Citigroup to settle rate case for $100M
NEW YORK -- Citigroup agreed Friday to pay $100 million to settle charges that its bankers manipulated an important interest rate used to price everything from credit cards to mortgages.
It is the latest major bank to settle charges related to the manipulation of the London Interbank Offered Rate, better known as LIBOR.
Citigroup will pay $100 million to the New York attorney general's office and 41 other states involved with the investigation, including Arkansas, New York Attorney General Barbara Underwood said Friday. New York has been leading the LIBOR investigations.
The New York attorney general's office alleged that Citigroup earned millions in revenue off manipulating LIBOR, along with other financial institutions.
LIBOR is priced every day, and is a widely quoted interest rate used to price a myriad of financial instruments. Credit cards interest rates typically use LIBOR as its benchmark, for example.
Citigroup had paid $95 million to European Union authorities back in 2013 over its role in LIBOR manipulation. The bank said in a statement that Friday's settlement "represents another significant step for Citigroup in resolving its legacy interbank offered rate litigation."
-- The Associated Press
Theranos' founder charged with fraud
SAN FRANCISCO -- Theranos Inc. founder Elizabeth Holmes, who reigned briefly as the world's youngest female self-made billionaire over her promise to revolutionize blood testing, was criminally charged, along with the company's former president, with defrauding investors.
The indictment announced Friday by the U.S. attorney in San Francisco alleging wire fraud follows claims by the U.S. Securities and Exchange Commission that Theranos, Holmes and the company's ex-president, Ramesh "Sunny" Balwani, lied about their technology while raising more than $700 million to build the medical-testing startup.
The charges are the most serious blow to the company since scrutiny by the media and regulators escalated in 2015. After its valuation peaked at $9 billion in 2013 and 2014, Holmes and Balwani spent millions of dollars defending against shareholder and consumer lawsuits and settling claims, including a suit by would-be partner Walgreens Boots Alliance Inc. The startup was on the verge of bankruptcy by the end of 2017 when it got a loan that it said would keep the business afloat for another year, according to the commission.
-- Bloomberg News
Kellogg's recalls Honey Smacks cereal
ATLANTA -- A salmonella outbreak linked to Kellogg's Honey Smacks cereal has sickened 73 people in 31 states, according to federal health officials, prompting a recall of some of the product this week. As of Thursday, 24 people had been hospitalized, but no deaths had been reported.
Cereal boxes that have a "best if used by" date of June 14, 2018, through June 14, 2019, on the tops of 15.3-ounce and 23-ounce packages of the cereal should be thrown away, according to a statement from the Centers for Disease Control and Prevention. It also advised that any containers used to store the cereal should be washed.
The illnesses took place between March 3 and May 28 in people who ranged in age from less than a year to 87 years old.
The Kellogg Co. said in a statement Thursday that it would give consumers a refund for affected products, which were distributed across the United States, and in Costa Rica, Guatemala, Mexico, the Caribbean, Guam, Tahiti and Saipan. The company and the CDC did not specify which states were involved and which stores had sold boxes associated with the illnesses.
-- The New York Times
FDA approves generic opioid treatment
WASHINGTON -- U.S. regulators have approved the first generic version of an under-the-tongue film for treating opioid addiction.
The Food and Drug Administration on Thursday approved a generic version of Suboxone, a film strip that dissolves under the tongue. Used daily, it reduces withdrawal symptoms, cravings for opioids and the high from abusing them.
The medication combines buprenorphine and naloxone. It's used along with counseling and other behavioral therapy.
The generic version will be sold by partners Mylan N.V. and Dr. Reddy's Laboratories SA. They didn't immediately respond to questions about when their version will be available or what it will cost.
Brand-name Suboxone film costs about $200 a month without insurance.
The FDA said the approval was aimed at making the treatment available to more people.
-- The Associated Press
American Airlines settles antitrust suit
FORT WORTH -- American Airlines Group Inc. agreed to pay $45 million to end a consumer antitrust lawsuit that accused it and three other major U.S. airlines of colluding to limit plane capacity and drive up domestic airfares.
The Fort Worth-based carrier is the second to settle in the 3-year-old litigation. Southwest Airlines Co. won preliminary court approval for its offer to pay $15 million and cooperate in the case in January. American, too, has pledged its cooperation as the litigation continues against United Continental Holdings Inc. and Delta Air Lines Inc.
The four airlines' fares rose substantially even though demand was stagnant and the price of jet fuel, one of the largest costs for airlines, was declining, according to the consumers. Executives for those companies are accused of assuring one another that they'd adhere to "capacity discipline" and of carrying out their scheme by limiting consumers' ability to compare prices and deter market entry by foreign rivals.
American spokesman Matt Miller said the airline denies the allegations and, in settling, admitted no wrongdoing.
Passengers claimed that the airlines' collusion began in early 2009 and led to higher fares and reduced flight choices.
-- Bloomberg News
Business on 06/16/2018