-money call and put options with the same expiration date.
Strangle
Like the straddle, the strangle is also a strategy that has limited risk and unlimited profit potential. The difference between the two strategies is that out-of-the-money options are purchased to construct the strangle, lowering the cost to establish the position but at the same time, a much larger move in the price of the underlying is required for the strategy to be profitable.
Strip
The strip is a modified, more bearish version of thecommon straddle. Construction is similar to the straddle except that the ratio of puts to calls purchased is 2 to 1.
Strap
The strap is a more bullish variant of the straddle. Twice the number of call options are purchased to modify the straddle into a strap.
Synthetic Underlying
Combinations can be used to create options positions that have the same payoff pattern as the underlying. These positions are known as synthetic underlying positions . Using equity options as an example, a synthetic long stock position can be created by buying at-the-money call and selling an equal number of at-the-money put options.
Saturday 19 January 2013
Cyprus bank capital needs still being discussed -central bank
NICOSIA, Jan 19 (Reuters) - Cyprus said on Saturday that consultations on defining a bailout sum for its Greece-exposed banks were still in progress, effectively overshooting a deadline to decide how much aid the cash-strapped island will need from lenders.
Evaluating bank capital needs is crucial to determining how much Cyprus should receive in badly needed financial aid. The island, one of the euro zone's smallest economies, sought IMF and EU financial assistance in mid-2011.
"The assessment of technical details for the calculation of capital needs of banking institutions in Cyprus is still in progress," theisland's central bank said.
No further details were available.
Cypriot banks were badly burnt by an EU-sanctioned writedown of Greek sovereign debt held by private investors.
Investment managers PIMCO are carrying out the review of bank capital needs, and itsfindings are being assessed by a steering committee made up of lenders and Cypriots.
A definitive result had been expected by Jan.18.
A preliminary estimate of a draft bailout dealsaid Cyprus could need up to 10 billion euros to plug holes in its banking sector.
On that basis, its total bailout including fiscalrequirements could reach 17.0-17.5 billion euros, equivalent to the island's annual economic output.
A European Union official said on Friday thata bailout for Cyprus is likely to be concluded only in the second half of March, after Cypriot elections next month. (Reporting By Michele Kambas; Editing by Susan Fenton)
Evaluating bank capital needs is crucial to determining how much Cyprus should receive in badly needed financial aid. The island, one of the euro zone's smallest economies, sought IMF and EU financial assistance in mid-2011.
"The assessment of technical details for the calculation of capital needs of banking institutions in Cyprus is still in progress," theisland's central bank said.
No further details were available.
Cypriot banks were badly burnt by an EU-sanctioned writedown of Greek sovereign debt held by private investors.
Investment managers PIMCO are carrying out the review of bank capital needs, and itsfindings are being assessed by a steering committee made up of lenders and Cypriots.
A definitive result had been expected by Jan.18.
A preliminary estimate of a draft bailout dealsaid Cyprus could need up to 10 billion euros to plug holes in its banking sector.
On that basis, its total bailout including fiscalrequirements could reach 17.0-17.5 billion euros, equivalent to the island's annual economic output.
