Friday, March 30, 2012

Reuters: Regulatory News: U.S. swaps pushout rule to kick in July 2013

Reuters: Regulatory News
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U.S. swaps pushout rule to kick in July 2013
Mar 30th 2012, 19:09

WASHINGTON, March 30 | Fri Mar 30, 2012 3:09pm EDT

WASHINGTON, March 30 (Reuters) - U.S. banking regulators said on Friday that the controversial rule requiring banks to spin off some of their swap trading into affiliates will not take effect until July 16, 2013.

The rule was mandated by the 2010 Dodd Frank Wall Street reform law.

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Reuters: Regulatory News: EU's Almunia: may probe Motorola, Apple, Microsoft dispute

Reuters: Regulatory News
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EU's Almunia: may probe Motorola, Apple, Microsoft dispute
Mar 30th 2012, 19:00

By Foo Yun Chee

BRUSSELS, March 30 | Fri Mar 30, 2012 3:00pm EDT

BRUSSELS, March 30 (Reuters) - EU antitrust regulators may open an investigation into a patent dispute between Apple Inc , Microsoft Corp and Motorola Mobility Holdings Inc to ensure patent holders do not thwart rivals, the EU's antitrust chief said on Friday.

Last month Microsoft took its case to the European Commission, saying Motorola Mobility was charging too much for use of its patents in Microsoft products.

Motorola Mobility said Apple had also complained to the EU watchdog about its patents.

Google Inc, which is in the process of buying Motorola Mobility, has said it will offer Motorola patents on fair and reasonable terms once the deal is completed.

The EU watchdog, which is also investigating whether legal tactics used by Samsung Electronics Co Ltd against Apple breach EU antitrust rules, may open a second patent case into the sector, EU Competition Commissioner Joaquin Almunia said.

"I am considering whether we need to investigate these complaints formally to help bring more clarity into this area of competition control," Almunia said in the text of a speech to be delivered at a conference in Washington.

"The holders of standard-essential patents have considerable market power. This market power can be used to harm competition ... I don't need to tell you that this is unacceptable, and I am determined to use antitrust enforcement to prevent such hold-up by patent holders," he said.

The Commission, which can fine companies up to 10 percent of their global turnover, has levied billions of euros in penalties against Microsoft, Intel and others for breaching EU rules.

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Reuters: Regulatory News: FDA: Big Tobacco must tell you what you're smoking

Reuters: Regulatory News
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FDA: Big Tobacco must tell you what you're smoking
Mar 30th 2012, 18:38

By Anna Yukhananov

WASHINGTON, March 30 | Fri Mar 30, 2012 2:38pm EDT

WASHINGTON, March 30 (Reuters) - U.S. health regulators said on Friday tobacco companies must report how much formaldehyde, nicotine or any of 18 other harmful chemicals are in their products, as part of a larger government effort to regulate the tobacco industry.

Another draft rule places limits on misleading advertising that attempts to show some tobacco products are less harmful than others, such as "tar-free" or "light," without providing evidence these claims actually make products safer.

The guidelines are part of the U.S. Food and Drug Administration's enforcement of a 2009 law that gives it broad authority to oversee the manufacturing and marketing of cigarettes and other tobacco products.

"Tobacco products, in this country at least, are the only mass-consumed products that consumers don't know what's in them," Dr. Lawrence Deyton, director of the FDA's Center for Tobacco Products, told reporters.

"Today, we are ending that era."

Some 8 million Americans have smoking-related illnesses, and as many as 443,000 Americans die each year from smoking-related causes such as lung cancer. Smoking is estimated to be the No. 1 preventable cause of illness and death in the United States, and contributes about $96 billion each year to health care costs.

The guidelines would force companies to tell the FDA whether their products contain any of 20 harmful or potentially harmful ingredients found in tobacco or tobacco smoke, and the amount of each.

The ingredients won't go on the packaging; rather, the FDA would compile information for each product and provide it to the public by April 2013. The FDA said it hasn't yet decided how it will present the information.

These 20 chemicals are the easiest to test for immediately, but the FDA will later make companies provide information for a full list of 93 chemicals.

Deyton, head of the FDA's tobacco center, said most people are aware of the dangers of smoking in general, but may not know specifically which chemicals in tobacco are harmful, and why.

For example, ingesting carbon monoxide - produced any time you burn something, and present in tobacco smoke - is known to increase the risk of heart disease and lung disease, the FDA said.

Besides informing the public, regulators said they hope the rules would encourage tobacco companies like Lorillard Inc and Altria Group, parent of Philip Morris USA, to make their products safer and less addictive.

