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Thursday Papers: UBS pays price for ‘epic’ scandal

Thursday Papers: UBS pays price for ‘epic’ scandal

Top stories

  • Financial Times: UBS agreed to pay a record $1.5 billion to US, UK and Swiss regulators to settle allegations of “pervasive” and “epic” efforts to manipulate Libor.
  • Financial Times: UBS traders and managers on three continents used phone calls, electronic chat rooms and emails to manipulate benchmark interest rates in five currencies on an almost daily basis, according to documents filed by US, UK and Swiss authorities.
  • Financial Times: The US auto industry took a key step towards ending more than four years of dependence on the US government when General Motors revealed on Wednesday it would pay $5.5 billion to buy back 40% of the Treasury stake in the carmaker.
  • Daily Mail: The British pound continued its one-month surge against the US dollar on Wednesday after signals from the Bank of England indicated that no more cash will be injected into the economy before the spring; Sterling ticked up half a cent from $1.625 to $1.630.
  • Financial Times: The incoming governor of the Bank of England, Mark Carney, will get a housing allowance that dwarfs the salary of the prime minister.
  • The Daily Telegraph: Facebook founder Mark Zuckerberg has donated $500 million to charity.
  • The Independent: Lloyd's of London has warned that Superstorm Sandy, which devastated parts of the US east coast in October, could cost it up to $2.5 billion, making it one of the costliest disasters in the insurance market's history.
  • Financial Times: The UK’s takeover watchdog has entered the controversy surrounding Bumi Plc, capping the voting rights of the coal miner’s key Indonesian shareholders and pledging to investigate the deal that created the London-listed group.
  • Financial Times: Focus Media, the US-listed Chinese advertising company, has formally agreed a $3.7 billion offer to take the company private from a group of private equity funds, including Carlyle.
  • The Independent: The energy grid operator National Grid has awarded £3.1 billion worth of contracts to companies including the construction group Balfour Beatty to upgrade its gas distribution systems.
  • Financial Times: Wendelin Wiedeking and Holger Härter‬, Porsche’s former chief executive and chief financial officer, respectively, have been charged by German prosecutors with market manipulation after a lengthy investigation into the sports car maker’s controversial attempt to take over the much larger Volkswagen.
  • The Daily Telegraph: GlaxoSmithKline has agreed to pay US drug wholesalers $150 million, after they claimed the company improperly maintained a market monopoly of its nasal spray by restricting access to less expensive versions.
  • Financial Times: Eastman Kodak has sold its digital imaging patents to a consortium of bidders for around $525 million, less than a quarter of the $2.6 billion it had suggested they were worth when it began the auction in August.
  • Financial Times: Lloyds TSB and Bank of Scotland will suspend telephone and branch sales of packaged bank accounts next year, as fears grow that the product could spark the next consumer mis-selling scandal.

Business and economics

  • Daily Mail: Britain and the US could lose their triple-A status if they fail to tackle their deficit, ratings firm Fitch warned on Wednesday.
  • The Daily Telegraph: The Bank of England has warned that the economy is "quite likely" to shrink in the final three months of the year, bringing the recovery to an abrupt end, as it forecast that inflation will remain above 2% "for the next year or so".
  • Financial Times: Next year will be “a make or break” year for Greece’s future as a member of the eurozone, the country’s finance minister has said, warning Europe’s leaders that Athens still faces “the possible risk” of crashing out of the currency bloc.
  • Financial Times: Preliminary figures from Dealogic, released on Wednesday, show global issuance of both high-yield, or junk, bonds and investment grade corporate bonds set records in 2012.
  • The Guardian: Revenue & Customs is to write to some of Britain's wealthiest bankers, hedge fund managers and celebrities offering a chance to settle income tax avoidance schemes estimated to have sheltered more than £3.5 billion through film financing structures and other tax-motivated partnerships.
  • The Daily Telegraph: Barclays has "made a big mistake" in offering its new compliance officer, Hector Sants, a pay package reportedly worth as much as £3 million, former treasury minister Lord Myners has warned.
  • Financial Times: Raphael Geys, SocGen’s former head of European fixed income, who sued Société Générale over a termination payment of €12.5 million he claimed he was owed, has won his case at the UK’s highest court.
  • The Daily Telegraph: British defence giant BAE Systems warned profits might be lower than expected in 2012 because it has still failed to agree a price with Saudi Arabia for its Typhoon fighter jets despite securing the order five years ago.
  • Financial Times: FedEx said the superstorm Sandy was responsible for 11 cents of an 11% fall in earnings per share, from $1.57 to $1.39; net income for the quarter was $438 million, on revenue up 5% to $11.1 billion.
  • The Guardian: BT has awarded the £100 millio-plus contract to produce its live coverage of Premier League football and Premiership rugby union matches to Sunset+Vine.
  • Financial Times: Colt, the telecoms and technology group, will cut more than 200 jobs as part of a wider restructuring of its business to focus on growth areas such as data centres and reduce annual costs by €44 million.
  • The Daily Telegraph: The Co-operative Group has announced the surprise appointment of Euan Sutherland from Kingfisher as its new group chief executive.
  • Financial Times: The intensifying struggle by private equity groups to raise funds has spurred plans by Apax Partners to call time on its current fund marketing push after reckoning its €9 billion target is out of reach.
  • The Independent: Scotch whiskey maker Whyte & Mackay made a profit of £15.3 million on sales which increased by more than 35% to £229.8 million for the year to the end of March 2012.

Share tips, comment and bids

  • Financial Times: Google has reached a $2.35 billion cash-and-stock deal to sell the TV set-top business it acquired when it bought Motorola Mobility earlier this year.
  • Financial Times: Getco, the high-frequency trading firm, has acquired Knight Capital in a $1.8 billion deal that could see the creation of one of the largest US electronic trading and market-making companies on Wall Street.
  • Financial Times: British American Tobacco has acquired CN Creative, a UK-based start-up which specialises in the development of ecigarettes, for an undisclosed sum.
  • Financial Times (Comment – Lombard): Conduct in UBS Libor scandal shows a need to rediscover ethics.
  • The Guardian (Comment): News that Swiss banking giant UBS has been fined £944 million for rigging the Libor rate, raises the question: "Has the culture of banking changed since the financial crash?"
  • The Daily Telegraph (Comment): Libor rigging: Banks should be banned not fined.
  • The Daily Telegraph (Comment): Long-suffering investors look set to gain from Aviva’s decision to end the pain in Spain.
  • Daily Mail (Comment – Alex Brummer): What is absolutely clear from the near-£1billion fine now imposed on UBS by regulators in Britain, US and Switzerland is that whatever Barclays did wrong UBS was even worse.
  • Financial Times (Lex): GM and Treasury: the government’s books are growing tidier; they remain far from clean.
  • Financial Times (Lex): UBS: the Swiss bank is becoming a serial offender when it comes to destroying value through compliance failures. Is this the last of the bad news?
  • Financial Times (Lex): South Korea election: Park Geun-hye becomes the first female president of South Korea, but she must deliver against a challenging backdrop of slow growth and a large export dependence.
  • Financial Times (Lex): Telecoms equipment: the sector has performed well recently, but when the cold light of 2013 dawns, will prospects will look rather less twinkly?

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