A European Union official said on Friday thata bailout for Cyprus is likely to be concluded only in the second half of March, after Cypriot elections next month. (Reporting By Michele Kambas; Editing by Susan Fenton)
Tuesday 15 January 2013
top hotels in hong kong
Hong Kong has some of the most extravagant hotels in the world and they often find themselves on global hotel top ten lists. These hotels know how to spoil you, and if your wallet is deep enough, you can take your pick of these Hong Kong luxury hotels Bishop Lei International House - 3 Star
4 Robinson Road
Mid Levels, Hong Kong
Tel.: (852) 2868-0828
Fax: (852) 2868-1551
Email: resvtion@bishopleihtl.com.hk
Website: www.bishopleihtl.com.hk
Conrad International Hong Kong - 5 Star
Pacific Place, 88 Queensway
Hong Kong
Tel.: (852) 2521-3838
Fax: (852) 2521-3888
Email: info@conrad.com.hk
Website: www.conrad.com.hk
Courtyard by Marriot Hong Kong - 4 Star
167 Conuaught Road West, Hong Kong
Tel.: (852) 3717-8888
Fax: (852) 3717-8288
Email: connie.ho@courtyard.com
Website: www.courtyardhongkong.com
Excelsior Hong Kong - 4 Star
281 Gloucester Road
Causeway Bay, Hong Kong
Tel.: (852) 2894-8888
Fax: (852) 2895-6459
Email: reserve-exhkg@mohg.com
Website: www.mandarinoriental.com
Grand Hyatt Hong Kong - 5Star
1 Harbour Road
Wanchai, Hong Kong
Tel.: (852) 2588-1234
Fax: (852) 2802-0677
Email: info@grandhyatt.com.hk
Website: www.hongkong.hyatt.com
Island Shangri-La Hong Kong - 5 Star
Pacific Place, Supreme CourtRoad
Central, Hong Kong
Tel.: (852) 2877-3838
Fax: (852) 2521-8742
Email: isl@shangri-la.com
Website: www.shangri-la.com
JW Marriott Hotel Hong Kong - 5 Star
One Pacific Place, 88 Queensway
Central, Hong Kong
Tel.: (852) 2810-8366
Fax: (852) 2845-0737
Email: hotel@marriott.com.hk
Reservations: room@marriott.com.hk
Website: www.marriot.com
Mandarin Oriental, Hong Kong - 5 Star
5 Connaught Road
Central, Hong Kong
Tel.: (852) 2522-0111
Fax: (852) 2810-6190
Email: mohkg-reservations@mohg.com
Website: www.mandarinoriental.com
Park Lane Hong Kong - 4 Star
310 Gloucester Road
Causeway Bay, Hong Kong
Tel.: (852) 2293-8888
Fax: (852) 2576-7853
Email: info@parklane.com.hk
Website: www.parklane.com.hk/contact_us.php
The Charterhouse Hotel, Hong Kong - 3 Star
209 - 219 Wanchai Road, Hong Kong
Tel.: (852) 2833 5566
Fax: (852) 2833 5888
Email: info@charterhouse.com
Website: www.charterhouse.com/contactus.php
Four Seasons Hotel Hong Kong - 6 Star
8 Finance Street, Central, Hong Kong, China
Tel.: (852) 3196-8888
Fax: (852) 3196-8899
Website: www.fourseasons.com/hongkong
Hotel LKF - 4 Star
33 Wyndham Street, Lan Kwai Fong, Centreal, Hong Kong
Tel.: (852) 3518-9688
Fax: (852) 3518-9699
Email: reservation@hotel.LFK.com.hk
Website: www.hotel-lkf.com.hk
Lanson Place Hotel - 4 Star
133 Leighton Road, Hong Kong
Tel.: (852) 3477-6888
Fax: (852) 3477-6999
Email: rsvn.lphk@lansonplace.com
Website: www.lansonplace.com
Novotel Century Hong Kong - 3 Star
238 Jaffe Road, Wan Chai, Hong Kong
Tel.: (852) 2598-8888
Fax: (852) 2598-8866
Email: business@century.com.hk
Website: www.novotel.hk
Regal Hong Kong Hotel - 4 Star
88 Yee Wo Street, CausewayBay, Hong Kong
Tel.: (852) 2890 6633
Fax: (852) 2881 0777
Email: rhk.info@RegalHotel.com
Website: www.regalhotel.com
Renaissance Harbour View Hotel Hong Kong - 4 Star
1 Harbour Road
Wanchai, Hong Kong
Tel.: (852) 2802-8888
Fax: (852) 2802-8833
Email: rhvhksal@hkstar.com
Website: www.renaissancehotel.com
The Garden View - YWCA - 3 Star
1 MacDonnell Road, Mid-levels, Hong Kong
Tel.: (852) 2877 3737
Fax: (852) 2845 6263
Email : ywgv@ywca.org.hk
Website: hotel.ywca.org.hk InterContinental Hong Kong - 5 Star
18 Salisbury Road, Kowloon,Hong Kong
Tel.: (852) 2721 1211
Fax: (852) 2739 4546
Email: hongkong@interconti.com
Website: hongkong-ic.intercontinental.com The Peninsula Hong Kong - 5 Star
Salisbury Road
Tsimshatsui, Kowloon
Tel.: (852) 2920-2888
Fax: (852) 2722-4170
Email: pen@peninsula.com
Website: www.peninsula.com
The Marco Polo Hong Kong Hotel - 5 Star
