FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
SEC Charges Atlanta-Based Investment Adviser Representative and Related Companies with Securities Fraud
On September 11, 2013, the Securities and Exchange Commission filed an emergency action seeking a temporary restraining order and other emergency relief in federal court in the Northern District of Georgia, charging Paul Marshall (Marshall), a state-registered investment adviser representative, and three Atlanta-based companies that he owned and controlled - Bridge Securities, LLC, Bridge Equity, Inc. (collectively, the Bridge Entities) and FOGFuels, Inc. (FOGFuels) - with violations of the federal securities laws for misappropriating client funds.
According to the Commission's complaint, since at least 2011, Marshall, an investment adviser representative of the Bridge Entities, misappropriated at least $2 million from advisory clients. In its complaint, the Commission alleges that Marshall instructed clients, some of whom were elderly, to transfer funds to bank accounts under his control for purported investment in various securities, including mutual funds. Instead, Marshall used those client funds to pay personal expenses, including luxury vacations and private school tuition for his children. The complaint further alleges that Marshall concealed his fraud by providing advisory clients with fabricated account statements.
Additionally, the Commission's complaint alleges that Marshall, currently the majority owner and Managing Director of purported alternative fuel company FOGFuels, misappropriated $100,000 from an advisory client who invested in that company.
The Commission's complaint alleges that, through their misconduct, Marshall, the Bridge Entities, and FOGFuels violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and that Marshall and FOGFuels violated Section 17(a) of the Securities Act of 1933. Finally, the complaint alleges that Marshall and the Bridge Entities violated Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.
On September 11, 2013, the Honorable Timothy C. Batten, Sr., United States District Judge for the Northern District of Georgia, granted the Commission's request for emergency relief, issuing an order temporarily restraining Marshall, the Bridge Entities and FOGFuels from further securities laws violations, freezing their assets, preventing the destruction of documents, requiring an accounting, and expediting discovery. The Court also set a hearing date of September 20, 2013 for the Commission's request for a preliminary injunction. The Commission's complaint also seeks a permanent injunction, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties. Those claims will be adjudicated at a later date.
Saturday, September 14, 2013
Friday, September 13, 2013
STAFFING COMPANY RESOLVES WITH JUSTICE DEPARTMENT ALLEGATIONS OF UNFAIR EMPLOYMENT PRACTICES
FROM: U.S. JUSTICE DEPARTMENT
Monday, September 9, 2013
Justice Department Reaches Settlement with Staffing Company to Resolve Immigration-related Unfair Employment Practices
The Justice Department announced today that it reached an agreement with Kelly Services Inc., a staffing company based in Troy, Mich., resolving an allegation of discrimination based on citizenship status during the employment eligibility re-verification process at one of its branch locations in Schaumburg, Ill. The investigation was initiated by the department’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) based on information obtained from a former employee of the company who had contacted that office.
The department’s investigation concluded that Kelly Services terminated the individual’s employment during the employment eligibility re-verification process when he did not produce a new U.S. Citizenship and Immigration Services (USCIS)-issued document, even though he had a valid unrestricted Social Security card at the time that was also acceptable to show continued employment eligibility. To resolve the matter, Kelly Services has agreed to compensate the former employee for lost wages in the amount of $1,888.60 and pay a $1,100 civil penalty to the United States. Designated Kelly Services staff will also participate in Justice Department training on employers’ responsibilities under the anti-discrimination provision of the Immigration and Nationality Act (INA).
OSC is responsible for enforcing the anti-discrimination provision of the INA.
Monday, September 9, 2013
Justice Department Reaches Settlement with Staffing Company to Resolve Immigration-related Unfair Employment Practices
The Justice Department announced today that it reached an agreement with Kelly Services Inc., a staffing company based in Troy, Mich., resolving an allegation of discrimination based on citizenship status during the employment eligibility re-verification process at one of its branch locations in Schaumburg, Ill. The investigation was initiated by the department’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) based on information obtained from a former employee of the company who had contacted that office.
The department’s investigation concluded that Kelly Services terminated the individual’s employment during the employment eligibility re-verification process when he did not produce a new U.S. Citizenship and Immigration Services (USCIS)-issued document, even though he had a valid unrestricted Social Security card at the time that was also acceptable to show continued employment eligibility. To resolve the matter, Kelly Services has agreed to compensate the former employee for lost wages in the amount of $1,888.60 and pay a $1,100 civil penalty to the United States. Designated Kelly Services staff will also participate in Justice Department training on employers’ responsibilities under the anti-discrimination provision of the Immigration and Nationality Act (INA).
