French bank guilty, will pay $8.9 billion
BNP Paribas SA pleaded guilty Monday and agreed to pay $8.9 billion for violating U.S. sanctions in a case that has spanned several years and reached the highest echelons of French and American diplomacy.
BNP, France's largest bank, admitted that it processed almost $9 billion in banned transactions from 2004 to 2012 involving Sudan, Iran and Cuba, the Justice Department said in a statement. The bank will also be barred from some U.S. dollar-clearing operations for one year, according to the statement.
As part of the agreement, New York's top banking regulator required 13 executives to leave the bank, including Georges Chodron de Courcel, co-chief operating officer; Vivien Levy-Garboua, former head of compliance; Dominique Remy, former head of structured finance for the corporate investment bank; and Stephen Strombelline, head of ethics and compliance for North America, the regulator said in a statement.
"BNP Paribas went to elaborate lengths to conceal prohibited transactions, cover its tracks and deceive U.S. authorities," U.S. Attorney General Eric Holder said. "If sanctions are to have teeth, violations must be punished."
Fallout from the investigation, and negotiations over its settlement with state and federal prosecutors, has reached the highest levels of the French and American governments. Overtures this year by numerous French officials, including President Francois Hollande, weren't enough to persuade U.S. officials to take a more lenient approach with the Paris-based bank.
-- Bloomberg News
Southwest ready to fly international
From its Texas beginnings 43 years ago, Southwest Airlines Co. has grown to be the largest domestic carrier in the United States. But it has never flown to an airport outside the U.S.
That changes today.
The Dallas-based carrier will begin flights to the Bahamas, Aruba and Jamaica today. It adds flights to Cancun and Los Cabos, Mexico, on Aug. 10, and Mexico City and Punta Cana, Dominican Republic, on Nov. 2.
"It's huge," Southwest executive Teresa Laraba said last week about today's move into international markets. "Obviously we've been waiting for 43 years to get to this point. It's a pretty big deal. It's such an opportunity for us to plant our name and flag in international waters, and we've never done it. We are pretty excited around this place."
Right now, those cities are served by AirTran Airways Inc., a carrier acquired by Southwest in May 2011. Southwest has been absorbing the smaller carrier over time but had not assumed any of AirTran's international markets.
As Southwest enters the seven international cities in the next four months, AirTran will pull out. On Dec. 28, AirTran will operate its last flight, from Atlanta to Tampa, Fla., as it finishes its integration into Southwest.
Dallas Love Field will not be part of the international flight expansion.
-- The Dallas Morning News
Ex-BP official can be tried, court says
NEW ORLEANS -- A federal appeals court in New Orleans says a former BP executive can be tried on a charge that he obstructed a Congressional investigation into the 2010 Gulf oil spill.
The 5th Circuit Court of Appeals decision posted Monday reversed a ruling by U.S. District Judge Kurt Engelhardt.
The case involves allegations that David Rainey failed to disclose information from BP PLC indicating that the amount of oil gushing into the Gulf after the 2010 Deepwater Horizon explosion could have been far higher than estimates that were being made publicly.
Engelhardt had ruled in favor of defense lawyers who said the law that Rainey was charged with breaking refers specifically to congressional committees, but not subcommittees.
A three-judge 5th Circuit panel disagreed, saying the law includes congressional subcommittees.
-- The Associated Press
2 charged after run on Bulgarian banks
SOFIA, Bulgaria -- Two brokers have been charged with plotting to undermine Bulgaria's top banks by spreading rumors of their instability, triggering runs on deposits and forcing the government to step in with rescue aid.
Police arrested five people Sunday for allegedly sending hundreds of text messages and emails last week "to spread false information that caused detriment to commercial banks and destabilized the banking system." Two of them -- investment brokers from financial services firm Global Markets -- were charged Monday and could face two years of prison.
The company could not be reached for comment, and it was not clear whether the employees acted upon their own initiatives.
Rumors of liquidity shortfalls had caused widespread concern, and a run began on the fourth-largest lender, Corpbank, a week ago. Bulgarian authorities allege that the two men sought to take advantage of the situation by spreading rumors about other banks, leading to a run on First Investment Bank, the country's third-largest lender, Friday.
The government decided this weekend to offer a $2.25 billion emergency credit line to the banks to stabilize them. Shares in the banks soared Monday after the European Commission cleared the move.
-- The Associated Press
Sale closes on Canadian railroad assets
PORTLAND, Maine -- The $15.85 million sale of a bankrupt railroad responsible for a deadly oil train derailment in Quebec is now complete with transfer of the company's Canadian assets to new ownership.
More than a month ago, parties completed the sale of U.S. assets of Montreal, Maine and Atlantic Railway to a subsidiary of New York-based Fortress Investment Group. But the Canadian closing was delayed until regulators issued a "certificate of fitness."
Bankruptcy trustee Bob Keach said the Canadian sale was completed Monday.
The derailment last summer in Lac-Megantic claimed 47 lives, making it the worst railway accident in Canada in nearly 150 years. It led to calls for making oil trains safer across North America.
The railroad's new name is Central Maine and Quebec Railway.
-- The Associated Press
Ikea opens 1st urban store in Germany
HAMBURG, Germany -- Ikea became the world's biggest home-furnishings retailer by getting shoppers to drive to sprawling hyper-centers on the outskirts of cities from Stockholm to Shanghai. After Monday, residents in Hamburg can just walk in off the high street.
The Swedish chain opened its first city-center store in the district of Altona, the most westerly of Hamburg's seven boroughs, in a pilot project targeting a rising number of urbanites who dread the long haul to its traditional outlets with their distinctive blue and yellow design. The store opening, which is costing the company $109 million, is an experiment for Ikea, breaking new ground in its largest market, said Johannes Ferber, the managing director who's spearheading Ikea's expansion in Germany.
"It's a very expensive experiment for us, but we want to know if the city-store concept works out," he said. "Altona could serve as a model for other big cities such as Berlin."
The venture is part of a wider trend by retailers to populate urban centers as companies from Tesco to Carrefour open smaller downtown shops. Carmakers are also discovering city centers. Daimler last month opened its first Mercedes Me store, also in Hamburg, with a bistro, gallery area and a single car on show.
Ikea, which operates 356 stores worldwide, has 49 centers in Germany. The Altona outlet is its third in the port town, Germany's second-largest and most affluent city in terms of gross domestic product per capita, according to statistics compiled by the local business development authority.
-- The Associated Press
Business on 07/01/2014