Lehman brokerage, Europe unit settle $38 billion in claims

NEW YORK, Fri Oct 5, 2012 – The U.S. brokerage unit and a European unit of the former Lehman Brothers Holdings Inc. said they settled a dispute over $38 billion in claims over client and creditor assets, a major step toward allowing customers and creditors to recover money.

Lehman Brothers Inc. and Lehman Brothers International Europe announced the agreement in principle in a joint statement on Friday.

The accord requires approval by U.S. Bankruptcy Judge James Peck in Manhattan as well as by the English High Court.

On Thursday, the U.S. brokerage unit announced a separate agreement with its former Swiss-based derivatives unit Lehman Brothers Finance AG.

Taken together, the agreements resolve two of the biggest outstanding claims facing the U.S. brokerage unit.

Friday’s agreement “sets the stage for distributions that will provide for 100 percent recovery of customer property,” said James Giddens, the trustee for the Lehman brokerage unit.

Tony Lomas, joint administrator of LBIE, said the accord allows it to focus on how to distribute more than $7 billion of client assets.

Under the agreement, the European unit will be allowed $8 billion in claims for customer accounts. The accounts include $7.5 billion in securities and cash and $500 million in cash net equity.

The unit will also be entitled to a $4 billion general property claim, plus $600 million of “post-filing income.” Lehman Brothers Inc.’s $13.8 billion unsecured claim against the European unit will be eliminated.

In March, the parent company emerged from the largest U.S. bankruptcy in history after 3½ years in Chapter 11. Lehman had been Wall Street’s fourth largest investment bank.

Bank of America settles shareholder lawsuit, to pay $2.43 billion

NEW YORK, Fri Sep 28, 2012 – Bank of America said it will pay $2.43 billion to settle a class action lawsuit with investors who held its securities at the time the company announced plans to acquire Merrill Lynch.

The company expects to incur total litigation expense of about $1.6 billion for the quarter ending Sept. 30.

The litigation expense and a U.K. tax charge are expected to hurt the bank’s third-quarter earnings by about 28 cents per share, the company said in a statement.

The bank will also institute certain corporate governance enhancements until Jan. 1, 2015, under the settlement.

Plaintiffs had alleged, among other claims, that Bank of America and certain of its officers made false or misleading statements about the financial health of Bank of America and Merrill Lynch.

Bank of America denied the allegations and said it was entering into this settlement to eliminate the uncertainty and expense related to a long drawn-out litigation.

The settlement has to be approved by the U.S. district court for the Southern District of New York.

Bank of America is scheduled to report third-quarter results on Oct. 17.

Shares of the company were down slightly before the bell. They closed at $8.97 on the New York Stock Exchange on Thursday.

Restaurants oppose $7.2 billion credit-card fee settlement

NEW YORK, Tue Sep 25, 2012 – The National Restaurant Association said Tuesday it is joining the opposition to a proposed $7.2 billion settlement between some retailers and Visa Inc and MasterCard Inc. over fees for credit card transactions.

The NRA, which represents the $600 billion U.S. restaurant industry, is the last of six trade groups leading the case to weigh in on the potentially historic settlement.

The trade group’s chief concern is that the settlement would prohibit all merchants that use Visa and MasterCard – whether they decide to opt in or opt out of the settlement – from filing future lawsuits over interchange issues.

“There is strong concern that the proposed settlement agreement will not achieve the litigation’s most critical goal – to fundamentally change a broken marketplace in which swipe fees are set,” NRA President and CEO Dawn Sweeney said in a statement.

NRA’s board of directors unanimously voted to throw the trade group’s weight behind the opposition amassing against the settlement, the group said. While the group has been pushing for reforms that would bring transparency to the interchange system and help lower costs for restaurants, the proposed settlement accomplishes neither, it said.

The antitrust settlement was announced in July and requires the approval of U.S. District Judge John Gleeson in Brooklyn, New York, a process that could stretch well into 2013. If it does receive approval, the settlement would be the largest of its kind in U.S. history, resolving a seven-year-old lawsuit accusing Visa and MasterCard of conspiring with major banks to artificially inflate swipe fees.

J&J to pay $181 million to settle improper marketing claims

NEW BRUNSWICK, N.J., Thu Aug 30, 2012 –Johnson & Johnson said it has agreed to pay $181 million to resolve consumer fraud claims by 36 U.S. states and the District of Columbia that it improperly marketed its Risperdal antipsychotic drug for unapproved uses.

The diversified healthcare company, which has also been targeted by federal authorities for separate but related criminal allegations, said it had already set aside funds to cover the civil settlement. The funds will be divided among the states participating in the agreement, announced on Thursday.

The company said the settlement was not an admission of wrongdoing.

Citigroup reaches $590 million settlement over CDOs

NEW YORK, Wed Aug 29, 2012 – Citigroup Inc. has reached a $590 million settlement of litigation accusing the bank of fraudulently concealing tens of billions of dollars of exposure to risky collateralized debt obligations heading into the global financial meltdown.

The settlement is one of the largest arising from the 2007-2008 crisis. It resolves claims that Citigroup failed to take timely writedowns on the CDOs, many of which were backed by subprime mortgages, and that shareholders suffered billions of dollars of losses once the risks were realized.

Citigroup in a statement called the accord “a significant step toward resolving our exposure to claims arising from the period of the financial crisis.” It said the $590 million is covered by existing litigation reserves.

