SEC probes some Wall Street trades after 2008 meet with Henry Paulson: WSJ

NEW YORK, Fri Sep 14, 2012 – The U.S. Securities and Exchange Commission (SEC) is probing possible insider trading activities by Wall Street professionals who were present in a private meeting with the then Treasury Secretary Henry Paulson in 2008, the Wall Street Journal reported, citing people familiar with the investigation.

The SEC is trying to find out if Paulson suggested in the meeting that the government was willing to bail out struggling mortgage-finance companies Fannie Mae and Freddie Mac, the WSJ said.

Subsequently, the federal government took over Fannie and Freddie amid heavy losses less than two months after the meeting.

SEC recently sent subpoenas to parties who were present at the July 2008 meeting, the Journal said adding that Paulson hasn’t been handed one.

Parties present at the meeting included Taconic Capital Advisors, GSO Capital Partners, now part of Blackstone Group LP, Lone Pine Capital LLC, Och-Ziff Capital Management Group LLC and TPG-Axon Management LP, WSJ said.

Taconic confirmed the receipt of a subpoena and declined any wrongdoing, the Journal said.

Transocean says may face $473 million U.S. tax bill

HOUSTON – March 1: Transocean Ltd. may face $473 million in U.S. back taxes, according to its annual filing, though it also said it was cleared in a similar dispute dating back eight years, which may give its lawyers a useful precedent.

Transocean, owner of the world’s largest offshore oil rig fleet, said the latest assessment received this month for 2008 and 2009 related to accounting between subsidiaries, for both engineering services performed between them and transfer pricing for rig charters.

“If the authorities were to continue to pursue these positions with respect to subsequent years and were successful in such assertions, our effective tax rate on worldwide earnings with respect to years following 2009 could increase substantially,” said Transocean, which booked an overall 2011 income tax expense of $395 million.

The $473 million of proposed adjustments exclude interest, but the company said in the filing released this week that it believed its tax returns were correct and planned to defend against the claims.

The company declined to comment further on Wednesday.

Problems with transfer pricing, generally, have grown with globalization of the world economy. The issue involves how to tax the earnings of foreign affiliates that transfer goods and services between themselves.

By setting internal transfer prices higher or lower than market value, foreign affiliates can shift profits from high-tax countries to low-tax countries, reducing the parent company’s overall tax burden with the Internal Revenue Service.

“You can be a reasonable pig, but when you turn into a hog, the IRS comes after you,” said Larry Langdon, a former IRS commissioner for large & mid-size business who is now at law firm Mayer Brown.

Ford to pay bonuses, raises for salaried workers; first since 2008

DETROIT ― Ford Motor Co. will give bonuses and merit-based raises to salaried workers in the United States and Canada this spring, the first time the No. 2 U.S. automaker has paid out both since the onset of the financial crisis.

The company will offer an average 2.7 percent salary increase that is based largely on individual performance, Ford spokeswoman Marcey Evans said.

The raises will be effective April 1 and bonuses will paid in March, Evans added.

Mark Fields, who runs Ford’s operations in North and South America, sent a note last week to 20,000 salaried employees in the United States and Canada confirming that both bonuses and merit pay increases will be offered.

Ford last offered both in 2008, when the U.S. automaker was in the early stages of its turnaround plan “One Ford” under CEO Alan Mulally.

Then in the fall of 2008, investment Lehman Brothers filed for bankruptcy, sending global markets into a tailspin and pushing Ford’s crosstown rivals General Motors Co. and Chrysler Group LLC to the brink of collapse.

Ford, the only U.S. automaker not to take a federal bailout, paid neither bonuses nor pay increases in 2009.

In 2010, Ford offered only merit-based pay increases to salaried workers. Last year, salaried employees received only a bonus.