OSC is responsible for enforcing the anti-discrimination provision of the INA.
Thursday, September 12, 2013
CFTC CHAIRMAN GENSLER TESTIFIED BEFORE CONGRESS ON REFORM
FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
Testimony of Chairman Gary Gensler Before the U.S. House Committee on Oversight and Government Reform, Washington, DC
September 10, 2013
Good morning Chairman Issa, Ranking Member Cummings and members of the Committee.
Thank you for holding this hearing on promoting transparency in government.
Promoting transparency in government is critical so that the public can have a clear window into and participate in the decision-making of their government. The Federal Records Act is key to ensuring for such transparency. The Committee’s work has brought this matter into sharper focus.
I joined the Commodity Futures Trading Commission (CFTC) in May of 2009 in the wake of the worst financial crisis in 80 years. Eight million Americans lost their jobs.
The remarkably dedicated CFTC staff have worked around the clock to bring much-needed reforms to the swaps market, which was at the center of the crisis. As we worked to implement reforms, we also took numerous steps to bring greater transparency to the work of the CFTC. We have, among other things:
Voluntarily posted more than 2,200 external meetings on our website;
Increased by nearly tenfold the number of public Commission meetings where rules are openly debated; and
Initiated public roundtables – holding nearly two dozen – to facilitate public interaction on matters before the Commission.
My CFTC colleagues and I rolled up our sleeves and worked day and night. Though I used my official e-mail account far more than my personal e-mail, to get the job done I did routinely engage with CFTC staff and others through my personal e-mail, particularly outside normal business hours. Having come to this job after years of not working in a traditional office setting and primarily being a single, stay-at-home dad, I was not attuned to the ways of accessing work e-mail at home. At the CFTC, we didn’t have a robust training program – and I personally did not receive training – on either remote access or federal records.
As head of the agency, I take full responsibility with regard to records management, training and promoting transparency at the CFTC.
I want to thank the agency’s Inspector General who highlighted in a May 2013 report that it is better to avoid using personal e-mail, even though there is no law prohibiting it.
The IG reported that I used my official CFTC e-mail account “far more frequently” than my personal e-mail, as he counted approximately ten times more e-mails using my CFTC e-mail as compared to my personal e-mail. He also reported that there was “no indication that the Chairman was attempting to hide the use of his personal e-mail from other CFTC employees in an attempt to conduct ‘secret’ official business.” In a subsequent letter to members of Congress, the IG said of my personal e-mail use, “We do not believe it violated any federal statute.”
When this Committee sought e-mails from my personal account, I immediately tasked staff with gathering and delivering all responsive documents.
We provided approximately 11,000 e-mails together with some 3,000 attachments that were sent to, originated from, or copied to my personal e-mail. Approximately 99 percent of these were exchanged with another government official and were on federal systems. Approximately 97 percent were sent to or received from CFTC staff and were on CFTC systems. The remaining documents that were not already at the CFTC are now on CFTC systems. I have directed staff to ensure that all of these documents are filed in a CFTC recordkeeping system as appropriate.
Moving forward, though, I believe that we can and need to do better.
First, I have directed staff to revise and tighten the CFTC e-mail policy, including appropriately restricting the use of personal e-mail. I want to thank David Ferriero, Archivist of the United States, who has agreed to make his staff available to ensure that as we revise our policies, they are in accordance with the Archivist’s guidance.
Second, I have directed the CFTC’s Executive Director and General Counsel to significantly enhance the agency’s training on the Federal Records Act and transparency in government, both for new staff as they arrive and for existing staff. Further, to promote an environment that supports telework and flexible schedules, we also must ensure staff are properly trained on how to access official e-mail remotely.
Third, while we’ve already made some significant changes at the CFTC with regard to enhancing technology, I have directed staff to do more to make these tools flexible and efficient, particularly with regard to access and recordkeeping. I also fully support devoting resources to meet the National Archives and Records Administration’s goals for Capstone electronic e-mail retention by government agencies.
Ensuring full compliance with the Federal Records Act and other transparency laws is critical to the important work of the CFTC. It is critical in maintaining the public’s faith in and understanding of the CFTC.
Thank you.
Testimony of Chairman Gary Gensler Before the U.S. House Committee on Oversight and Government Reform, Washington, DC
September 10, 2013
Good morning Chairman Issa, Ranking Member Cummings and members of the Committee.
Thank you for holding this hearing on promoting transparency in government.
