Bloomberg News

Chinese Raid Microsoft, Barclays Swiss Unit: Compliance

July 30, 2014

Chinese regulators opened an anti-monopoly investigation into Microsoft Corp. (MSFT:US), seizing computers and documents from offices in four cities amid escalating tensions with U.S. technology companies.

The government also is investigating Microsoft executives in China, including a vice president, according to a statement posted yesterday on the State Administration for Industry & Commerce website. The regulator urged the company to cooperate after almost 100 members of its staff inspected the offices July 28, copying contracts and financial statements.

China stepped up the pressure on U.S. companies after American prosecutors indicted five Chinese military officers in May, accusing them of stealing corporate secrets.

Microsoft acknowledged the probe July 28 in an e-mail and said it’s “happy to answer” government questions.

The U.S. and China have traded accusations over cyberspying on information-technology security for years.

Compliance Action

Barclays Swiss Unit Quits U.S. Justice Department Tax Program

Barclays Plc (BARC)’s Swiss unit is withdrawing from the U.S. Justice Department’s taxpayer disclosure program, a bank official said.

The official asked not to be identified as the information hasn’t been publicly announced.

Barclays said in its 2013 annual report that it would take part in the program, which required a review of U.S. client accounts in Switzerland.

The U.S. previously said 106 Swiss banks applied to join the program to seek non-prosecution agreements for managing undeclared money for Americans.

U.K. Markets Agency’s Tougher Stand Sends Settlement Rate to 97%

Almost all the fines levied by the U.K. Financial Conduct Authority since 2010 have come through settlements as the regulator’s tougher stance pushes more firms to yield quickly, according to law firm data.

Of the 944 million pounds ($1.6 billion) in fines reaped by the FCA from January 2010 to December 2013, 915 million pounds, or 97 percent, came from settlements, London-based Freshfields Bruckhaus Deringer LLP said, citing public records.

Firms and individuals who settle early can get a discount of as much as 30 percent. Or they can challenge the fine before the Regulatory Decisions Committee, an FCA forum that plays a role in approving and reviewing fines.

Lara Joseph, a spokeswoman for the FCA, declined to comment on Freshfields’ findings.

The U.K. Treasury opened a consultation on the FCA’s enforcement decision-making processes in May. The review, due in the autumn, will examine the role of the decisions committee in particular.

DreamWorks Animation Slides After Loss as SEC Probes Writedown

DreamWorks Animation SKG Inc. (DWA:US), the independent cartoon-movie studio, posted a second-quarter loss and said securities regulators are investigating a writedown. The shares fell 7.5 percent.

Executives said on a conference call yesterday that the U.S. Securities and Exchange Commission is looking into how the company wrote down its “Turbo” inventory, without being more specific. They said DreamWorks Animation learned of the investigation in the second quarter and is cooperating. They declined to elaborate further.

The company, led by co-founder Jeffrey Katzenberg, has struggled to recoup its costs on recent films such as “Turbo,” a 2013 movie that led to a writedown.

The studio’s current theatrical film, “How to Train Your Dragon 2,” has generated $424.6 million in worldwide box office sales, according to Box Office Mojo, a sum that’s shared with theaters and the company’s distributor, 21st Century Fox Inc.

“It will be a highly profitable film for the company,” Katzenberg said yesterday in a statement.

Interviews/Commentary

Deutsche Bank Reporting System to Be Ready on Time, CFO Says

“We are confident that the program we have in place will fully address our regulatory reporting requirements within the necessary time frame,” Deutsche Bank AG (DBK) Chief Financial Officer Stefan Krause said.

He made the comments on an investor call with Bloomberg News, responding to media reports on the bank’s U.S. regulatory reporting system.

The architecture of the bank’s U.S. compliance system is “complex and will take time to complete,” Krause said.

Sanctions May Pose Risk to BP’s Rosneft Dividend, Rainforth Says

Lydia Rainforth, an analyst at Barclays Plc, talked about the outlook for OAO Rosneft (ROSN)’s contribution to BP Plc (BP/)’s earnings and the possible impact of Russian sanctions on the company.

She spoke from London with Guy Johnson on Bloomberg Television’s “The Pulse.”

For the video, click here, and for more, click here.

To contact the reporter on this story: Carla Main in New Jersey at cmain2@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Charles Carter, Joe Schneider


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Companies Mentioned

  • MSFT
    (Microsoft Corp)
    • $45.64 USD
    • 0.62
    • 1.36%
  • DWA
    (DreamWorks Animation SKG Inc)
    • $22.95 USD
    • -0.79
    • -3.44%
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