Now that the biggest firms on Wall Street have agreed to pay US$1.4 billion to end investigations into the behavior of their stock analysts, some are trying to get their insurance firms to write the checks.
Representatives of two big insurers, the American International Group and Chubb, have asked the regulators who are drawing up the final settlement to include a clause that states the firms must pay the penalties themselves, people involved in the negotiations said Friday. Citigroup, which agreed to a US$300 million fine and another US$100 million in payments, is among the firms hoping to recover at least part of its share of the settlement, the people said.
Some regulators, including Eliot Spitzer, the attorney general of New York, said they favor the clause because letting the firms pass on their punishment would violate the spirit of the pending agreement.
Eleven securities firms agreed in principle last month to pay US$800 million in fines and more than US$500 million in other penalties to state and federal regulators who have been investigating the conflicts of interest of stock analysts. The regulators had hoped to have an agreement by the end of January, but that process has been delayed by disputes about several issues, including whether insurance would or should cover the firms' costs.
Spitzer has made his position clear: ``As a matter of public policy, fines and penalties should not be recoverable from any insurance policy,'' he said in a statement read by a spokesman.
The part of the settlement that would go to state regulators is likely to be described as fines and end up in state treasuries, people involved in the negotiations said.
But lawyers for some firms said they think that at least some of the settlement money may be recoverable from their insurers, people involved in the negotiations said. One reason is that the Sarbanes-Oxley Act, the overhaul of corporate fraud, accounting and securities laws that Congress passed last year, calls for fines collected by securities regulators to go back to investors who were harmed.
Restitution money to investors, like damages awarded in court, can be recovered under certain types of insurance policies, lawyers said. Fines and other penalties levied by government agencies often are not recoverable, they said.
Some firms have said that they do not expect to receive any of their settlement back from insurance companies. Lehman Brothers Holdings took an US$80 million charge against its earnings, before taxes, for the fourth-quarter of its 2002 fiscal year.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last