U.S. judge approves IBM's foreign bribery case settlement with SEC

By Alina Selyukh

WASHINGTON | Thu Jul 25, 2013 7:21pm EDT

WASHINGTON (Reuters) - A U.S. judge on Thursday signed off on IBM's 2011 settlement with U.S. regulators over charges of foreign bribery, wrapping up the latest case that questioned U.S. authorities' aggressiveness in investigating corporate misconduct.

U.S. District Judge Richard Leon approved the settlement between International Business Machines Corp (IBM.N) and the Securities and Exchange Commission after IBM agreed to a two-year reporting requirement on accounting fraud or bribery as well as federal investigations.

IBM in March 2011 agreed to pay some $10 million to resolve SEC charges over improper gifts to government officials in South Korea and China. The Department of Justice is now investigating allegations of illegal activity by a former IBM employee in Poland as well as transactions in Argentina, Bangladesh an Ukraine, according to IBM's April 30 filing with the SEC.

Leon warned that if any IBM violations land on his desk in the future, he would be stricter in his review.

"If there's a problem in the next two years, obviously it won't be a day like today, it won't be a happy day," Leon told IBM's General Counsel Robert Weber at the court hearing.

IBM neither admitted nor denied the allegations of bribery in South Korea or China, a common feature in SEC settlements.

"When we receive an allegation of wrongdoing, we investigate it and take appropriate action," IBM said in a statement on Thursday while also calling its compliance program "robust" and welcoming Leon's ruling.

In February, Leon scolded IBM for a "history" of violating provisions of the Foreign Corrupt Practices Act and "major payments" to foreign governments, the latest federal judge to express concerns over U.S. regulators' handling of settlements with corporations during the past two years.

Numerous federal judges have recently asked whether U.S. regulators were aggressive enough in responding to corporate misconduct. The law bars payments to officials of foreign governments in exchange for business and also requires companies to maintain accurate books.

Leon's ruling on Thursday required IBM to annually report to the court and the SEC about its compliance with the foreign corruption laws and immediately notify them if bribery or accounting fraud violations have "reasonably likely" happened.

IBM would also have to report within 60 days of discovering that it is party to any federal investigation, enforcement or civil litigation.

IBM's lawyers at the hearing enumerated steps IBM takes to internally avoid and pursue violation allegations, including a confidential reporting system, and said the company's board of directors has agreed to Leon's reporting requirements.

The case is SEC v. International Business Machines Corp, U.S. District Court, District of Columbia, No. 11-00563.

(Reporting by Alina Selyukh; Editing by Ros Krasny and Ken Wills)

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U.S. judge approves IBM's foreign bribery case settlement with SEC

By Alina Selyukh

WASHINGTON | Thu Jul 25, 2013 7:21pm EDT

WASHINGTON (Reuters) - A U.S. judge on Thursday signed off on IBM's 2011 settlement with U.S. regulators over charges of foreign bribery, wrapping up the latest case that questioned U.S. authorities' aggressiveness in investigating corporate misconduct.

U.S. District Judge Richard Leon approved the settlement between International Business Machines Corp (IBM.N) and the Securities and Exchange Commission after IBM agreed to a two-year reporting requirement on accounting fraud or bribery as well as federal investigations.

IBM in March 2011 agreed to pay some $10 million to resolve SEC charges over improper gifts to government officials in South Korea and China. The Department of Justice is now investigating allegations of illegal activity by a former IBM employee in Poland as well as transactions in Argentina, Bangladesh an Ukraine, according to IBM's April 30 filing with the SEC.

Leon warned that if any IBM violations land on his desk in the future, he would be stricter in his review.

"If there's a problem in the next two years, obviously it won't be a day like today, it won't be a happy day," Leon told IBM's General Counsel Robert Weber at the court hearing.

IBM neither admitted nor denied the allegations of bribery in South Korea or China, a common feature in SEC settlements.

"When we receive an allegation of wrongdoing, we investigate it and take appropriate action," IBM said in a statement on Thursday while also calling its compliance program "robust" and welcoming Leon's ruling.

In February, Leon scolded IBM for a "history" of violating provisions of the Foreign Corrupt Practices Act and "major payments" to foreign governments, the latest federal judge to express concerns over U.S. regulators' handling of settlements with corporations during the past two years.

Numerous federal judges have recently asked whether U.S. regulators were aggressive enough in responding to corporate misconduct. The law bars payments to officials of foreign governments in exchange for business and also requires companies to maintain accurate books.

Leon's ruling on Thursday required IBM to annually report to the court and the SEC about its compliance with the foreign corruption laws and immediately notify them if bribery or accounting fraud violations have "reasonably likely" happened.

IBM would also have to report within 60 days of discovering that it is party to any federal investigation, enforcement or civil litigation.

IBM's lawyers at the hearing enumerated steps IBM takes to internally avoid and pursue violation allegations, including a confidential reporting system, and said the company's board of directors has agreed to Leon's reporting requirements.

The case is SEC v. International Business Machines Corp, U.S. District Court, District of Columbia, No. 11-00563.

(Reporting by Alina Selyukh; Editing by Ros Krasny and Ken Wills)

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U.S. regulator announces $885 million settlement with UBS

The logo of Swiss bank UBS is seen on an office building in Zurich July 22, 2013.