Promoting transparency in government is critical so that the public can have a clear window into and participate in the decision-making of their government. The Federal Records Act is key to ensuring for such transparency. The Committee’s work has brought this matter into sharper focus.
I joined the Commodity Futures Trading Commission (CFTC) in May of 2009 in the wake of the worst financial crisis in 80 years. Eight million Americans lost their jobs.
The remarkably dedicated CFTC staff have worked around the clock to bring much-needed reforms to the swaps market, which was at the center of the crisis. As we worked to implement reforms, we also took numerous steps to bring greater transparency to the work of the CFTC. We have, among other things:
Voluntarily posted more than 2,200 external meetings on our website;
Increased by nearly tenfold the number of public Commission meetings where rules are openly debated; and
Initiated public roundtables – holding nearly two dozen – to facilitate public interaction on matters before the Commission.
My CFTC colleagues and I rolled up our sleeves and worked day and night. Though I used my official e-mail account far more than my personal e-mail, to get the job done I did routinely engage with CFTC staff and others through my personal e-mail, particularly outside normal business hours. Having come to this job after years of not working in a traditional office setting and primarily being a single, stay-at-home dad, I was not attuned to the ways of accessing work e-mail at home. At the CFTC, we didn’t have a robust training program – and I personally did not receive training – on either remote access or federal records.
As head of the agency, I take full responsibility with regard to records management, training and promoting transparency at the CFTC.
I want to thank the agency’s Inspector General who highlighted in a May 2013 report that it is better to avoid using personal e-mail, even though there is no law prohibiting it.
The IG reported that I used my official CFTC e-mail account “far more frequently” than my personal e-mail, as he counted approximately ten times more e-mails using my CFTC e-mail as compared to my personal e-mail. He also reported that there was “no indication that the Chairman was attempting to hide the use of his personal e-mail from other CFTC employees in an attempt to conduct ‘secret’ official business.” In a subsequent letter to members of Congress, the IG said of my personal e-mail use, “We do not believe it violated any federal statute.”
When this Committee sought e-mails from my personal account, I immediately tasked staff with gathering and delivering all responsive documents.
We provided approximately 11,000 e-mails together with some 3,000 attachments that were sent to, originated from, or copied to my personal e-mail. Approximately 99 percent of these were exchanged with another government official and were on federal systems. Approximately 97 percent were sent to or received from CFTC staff and were on CFTC systems. The remaining documents that were not already at the CFTC are now on CFTC systems. I have directed staff to ensure that all of these documents are filed in a CFTC recordkeeping system as appropriate.
Moving forward, though, I believe that we can and need to do better.
First, I have directed staff to revise and tighten the CFTC e-mail policy, including appropriately restricting the use of personal e-mail. I want to thank David Ferriero, Archivist of the United States, who has agreed to make his staff available to ensure that as we revise our policies, they are in accordance with the Archivist’s guidance.
Second, I have directed the CFTC’s Executive Director and General Counsel to significantly enhance the agency’s training on the Federal Records Act and transparency in government, both for new staff as they arrive and for existing staff. Further, to promote an environment that supports telework and flexible schedules, we also must ensure staff are properly trained on how to access official e-mail remotely.
Third, while we’ve already made some significant changes at the CFTC with regard to enhancing technology, I have directed staff to do more to make these tools flexible and efficient, particularly with regard to access and recordkeeping. I also fully support devoting resources to meet the National Archives and Records Administration’s goals for Capstone electronic e-mail retention by government agencies.
Ensuring full compliance with the Federal Records Act and other transparency laws is critical to the important work of the CFTC. It is critical in maintaining the public’s faith in and understanding of the CFTC.
Thank you.
Wednesday, September 11, 2013
CFTC RULE ENFORCEMENT REVIEW
FROM: COMMODITY FUTURES TRADING COMMISSION
CFTC Releases Rule Enforcement Review of the CBOE Futures Exchange
Washington, DC – The Commodity Futures Trading Commission (Commission) today notified CBOE Futures Exchange (CFE) of the results of a rule enforcement review completed by the Commission’s Division of Market Oversight (Division). The review covered the target periods from November 1, 2009 to November 1, 2010 (first target period) and November 1, 2010 to August 1, 2012 (second target period). The Division evaluated the Exchange’s compliance with Core Principles 10 (Trade Information) and 17 (Recordkeeping), which relate to an exchange’s audit trail program for the recording and safe storage of trade information in a manner which enables prevention of customer and market abuses and enforcement of exchange rules.
