May 2014 Newsletter

INSIDE THIS ISSUE

•  FTC Releases 2013 Annual Highlights

•  Plaintiffs File Consolidated Amended Complaint in Foreign Exchange Case

•  United States Department of Justice Successfully Extradites Foreign National

•  Department of Justice Antitrust Division Publishes Its 2014 Annual Newsletter

•  Conferences and Educational Seminars

 

FTC Releases 2013 Annual Highlights

On March 28, 2014, the Federal Trade Commission (“FTC”) released its 2013 Annual Highlights at the meeting of the American Bar Association’s Section of Antitrust Law.  In its Annual Highlights, the FTC focused on its work to protect consumers and promote competition in 2013.

The FTC is celebrating its centennial this year, having been created by Congress in 1914 by the Federal Trade Commission Act.  The FTC was created to promote consumer protection and to help eliminate and prevent anticompetitive business practices, including coercive monopolies.  Some of the primary functions of the FTC are enforcing the provisions of the Clayton Act, a key antitrust statute, and the provisions of the FTC Act.  Furthermore, Congress has delegated responsibility to the FTC to enforce numerous additional business regulation states.

Edith Ramirez, the FTC Chairperson, said that “[t]he hallmark of our work has been, and will continue to be, our ability to adapt established tools – law enforcement, policy initiatives and education – to address economic challenges and technological advances that Congress could never have imagined when it created the FTC.”

Today, the FTC brings a variety of enforcement actions in industries including health care, technology, and energy and the environment.  One of the agency’s top priorities is to promote competition in the health care and pharmaceutical industries in an effort to reduce costs to consumers.  The FTC has also brought enforcement actions in the technology sector, including maintaining its efforts to prevent consumer fraud.  In 2013, the FTC’s actions led to redress orders of more than $297 million and civil penalty orders of $20 million.

In 2013, the FTC filed 18 advocacy and amicus briefs on various topics, including non-physician health care professionals, dental therapy education programs, and local taxicab regulations.  The FTC also published 16 reports on a variety of subjects, including mobile payments and mobile privacy disclosures. 

In addition, Commissioners and staff of the FTC are often asked by Congress to testify about the agency’s activities and to provide expertise on topics related to consumer protection and business competition.  During 2013, members of the FTC testified before Congress on a number of subjects, including “What Information Do Data Brokers Have on Consumers, and How Do They Use it?”; “Oversight of and the Enforcement of the Antitrust Laws”; and a prepared statement on Pay-For-Delay Deals impacting pharmaceutical patents.

The FTC has also led international efforts to develop strong mutual enforcement cooperation and sound policy with the United States’ international partners.  In 2013, the FTC held bilateral meetings with key partners including counterpart agencies in the EU, Canada, Mexico, Japan, China, and India.  Furthermore, the FTC plays a lead role in the International Competition Network.

Last, the FTC Annual Highlights recognized the agency’s programs to alert businesses to compliance standards and to alert consumers to the tell-tale signs of fraud and deceptive business practices.  Among other initiatives in 2013, the FTC released new guidance for media to spot false weight-loss claims; developed information for mobile app developers; hosted the first Military Consumer Protection Day; and launched its Competition Matters blog.

 

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Plaintiffs File Consolidated Amended Complaint in Foreign Exchange Case

 

On March 31, 2014, plaintiffs, represented by Scott+Scott, Attorneys at Law, LLP and its co-counsel, in In re Foreign Exchange Benchmark Rates Antitrust Litigation, 13-cv-7789 (S.D.N.Y.), filed a consolidated amended complaint alleging that twelve large financial institutions shared sensitive market information to execute a variety of strategies to manipulate foreign exchange rate benchmarks.  Defendants include Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, RBS, and UBS.

