Finance

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BEIJING (Reuters) – A Chinese government housing vice-minister has lodged a $10 million defamation lawsuit against controversial billionaire Guo Wengui in New York over claims made by the exiled tycoon that she had engaged in graft and provided sexual favors. Huang Yan, vice-minister of housing and urban-rural development, filed the complaint with the New York State Supreme Court on Wednesday, saying Guo’s “false and outrageous” claims, made in a video published on YouTube in May, had caused her “severe emotional distress” and “mental anguish”. A copy of the filing was obtained by Reuters. It is the first legal case brought on by an individual Chinese government official since the exiled tycoon began making accusations of high-level Communist Party corruption and represents an exceedingly rare instance of a senior serving Chinese government official pursuing legal action against an individual overseas. Guo and his lawyer Josh Schiller did not immediately respond to requests for comment after business hours in New York. Huang’s complaint says Guo had falsely alleged that she helped real estate developers secure project approvals by providing sexual favors to Beijing government officials, and in turn received property assets from the developers who benefited. “Guo has falsely and repeatedly claimed that Plaintiff Huang has engaged in various nefarious actions, including, but not limited to: sex scandals and corruption,” the complaint said, adding that Guo’s statements had damaged Huang’s reputation among a large number of people, and caused many to “doubt her capabilities as a professional and a government official”. Guo’s claims of high-level government corruption have come in an acutely politically sensitive year, with the Communist Party keen to ensure a key five-yearly congress to be held in the autumn goes off without a hitch. Huang’s defamation suit was filed by lawyer Kevin Tung, who is also representing …read more

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(Reuters) – The largest city on New Zealand’s south island has declared a state of emergency amid a severe storm which has already seen hundreds of homes evacuated across the Pacific island nation, highways cut and soldiers called in to help provide emergency services. The New Zealand Defense Force mobilized additional troops overnight on Friday, bringing its total deployment to at least a dozen trucks and 140 personnel to provide emergency services and help rescue those trapped by rising flood waters. Christchurch declared a state of emergency after the Heathcote River burst its banks and flooded southern parts of the city on Saturday morning, becoming the fourth area to do so after a severe weather event which has lashed the south island over the past 24 hours, causing widespread flooding. Local media reports that about 1,500 people in settlements further north were told to leave their homes as water levels rose overnight, while more than 100 homes were evacuated outside of Dunedin, the south island’s second largest city. Emergency services are now focused on the Taieri River near Dunedin, after predictions it would rise to near-record levels on Saturday. In addition to Christchurch and Dunedin, states of emergency are ongoing in Timaru and Otago. New Zealand Prime Minister Bill English took to social media to address the nation on Saturday. “My thoughts are with those affected by the weather events in the South Island. Please follow official advice and take care of each other,” the prime minister said on Twitter. The country’s weather bureau said rivers in affected areas remained at very high levels on Saturday morning, after some areas were hit with more than 200 millimeters (7.8 inches) of rain in 24 hours. It predicted that rain should gradually ease throughout the day, …read more

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NEW YORK (Reuters) – Deutsche Bank AG (DBKGn.DE) and JPMorgan Chase & Co (JPM.N) have agreed to pay a combined $148 million to end private U.S. antitrust litigation claiming they conspired with other banks to manipulate the yen Libor and Euroyen Tibor benchmark interest rates. The preliminary settlements, totaling $77 million for Deutsche Bank and $71 million for JPMorgan, were detailed in filings late Friday in the U.S. District Court in Manhattan, and require a judge’s approval. They followed similar settlements last year with Citigroup Inc (C.N) and HSBC Holdings Plc (HSBA.L) totaling $23 million and $35 million, respectively. Investors including the California State Teachers’ Retirement System and J. Kyle Bass’ hedge fund Hayman Capital Management LP had accused more than 20 banks of conspiring to rig yen Libor, Euroyen Tibor and Euroyen Tibor futures contracts to benefit their own positions from 2006 through at least 2010. Deutsche Bank and JPMorgan did not admit wrongdoing or liability in agreeing to settle, court papers show. Banks use the London Interbank Offered Rate (Libor) and Tokyo Interbank Offered Rate (Tibor) to set costs of borrowing from each other. Libor is often used to set rates on mortgages, credit cards and other loans. Investors have filed many lawsuits in the Manhattan court accusing banks of conspiring to rig rates or prices in various financial and commodities markets. Reporting by Jonathan Stempel in New York; editing by Diane CraftLet’s block ads! (Why?) …read more