The Division found that CFE maintains an adequate audit trail program, and commends the Exchange for substantial improvements during the second target period, including the development of a comprehensive new audit trail exam program and a significant increase in staffing.
Although the Division found that the Exchange’s overall audit trail program was adequate, it also identified specific areas in which CFE should improve. Specifically, the Division recommended that all logs maintained by CFE contain accurate and meaningful dates, including the dates on which staff began and completed its work on a matter. Similarly, the Division recommended that CFE include in its case reports the date on which the report was approved by senior compliance staff and the signature of the approving compliance official.
The Division also recommended that the Exchange reduce the time it takes to complete audit trail investigations, and that it continue to focus on reducing the time taken to complete annual audit trail exams of trading privilege holders.
Lastly, the Division found the quality and documentation of CFE’s investigations and examinations work to be thorough and complete, with one exception. Accordingly, the Division recommended that the Exchange take prompt disciplinary action when it identifies violations of its audit trail or recordkeeping requirements by persons subject to CFE’s rules.
CFTC Releases Rule Enforcement Review of the CBOE Futures Exchange
Washington, DC – The Commodity Futures Trading Commission (Commission) today notified CBOE Futures Exchange (CFE) of the results of a rule enforcement review completed by the Commission’s Division of Market Oversight (Division). The review covered the target periods from November 1, 2009 to November 1, 2010 (first target period) and November 1, 2010 to August 1, 2012 (second target period). The Division evaluated the Exchange’s compliance with Core Principles 10 (Trade Information) and 17 (Recordkeeping), which relate to an exchange’s audit trail program for the recording and safe storage of trade information in a manner which enables prevention of customer and market abuses and enforcement of exchange rules.
The Division found that CFE maintains an adequate audit trail program, and commends the Exchange for substantial improvements during the second target period, including the development of a comprehensive new audit trail exam program and a significant increase in staffing.
Although the Division found that the Exchange’s overall audit trail program was adequate, it also identified specific areas in which CFE should improve. Specifically, the Division recommended that all logs maintained by CFE contain accurate and meaningful dates, including the dates on which staff began and completed its work on a matter. Similarly, the Division recommended that CFE include in its case reports the date on which the report was approved by senior compliance staff and the signature of the approving compliance official.
The Division also recommended that the Exchange reduce the time it takes to complete audit trail investigations, and that it continue to focus on reducing the time taken to complete annual audit trail exams of trading privilege holders.
Lastly, the Division found the quality and documentation of CFE’s investigations and examinations work to be thorough and complete, with one exception. Accordingly, the Division recommended that the Exchange take prompt disciplinary action when it identifies violations of its audit trail or recordkeeping requirements by persons subject to CFE’s rules.
Tuesday, September 10, 2013
FDIC CONSUMER NEWS HAS SIMPLE TIPS TO HELP SENIORS PROTECT THEIR ASSETS
FROM: FEDERAL DEPOSIT INSURANCE CORPORATION
Consumers face financial issues in their retirement years ranging from how to maintain their lifestyle and pay for medical expenses on a fixed income to avoiding scams that target the elderly. To help older adults make informed decisions and protect their assets, the Summer 2013 issue of FDIC Consumer News features a collection of articles entitled "Financial Tips for Seniors." Other timely topics include avoiding wire transfer scams, new protections for sending money abroad, things to keep in mind when considering adjustable-rate mortgages, basic points about Health Savings Accounts, and help for student loan borrowers having payment problems. Here's an overview:
Simple strategies for seniors: The newsletter starts with 15 quick tips on topics ranging from finding reliable help with finances to earning and managing money and getting organized. Additional articles provide practical suggestions for steering clear of fraud artists and thieves, what to know before agreeing to a reverse mortgage or any other loan backed by your home, and tips for seniors wanting to help relatives (including risks to avoid). The newsletter also gives key facts about FDIC deposit insurance, an important topic for older Americans who have worked hard over the years to accumulate savings.
Preventing wire transfer scams: Using a bank or a money transfer company to wire funds electronically is an easy and convenient way for individuals to send cash to someone they know. But wiring money to strangers — especially in another country — is risky because often they could be scam artists.
New protections for sending money abroad: Each year, consumers in the U.S. send tens of billions of dollars to friends, family members or businesses in other countries using wire transfers and other electronic payments — often called "remittances." The newsletter gives a preview of new federal protections that will take effect on October 28, 2013, and that are heavily focused on disclosures before and after a remittance transaction takes place.
