London stung by U.S. attack on bank regulation record - Reuters UK
LONDON |
LONDON (Reuters) - Calling London a haven of regulatory loopholes that spawns financial trading disasters could make it harder to align new transatlantic rules, figures in London's financial and legal circles said on Wednesday.
Responding to attacks in Congress on London's regulatory record, European policymakers, analysts and industry officials called the American comments ill-advised and politically driven.
"As the old saying goes, it is like the pot calling the kettle black," analysts at Mediobanca said.
A hearing in Congress - on how supervisors failed to spot the buildup of $2 billion (1.27 billion pounds) in derivatives losses at a London unit of U.S. bank JPMorgan Chase & Co - heard a top regulator and MPs describe London as offering a loophole American banks eagerly exploit.
"It seems to be that every big trading disaster happens in London," Carolyn Maloney, a Democratic lawmaker told Tuesday's hearing.
Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission (CFTC), which regulates derivatives, added that U.S. firms, such as the JPMorgan branch in London, were set up abroad to find "lower regulatory regimes".
AIG, the U.S. insurer rescued by U.S. taxpayers, and CitiGroup's special purpose investment vehicle, which kept huge holdings of debt off the bank's balance sheet, were both in London and could put American taxpayers on the hook, Gensler said.
"So often it comes right back here, crashing to our shores," Gensler said, putting London on a par with other offshore centres like the Cayman Islands, a home to some hedge funds.
Yet Britain's Financial Services Authority has repeatedly said JPMorgan operates as a branch in London that is mainly regulated by the U.S. authorities, with the Office of the Comptroller of the Currency having five of its examiners based in JPMorgan's London building.
The FSA has long admitted its "light touch" pre-crisis regime failed and says it has become one of the toughest regulators in the world. Its top banking supervisor has seen no UK regulatory breaches for now at JPMorgan.
The UK watchdog declined to comment on Tuesday's remarks in Congress.
Mark Boleat, policy committee chairman at the City of London, home to a big chunk of the UK financial services sector, said the comments bring heat but no light and that each country needed to put its regulatory house in order.
"What we need to do, however, is avoid political jousting and to work together to ensure that international regulation is congruent," Boleat said.
NO TOUCH
Anthony Belchambers, chief executive of the Futures and Options Association, said the outburst was extraordinary after the financial crisis was sparked by a "no touch" U.S. regulatory regime towards derivatives and mortgage selling.
Defaults on U.S. home loans in 2007 triggered a global market meltdown, fuelled by the collapse of U.S. bank Lehman Brothers the following year.
"It is simply not helpful to wag fingers at other jurisdictions at a time when we must be thinking of how to establish a coherent framework for regulations across borders," Belchambers said.
The accusations came on the day world leaders met in neighbouring Mexico to congratulate themselves on how well their globally coordinated financial reforms were falling into place.
JPMorgan's losses not only embarrassed the bank but also regulators like the CFTC, which was already under the gun for failing to spot the financial crisis and faces a Congress-inspired budget cut.
The bank's losses coincide with a shift to implementing new rules at a time when there are already suspicions that some countries may try to row back on the detail.
"You would hope that regulators would be working in a more cooperative spirit and that is difficult where there is any lack of trust," said Richard Reid, director of research at the International Centre for Financial Regulation.
This lack of trust has already prompted the financial industry to call on the G20 to redouble efforts to mesh their national rules to avoid extra costs.
Some regulatory over-reach beyond local borders looks unavoidable, as Gensler openly linked concerns about London with his commission's push to get approval for new derivatives rules.
Leaving out the London branches of U.S. banks from the rules would be another loophole and a retreat from reform, Gensler said.
"I hope that the commission will vote ... to get public comment this Thursday so that we don't in essence create another London loophole," Gensler said.
The European Union has been slammed for doing likewise with its new markets and derivatives rules, saying that U.S. firms who want to do business in the 27-country bloc should be complying with "equivalent" rules back home.
"This is just another manifestation of the iron curtain which financial services regulators are raising across the Atlantic," said Simon Gleeson, a partner at law firm Clifford Chance.
(Editing by David Holmes)
London trader and wife jailed for insider dealing - Reuters UK
LONDON |
LONDON (Reuters) - A British trader and his wife who helped fund a lavish lifestyle from illegal share dealing, were jailed on Wednesday in a landmark case pursued by prosecutors on both sides of the Atlantic.