Harbour City, Kowloon
Tel.: (852) 2113-0088
Fax: (852) 2113-0011
Email: hongkong@marcopolohotels.com
Website: www.marcopolohotels.com
The Mira Hotel - 3 Star
118 Nathan Road, Tsimshatsui, Kowloon
Tel.: (852) 2368-1111
Fax: (852) 2369-1788
Email: sales@themirahotel.com
Website: www.themirahotel.com/en/home.html
4 Robinson Road
Mid Levels, Hong Kong
Tel.: (852) 2868-0828
Fax: (852) 2868-1551
Email: resvtion@bishopleihtl.com.hk
Website: www.bishopleihtl.com.hk
Conrad International Hong Kong - 5 Star
Pacific Place, 88 Queensway
Hong Kong
Tel.: (852) 2521-3838
Fax: (852) 2521-3888
Email: info@conrad.com.hk
Website: www.conrad.com.hk
Courtyard by Marriot Hong Kong - 4 Star
167 Conuaught Road West, Hong Kong
Tel.: (852) 3717-8888
Fax: (852) 3717-8288
Email: connie.ho@courtyard.com
Website: www.courtyardhongkong.com
Excelsior Hong Kong - 4 Star
281 Gloucester Road
Causeway Bay, Hong Kong
Tel.: (852) 2894-8888
Fax: (852) 2895-6459
Email: reserve-exhkg@mohg.com
Website: www.mandarinoriental.com
Grand Hyatt Hong Kong - 5Star
1 Harbour Road
Wanchai, Hong Kong
Tel.: (852) 2588-1234
Fax: (852) 2802-0677
Email: info@grandhyatt.com.hk
Website: www.hongkong.hyatt.com
Island Shangri-La Hong Kong - 5 Star
Pacific Place, Supreme CourtRoad
Central, Hong Kong
Tel.: (852) 2877-3838
Fax: (852) 2521-8742
Email: isl@shangri-la.com
Website: www.shangri-la.com
JW Marriott Hotel Hong Kong - 5 Star
One Pacific Place, 88 Queensway
Central, Hong Kong
Tel.: (852) 2810-8366
Fax: (852) 2845-0737
Email: hotel@marriott.com.hk
Reservations: room@marriott.com.hk
Website: www.marriot.com
Mandarin Oriental, Hong Kong - 5 Star
5 Connaught Road
Central, Hong Kong
Tel.: (852) 2522-0111
Fax: (852) 2810-6190
Email: mohkg-reservations@mohg.com
Website: www.mandarinoriental.com
Park Lane Hong Kong - 4 Star
310 Gloucester Road
Causeway Bay, Hong Kong
Tel.: (852) 2293-8888
Fax: (852) 2576-7853
Email: info@parklane.com.hk
Website: www.parklane.com.hk/contact_us.php
The Charterhouse Hotel, Hong Kong - 3 Star
209 - 219 Wanchai Road, Hong Kong
Tel.: (852) 2833 5566
Fax: (852) 2833 5888
Email: info@charterhouse.com
Website: www.charterhouse.com/contactus.php
Four Seasons Hotel Hong Kong - 6 Star
8 Finance Street, Central, Hong Kong, China
Tel.: (852) 3196-8888
Fax: (852) 3196-8899
Website: www.fourseasons.com/hongkong
Hotel LKF - 4 Star
33 Wyndham Street, Lan Kwai Fong, Centreal, Hong Kong
Tel.: (852) 3518-9688
Fax: (852) 3518-9699
Email: reservation@hotel.LFK.com.hk
Website: www.hotel-lkf.com.hk
Lanson Place Hotel - 4 Star
133 Leighton Road, Hong Kong
Tel.: (852) 3477-6888
Fax: (852) 3477-6999
Email: rsvn.lphk@lansonplace.com
Website: www.lansonplace.com
Novotel Century Hong Kong - 3 Star
238 Jaffe Road, Wan Chai, Hong Kong
Tel.: (852) 2598-8888
Fax: (852) 2598-8866
Email: business@century.com.hk
Website: www.novotel.hk
Regal Hong Kong Hotel - 4 Star
88 Yee Wo Street, CausewayBay, Hong Kong
Tel.: (852) 2890 6633
Fax: (852) 2881 0777
Email: rhk.info@RegalHotel.com
Website: www.regalhotel.com
Renaissance Harbour View Hotel Hong Kong - 4 Star
1 Harbour Road
Wanchai, Hong Kong
Tel.: (852) 2802-8888
Fax: (852) 2802-8833
Email: rhvhksal@hkstar.com
Website: www.renaissancehotel.com
The Garden View - YWCA - 3 Star
1 MacDonnell Road, Mid-levels, Hong Kong
Tel.: (852) 2877 3737
Fax: (852) 2845 6263
Email : ywgv@ywca.org.hk
Website: hotel.ywca.org.hk InterContinental Hong Kong - 5 Star
18 Salisbury Road, Kowloon,Hong Kong
Tel.: (852) 2721 1211
Fax: (852) 2739 4546
Email: hongkong@interconti.com
Website: hongkong-ic.intercontinental.com The Peninsula Hong Kong - 5 Star
Salisbury Road
Tsimshatsui, Kowloon
Tel.: (852) 2920-2888
Fax: (852) 2722-4170
Email: pen@peninsula.com
Website: www.peninsula.com
The Marco Polo Hong Kong Hotel - 5 Star
Harbour City, Kowloon
Tel.: (852) 2113-0088
Fax: (852) 2113-0011
Email: hongkong@marcopolohotels.com
Website: www.marcopolohotels.com
The Mira Hotel - 3 Star
118 Nathan Road, Tsimshatsui, Kowloon
Tel.: (852) 2368-1111