The comeback of adjustable-rate mortgages (ARMs): Also known as variable-rate loans, these have been out of favor with many people in recent years because of the low interest-rate environment and the perception that rising payments on ARMs contributed to foreclosures during the recent financial crisis. But with new federal disclosures and protections for consumers, some borrowers are wondering if they should consider an ARM if the initial interest rate is significantly lower than what's being offered for a 30-year fixed-rate loan. The article presents key concepts that consumers should understand.
Basic points about Health Savings Accounts (HSAs): Consumers who are enrolled in a health insurance with a high deductible are probably eligible to open an HSA, a tax-preferred savings account that can be used to help pay for certain medical expenses. The newsletter covers some basic points about the benefits, the limitations and other considerations, including FDIC deposit insurance coverage if the account is at an insured bank.
Help for student loan borrowers having payment problems: Many people who are unemployed or face other economic troubles are having problems making monthly payments on their student loans. The newsletter offers ideas for how struggling borrowers can get help.
Consumers face financial issues in their retirement years ranging from how to maintain their lifestyle and pay for medical expenses on a fixed income to avoiding scams that target the elderly. To help older adults make informed decisions and protect their assets, the Summer 2013 issue of FDIC Consumer News features a collection of articles entitled "Financial Tips for Seniors." Other timely topics include avoiding wire transfer scams, new protections for sending money abroad, things to keep in mind when considering adjustable-rate mortgages, basic points about Health Savings Accounts, and help for student loan borrowers having payment problems. Here's an overview:
Simple strategies for seniors: The newsletter starts with 15 quick tips on topics ranging from finding reliable help with finances to earning and managing money and getting organized. Additional articles provide practical suggestions for steering clear of fraud artists and thieves, what to know before agreeing to a reverse mortgage or any other loan backed by your home, and tips for seniors wanting to help relatives (including risks to avoid). The newsletter also gives key facts about FDIC deposit insurance, an important topic for older Americans who have worked hard over the years to accumulate savings.
Preventing wire transfer scams: Using a bank or a money transfer company to wire funds electronically is an easy and convenient way for individuals to send cash to someone they know. But wiring money to strangers — especially in another country — is risky because often they could be scam artists.
New protections for sending money abroad: Each year, consumers in the U.S. send tens of billions of dollars to friends, family members or businesses in other countries using wire transfers and other electronic payments — often called "remittances." The newsletter gives a preview of new federal protections that will take effect on October 28, 2013, and that are heavily focused on disclosures before and after a remittance transaction takes place.
The comeback of adjustable-rate mortgages (ARMs): Also known as variable-rate loans, these have been out of favor with many people in recent years because of the low interest-rate environment and the perception that rising payments on ARMs contributed to foreclosures during the recent financial crisis. But with new federal disclosures and protections for consumers, some borrowers are wondering if they should consider an ARM if the initial interest rate is significantly lower than what's being offered for a 30-year fixed-rate loan. The article presents key concepts that consumers should understand.
Basic points about Health Savings Accounts (HSAs): Consumers who are enrolled in a health insurance with a high deductible are probably eligible to open an HSA, a tax-preferred savings account that can be used to help pay for certain medical expenses. The newsletter covers some basic points about the benefits, the limitations and other considerations, including FDIC deposit insurance coverage if the account is at an insured bank.
Help for student loan borrowers having payment problems: Many people who are unemployed or face other economic troubles are having problems making monthly payments on their student loans. The newsletter offers ideas for how struggling borrowers can get help.
Monday, September 9, 2013
ASSISTANT AG BAER MAKES STATEMENT REGARDING E-BOOK PRICE FIXING REMEDY
FROM: U.S. JUSTICE DEPARTMENT
STATEMENT BY ASSISTANT ATTORNEY GENERAL BILL BAER ON REMEDY TO ADDRESS APPLE’S PRICE FIXING OF E-BOOKS
Remedy Requires Apple to Modify Agreements with Five Publishers; Provides for a Court-Appointed External Monitor; Includes Anti-Retaliatory Provisions to Protect Publishers; Prohibits Apple from Engaging in Future Anticompetitive Conduct
WASHINGTON — Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division issued the following statement today after the U.S. District Court for the Southern District of New York issued an order regarding a remedy to address Apple Inc.’s illegal conduct:
“We’re pleased that the court has issued an order supporting the Department of Justice’s efforts to address Apple’s illegal price fixing conduct. Consumers will continue to benefit from lower e-books prices as a result of the department’s enforcement action to restore competition in this important industry. By appointing an external monitor to ensure future compliance with the antitrust laws, the court has helped protect consumers from further misconduct by Apple. The court’s ruling reinforces the victory the department has won for consumers.”