James Sanders, who owned and was a director of now-defunct brokerage Blue Index, his wife Miranda and James Swallow, a Blue Index co-director, had last month pleaded guilty to a combined 18 counts of insider dealing between October 2006 and February 2008.
James Sanders, dubbed by Judge Peregrine Simon as "the driving force behind the criminality", was jailed for a record four years. Miranda Sanders - who was tipped off about imminent U.S. takeovers by her sister in America - was jailed for 10 months, as was Swallow.
The striking, sharply-dressed couple, who are both in their mid thirties and have two young children, saw their sentences cut by 25 percent after pleading guilty, although James initially argued his trades were legitimate stock picks.
They held hands while judge Peregrine Simon read out the case against them and kissed after sentencing. Miranda turned to smile and nod encouragingly at a woman in the court room's public gallery, who burst into tears on sentencing.
The Financial Services Authority (FSA), which brought the UK prosecution, said the three scooped almost 2.0 million pounds in profits from illegal share dealings, while Blue Index clients made around 10.2 million - a precursor to the Sanders' couple selling the business for around 8.0 million.
The FSA, which only started prosecuting notoriously tricky insider dealing cases in 2007 after being criticised for its "light touch" approach to regulation, had pushed for three custodial sentences despite the couple's young family.
"This was a case of systematic abuse by approved people of their privileged position in the market - we are determined to stamp out such abuse," said Tracey McDermott, acting head of enforcement at the Financial Services Authority (FSA).
"No doubt as they prepare to spend their first night behind bars, they will be reflecting on the consequences of their greed. Others, who might be tempted to do the same, should be in no doubt about our continued commitment to use all of the tools at our disposal to tackle those who abuse the market."
NAILED
The FSA was first alerted to possible insider dealing after spotting unusually heavy trade in U.S.-listed staffing services company Kronos ahead of its takeover by private equity house Hellman & Friedman Capital Partners in 2007.
Calling on the Securities and Exchange Commission (SEC), its U.S. peer, the regulator eventually pieced together the links between the Sanders couple and Miranda's San Francisco-based sister and brother-in-law, an M&A partner at accountancy firm Deloitte, "Annie and Arnie" McClellan.
In a tortuous case that involved trawling through 26 million emails and 800,000 phone calls recorded on Blue Index's office lines, regulators focused on dealings in five takeover targets: Kronos, Per Se, aQuantive, ChoicePoint and Getty Images.
McDermott told a journalist briefing there were "whoops of joy" in the FSA's offices when in one recorded telephone call, James Sanders' father Tim asks: "Is this not insider dealing?" James answers: "No, not really. Well ...". When his father laughs and says: "Try proving it", James says: "Yes, exactly".
A consummate trader, James Sanders told a newspaper in 2008 his mantra was: "Buy at the point of maximum fear" after snapping up a 5 million pound property in London's exclusive Kensington district for a 22 percent discount at the height of the credit crunch.
The FSA found what they called his "life plan" in his kitchen, in which he documented his plans to pay off his mortgages and luxury cars and resign from Blue Index by placing one 200,000 pound tip a year.
In a scribbled account, he put aside 100,000 pounds for a "car fund" and 50,000 for a watch, clothes, holidays and wine.
Blue Index was a specialist brokerage of contracts for differences (CFD), a tax-efficient trade that allows dealers to speculate on short-term price fluctuations of assets such as stocks by buying a percentage of their value, or "margin".
The FSA said the insider in the case was Miranda's brother-in-law Arnold McClellan, a senior partner at the San Francisco branch of Deloitte. It said Miranda's sister Annabel or Arnold leaked privileged, price-sensitive information to the British couple about U.S. securities listed in New York.
James Sanders then disclosed information to James Swallow and encouraged Blue Index clients to trade in those stocks.
Annabel McClellan has already been jailed for 11 months without parole and fined $1.0 million after being pursued by the SEC, Department of Justice (DoJ) and Federal Bureau of Investigation (FBI). No charges were brought against Arnold, who has now retired.
James Sanders, meanwhile, has been forced to park the Ferrari and has been disqualified as a director for five years. The court will decide on confiscation orders at a later date.