Fax: (852) 2369-1788
Email: sales@themirahotel.com
Website: www.themirahotel.com/en/home.html
Tuesday 8 January 2013
mobile handset sales drove earnings at Samsung Electronics to another record
The South Korean group's operating profit hit a record for the fifth straight quarter, rising 88 per cent from a year earlier to aboutWon8.8tn ($8.27bn), it saidin preliminary guidance published on Tuesday. Revenue rose 18 per cent to approximately Won56tn.
Although Samsung did notprovide a breakdown of the results, analysts believethe profit growth was driven by the handset business, which accounted for about two-thirds of earnings in the previous quarter.
Read more: Touch laptops are coming
Samsung has established itself as the leading smartphone maker by unit sales with a product range that stretches from premium to low-end devices, unlike rival Apple,which focuses on the top end of the market.
Apple won a hard-fought US legal battle when a California court in August ordered Samsung to pay$1bn for infringing patents related to the iPhone.
The legal tussle has continued, with Apple last month appealing against a US judge's refusal to ban some Samsung products from sale in the country. InSeptember, Apple unveiled the iPhone 5 amid feverish publicity, followed the next month by a miniature version of the iPad.
Read more: Six gadget trends at the CES
But analysts said Apple's introduction of competing devices failed to slow Samsung's momentum. Daniel Kim at Macquarie Securities estimated that Samsung sold about 15m units of its flagship Galaxy S3 smartphone in the period and about 8m of its Galaxy Note 2 miniature tablet.
Samsung phones using Microsoft's Windows Phone8 operating system will go on sale in the US early this year, as the company seeks to diversify beyond However, the rapid growthof the handset business threatens to leave Samsung"too dependent on a single profit source", Mr Kim added.
While Samsung is the world's leading producer of memory chips, smartphone application processors and televisions, these businesses combinedcontribute a fraction of the profits generated by the smartphone division.
The operating profit figure was ahead of analysts' consensus forecasts of Won8.5tn compiled by Bloomberg, but the shares fell 0.9 per cent in morning trading in Seoul.
Marcello Ahn, an analyst at Nomura, said investors were taking profits following a strong run that had seen the shares rise 19per cent since the beginning of September.
"For the share price to move by another jump from this level, we must see Samsung diversifying its [earnings base] into tablets and PCs," he said.
Another key factor in Samsung's performance this year will be the impact of its next flagship smartphone, expected to be released in the second quarter of the year.
Although Samsung did notprovide a breakdown of the results, analysts believethe profit growth was driven by the handset business, which accounted for about two-thirds of earnings in the previous quarter.
Read more: Touch laptops are coming
Samsung has established itself as the leading smartphone maker by unit sales with a product range that stretches from premium to low-end devices, unlike rival Apple,which focuses on the top end of the market.
Apple won a hard-fought US legal battle when a California court in August ordered Samsung to pay$1bn for infringing patents related to the iPhone.
The legal tussle has continued, with Apple last month appealing against a US judge's refusal to ban some Samsung products from sale in the country. InSeptember, Apple unveiled the iPhone 5 amid feverish publicity, followed the next month by a miniature version of the iPad.
Read more: Six gadget trends at the CES
But analysts said Apple's introduction of competing devices failed to slow Samsung's momentum. Daniel Kim at Macquarie Securities estimated that Samsung sold about 15m units of its flagship Galaxy S3 smartphone in the period and about 8m of its Galaxy Note 2 miniature tablet.