The settlement covers Citigroup shareholders from February 26, 2007, to April 18, 2008, according to papers filed Wednesday in Manhattan federal court, and requires approval by U.S. District Judge Sidney Stein.

“Although plaintiffs believe that the defendants knowingly or recklessly misrepresented Citigroup’s CDO exposure and valuation, defendants have raised a host of factual and legal challenges, increasing the uncertainty of a favorable outcome absent settlement,” lawyers for the shareholders said in settlement papers.

Pfizer settles foreign bribery case with U.S. government

NEW YORK, Tue Aug 7, 2012 – Pfizer Inc. has agreed to pay $60.2 million to settle a U.S. government probe of the drug maker’s alleged use of illegal payments to win business overseas, according to the U.S. Securities and Exchange Commission.

The settlement, made public on Tuesday, is part of a broad crackdown on bribery by multinational companies in foreign countries that has affected several of the world’s top pharmaceutical companies.

According to an SEC complaint, filed in U.S. District Court for the District of Columbia, Pfizer’s misconduct dates to 2001. Employees of Pfizer subsidiaries bribed foreign officials to use Pfizer products and boost prescriptions, the complaint said.

The improper payments were made to officials in Russia, Bulgaria, Croatia, Kazakhstan, Serbia, Czech Republic, China and Italy.

The 1977 Foreign Corrupt Practices Act makes it illegal for U.S. companies and foreign firms whose stock is traded in the United States to bribe government officials in foreign countries.

Separately, the SEC also charged Wyeth, which Pfizer acquired in 2009, with similar violations. Pfizer and Wyeth agreed to separate settlements in which they will pay a total more than $45 million.

In a parallel action, the Justice Department said a Pfizer indirect subsidiary, Pfizer H.C.P. Corp., had agreed to pay a $15 million penalty to resolve a department investigation of alleged violations.

Facebook, Yahoo tie up, settle lawsuits, according to source

SAN FRANCISCO | Fri Jul 6, 2012 – Facebook Inc. and Yahoo Inc. have struck a broad advertising partnership as part of a final settlement of dueling patent lawsuits, technology blog AllThingsDigital cited sources close to the pact as saying on Friday.
Both boards approved a strategic deal that will encompass joint online advertising sales and cross-licensing of key patents. No money will change hands in the deal to be announced later on Friday, it added.
Yahoo sued Facebook in March, claiming the No. 1 social networking company infringed 10 patents including several that cover online advertising technology. In its lawsuit, the company said Facebook was considered “one of the worst performing sites for advertising” prior to adopting Yahoo’s ideas.
Facebook, which went public in May, filed a countersuit of its own a month later and called Yahoo short-sighted for its decision to prioritize “litigation over innovation.”
Yahoo brought its lawsuit while the company was under the leadership of then-CEO Scott Thompson. Thompson was ousted from the company shortly after the case began, amid questions about his resume.
On Thursday, sources told Reuters that Hulu CEO Jason Kilar and current interim CEO Ross Levinsohn are now in the final running for the top job.
Facebook has been beefing up its patents arsenal. In April, it announced to deal to pay Microsoft Corp $550 million for hundreds of patents that originated with AOL.

Bear Stearns $275 million settlement reached in shareholder suit

NEW YORK, Thu Jun 7, 2012 – A $275 million settlement has been reached in a nationwide shareholder lawsuit stemming from the near-collapse of the former Wall Street investment bank Bear Stearns Cos., court papers show.

The settlement resolves claims that Bear, and several officials including former Chief Executive James Cayne, misled investors about the company’s deteriorating financial health before it was acquired by JPMorgan Chase & Co.

The lead plaintiff, the State of Michigan Retirement Systems, filed settlement papers on Wednesday night with the U.S. District Court in Manhattan, and is seeking preliminary court approval of the accord.

MetLife in $500 million ‘Death Master’ deal with states

SACRAMENTO, Mon Apr 23, 2012 –  MetLife Inc., the largest life insurer in the United States, will pay $500 million to settle a multi-state investigation into claims payment practices, the office of California’s state controller said on Monday.

The investigation related to the use of the Social Security “Death Master” file, which lists those who have recently died.

A number of states have accused insurers of using the list to stop making annuity payments to dead customers, but at the same time not using the list to check whether any life insurance policy holders had passed away.

JPMorgan to pay $150 million over failed Sigma SIV

NEW YORK , Tue Mar 20, 2012 – JPMorgan Chase & Co. agreed to pay $150 million to settle a lawsuit by pension funds and other investors accusing the largest U.S. bank of imprudently investing their cash in a risky debt vehicle that collapsed in 2008.

The settlement with investors including the American Federation of Television and Radio Artists Retirement Fund was disclosed in filings late Friday with the U.S. District Court in Manhattan.

It related to the collapse of Sigma Finance Corp, a $27 billion investment fund created by London-based Gordian Knot Ltd. Sigma failed in October 2008 at the height of the global financial crisis.

According to the complaint and a regulatory filing, JPMorgan invested cash collateral posted by participants in a securities lending program in about $500 million of medium-term notes issued by Sigma Finance Inc, a structured investment vehicle.

While Sigma once carried “triple-A” ratings, JPMorgan “buried its head in the sand and refused to heed the warning signs” as analysts began predicting by late 2007 that Sigma would be unable to repay the notes, the complaint said.

Sigma’s failure left about $1.9 billion as security for roughly $6.2 billion of medium-term notes and other secured debt, the complaint said.