The FSA, which said it spent "millions" on pursuing the Blue Index case, is prosecuting 11 others for insider dealing - an offence that carries a maximum jail term of 7 years in the UK.
"This case really does demonstrate the FSA's determination to deliver criminal prosecutions for insider dealing," said Tim Dolan, a lawyer at Pinsent Masons.
"While the FSA have still brought relatively few criminal actions, and have not always been successful, results like this should go some way to deterring insider dealing in the future."
(Editing by Douwe Miedema and Jon Loades-Carter)
London politicians call for Munich '72 remembrance - The Guardian
London’s parks show Occupiers the exit - Financial Times
June 20, 2012 7:35 pm
US ambassador admits passion for Liverpool FC during Vauxhall car plant tour - Liverpool Echo
US ambassador admits passion for Liverpool FC during Vauxhall car plant tour
THE American ambassador to the UK said he is now “passionate” about football after watching Liverpool FC win the Carling Cup.
Louis Susman, who visited the Vauxhall car plant at Ellesmere Port yesterday, said he watched the match in February as a guest of his friends, John Henry and Tom Warner, the club’s US co-owners.
He said: “I have a history of being involved in baseball in the US and that was how I got to know John Henry and Tom Warner in San Diego.
“Subsequently they invited me to watch Liverpool win the Carling Cup at Wembley. I love all sports and become passionate about the Premier League.”
Asked if he would come to watch the Reds play at Anfield, he said: “Why not return here to see some more matches?”
Mr Susman was on a 24-hour visit to Merseyside to see US investment in firms such as Vauxhall, owned by General Motors, and Speke-based pharmaceutical company Eli Lilly UK.
He said: “I made it my priority to go everywhere because I am ambassador to all the UK.
“But Liverpool is a fabulous place. It is a landmark in culture and regeneration and I was very impressed by my visit to the university and meeting the business leaders.
“I am so pleased that General Motors has not only kept the Vauxhall factory open but expanded it too. This is a boon for the Ellesmere Port area.”
After meeting the US Fulbright and Marshall scholars at Liverpool university, Mr Susman also opened Tate Liverpool gallery’s new show – Turner, Monet, Twombley: The Later Paintings – last night.
He said: “My wife and I are active members of the arts community and I was delighted to accept when asked.
“On this visit there is no shortage of places to see.
“This city and the US is a particular part of the special relationship between our two countries. It was here the very first US consul James Maury was based from 1790 and where the last Confederate ship surrendered.
“There are so many cultural institutions here like the Tate, Albert Dock, St George’s Hall, the Philharmonic and the Gormley statues.
“You have got to tell people about it and make it a tourism destination port.”
Mr Susman was also one of the first to spot President Barack Obama’s potential when he was a young politician and keenly fund- raised for him.
He said: “I saw he had great talent and encouraged him to do what he’s now doing.”
As for President Obama visiting Liverpool, Mr Susman said: “We will cross that bridge after the US election.”
Try Ascot - in London - The Sun
A London restaurant is running its very own day at the races on Sunday June 23.
The Plough Bar and Kitchen in Clapham, will show all the races on a big screen, from 2.30-5.30pm
So dust off your best suit, fasten your fascinators and jockey for a prime position to watch the dramatic climax, the Diamond Jubilee Stakes, through a pair of Veuve Clicquot sunglasses - free with every bottle of bubbly bought.
Call 020 7585 1844, email ploughevents@youngs.co.uk, or see theploughstjohnshill.co.uk.
ADD mystery to a camping trip by booking one of the new Wild Comfort mobile camping sites in Devon – whose locations are kept secret.
The luxury sites pop up at various locations in the South Hams and exact addresses are only given when booking.
But they are all close to beaches and rivers, the wilds of Dartmoor and the charming towns of Totnes, Kingsbridge, Dartmouth and Salcombe.
They are made up of five sleeping tents, one living room tent, kitchen and hot showers – and you can ask for the kitchen to be stocked on arrival. Prices are from £650 for eight people for one week with short breaks also available from £500. See oneoffplaces.co.uk.
BRITS driving abroad show a worrying lack of regard for road safety.
Twenty-seven per cent are less concerned about breaking speed limits, and 18 per cent take drink-driving less seriously than at home, according to an AXA poll.