The key foreign exchange (“FX”) benchmarks at issue are the WM/Reuters Closing Spot Rates, which are set at 4 p.m. London time (11 a.m. in New York) and are based on actual trades, bids, and asks recorded by Reuters during a one-minute or two-minute period.  Reuters then publishes a benchmark rate for numerous currency pairs using a median calculation.  Plaintiffs allege that Defendants’ manipulation of the WM/Reuters Closing Spot Rates affected the pricing of trillions of dollars’ worth of financial transactions globally and violates Section 1 of the Sherman Act, 15 U.S.C. §1.

Plaintiffs further allege a conspiracy by Defendants to manipulate the WM/Reuters Closing Spot Rates.  By communicating directly with one another, including in closed network chat rooms, such as “The Cartel,” “The Bandits’ Club,” and “The Mafia” chat rooms, Defendants exchanged confidential customer order information and trading positions.  Defendants agreed on concerted strategies for trading in and around the setting of the WM/Reuters Closing Spot Rates.  Their collusive trading tactics included “front running/trading ahead” (trading proprietary positions before executing customers’ market-moving trades despite knowledge of the customers’ trade orders), “banging the close” (breaking up large trade orders into smaller trades and executing them around the fixing window to cause changes in published rates), and “painting the screen” (placing phony trade orders with other Defendants to create the illusion of trading activity).  According to news reports, the chat room transcripts reveal the details of Defendants’ collusion.

Law enforcement and regulatory authorities around the world, including in the United States, Europe, Asia, Australia, and New Zealand, are engaged in open and active investigations into Defendants’ conduct in the FX market.  A number of Defendants are seeking immunity, or otherwise cooperating with authorities in these investigations, by producing voluminous quantities of documents, including chat room transcripts and other conspiratorial communications.  As a direct result of these global investigations, Defendants have terminated and suspended over 30 employees, including personnel with supervisory authority over their FX operations.

Plaintiffs expect discovery to commence after motion practice on the complaint concludes late this year.

 

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United States Department of Justice Successfully Extradites Foreign National

 

The United States Department of Justice (“DOJ”) recently achieved a significant breakthrough in cartel prosecution with the successful extradition of a foreign national to face charges of price fixing and other anticompetitive conduct in the United States.  The extradition was a first for the DOJ, which had tried unsuccessfully for decades to convince other countries to extradite to the United States foreign executives who are charged with price fixing or other anticompetitive conduct.   

On April 4, 2014, DOJ announced that it had successfully sought and obtained the extradition of Romano Pisciotti (“Pisciotti”), a former executive of Italian marine hose manufacturer, Parker ITR, Srl (“Parker”), to face criminal antitrust charges in the United States District Court for the Southern District of Florida.  Pisciotti was extradited from Germany.  The charges stem from a scheme in which Pisciotti and other Parker executives made illegal agreements with other marine hose manufacturers.  The alleged agreements were made among conspiring companies to illicitly allocate shares of the marine hose market and deliberately refrain from competing for customers with each other via use of sham or coordinated customer bids.  The alleged conspiracy was carried out from at least 1999 until May 2007,  involved customers in the United States and elsewhere, and was designed to raise the price for hundreds of millions of dollars’ worth of marine hose equipment that Parker and other co-conspirators regularly sold to customers who used the hoses to ship oil from storage facilities and tankers. 

Until now, the DOJ was unsuccessful in its attempts to secure extradition of foreign executives to face U.S. antitrust charges, as foreign countries have been reluctant to send sovereign citizens to the United States to face such charges.  This reticence has been justified in the past by pointing out that typical extradition treaties often do not cover antitrust crimes, or that other countries do not have laws mirroring the U.S. antitrust laws.  “This first of its kind extradition on an antitrust charge allows the department to bring an alleged price fixer to the United States to face charges of participating in a worldwide conspiracy,” Bill Baer, Assistant Attorney General in charge of the DOJ’s Antitrust Division, said in a recent statement.  “This marks a significant step forward in our ongoing efforts to work with our international antitrust colleagues to ensure that those who seek to subvert U.S. law are brought to justice.”

To date, five marine hose companies, including Parker, and nine individuals working within those companies have pled guilty in connection with the marine hose conspiracy, which means that additional extraditions may be forthcoming.  Indeed, the DOJ’s recent extradition victory should serve as a cautionary warning to foreign executives that the risk of extradition in antitrust cases is now a real possibility.