Samsung phones using Microsoft's Windows Phone8 operating system will go on sale in the US early this year, as the company seeks to diversify beyond However, the rapid growthof the handset business threatens to leave Samsung"too dependent on a single profit source", Mr Kim added.
While Samsung is the world's leading producer of memory chips, smartphone application processors and televisions, these businesses combinedcontribute a fraction of the profits generated by the smartphone division.
The operating profit figure was ahead of analysts' consensus forecasts of Won8.5tn compiled by Bloomberg, but the shares fell 0.9 per cent in morning trading in Seoul.
Marcello Ahn, an analyst at Nomura, said investors were taking profits following a strong run that had seen the shares rise 19per cent since the beginning of September.
"For the share price to move by another jump from this level, we must see Samsung diversifying its [earnings base] into tablets and PCs," he said.
Another key factor in Samsung's performance this year will be the impact of its next flagship smartphone, expected to be released in the second quarter of the year.
Thursday 3 January 2013
Ex-SAC fund manager pleads not guilty in insider case
NEW YORK, Jan 3 (Reuters) - Mathew Martoma, a former portfolio manager at hedge fund SAC Capital Management, pleaded notguilty to fraud charges stemming from a $276 million insider-trading case brought by federal prosecutors.
"I plead not guilty, your honor," said Martoma, speaking in a calm voice, to each of three counts that U.S. District Judge Paul Gardephe in Manhattan read to him on Thursday.
Martoma was indicted last month on charges of conspiracy to commit securities fraud and securities fraud.
He is accused of helping CR Intrinsic Investors, oneof the funds run by investment manager Steven A. Cohen's SAC Capital, make illegal trades in Elan Corp Plc and Wyeth, now part of Pfizer Inc. The trades were made in the summerof 2008 based on illicit tips prosecutors say Martoma received from a doctor, according to the indictment.
The case is the latest in the U.S. government's wide-ranging investigation of suspicious trading among hedge fund traders, portfolio managers and consultants.The probes have produced more than 50 convictions, with many of the defendants pleading guilty instead of going to trial.
When asked after the hearing if he was negotiating a plea agreement with prosecutors, Martoma's lawyer, Charles Stillman, said "the answer is no."
"Mathew Martoma is an innocent man," Stillman said.
At the hearing, Assistant U.S. Attorney Arlo Devlin-Brown said evidence in the case will include trading records, phone records and e-mails regarding the trades, and will include "voluminous discovery" from the hedge fund in the case.
Martoma is the seventh former employee of Cohen's to be charged or implicated in an insider-trading case while working at SAC Capital. Some former SAC Capital employees have been charged with insider trading after leaving the firm and while working at other funds.
Cohen has not been charged with wrongdoing.
The criminal complaint against Martoma is the firstto refer to Cohen, who appears in it as "Hedge Fund Owner" and"hedge fund manager A,"in a corresponding civil complaint the U.S. Securities and Exchange Commission filed against him, a source previously told Reuters.
"I plead not guilty, your honor," said Martoma, speaking in a calm voice, to each of three counts that U.S. District Judge Paul Gardephe in Manhattan read to him on Thursday.
Martoma was indicted last month on charges of conspiracy to commit securities fraud and securities fraud.
He is accused of helping CR Intrinsic Investors, oneof the funds run by investment manager Steven A. Cohen's SAC Capital, make illegal trades in Elan Corp Plc and Wyeth, now part of Pfizer Inc. The trades were made in the summerof 2008 based on illicit tips prosecutors say Martoma received from a doctor, according to the indictment.
The case is the latest in the U.S. government's wide-ranging investigation of suspicious trading among hedge fund traders, portfolio managers and consultants.The probes have produced more than 50 convictions, with many of the defendants pleading guilty instead of going to trial.
When asked after the hearing if he was negotiating a plea agreement with prosecutors, Martoma's lawyer, Charles Stillman, said "the answer is no."
"Mathew Martoma is an innocent man," Stillman said.
At the hearing, Assistant U.S. Attorney Arlo Devlin-Brown said evidence in the case will include trading records, phone records and e-mails regarding the trades, and will include "voluminous discovery" from the hedge fund in the case.
Martoma is the seventh former employee of Cohen's to be charged or implicated in an insider-trading case while working at SAC Capital. Some former SAC Capital employees have been charged with insider trading after leaving the firm and while working at other funds.