And only 49 per cent slap a GB sticker on their vehicle abroad, even though it is required.
IF you need vaccines when abroad. it pays to shop around for the best deal.
There were some large differences in prices at clinics nationwide, when
the appointment and administration fees were added in, research by Airport Parking & Hotels (APH.com) found.
Across the seven clinics surveyed, Doctor Today was the dearest – charging £105 for the cholera inoculation and £63 for rabies.
In contrast, Well-Travelled Clinics charges £30.95 and £61.99 respectively.
The Hospital for Tropical Diseases had the cheapest rabies vaccine of those polled, at just £42.
For a full list of costs see aph.com/travelvaccines.
VISITORS to London will soon be able to get wi-fi while on the Tube.
London Underground have teamed up with Virgin Media to get 120 stations connected by the end of the year.
The first batch of stations are set to get online in July and include Oxford Circus, Camden Town, London Bridge and King’s Cross.
DESPITE the best efforts of the various UK tourist boards this year, it seems as though the days of the staycation could be over.
Research by M&S Money reveals staying in the UK can be 25 per cent more expensive than going abroad.
The cost of a week in London, for those wanting to celebrate the Jubilee and the Olympics in the capital, will set Brits back £1,631, compared with an average £1,298 for a sunny holiday overseas.
Stats from online travel agent On The Beach back up the findings – they have seen a massive increase in bookings for this summer with Spain again leading the way.
Tenerife topped the list of destinations with a year-on-year boost in bookings of 60 per cent, closely followed by Majorca which has increased by 90 per cent.
With hoteliers in Greece slashing prices by some 15 per cent and the low rate of the euro, bookings to the crisis-torn country have risen by 55 per cent. Alistair Daly, marketing director at On The Beach said: “With Britain focusing on the Queen’s Jubilee and the Olympics the UK will be saturated with tourists.
“Our data shows that Brits have chosen to avoid these crowds and take advantage of the reduction on family holidays and guarantee themselves a bit of sun.
“Staycations have taken a back seat in 2012.”
A NEW travel tribe is on the rise – OATs, or Old Age Travellers.
Gatwick Airport polled 1,000 travellers over the age of 70 and found 56 per cent were travelling more now than they did when they were younger.
The airport has now launched a search to find Britain’s oldest traveller.
If you think that’s you, or want to nominate someone, email proof of date of birth, a photo and a line about a favourite travel experience to ukoldesttraveller@gatwick-airport.com before June 29.
London bombing survivor Martine Wiltshire selected for Paralympics - ITV
A survivor of the July 7 suicide bombings spoke of her joy today at being picked to compete at the London 2012 Paralympics.
Martine Wiltshire, who took up sitting volleyball after losing her legs in the 2005 terror attacks, described her ParalympicsGB selection as "amazing".
"It's a dream, and something that I never, ever thought I'd be doing, and a journey that I never thought I'd be on."
Video report by Lewis Vaughan Jones
"This has been a long journey but it does not stop here, as we now enter our final training phase.
Wiltshire was one of the last people to be pulled from the wreckage of the tube train at Aldgate. She spent 10 days in a coma, and lost both her legs.
She is among the 21 players who make up Britain's first ever men's and women's sitting volleyball teams to compete at a Paralympics.
In July 2005, Wiltshire had been celebrating London winning the right to host the 2012 Games the night before and was running late for work as a marketing manager when she got caught up in the bombings.
"The last thing I was reading on the tube that morning before the bomb went off was about the Olympics," she told ITV News reporter Lewis Vaughan Jones.
Wiltshire feels she is lucky to be alive because she was only 3ft away from one of the bombers and 52 people were killed that day.
Wiltshire tried a taster Paralympic day and fell in love with the team sport of sitting volleyball.
The sport is in its infancy in Britain, potentially putting them at a disadvantage in comparison to their rivals, but with London 2012 on the horizon the team has made a determined push to try and prove they are worth their home nation spot.
ParalympicsGB had only sent a standing volleyball team to compete at the Games before London 2012.
It has meant that an extra focus by the British Paralympic Association and Volleyball England governing bodies so the teams could meet their "credible performance" requirement before being rubber-stamped for a home nation slot.
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