Representatives from the companies could not be immediately reached for comment.

The announcement comes only a month after the government suffered a blow in court in trying to enforce another tobacco law that requires companies to put large graphic warnings on cigarette packaging. A U.S. District Court judge sided with the companies and ruled the labels were unconstitutional. The United States is appealing the decision.

The second draft rule requires FDA approval for companies to sell products they claim to be less harmful than typical tobacco products, known as modified risk tobacco products.

The companies must submit scientific studies and analyses to the FDA in order to prove their tobacco products actually benefit public health, or reduce harm.

To counter a decline in smoking in the United States, cigarette makers have focused on smokeless tobacco and other "modified risk" products.

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Reuters: Regulatory News: UPDATE 1-BP: U.S. hiding evidence on size of Gulf oil spill

Reuters: Regulatory News
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UPDATE 1-BP: U.S. hiding evidence on size of Gulf oil spill
Mar 30th 2012, 18:40

Fri Mar 30, 2012 2:40pm EDT

* U.S. estimated 4.9 billion barrels of oil spilled

* BP seeks evidence that may show spill was smaller

* Clean Water Act fines dependent on spill total

By Jonathan Stempel

March 30 (Reuters) - BP Plc has accused the U.S. government of withholding evidence that may show the 2010 Deepwater Horizon oil spill in the Gulf of Mexico was smaller than federal officials claimed, a key issue in determining the oil company's liability.

A reduction in the size of the spill would lower the maximum civil fine BP could be forced to pay under the U.S. Clean Water Act, a sum now estimated as high as $17.6 billion.

The government is one of many plaintiffs suing BP over the April 20, 2010 explosion of the Deepwater Horizon drilling rig, which killed 11 workers and triggered the largest U.S. offshore oil spill.

In a filing late on Thursday with the U.S. district court in New Orleans, BP said more than 10,000 documents the government is refusing to turn over "appear to relate to flow rate issues" at the company's ruptured Macondo well.

BP said the documents, which the government considers privileged because they reflect policy deliberations, may show that an August 2010 estimate that 4.9 million barrels of oil spilled from the well is too high.

"The United States' invocation of the deliberative process privilege here sweeps too broadly," because it shields evidence concerning "a factual issue, namely, the amount of oil discharged," wrote Don Haycraft, a lawyer for BP.

"Fundamental fairness" requires that BP get access to this evidence for its defense, he added.

Wyn Hornbuckle, a U.S. Department of Justice spokesman, declined to comment.

In an order dated Friday, U.S. Magistrate Judge Sally Shushan directed BP and the government to meet over the next couple of weeks to try to resolve disagreements over some of the challenged evidence.

The Clean Water Act calls for maximum fines of $1,100 per barrel of oil spilled or $4,300 if there were gross negligence.

Assuming 4.1 million barrels were spilled and not cleaned up as the government contends, BP could face a maximum $17.6 billion fine if there was gross negligence.

BP agreed in principle on March 2 to pay $7.8 billion to settle claims by more than 100,000 private plaintiffs for economic, property and other damages.

It still faces claims from the government, Gulf Coast states and drilling partners Transocean Ltd and Halliburton Co.

BP has calculated its legal and cleanup costs to be roughly $43 billion. The company is based in London.

The settlement with private plaintiffs put a potentially year-long trial over the spill on indefinite hold. The size of the spill was among the issues to be determined.

U.S. District Judge Carl Barbier has scheduled a May 3 meeting with lawyers to discuss how the case should proceed.

The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

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Reuters: Regulatory News: Expedia files Google complaint to EU regulators

Reuters: Regulatory News
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Expedia files Google complaint to EU regulators
Mar 30th 2012, 19:20

By Foo Yun Chee

BRUSSELS, March 30 | Fri Mar 30, 2012 3:20pm EDT

BRUSSELS, March 30 (Reuters) - Online travel agency Expedia on Friday accused Google of breaching EU rules with a formal complaint to EU antitrust regulators as it joined a dozen other firms that have taken their case to the European Commission in the last two years.

The EU watchdog is now investigating the world's most popular search engine after rivals, including Microsoft , accused Google of abusing its dominant position in the market for Web search engines.

EU Competition Commissioner Joaquin Almunia said earlier this week that he would decide after Easter whether to formally charge Google or drop the investigation.

Expedia said it had details of specific business and search practices by Google that violated EU competition and consumer protection laws.

"The complaint offers evidence of how Google's conduct harms not only competition, but consumers," Brent Thompson, senior vice president of government affairs, said in a statement.