The court’s order requires Apple to modify its existing agreements with the five major publishers with which it conspired – Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, which does business as Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc. – to allow retail price competition and to eliminate the most favored nation (MFN) pricing clauses that led to higher e-book prices. Apple is prohibited from serving as a conduit of information among the conspiring publishers or from retaliating against publishers for refusing to sell e-books on agency terms. Apple is also prohibited from entering into agreements with e-books publishers that are likely to increase the prices at which Apple’s competitor retailers may sell that content.
Additionally, the court has decided to appoint an external monitor to ensure that Apple’s internal antitrust compliance policies will be sufficient to catch future anticompetitive activities before they result in harm to consumers. The monitor, whose salary and expenses will be paid by Apple, will work with an internal antitrust compliance officer who will be hired by and report exclusively to the outside directors comprising Apple’s audit committee. The antitrust compliance officer will be responsible for training Apple’s senior executives about the antitrust laws and ensuring that Apple abides by the relief ordered by the court.
On April 11, 2012, the department filed a civil antitrust lawsuit in the U.S. District Court for the Southern District of New York against Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster, for conspiring to end e-book retailers’ freedom to compete on price by taking control of pricing from e-book retailers and substantially increasing the prices that consumers paid for e-books.
At the same time that it filed the lawsuit, the department reached settlements with three of the publishers – Hachette, HarperCollins and Simon & Schuster. Those settlements were approved by the court in September 2012. The department settled with Penguin on Dec. 18, 2012, and with Macmillan on Feb. 8, 2013. The Penguin settlement was approved by the court on May 20, 2013, and the Macmillan settlement on Aug. 14, 2013. Under the settlements, each publisher was required to terminate agreements that prevented e-book retailers from lowering the prices at which they sell e-books to consumers and to allow for retail price competition in renegotiated e-book distribution agreements.
The department’s trial against Apple, which was overseen by Judge Denise Cote, began on June 3, 2013. The trial lasted for three weeks, with closing arguments taking place on June 20, 2013. The court issued its opinion that Apple Inc. violated Section 1 of the Sherman Act on July 10, 2013. The department and 33 state attorneys general submitted a proposed remedy to the court on Aug. 2, 2013. Apple submitted a separate remedy. The court held remedy hearings on Aug. 9 and 27, 2013, and asked the parties to revise their proposals. The department, 33 state attorneys general and Apple submitted a joint remedy to the court on Sept. 5, 2013.
STATEMENT BY ASSISTANT ATTORNEY GENERAL BILL BAER ON REMEDY TO ADDRESS APPLE’S PRICE FIXING OF E-BOOKS
Remedy Requires Apple to Modify Agreements with Five Publishers; Provides for a Court-Appointed External Monitor; Includes Anti-Retaliatory Provisions to Protect Publishers; Prohibits Apple from Engaging in Future Anticompetitive Conduct
WASHINGTON — Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division issued the following statement today after the U.S. District Court for the Southern District of New York issued an order regarding a remedy to address Apple Inc.’s illegal conduct:
“We’re pleased that the court has issued an order supporting the Department of Justice’s efforts to address Apple’s illegal price fixing conduct. Consumers will continue to benefit from lower e-books prices as a result of the department’s enforcement action to restore competition in this important industry. By appointing an external monitor to ensure future compliance with the antitrust laws, the court has helped protect consumers from further misconduct by Apple. The court’s ruling reinforces the victory the department has won for consumers.”
The court’s order requires Apple to modify its existing agreements with the five major publishers with which it conspired – Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, which does business as Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc. – to allow retail price competition and to eliminate the most favored nation (MFN) pricing clauses that led to higher e-book prices. Apple is prohibited from serving as a conduit of information among the conspiring publishers or from retaliating against publishers for refusing to sell e-books on agency terms. Apple is also prohibited from entering into agreements with e-books publishers that are likely to increase the prices at which Apple’s competitor retailers may sell that content.
Additionally, the court has decided to appoint an external monitor to ensure that Apple’s internal antitrust compliance policies will be sufficient to catch future anticompetitive activities before they result in harm to consumers. The monitor, whose salary and expenses will be paid by Apple, will work with an internal antitrust compliance officer who will be hired by and report exclusively to the outside directors comprising Apple’s audit committee. The antitrust compliance officer will be responsible for training Apple’s senior executives about the antitrust laws and ensuring that Apple abides by the relief ordered by the court.