Credit: Reuters/Arnd Wiegmann

WASHINGTON | Thu Jul 25, 2013 7:04pm EDT

WASHINGTON (Reuters) - A U.S. regulator on Thursday said it reached an $885 million settlement with UBS over allegations the bank misrepresented mortgage-backed bonds that were sold to Fannie Mae and Freddie Mac during the housing bubble.

Under the terms of the agreement with the Federal Housing Finance Agency, UBS must pay about $415 million to Fannie Mae and $470 million to Freddie Mac to resolve claims related to securities sold to the companies between 2004 and 2007. The Swiss banking giant did not admit to any liability or wrongdoing in settling the allegations. On Monday, it said it had reached an agreement in principle with the FHFA.

Fannie Mae and Freddie Mac were seized by the U.S. government in 2008 as the housing crisis threatened their solvency. They have received $187.5 billion in taxpayer funds to stay afloat.

UBS is just one of 18 banks the FHFA pursued in 2011 for allegedly misrepresenting the quality of the collateral backing securities during the run-up to the financial crisis. The regulator is seeking to recover losses on mortgage bonds sold to Fannie Mae and Freddie Mac, which could result in the recovery of billions of dollars.

Citigroup and General Electric have already settled with the FHFA for undisclosed sums.

(Reporting by Margaret Chadbourn; editing by Jackie Frank and Phil Berlowitz)

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U.S. regulator announces $885 million settlement with UBS

The logo of Swiss bank UBS is seen on an office building in Zurich July 22, 2013.

Credit: Reuters/Arnd Wiegmann

WASHINGTON | Thu Jul 25, 2013 7:04pm EDT

WASHINGTON (Reuters) - A U.S. regulator on Thursday said it reached an $885 million settlement with UBS over allegations the bank misrepresented mortgage-backed bonds that were sold to Fannie Mae and Freddie Mac during the housing bubble.

Under the terms of the agreement with the Federal Housing Finance Agency, UBS must pay about $415 million to Fannie Mae and $470 million to Freddie Mac to resolve claims related to securities sold to the companies between 2004 and 2007. The Swiss banking giant did not admit to any liability or wrongdoing in settling the allegations. On Monday, it said it had reached an agreement in principle with the FHFA.

Fannie Mae and Freddie Mac were seized by the U.S. government in 2008 as the housing crisis threatened their solvency. They have received $187.5 billion in taxpayer funds to stay afloat.

UBS is just one of 18 banks the FHFA pursued in 2011 for allegedly misrepresenting the quality of the collateral backing securities during the run-up to the financial crisis. The regulator is seeking to recover losses on mortgage bonds sold to Fannie Mae and Freddie Mac, which could result in the recovery of billions of dollars.

Citigroup and General Electric have already settled with the FHFA for undisclosed sums.

(Reporting by Margaret Chadbourn; editing by Jackie Frank and Phil Berlowitz)

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China, EU reach settlement on solar panels

BEIJING (AP) — The Europe Union and Chinese solar panel exporters said Saturday that they had reached a settlement in their long trade dispute, with the exporters agreeing to sell their products at a minimum price in the EU market.

The agreement ends one of the biggest-ever trade disputes between China and Europe — a row that threatened to escalate into a full-blown trade war involving European wines and to disrupt EU-China relations.

The settlement comes after negotiations that began in June when the EU announced that duties averaging 47 percent on Chinese-made solar panels, cells and wafers would come into effect in August. The EU said then that China was selling its products in the EU market at below-cost prices and harming the European solar panel industry.

In announcing the settlement, EU Trade Commissioner Karel De Gucht said that he was satisfied with the offer by the Chinese solar panel exporters and that the agreement would stabilize the European solar panel market.

"We have found an amicable solution that will result in a new equilibrium on the European solar panel market at a sustainable price level," he said.

The China Chamber of Commerce for Import and Export of Machinery and Electronic Products said in a statement that the price promise represents the majority will of Chinese companies and that it would allow Chinese manufacturers to continue to export their products to Europe and retain fair market shares. The chamber described the negotiations as "arduous" and "meticulous."

"China's solar panels industry is always committed to maintaining a fair international trade environment," the statement said. "It opposes trade protectionism and supports resolving disputes through negotiations."

Chinese Ministry of Commerce spokesman Shen Danyang said China welcomed the settlement. The EU is the largest export market for Chinese solar panel products, according to Shen.

In Europe and the United States, the price drop in the solar panels market in recent years has wreaked havoc among EU and U.S. manufacturers, forcing several out of business.

More than a fifth of all jobs — or about 24,000 — in Germany's once-burgeoning solar panel industry have been lost since 2011. A recent government report found that solar industry revenue dropped to 7.34 billion euros ($9.53 billion) last year from 11.9 billion euros in 2011 and blamed the price fall on cheap solar panels made in China.

But German Chancellor Angela Merkel, the most powerful EU leader, spoke out strongly against the duties, fearful they would result in a Chinese backlash.

In early July, China's commerce ministry opened an anti-dumping probe into wine exports from Europe in response to the EU's planned tariffs on Chinese solar panels.

___

Associated Press writer Frank Jordans in Berlin contributed to this report.

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Judge signs off on IBM bribery case settlement

WASHINGTON (Reuters) - A District Court judge on Thursday approved a 2011 settlement between International Business Machines Corp and U.S. regulators over charges of foreign bribery related to improper gifts to government officials in China and South Korea.

(Reporting by Alina Selyukh; writing by Ros Krasny)

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