Cohen has not been charged with wrongdoing.
The criminal complaint against Martoma is the firstto refer to Cohen, who appears in it as "Hedge Fund Owner" and"hedge fund manager A,"in a corresponding civil complaint the U.S. Securities and Exchange Commission filed against him, a source previously told Reuters.
Wednesday 2 January 2013
Avis buying Zipcar in deal worth nearly$500M
Avis is buying Zipcar for$491.2 million, expanding its offerings from traditional car rentals to car sharing services.
Car sharing has become a popular alternative to traditional rentals in metropolitan areas and on college campuses, allowing members to get a vehicle quickly for short trips. Zipcar, which was founded in 2000, has more than 760,000 members. It went public in 2011 and posted net income of $850,000 in the first nine months of this year.
"By combining with Zipcar, we will significantly increaseour growth potential, both in the United States and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs," said Avis Chairman and CEO Ronald Nelson.
Bringing the Avis fleet into play will help Zipcar meet high demand on weekends,Avis said, when most peoplemake a run to the grocery store or run other errands. It will also help Avis compete with Hertz Global Holdings Inc., which has its own car sharing service, Hertz on Demand.
Both Zipcar and Hertz on Demand park cars throughout cities and college campuses, which allow renters to avoid waiting in lines at traditionalcar rental counters. Some areas provide reserved parking for the cars and vehicles can be located online or through the companies' smart phone applications.
The car sharing companies also pay for fuel, a cost not included in standard car rentals. Although the hourly rental options are quicker and cheaper than renting a car by the day, Zipcar and Hertz on Demand are generally moreexpensive for rentals longerthan 24 hours.
Avis Budget Group Inc. willpay $12.25 per share, whichis a 49 percent premium to Zipcar's closing price on Friday. The companies put the total value of the deal atapproximately $500 million.
Zipcar Inc. has about 40.1 million outstanding shares, according to FactSet. It will become an Avis subsidiary and have headquarters in Boston.
Its shares jumped almost more than 47 percent to$12.19 in premarket tradingMonday.
The boards of both companies unanimously approved the buyout. If Zipcar shareholders approvethe deal, it's expected to close in the spring.
Avis anticipates $50 million to $70 million in annual savings. The Parsippany, N.J.-based company also expects the acquisition will add to its adjusted earningsper share in the second year after it is complete.
Avis said that it expects certain members of Zipcar management, including Chairman and CEO Scott Griffith and President and Chief Operating Officer Mark Norman, to help run its day-to-day operations.
Avis also maintained its 2012 adjusted earnings forecast Monday of about$2.35 to $2.45 per share on revenue of approximately$7.3 billion.
Analysts predict earnings of$2.42 per share on revenueof $7.3 billion.
Car sharing has become a popular alternative to traditional rentals in metropolitan areas and on college campuses, allowing members to get a vehicle quickly for short trips. Zipcar, which was founded in 2000, has more than 760,000 members. It went public in 2011 and posted net income of $850,000 in the first nine months of this year.
"By combining with Zipcar, we will significantly increaseour growth potential, both in the United States and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs," said Avis Chairman and CEO Ronald Nelson.
Bringing the Avis fleet into play will help Zipcar meet high demand on weekends,Avis said, when most peoplemake a run to the grocery store or run other errands. It will also help Avis compete with Hertz Global Holdings Inc., which has its own car sharing service, Hertz on Demand.
Both Zipcar and Hertz on Demand park cars throughout cities and college campuses, which allow renters to avoid waiting in lines at traditionalcar rental counters. Some areas provide reserved parking for the cars and vehicles can be located online or through the companies' smart phone applications.
The car sharing companies also pay for fuel, a cost not included in standard car rentals. Although the hourly rental options are quicker and cheaper than renting a car by the day, Zipcar and Hertz on Demand are generally moreexpensive for rentals longerthan 24 hours.
Avis Budget Group Inc. willpay $12.25 per share, whichis a 49 percent premium to Zipcar's closing price on Friday. The companies put the total value of the deal atapproximately $500 million.
Zipcar Inc. has about 40.1 million outstanding shares, according to FactSet. It will become an Avis subsidiary and have headquarters in Boston.
Its shares jumped almost more than 47 percent to$12.19 in premarket tradingMonday.
The boards of both companies unanimously approved the buyout. If Zipcar shareholders approvethe deal, it's expected to close in the spring.