On April 11, 2012, the department filed a civil antitrust lawsuit in the U.S. District Court for the Southern District of New York against Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster, for conspiring to end e-book retailers’ freedom to compete on price by taking control of pricing from e-book retailers and substantially increasing the prices that consumers paid for e-books.
At the same time that it filed the lawsuit, the department reached settlements with three of the publishers – Hachette, HarperCollins and Simon & Schuster. Those settlements were approved by the court in September 2012. The department settled with Penguin on Dec. 18, 2012, and with Macmillan on Feb. 8, 2013. The Penguin settlement was approved by the court on May 20, 2013, and the Macmillan settlement on Aug. 14, 2013. Under the settlements, each publisher was required to terminate agreements that prevented e-book retailers from lowering the prices at which they sell e-books to consumers and to allow for retail price competition in renegotiated e-book distribution agreements.
The department’s trial against Apple, which was overseen by Judge Denise Cote, began on June 3, 2013. The trial lasted for three weeks, with closing arguments taking place on June 20, 2013. The court issued its opinion that Apple Inc. violated Section 1 of the Sherman Act on July 10, 2013. The department and 33 state attorneys general submitted a proposed remedy to the court on Aug. 2, 2013. Apple submitted a separate remedy. The court held remedy hearings on Aug. 9 and 27, 2013, and asked the parties to revise their proposals. The department, 33 state attorneys general and Apple submitted a joint remedy to the court on Sept. 5, 2013.
Sunday, September 8, 2013
U.S., SAFEWAY REACH SETTLEMENT REGARDING ALLEGED CLEAN AIR ACT VIOLATIONS
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, September 4, 2013
United States Reaches Settlement with Safeway to Reduce Emissions of Ozone-Depleting Substances Nationwide
In a settlement agreement with the United States, Safeway, the nation’s second largest grocery store chain, has agreed to pay a $600,000 civil penalty and implement a corporate-wide plan to significantly reduce its emissions of ozone-depleting substances from refrigeration equipment at 659 of its stores nationwide, estimated to cost approximately $4.1 million, announced the U.S. Environmental Protection Agency (EPA) and Department of Justice today.
The settlement involves the largest number of facilities ever under the Clean Air Act (CAA)’s regulations governing refrigeration equipment.
The settlement resolves allegations that Safeway violated the federal CAA by failing to promptly repair leaks of HCFC-22, a hydro-chlorofluorocarbon that is a greenhouse gas and ozone-depleting substance used as a coolant in refrigerators, and failed to keep adequate records of the servicing of its refrigeration equipment. Safeway will now implement a corporate refrigerant compliance management system to comply with stratospheric ozone regulations. In addition, Safeway will reduce its corporate-wide average leak rate from 25 percent in 2012 to 18 percent or below in 2015. The company will also reduce the aggregate refrigerant emissions at its highest-emission stores by 10 percent each year for three years.
“Safeway’s new corporate commitment to reduce air pollution and help protect the ozone layer is vital and significant,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Fixing leaks, improving compliance and reducing emissions will make a real difference in protecting us from the dangers of ozone depletion, while reducing the impact on climate change.”
“This first-of-its-kind settlement will benefit all Americans by cutting emissions of ozone-depleting substances across Safeway’s national supermarket chain,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “It can serve as a model for comprehensive solutions that improve industry compliance with the nation’s Clean Air Act.”
HCFC-22 is up to 1,800 times more potent than carbon dioxide in terms of global warming emissions. The measures that Safeway has committed to are expected to prevent over 100,000 pounds of future releases of ozone-depleting refrigerants that destroy the ozone layer.
EPA regulations issued under Title VI of the CAA require that owner or operators of commercial refrigeration equipment that contains over 50 pounds of ozone-depleting refrigerants, and that has an annual leak rate greater than 35 percent repair such leaks within 30 days.
HCFCs deplete the stratospheric ozone layer, which allows dangerous amounts of cancer-causing ultraviolet rays from the sun to strike the earth, leading to adverse health effects that include skin cancers, cataracts, and suppressed immune systems. Pursuant to the Montreal Protocol, the United States is implementing strict reductions of ozone-depleting refrigerants, including a production and importation ban by 2020 of HCFC-22, a common refrigerant used by supermarkets.
The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including large grocery stores.
Corporate commitments to reduce emissions from refrigeration systems have been increasing in recent years. EPA’s GreenChill Partnership Program works with food retailers to reduce refrigerant emissions and decrease their impact on the ozone layer and climate change by transitioning to environmentally friendlier refrigerants, using less refrigerant and eliminating leaks, and adopting green refrigeration technologies and best environmental practices.