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SAO PAULO/BOGOTA (Reuters) – The busiest week for initial public offerings in Brazil in four years ended on Friday on an upbeat note for issuers, as a nascent economic recovery and the passage of key economic reforms helped to lure global investors. Grupo Biotoscana SA, a Colombia-based pharmaceutical firm, and shareholders raised 1.34 billion reais ($426.7 million) in a Friday IPO. Three days earlier, the IPO of Brazil’s biggest diversified retailer Grupo Carrefour Brasil SA fetched 5.12 billion reais. That marked the busiest week for local equity offerings since April 25, 2013, when the IPOs of insurer BB Seguridade Participações SA (BBSE3.SA) and loyalty program Smiles SA raised 12.6 billion reais. Brazilian stocks .BVSP and its currency BRBY have outperformed Latin American peers in recent weeks as President Michel Temer’s plan to revamp labor regulations cleared Congress before its winter break, suggesting resilient lawmaker support for his reform agenda despite the nation’s political crisis. “With the labor reform approved and Congress in recess, there’s a window of opportunity for companies looking to seize on demand for Brazilian equities,” said one fund manager who participated in the Carrefour listing. This week’s successful transactions spell good news for reinsurer IRB Brasil Resseguros SA and renewable power firm Omega Geração SA, whose shares are scheduled to debut on the São Paulo Stock Exchange in coming weeks. Extending the current wave of offerings hinges, at least in part, on Temer’s ability to garner support for an ambitious pension code reform when Congress returns in August, bankers said. Bankers said companies seeking to tap local equity markets needed to balance risks and returns as Brazil slowly emerges from recession against the backdrop of escalating corruption allegations against Temer. Uncertainty has kept many foreign investors – traditionally the main buyers …read more

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NEW YORK (Reuters) – Digital currency bitcoin on Friday averted a split into two currencies after its network supported an upgrade to its software that would enhance its ability to process an increasing number of transactions. Bitcoin’s miners have signaled their support for the so-called Bitcoin Improvement Proposal (BIP) 91, avoiding a split of bitcoin into two blockchains. The miners represent a network of computer operators who secure the blockchain or a public ledger of all bitcoin transactions BIP 91 is the first step toward a larger effort to upgrade bitcoin through a software called SegWit2x. On Friday, the support for BIP 91 reached nearly 100 percent, exceeding the required threshold of 80 percent, according to analysts and market participants. Some investors have warmed to bitcoin, wooed by its explosive performance and potential to compete with gold and government-issued money as a means to store value. Demand for bitcoin has grown in eight years to a market capitalization of more than $40 billion. But fears about the bitcoin split dampened demand for bitcoin in recent weeks. After hitting record high near $3,000, bitcoin dropped as low $1,830 BTC=BTSP on the Bitstamp platform. On Friday, it traded at $2,647. The software upgrade attempts to address the bitcoin network’s limitations in processing millions of daily transactions. Bitcoin’s network has not kept pace with its growth and is unable to process all the transactions fast enough. “BIP 91 unleashes the next wave of innovation because it has been a little bit stagnant of late for bitcoin,” said Rob Viglione, co-founder of ZenCash, a digital coin focused on privacy and security. Before BIP 91’s endorsement, some bitcoin investors feared it could split into two independent currencies because core developers of the network and the miners each wanted different ways to increase bitcoin’s …read more

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WASHINGTON (Reuters) – Heads of the U.S. financial regulatory agencies will meet behind closed doors next Friday to discuss MetLife Inc’s (MET.N) lawsuit against them, according to a notice from Treasury, as the Trump administration wrestles with reforms put in place in response to the financial crisis. The regulators, who comprise the Financial Stability Oversight Council (FSOC), and MetLife both asked earlier this month for another pause in the long-running case in which the country’s largest life insurer has challenged the federal government’s decision to label it as “too big to fail.” The appeals court has not yet said whether it will grant an abeyance. More than a year ago, U.S. District Judge Rosemary Collyer struck down the council’s designation of MetLife as “systemically important,” which signifies that it could devastate the financial system if it failed and which triggers stricter oversight. Collyer said the label was “arbitrary and capricious.” The administration of former Democratic President Barack Obama immediately appealed. Republican President Donald Trump, however, has expressed skepticism about the designation process, and the FSOC has ordered the Treasury Department to review both. Treasury Secretary Steven Mnuchin, who chairs the council, also has said its work should be evaluated. Both sides of the lawsuit have said the appeals court should put the case on pause until Mnuchin finishes his review. In May, the court granted a 60-day abeyance, which expired this month. Only two other insurers – Prudential Insurance (PRU.N) and American International Group (AIG.N) – still carry the “systemically important” label. According to the Treasury notice, the council will also receive an update on the designation of one of the insurance companies and discuss Mnuchin’s recent recommendations to change a rule on proprietary trading, commonly called the Volcker Rule, in next week’s executive session. In a June report Mnuchin …read more

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WASHINGTON (Reuters) – Heads of the U.S. financial regulatory agencies will meet behind closed doors next Friday to discuss MetLife Inc’s (MET.N) lawsuit against them, according to a notice from Treasury, as the Trump administration wrestles with reforms arising from the financial crisis. The regulators, who make up the Financial Stability Oversight Council, and MetLife both asked earlier this month for another pause in the long-running case in which the country’s largest life insurer has challenged the federal government’s labeling of it as “too big to fail.” More than a year ago, U.S. District Judge Rosemary Collyer struck down the FSOC’s designation of MetLife as “systemically important,” which signifies it could devastate the financial system if it failed and triggers stricter oversight, saying the label was “arbitrary and capricious.” The administration of former President Barack Obama, a Democrat, immediately appealed. Reporting by Lisa Lambert; Editing by Tom BrownLet’s block ads! (Why?) …read more