"Expedia believes that strong action is needed by the European Commission to restore a fair and competitive marketplace in online search that respects consumers' rights," he said.

Google said it has not been informed of the complaint yet.

"We haven't seen the complaint yet, but we've been working to explain how our business works, cooperating with the European Commission since this investigation began," Google spokesman Al Verney said in a statement.

"Because there's always room for improvement, we're happy to discuss any concerns the Commission might have," he said.

There are now 12 complaints with the EU watchdog, the majority of them small competitors across Europe, which claimed that Google demoted their sites and promoted its own services. Google has denied that it stifles competition.

U.S. enforcers are also investigating Google which controls more than two-thirds of the global search market.

EU privacy regulators are also scrutinising Google's new privacy policy which came into effect on March 1.

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Reuters: Regulatory News: U.S. House Republicans discuss resuscitating earmarks

Reuters: Regulatory News
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U.S. House Republicans discuss resuscitating earmarks
Mar 30th 2012, 17:32

Fri Mar 30, 2012 1:32pm EDT

* Congress searching for ways to pass bills

* Special interest projects offered legislative "grease"

By Richard Cowan

WASHINGTON, March 30 (Reuters) - The huge federal transportation bill was in tatters in early March when U.S. Representative Mike Rogers posed a heretical idea for breaking through gridlock in the House.

In a closed-door meeting with fellow Republicans, Rogers recommended reviving a proven legislative sweetener that became politically toxic a year ago.

Bring back earmarks, Rogers told his colleagues.

Few members of Congress have been bold enough to use the "e" word since both the House and Senate temporarily banned the practice last year after public outcries about Alaska's "Bridge to Nowhere" and other pork barrel projects.

But as lawmakers wrestle with legislative paralysis, there are signs that earmarks - special interest projects that used to be tacked onto major bills - could make a comeback.

"I just got up ... and did it because I was mad because they were talking about how we can't get 218 votes," Rogers told Reuters, referring to the minimum of 218 votes needed to pass legislation in the 435-member House.

"There was a lot of applause when I made my comments. I had a few freshmen boo me, but that's okay. By and large it was very well embraced," he added.

New Republican members backed by the Tea Party movement have railed against earmarks as a symbol of out-of-control government spending and unaccountable lawmakers.

Congress has another nine months to operate under an earmark ban, so discussions on lifting the ban are in their early stages, members and aides say.

But on the House side, where a splintered Republican majority is struggling to muster enough votes to pass bills, second thoughts about the earmark ban are "pretty pervasive," said a senior aide.

Rogers' remarks in the closed caucus meeting in early March were echoed by two other Republican lawmakers, Representatives Louie Gohmert and Kay Granger, according to some at the meeting.

House Speaker John Boehner, who pushed for the earmark ban, is considering forming a committee to study earmarks reforms, according to Rogers. Other sources also said that during the closed meeting, the speaker said he would consider reforms, and other leading Republicans did not shoot down the idea.

Boehner has acknowledged that the ban makes his job more difficult. In past years, one reason the sprawling transportation bill could move through Congress with bipartisan support was because thousands of lawmakers' pet projects were tacked onto the bill, he has said.

But reviving earmarks is still so controversial that Boehner and other leaders are unlikely to publicly discuss it in an election year in which pork barrel spending is still under attack. The discussions so far appear to be among Republicans.

"The House did the right thing in instituting an earmark ban, and the American people strongly support it," a Boehner spokesman said in response to questions.

In the Senate, Thad Cochran, the senior Republican on the Appropriations Committee - an earmark gateway in the old days - told Reuters: "At some point there will surely be conversations about alternatives" to the earmark ban. He was quick to add that he has not tried to initiate the conversation.

Democrats agreed to banning earmarks after suffering big defeats in 2010 congressional elections and after President Barack Obama warned he would veto bills containing them.

But like Republicans, Democrats have differing views on keeping the ban. Senate Majority Leader Harry Reid is on record defending earmarks, saying elected representatives are more in touch with local needs than executive branch bureaucrats.

Steve Ellis, vice president of Taxpayers for Common Sense, a non-partisan budget watchdog group, said discussions about reviving earmarks suggest the desperation of a Congress in which stalled legislation is now routine.

The difficulties in passing bills are leading lawmakers to conclude the only answer is to "bring the political grease back into the system," Ellis said.

BRING BACK THE GREASE

Political analysts have long referred to earmarks, or "member-directed funding" as it is sometimes known, as the grease enabling legislation to move through Congress.