Safeway, headquartered in Pleasanton, Calif., is the second largest grocery chain in North America with 1,412 stores in the United States and 2012 revenues of $44.2 billion. Safeway operates companies under the banner of Vons in southern California and Nevada, Randalls in Texas, and Carrs in Alaska. The settlement covers 659 Safeway stores – all Safeway stores in the United States that have commercial refrigeration equipment regulated by the CAA except for those stores in Safeway’s Dominick’s Division, which was the subject of a 2004 settlement with the United States.
The settlement was lodged today in the U.S. District Court for the Northern District of California, and is subject to a 30-day public comment period and final court approval. It will be available for viewing at www.justice.gov/enrd/Consent_Decrees.
Wednesday, September 4, 2013
United States Reaches Settlement with Safeway to Reduce Emissions of Ozone-Depleting Substances Nationwide
In a settlement agreement with the United States, Safeway, the nation’s second largest grocery store chain, has agreed to pay a $600,000 civil penalty and implement a corporate-wide plan to significantly reduce its emissions of ozone-depleting substances from refrigeration equipment at 659 of its stores nationwide, estimated to cost approximately $4.1 million, announced the U.S. Environmental Protection Agency (EPA) and Department of Justice today.
The settlement involves the largest number of facilities ever under the Clean Air Act (CAA)’s regulations governing refrigeration equipment.
The settlement resolves allegations that Safeway violated the federal CAA by failing to promptly repair leaks of HCFC-22, a hydro-chlorofluorocarbon that is a greenhouse gas and ozone-depleting substance used as a coolant in refrigerators, and failed to keep adequate records of the servicing of its refrigeration equipment. Safeway will now implement a corporate refrigerant compliance management system to comply with stratospheric ozone regulations. In addition, Safeway will reduce its corporate-wide average leak rate from 25 percent in 2012 to 18 percent or below in 2015. The company will also reduce the aggregate refrigerant emissions at its highest-emission stores by 10 percent each year for three years.
“Safeway’s new corporate commitment to reduce air pollution and help protect the ozone layer is vital and significant,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Fixing leaks, improving compliance and reducing emissions will make a real difference in protecting us from the dangers of ozone depletion, while reducing the impact on climate change.”
“This first-of-its-kind settlement will benefit all Americans by cutting emissions of ozone-depleting substances across Safeway’s national supermarket chain,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “It can serve as a model for comprehensive solutions that improve industry compliance with the nation’s Clean Air Act.”
HCFC-22 is up to 1,800 times more potent than carbon dioxide in terms of global warming emissions. The measures that Safeway has committed to are expected to prevent over 100,000 pounds of future releases of ozone-depleting refrigerants that destroy the ozone layer.
EPA regulations issued under Title VI of the CAA require that owner or operators of commercial refrigeration equipment that contains over 50 pounds of ozone-depleting refrigerants, and that has an annual leak rate greater than 35 percent repair such leaks within 30 days.
HCFCs deplete the stratospheric ozone layer, which allows dangerous amounts of cancer-causing ultraviolet rays from the sun to strike the earth, leading to adverse health effects that include skin cancers, cataracts, and suppressed immune systems. Pursuant to the Montreal Protocol, the United States is implementing strict reductions of ozone-depleting refrigerants, including a production and importation ban by 2020 of HCFC-22, a common refrigerant used by supermarkets.
The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including large grocery stores.
Corporate commitments to reduce emissions from refrigeration systems have been increasing in recent years. EPA’s GreenChill Partnership Program works with food retailers to reduce refrigerant emissions and decrease their impact on the ozone layer and climate change by transitioning to environmentally friendlier refrigerants, using less refrigerant and eliminating leaks, and adopting green refrigeration technologies and best environmental practices.
Safeway, headquartered in Pleasanton, Calif., is the second largest grocery chain in North America with 1,412 stores in the United States and 2012 revenues of $44.2 billion. Safeway operates companies under the banner of Vons in southern California and Nevada, Randalls in Texas, and Carrs in Alaska. The settlement covers 659 Safeway stores – all Safeway stores in the United States that have commercial refrigeration equipment regulated by the CAA except for those stores in Safeway’s Dominick’s Division, which was the subject of a 2004 settlement with the United States.
The settlement was lodged today in the U.S. District Court for the Northern District of California, and is subject to a 30-day public comment period and final court approval. It will be available for viewing at www.justice.gov/enrd/Consent_Decrees.
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