However, the current international climate that has made extraditions like the one involving Pisciotti an exception to the general rule may still prove challenging to entities seeking extraterritorial extradition like the DOJ.  Foreign countries must possess both the political will to extradite one of its own citizens, as well as the legal ability to do so.  Nevertheless, the recent successful extradition of Pisciotti by the DOJ clearly signals a change in the political winds and may prove to be a harbinger of things to come.

 

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Department of Justice Antitrust Division Publishes Its 2014 Annual Newsletter

 

On March 26, 2014, the Antitrust Division of the Department of Justice (“DOJ”) issued its 2014 Annual Newsletter in which it summarized the DOJ’s civil and criminal enforcement activities during the previous year.  The DOJ’s initiatives are governed by an underlying economic principle according to which “American consumers win, innovation thrives, and the nation’s businesses operate more efficiently” only when “competition is protected.” 

The newsletter indicates that the DOJ civil enforcement section received 1,326 premerger notifications filed under the Hart-Scott-Rodino Act, thirteen (13) of which were challenged, restructured, or abandoned as a result of DOJ involvement. 

Most recently, in November 2013, along with six attorneys general, the DOJ blocked a proposed $11 billion merger between US Airways Group Inc. and American Airlines’ parent corporation, AMR Corp.  The DOJ alleged that the airline merger threatened to substantially lessen competition for commercial air travel in the United States.  A subsequent proposed settlement required the airlines to divest slots and gates to low-cost carriers at the nation’s largest airports, thereby securing the presence of the low cost airlines intended to “enhance[e] meaningful competition.”     

In its efforts to “safeguard American consumers,” the DOJ successfully prosecuted a price-fixing conspiracy between Apple and certain e-book publishers that caused the price of e-books to increase overnight from $9.99 to $12.99 or $14.99.  As a result of the DOJ’s prosecution, consumers received more than $69 million in compensation and the price of e-books dropped to close to $6.  This is considered to be the first significant civil conduct case tried by the DOJ in several years.

In another enforcement action, the DOJ blocked the proposed $20.1 billion acquisition by Anheuser-Bush InBev of Grupo Modelo, the manufacturer of seven different beer brands sold in the U.S, including Modelo’s most advanced brewery, Piedras Negras.  As part of a proposed settlement, the DOJ required Modelo to divest its entire U.S. business to Constellation Brands Inc., a fully independent competitor in the U.S.

The 2014 newsletter also provides information regarding the DOJ’s criminal docket.  In 2013, the DOJ charged 21 corporations and 34 individuals, who, on average, received a sentence of more than two years.  The DOJ obtained more than $1 billion in criminal fines – a figure that exceeds the DOJ’s annual direct budget tenfold – a portion of which flows directly to the Crime Victims Fund used to help victims of all types of crimes. 

The DOJ’s efforts in the area of competition advocacy translate to its activities in other fields, such as intellectual property and international convergence of the antitrust policies.  While the DOJ’s initiatives in intellectual property consist primarily of its collaboration with other U.S. agencies, industry representatives, and other standard-setting entities, the DOJ’s International Enforcement Cooperation reaches out to the world’s market regulators and broad international trade commissions, particularly those in the European Union and Canada.  Cases prosecuted at the international level have, to date, brought more than $2 billion in criminal fines and involved 28 individuals and 26 companies.  As such, they represent a substantial source of revenue and a significant intervention with the anticompetitive activities on the international scale.

 

Conferences and Events Summaries

 

May Events

 

+May 1st, 2014

 

Connecticut Public Pension Forum (CPPF)

Waters’ Edge Conference Center

Westbrook, CT

 

The Connecticut Public Pension Forum (CPPF) is a not-for-profit association created to provide a formal setting of educational and related programs for all public retirement systems within the State of Connecticut.  The CPPF's primary objective is to provide continuing educational programs to public retirement systems through scheduled seminars and written and verbal communications.  The purpose of the seminars will be to provide objective research on specific issues of common interest and create resources for public retirement systems.  Additionally, the seminars will provide a forum for discussion on national and state issues of interest to public retirement systems.