Republican Representative Steven LaTourette, an 18-year House veteran, said the earmark ban "has affected discipline" within the party. "You can't get 218 votes (out of 242 Republican House members) and part of that has to be if you can't give people anything (earmarks), you can't take anything away from them."

If a member of Congress agrees with 90 percent of a pending bill but is "uncomfortable" with the other 10 percent, "Sometimes taking care of your district (with earmarks) made up for that 10 percent," he said.

Some believe earmarks got a bad rap.

Public outrage focused on projects like the notorious "Bridge to Nowhere" connecting the Alaskan mainland with an isolated island, or a teapot museum in North Carolina.

Other earmarks have funded crucial projects, proponents say. One example is the "Predator" drone, the unmanned military aircraft used in Afghanistan and other hot-spots to target militants without jeopardizing U.S. soldiers' lives, that came from a lawmaker's request.

Both sides in the debate agree that before earmarks resurface, reforms are essential.

Earmarking was long controversial because many of the projects showed up in the fine print of legislation without warning and with little or no public debate.

Congressman Gohmert believes the solution is rules to keep spending on specific companies and projects from being "air dropped" into bills without oversight.

"We can be specific without having it be crony capitalism, monuments to me, bridges to nowhere," Gohmert said.

Others propose limiting earmarks so that they only go to local or state government-backed projects or universities. And reforms should also break the links between campaign contributions and earmarked projects, members say.

In pitching earmarks, Gohmert and other Republican lawmakers and aides lament that the ban has been a boon to Democratic President Barack Obama, whose administration can still dole out projects as it sees fit.

"I think there's a way that it can be done that we take back the purse strings that the Constitution gives us without just handing sacks of money to the president," Gohmert said.

But even if momentum grows for an earmark revival, some members are unlikely to join in.

Representative Jim Jordan, who heads a conservative coalition in the House, told Reuters: "My read is that the ban on earmarks is where it needs to be."

And Senator Tom Coburn, a conservative Republican who wants a permanent ban, said earmarks should not be a tool for buying votes on important bills.

Pork barrel spending was "the bane of the American taxpayers' existence." he said.

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Reuters: Regulatory News: UPDATE 1-Wells Fargo, SEC told to meet in subpoena dispute

Reuters: Regulatory News
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UPDATE 1-Wells Fargo, SEC told to meet in subpoena dispute
Mar 30th 2012, 17:21

Fri Mar 30, 2012 1:21pm EDT

* Judge rejects SEC demand to compel subpoena compliance

* SEC probes bank's sale of $60 bln mortgage debt

* SEC says has sought documents since September

By Jonathan Stempel

March 30 (Reuters) - A federal judge rejected the U.S. Securities and Exchange Commission's demand that Wells Fargo & Co comply with subpoenas related to a probe of the bank's sale of $60 billion of mortgage-backed securities, but directed both sides to meet.

In an order dated Thursday, U.S. Magistrate Judge Laurel Beeler in San Francisco directed the parties to try to resolve their dispute, and if they failed to explain why in writing.

On March 23, the SEC had accused Wells Fargo of repeatedly ignoring its subpoenas, six of which had been issued since Sept. 30, and demanded compliance.

The regulator is looking into whether Wells Fargo fraudulently misled investors about the risks of securities it sold from September 2006 to early 2008, including whether the underlying home loans complied with underwriting standards.

Wells Fargo spokesman Ancel Martinez said the bank was pleased with the judge's decision.

"This proceeding, which was filed without any notice to Wells Fargo, should never have been brought before this court," he said. "The application falsely accuses Wells Fargo of not cooperating in connection with an investigation by the SEC staff."

The bank made 68 separate document productions of more than 750,000 pages and had responded to the "vast majority" of the staff's 96 requests, Martinez said. More than 100 people, including Wells' internal and outside counsel, have spent thousands of hours gathering and producing documents to the SEC, he said.

The bank "looks forward to addressing the lack of merit of the underlying substantive issues addressed by the SEC," he added.

The SEC declined to comment.

Wells Fargo is based in San Francisco, and is the nation's fourth-largest bank by assets and largest mortgage lender.

The bank has not been accused of wrongdoing. It has called the SEC's March 23 demand inappropriate, believing there had been an understanding with SEC staff about the document requests.

Several major US banks have been faulted over their packaging and marketing of mortgage debt that proved riskier than expected. This debt was a major factor in both the 2008 financial crisis and the roughly five-year U.S. housing slump.

The case is SEC v. Wells Fargo & Co, U.S. District Court, Northern District of California, No. 12-mc-80087.

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