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(Reuters) – (The opinions expressed here are those of the author, a columnist for Reuters) With equity indexes at all-time highs, global mutual fund and ETF investors may be choosing now as the time to reverse a long-running move into bonds and out of equities. That’s either in harmony with retail investors’ legendary ability to pick the top or a canny bet on global reflation. Since the great financial crisis the broad global trend has been for mutual and exchange-traded fund investors to load up on bonds while trimming equities. Globally, funds held in equities vehicles went from above 90 percent of the whole in 2007 to about 70 percent now. And while that figure for U.S. funds bottomed at about 60 percent in 2010 and is now at 67 percent, equity funds have suffered net outflows for the majority of the last few years, except for a spike in inflows after the 2016 U.S. election. This ‘de-equitisation,’ driven partly by battle-scarred individuals and partly by a large move into long-term debt by pension funds seeking to hedge long-term obligations, has been expensive. Over the past five years, the S&P 500 has returned 13.4 percent per annum, against just 2.3 percent for 10-year Treasuries. But now, what started as a mild trend in the U.S. of upping equity exposure seems to be going global, perhaps as the last bears capitulate in the face of a low-volatility march higher in equity markets. There is also the fact that major central banks are signaling they may at last start to run down their own multi-trillion-dollar portfolios of bonds. “We find increasing evidence that the de-equitisation process, by which the weight of equity holdings in portfolios diminishes over time and is substituted by debt, has finally come to an end,” Alain Bokobza of …read more

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NEW YORK (Reuters) – U.S. prosecutors have decided to drop criminal charges against two former JPMorgan Chase & Co (JPM.N) derivatives traders implicated in the “London Whale” trading scandal that caused $6.2 billion of losses in 2012. In seeking the dismissal of charges against Javier Martin-Artajo and Julien Grout, the Department of Justice said it “no longer believes that it can rely on the testimony” of Bruno Iksil, the trader dubbed the London Whale, based on recent statements and writings he made that hurt the case. Prosecutors also said efforts to extradite Martin-Artajo and Grout, respectively citizens of Spain and France, to face the charges have been “unsuccessful or deemed futile.” Acting U.S. Attorney Joon Kim in Manhattan asked a federal judge for permission to drop charges that included securities fraud, wire fraud and falsifying records. Martin-Artajo and Grout were indicted in September 2013. “After four long years of protracted litigation, we are very pleased that the government has decided to do the right thing, and dismiss the criminal case,” Grout’s lawyer, Edward Little, said. Lawyers for Martin-Artajo did not immediately respond to requests for comment. Friday’s dismissal request marks a fresh setback in U.S. efforts to prosecute individuals for financial crimes. It came two days after a federal appeals court voided convictions won by Kim’s predecessor, Preet Bharara, of two former Rabobank NA traders for rigging the Libor interest rate benchmark. Martin-Artajo and Grout were accused of hiding hundreds of millions of dollars of losses within JPMorgan’s chief investment office (CIO) in London by marking positions in a credit derivatives portfolio at inflated prices. The losses were part of the $6.2 billion loss centered on Iksil, who Martin-Artajo supervised and Grout worked for. Prosecutors said Martin-Artajo and Grout acted in part to enhance their prospects for promotions and bonuses. …read more

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WASHINGTON (Reuters) – The U.S. regulator of credit unions will soon close some regional and agency offices and reorganize others, as it works to cut costs and respond to changes in the industry, according to an announcement released on Friday. “Months of very hard work by agency staff have produced a solid, commonsense plan that will help the agency respond to a new economic environment,” said Rick Metsger, a board member of the National Credit Union Administration (NCUA), which oversees the country’s nearly 6,000 credit unions. Since at least 2011 the number of credit unions, non-profit financial cooperatives that are owned and controlled by members, has consistently shrunk each year. At the same time, the unions’ membership, asset levels, and loans have grown, data from the Credit Union National Association, a trade group, showed. The result is a more concentrated system dominated by fewer, but larger, institutions than in the past. Like banks, the unions take deposits and provide loans. The regulator, currently functioning with only two board members, must position itself “to meet the changing demands” while “promoting efficiency and effectiveness,” NCUA Chairman Mark McWatters said in a statement. The NCUA plans to close its Albany, New York, and Atlanta, Georgia office, and cancel four of its five leased facilities. It will also “eliminate agency offices with overlapping functions and improve functions such as examination reporting, records management, and procurement,” according to the announcement, as it banks on a reduction in workers by attrition. The plan also foresees restructuring the examination and insurance office into specialized working groups. Full details, along with projected cost savings, will be posted in the fall. Earlier this week, the agency’s chief financial officer said in a report to the board it was on track to cut spending by $5.8 million this …read more

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LONDON (Reuters) - British pharmacy chain Boots has apologised for its response to a campaign calling for it to cut the price of one...