 

 

+May 5th – 6th, 2014

 

International Foundation of Employee Benefit Plans-Legislative Update

The Capital Hilton

Washington, D.C.

 

The Washington Legislative Update is designed to keep trustees abreast of the latest legislative and regulatory changes.  Learn from Washington insiders on how the events in Washingon will impact your plans.  The Washington Legislative Update is a must-attend program in 2014.  Following the implementation of the Affordable Care Act (ACA) this program will help you understand the current environment and future direction of the benefits world.  From policy initiatives to recent and proposed regulations, this conference will provide invaluable information. Many attendees schedule meetings with their congressional representatives around this conference.

 

 

 

May 6th - 9th, 2014

 

Illinois Public Pension Fund Association Midwest Pension Conference (IPPFA)

Embassy Suites

Peoria, IL

 

“Preparing Pension Funds for Tomorrow”

The Illinois Public Pension Fund Association is available to more than 600 Police and Fire Pension Funds.  The original IPPFA, Illinois Police Pension Fund Association, was organized by a group of police trustees in 1985 for the education and protection of Police pension funds in Illinois. The Firefighters joined the group more than eight years later and the IPPFA became known as the Illinois Public Pension Fund Association.  The IPPFA educational programs are certified trustee programs and are offered throughout the year at various locations throughout the state.  Other IPPFA sponsored programs include regional seminars, referral programs, on-line training,  legislative support, an annual conference as well as financial support to all member families who have lost a police officer or firefighter in the line of duty.

 

+May 7th - 9th, 2014

Council of Institutional Investors (CII)

The Marriott Wardman Park Hotel

Washington, D.C.

 

The Council of Institutional Investors is known as “The Voice of Corporate Governance” and this year’s theme is  “Building Momentum.”  As a nonprofit association of public, union and corporate pension funds the council’s mission is to educate its members, policymakers and the public about corporate governance and that environmental, social and corporate governance (ESG) issues can affect the performance of investment portfolios. More than 200 members will attend this annual conference.

 

 

+May 13th - 16th, 2014

 

State Association of County Retirement Sytems (SACRS)

Sheraton Grand Sacramento

Sacramento, CA

 

An association of 20 California county retirement systems that have made education and legislation their principle focus, particularly education in the investment and fiduciary responsibility area.  SACRS was organized under the County Retirement Act of 1937 and has 2 main conferences annually; one in the fall and one in the spring as well as various symposiums throughout the year.

 

 

 

+May 13th - 16th, 2014

 

National Association of State Treasurers (NAST): Treasury Management Training Symposium

Buena Vista Palace

Lake Buena Vista, FL

 

Presented in a series of multiple issue tracks, these in-depth educational workshops provide tools, resources, experiences and contacts to move forward and boost efficiency in spite of current and future challenges.  Best practices for managing public finance programs will be offered and geared to those new on the job as well as seasoned public finance professionals.

 

 

 

+May 16th - 20th, 2014

 

American Alliance Conference

Southhampton Fairmont Resort

Bermuda

 

This four day Union Conference provides several sessions of education, roundtable discussions and networking events.  Taft-Hartley and Union fund trustees, administrators, business managers and association leaders as well as service providers to the funds will be in attendance to learn the latest cost-saving ideas, legislative and legal developments in the pension fund and financial areas.  Fiduciary roles are growing in complexity as more legislation such as pension and health reform  which directly affect plan fiduciaries.  The American Alliance presents objective information as it is a nonlobbying and nonpartisan organization.   

