Lloyds settles in rate-rigging case
LONDON -- Lloyds Banking Group will pay $369 million to U.S. and British authorities to settle allegations it manipulated a key global interest rate.
Lloyds, one of the world's largest banks, on Monday became the sixth financial firm sanctioned in the international rate-rigging scandal. The U.S. and British regulators said Lloyds attempted to manipulate and, in some cases, succeeded in manipulating the London interbank offered rate, known as libor.
The libor, the rate used by banks to borrow from each other, affects trillions of dollars in contracts around the world, including mortgages, bonds and consumer loans.
Under an agreement with the U.S. Justice Department, Lloyds will be allowed to avoid criminal prosecution in exchange for admitting responsibility for misconduct and continuing to cooperate in the investigation of major banks' actions regarding libor.
The misconduct by Lloyds occurred between May 2006 and 2009, according to the British and U.S. regulators. They said traders at Lloyds rigged the estimates of borrowing costs submitted by the bank to help set the rate, to benefit their own trading positions and those of their friends.
British banks Barclays and Royal Bank of Scotland; Switzerland's biggest bank, UBS; and Rabobank of the Netherlands have also been fined for rate rigging. Nine people face criminal charges.
-- The Associated Press
Wendy's to pull out of Russian market
Wendy's Co., the third-biggest U.S. fast-food hamburger chain, said it's retreating from the Russian market after three years, after a change in the local franchisee's management.
The country's eight Wendy's outlets are being shut down, Bob Bertini, a spokesman for Dublin, Ohio-based Wendy's, said by email in a response to questions. Wenrus Restaurant Group, a former unit of Moscow-based Food Service Capital, had agreed in 2010 to open 180 restaurants under the format across Russia within a decade. There was a change in Wenrus's ownership and management in the past year, Bertini said.
"Unfortunately, the new leadership of Wenrus has not expressed interest in growing Wendy's business in Russia, nor shown they have the resources to successfully operate the existing restaurants on a long-term basis," Bertini said.
Muscovites have been getting the taste of American fast food since 1990, when McDonald's Corp. opened its first restaurant there.
-- Bloomberg News
Virgin America airline files plans for IPO
NEW YORK -- Virgin America, the California-based airline, filed Monday for an initial public offering of shares.
Virgin America Inc., which operates out of Los Angeles and San Francisco, flies to 22 airports in the United States and Mexico and has a fleet of 53 planes.
The airline carried 6.3 million passengers last year, less than 1 percent of the total passengers who flew on U.S. airlines. And its fleet is small compared with other carriers. United Airlines has more than 1,200 aircraft in its fleet. Virgin America was founded in 2004 but wasn't approved for flying until the summer of 2007.
The company was unprofitable until last year, when it reported a profit of $10.1 million. Since 2009, Virgin America has lost about $407.5 million. Revenue in 2013 rose 6.9 percent to $1.42 billion from $1.33 billion in 2012, according to the filling.
The company licenses the Virgin brand name from the Virgin Group. VX Holdings, the Virgin Group's parent company, has a 22.1 percent stake in Virgin America, according to the filing.
The company, which has its headquarters in Burlingame, Calif., did not say when it expects the IPO to happen, how many shares it plans to offer, how much each share will cost or which exchange they will trade on.
-- The Associated Press
McDonald's pulls meat from China cafes
McDonald's Corp. pulled beef, pork and chicken items from its restaurants in China as a supplier recalled products made in the country, threatening to further damage Chinese consumers' trust in fast-food chains' safety.
The restaurant company's China unit said in an emailed statement Monday that it is offering a "limited" menu in the country, and delivery dispatchers for McDonald's in Beijing and Shanghai confirmed that fish sandwiches are the only sandwiches available.
The scare -- prompted by a recall at supplier OSI Group LLC, which is accused of repackaging old meat as new -- is fueling concerns that China has yet to ensure the safety of its food supply despite years of government investigations and penalties. The latest episode, involving a foreign-owned company, suggests the problems affect even suppliers previously thought reliable.
"This recall may spoil any remaining goodwill consumers have for fast-food restaurants," said Michael Griffiths, a Shanghai-based qualitative research director at TNS China Co. "Food safety is right on the top of consumers' agenda."
McDonald's is China's second-largest fast-food chain by market share, trailing only Louisville, Ky.-based Yum! Brands Inc.
-- Bloomberg News
Britain opens bids for fracking permits
LONDON -- Energy firms were able to bid for licenses Monday to explore for shale gas in Britain, three years after the fracking process caused seismic tremors that led the government to suspend operations.
Business and Energy Minister Matthew Hancock said shale gas has the potential to increase the country's energy supply, but stressed national parks will be protected.
"Done right, speeding up shale will mean more jobs and opportunities for people and help ensure long-term economic and energy security for our country," he said.
The new licenses allow firms to start exploring for shale gas, with further permits required before drilling can begin. The government said national parks and other important sites will be protected unless there are "exceptional circumstances."
Drilling for shale gas, a process known as fracking, is a contentious issue in Britain, with protests disrupting some operations. The fracking process, which involves injecting water, proprietary chemicals and sand into shale rock to extract gas, is opposed by Britain's environmental lobby.
-- The Associated Press
Business on 07/29/2014