Avis anticipates $50 million to $70 million in annual savings. The Parsippany, N.J.-based company also expects the acquisition will add to its adjusted earningsper share in the second year after it is complete.
Avis said that it expects certain members of Zipcar management, including Chairman and CEO Scott Griffith and President and Chief Operating Officer Mark Norman, to help run its day-to-day operations.
Avis also maintained its 2012 adjusted earnings forecast Monday of about$2.35 to $2.45 per share on revenue of approximately$7.3 billion.
Analysts predict earnings of$2.42 per share on revenueof $7.3 billion.
Tuesday 1 January 2013
How Colombian drug traffickers used HSBC to launder money
Dec 31 (Reuters) - When several Colombian men were indicted in January 2010 on money-laundering charges, the case in Brooklyn federal court drew little attention.
It looked like a bust of another nexus of drug traffickers and money launderers, with mainly small-time operatives paying the price for their crimes.
One of the men was Julio Chaparro, a 48-year-old father of four who owned three factories that made children's clothing in Colombia.
But to U.S. authorities the case was anything but ordinary. Chaparro, prosecutors alleged, helped run a money-laundering ring for drug traffickers that took advantage of lax controls at UK-based international banking group HSBC Holdings Plc. It was one of the most important leads for U.S. investigatorspursuing a case against the bank that eventually led to a $1.9 billion settlement on Dec. 11.
Chaparro was "basically putting the orchestra together" and investigators saw "him as amajor player in terms of cleaning a lot of money," said James Hayes, special agent in charge of Homeland Security Investigations at U.S. Immigration and Customs Enforcement in New York.Known as ICE, the agencyand its task force led the probe.
The Colombian's lawyer, Ephraim Savitt, said Chaparro was a middleman in the operation, but disputed the extent of his client's role, saying he was the"page turner of sheet music for the conductor."
Chaparro, who was arrested in Colombia in 2010 and extradited to the United States in 2011, pleaded guilty to a money-laundering conspiracy count in May and is awaiting sentencingin 2013.
An HSBC spokesman declined comment.
Much about the trail that drug traffickers used to move U.S. dollars - the proceeds from drug sales - through HSBC and other banks remains unclear. By design, the process is layered to evade detection.
But a review of confidential investigative records that originate fromtwo U.S. Attorney office probes and federal court filings in New York and California, as well as interviews with senior law-enforcement officials, shows how investigators tracing the activities of people who allegedly worked with Chaparro were able to expose large-scale money laundering at one of the world's biggest banks.
The federal law-enforcement task force - named after El Dorado, the mythical city of gold in South America - used wire taps, email and computer searches, information from at least one inside source, and old-fashioned surveillance, to piece together the ring's operations.
SMUGGLED ACROSS BORDER
Drug cartels sold narcoticsin the United States and routed the cash to Mexico,often using couriers to smuggle it across the border. That cash would then be put into bank accounts at HSBC's Mexicounit, where large depositscould be made without arousing suspicion, according to U.S. Department of Justice documents.
In one filing, U.S. prosecutors said, Chaparroand others allegedly utilized accounts at HSBC Mexico to deposit "drug dollars and then wire those funds to ... businesses located in the United States and elsewhere. The funds were then used to purchase consumer goods, which were exported to South America and resold to generate 'clean' cash."
In a typical transaction, a middleman in a drug cartel would offer to deliver consumer goods, such as computers or washing machines, to Colombian businesses on favorable terms. Another person in the United States would buy the goods from firms using funds from drug trafficking, and fulfill those orders.
Money launderers exploited the laxness of HSBC in policing shadowymoney flows, the Department of Justice saidearlier this month. Failuresincluded not conducting due diligence on customers, not adequatelymonitoring wire transfers or cash shipments and nothaving enough employees to run anti-money laundering systems. U.S. Assistant Attorney General Lanny Breuer called the lapses"stunning failures of oversight."
The situation was so bad, according to the Department of Justice, thatin 2008, the head of HSBC's Mexican operations was told by Mexican regulators that a local drug lord describedthe bank as "the place to launder money."
The Chaparro probe, led by ICE and the Justice Department, converged over the past two years with two other investigations - led by federal prosecutors and investigators in West Virginia and by the Manhattan district attorney- resulting in this month's settlement with HSBC.
HSBC and its employees avoided criminal indictments, as the bank agreed instead to a deferred-prosecution deal that forces it to strengthen controls and accept a compliance monitor.