 

 

 

+May 18th - 20th, 2014

 

Michigan Association of Public Employee Retirement Systems Spring Conference

Soaring Eagle Resort

Mt. Pleasant, MI

 

The Michigan Association of Public Employee Retirement Systems (MAPERS) was established to

provide educational training and legislative updates to trustees of Public Employee Retirement

Systems within the State of Michigan.  The legislative updates are issued by a full time professional lobbyist, hired thru Capitol Services, Inc.  Trustees, administrators, and staff representing Michigan public pension plans as well as state officials, investment, financial and legal consultants attend the annual spring and fall conferences.

 

 

 

+May 21st - 23rd, 2014

 

Police Officers Association of Michigan (POAM)

Amway Grand Hotel

Grand Rapids, MI

 

POAM is a full service labor organization formed to provide labor related service and representation.  This highly attended conference promises to deliver comprehensive legislative updates.  This year’s conference will have an emphasis on how to handle budget cuts without losing efficiency.

 

+May 28th – 29th, 2014

Pennsylvania Association of Public Employees Retirement System (PAPERS)

Hilton Hotel and Convention Center

Harrisburg, PA

 

This is PAPERS 10th Annual Spring Forum and is expected to be have the largest attendance since the organization was founded.  PAPERS primary purpose in conducting an annual educational forum is to provide the basis for improved financial and operational performance of the public employee retirement systems in the state. PAPERS acts as a central resource for educational purposes and networking agent. This year a reception will be held at the State Capitol. PAPERS also conducts a Public Pension Certified Professional Program.

 

+May 28th – 30th, 2014

Pennsylvania County Administration Conference (CCAP)

The Nittany Lion Inn

State College, PA

 

 

 

+May 18th – 21st, 2014

 

Government Finance Officers’ Association 108th Annual Conference:

The Future of Government Finance

Minneapolis Convention Center

Minneapolis, MN

 

 

Government Finance Officers’ Association State Conferences:

 

+April 30th – May 2nd, 2014

GFOA of Missouri

Country Club Hotel and Conference Center

Lake Ozark, MO

http://www.gfoa-mo.org

 

 

+May 1st - 2nd, 2014

New Hampshire GFOA

North Conway Grand Hotel

North Conway, NH

http://www.nhgfoa.org

 

 

+May 5th, 2014

South Carolina GFOA

Columbia Metropolitan Convention Center

Columbia, SC

http://www.gfoasc.org

 

 

+May 6th, 2014

Oregon State Fiscal Association (OSFA)

Chemeketa Winema Place

Salem, OR

http://www.oregonstatefiscalassn.org

 

 

+May 7th - 9th, 2014      

Louisiana GFOA 

Baton Rouge Renaissance Hotel

Baton Rouge, LA

http://www.lagfoa.org 

 

 

+May 14th - 15th, 2014

Great Plains GFOA

College of Public Administration and Community Services

University of Nebraska

Omaha, NE

http://greatplainsgfoa.org

 

 

+May 25th – 28th, 2014

Canada Alberta GFOA

Sheraton Red Deer Hotel

Red Deer, AB

http://www.gfoa.ab.ca

 

 

+May 28th - 30th, 2014

Virginia GFOA

Virginia Beach Cavalier Hotel

Virginia Beach, VA

http://www.vgfoa.org 

 

             +May 28th - 30th, 2014

Canada British Columbia GFOA

Vancouver Island Conference Center

Nanaimo, BC

http://www.gfoabc.ca

 

+May 30, 2013

Alaska Government Finance Officers’ Association

Sitka, AK 

http://www.agfoa.com

 

 

+May 31st – June 4th, 2014

Florida GFOA

Marriott World Center

Orlando, FL

http://www.fgfoa.org

      

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Scott + Scott LLP is a nationally recognized law firm headquartered inConnecticut with offices in New York City, Ohio and California. The firmrepresents individual as well as institutional investors who have suffered from corporate stock fraud. Scott+Scott has participated in recovering billions of dollars and achieved precedent-setting reforms in corporate governance on behalf of its clients. In addition to being involved in complex shareholder securities and corporate governance actions, Scott+Scott also has a significant national practice in antitrust, ERISA, consumer, civil rights and human rights litigation. Through its efforts, Scott+Scott promotes corporate social responsibility.

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