Today, Chaparro sits in a federal detention center in Brooklyn, reading the Bible and awaiting sentencing, said Savitt, a former U.S. prosecutor in Brooklyn, who submitted a list of questions to Chaparro for Reuters.
"He is contrite, regretful and ashamed about his crimes," Savitt said. "He wants to serve his time and rejoin his family.
It looked like a bust of another nexus of drug traffickers and money launderers, with mainly small-time operatives paying the price for their crimes.
One of the men was Julio Chaparro, a 48-year-old father of four who owned three factories that made children's clothing in Colombia.
But to U.S. authorities the case was anything but ordinary. Chaparro, prosecutors alleged, helped run a money-laundering ring for drug traffickers that took advantage of lax controls at UK-based international banking group HSBC Holdings Plc. It was one of the most important leads for U.S. investigatorspursuing a case against the bank that eventually led to a $1.9 billion settlement on Dec. 11.
Chaparro was "basically putting the orchestra together" and investigators saw "him as amajor player in terms of cleaning a lot of money," said James Hayes, special agent in charge of Homeland Security Investigations at U.S. Immigration and Customs Enforcement in New York.Known as ICE, the agencyand its task force led the probe.
The Colombian's lawyer, Ephraim Savitt, said Chaparro was a middleman in the operation, but disputed the extent of his client's role, saying he was the"page turner of sheet music for the conductor."
Chaparro, who was arrested in Colombia in 2010 and extradited to the United States in 2011, pleaded guilty to a money-laundering conspiracy count in May and is awaiting sentencingin 2013.
An HSBC spokesman declined comment.
Much about the trail that drug traffickers used to move U.S. dollars - the proceeds from drug sales - through HSBC and other banks remains unclear. By design, the process is layered to evade detection.
But a review of confidential investigative records that originate fromtwo U.S. Attorney office probes and federal court filings in New York and California, as well as interviews with senior law-enforcement officials, shows how investigators tracing the activities of people who allegedly worked with Chaparro were able to expose large-scale money laundering at one of the world's biggest banks.
The federal law-enforcement task force - named after El Dorado, the mythical city of gold in South America - used wire taps, email and computer searches, information from at least one inside source, and old-fashioned surveillance, to piece together the ring's operations.
SMUGGLED ACROSS BORDER
Drug cartels sold narcoticsin the United States and routed the cash to Mexico,often using couriers to smuggle it across the border. That cash would then be put into bank accounts at HSBC's Mexicounit, where large depositscould be made without arousing suspicion, according to U.S. Department of Justice documents.
In one filing, U.S. prosecutors said, Chaparroand others allegedly utilized accounts at HSBC Mexico to deposit "drug dollars and then wire those funds to ... businesses located in the United States and elsewhere. The funds were then used to purchase consumer goods, which were exported to South America and resold to generate 'clean' cash."
In a typical transaction, a middleman in a drug cartel would offer to deliver consumer goods, such as computers or washing machines, to Colombian businesses on favorable terms. Another person in the United States would buy the goods from firms using funds from drug trafficking, and fulfill those orders.
Money launderers exploited the laxness of HSBC in policing shadowymoney flows, the Department of Justice saidearlier this month. Failuresincluded not conducting due diligence on customers, not adequatelymonitoring wire transfers or cash shipments and nothaving enough employees to run anti-money laundering systems. U.S. Assistant Attorney General Lanny Breuer called the lapses"stunning failures of oversight."
The situation was so bad, according to the Department of Justice, thatin 2008, the head of HSBC's Mexican operations was told by Mexican regulators that a local drug lord describedthe bank as "the place to launder money."
The Chaparro probe, led by ICE and the Justice Department, converged over the past two years with two other investigations - led by federal prosecutors and investigators in West Virginia and by the Manhattan district attorney- resulting in this month's settlement with HSBC.
HSBC and its employees avoided criminal indictments, as the bank agreed instead to a deferred-prosecution deal that forces it to strengthen controls and accept a compliance monitor.
Today, Chaparro sits in a federal detention center in Brooklyn, reading the Bible and awaiting sentencing, said Savitt, a former U.S. prosecutor in Brooklyn, who submitted a list of questions to Chaparro for Reuters.
"He is contrite, regretful and ashamed about his crimes," Savitt said. "He wants to serve his time and rejoin his family.
Subscribe to:
Posts (Atom)