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Citigroup faces $1 billion lawsuit for alleged fraud by Mexican oil companies
A U.S. court of appeals ruled Thursday that Citigroup will have to face a lawsuit alleging it caused over $1 billion in losses by orchestrating a fraud at the Mexican oil and gas service company Oceanografia. Three judges of the 11th U.S. Circuit Court of Appeals in Miami said that 30 Oceanografia vendors, creditors and bondholders adequately alleged that Citigroup substantially aided the fraud. A lower court judge erred by dismissing this nine-year-old case. Circuit Court of Appeals, Miami, said that 30 Oceanografia vendors and creditors, as well as bondholders, adequately alleged Citigroup's involvement in the fraud. A lower court judge erred by dismissing the case nine years ago. Danielle Romero Apsilos, Citigroup's spokeswoman declined to comment. Juan Morillo said that his clients were pleased with the ruling. Citigroup's Banamex division had advanced cash to Oceanografia which provided drilling services for Mexico's state owned oil company Petroleos Mexicanos, and collected interest on the advances. The plaintiffs include shipping and leasing companies as well as investment funds, and Rabobank in the Netherlands. They claim that Citigroup advanced $3.3billion to Oceanografia from 2008-2014 despite knowing it had too much debt, and was forging Pemex's signatures on authorization documents. Citigroup was fined by the U.S. Securities and Exchange Commission for Banamex's lack of internal controls in 2018. Former Citigroup CEO Michael Corbat claimed that the bank terminated 12 employees. Mexican regulators confirmed that 10 employees of the bank were held criminally responsible under Mexican law. Circuit Judge Britt grant found in an 82 page decision that there were sufficient allegations to prove that Citigroup had withheld important information about Oceanografia, and the interest payments provided a financial incentive. She added, "Citigroup, as one of the most sophisticated financial institutions in the world, is a difficult conclusion to draw if the plaintiffs' claims are true. Citigroup was unaware of Oceanografia's activities." The case was returned to U.S. district judge Darrin Gayles of Miami who dismissed it on August 20, 2023. Otto Candies LLC et al v Citigroup Inc., 11th U.S. Circuit Court of Appeals. Circuit Court of Appeals No. 23-13152. Reporting by Jonathan Stempel, New York; Editing and production by Richard Chang
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Document: Mali is pressed to pay an 'enormous debt' for a regional dam
A letter obtained by reveals that Mali owes over $94 million to an entity which manages a dam, which provides electricity to Senegal, Mauritania and other countries. The debt is "a matter of life or death" to its ability to operate, the letter states. The funding gap is a warning sign of further electricity supply problems for Mali. Outages have weakened public support in recent years for the military-led government which took power in coups in 2020-2021. Manantali Dam and Power Plant was installed in 2002 with a capacity of 200 Megawatts. Its production is distributed to Mali, Senegal and Mauritania. According to a letter sent by SOGEM on April 25 to the director general of Mali's electricity utility, Energie du Mali (Mali), Mali owes SOGEM "an enormous amount" of more than 54 billion CFA francs (94.12 millions) for the management of Manantali, among other projects. The letter was signed by Mohamed Mahmoud Sid'Elemine, the director general of SOGEM. Energy du Mali admitted in a Thursday statement that it owed SOGEM 43.8 billion CFA Francs and another 11.9 billion CFA Francs to an entity separate involved in the operation and maintenance of the dam. When asked why SOGEM had not paid the sums, they said that SOGEM projects - such as other dams – had "experienced substantial delays" which had affected Mali’s energy sector. It said that the utility "had no choice but to resort to expensive solutions such as leasing generators from private operators" to make up for its expected production shortfall. The SOGEM letter touts the Manantali Project as a success for regional co-operation that cost hundreds billions of CFA Francs to implement. Mali, Burkina Faso, and Niger were members of the Alliance of Sahel States. They announced their departure from the West African political and economic bloc called ECOWAS last year. $1 = 573.7500 CFA francs (Reporting and writing by Idrissa Singare; Editing and proofreading by Ayen Deng Bior and Aiden Lewis)
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Dollar gains and optimism about US/UK trade deal boost global stock markets
Dollar and Treasury yields rose on Thursday, after U.S. president Donald Trump announced a trade deal with Britain a day after the U.S. Federal Reserve opted to wait and see on interest rates. Bitcoin gained 4.83%, reaching $101,440.22. Ethereum grew by 14.72%, to $2 063.23. The U.S. and British trade agreement is the first announced deal since Trump initiated a 90-day pause in tariffs imposed by his administration on many U.S. Trading Partners a month earlier to give time for negotiations with other countries. Investors also await planned talks between U.S. officials and Chinese officials scheduled for the weekend in Switzerland. This could be a first step to reducing the damaging trade conflict between the two largest economies in the world. Investors have shown signs of frustration over the lack concrete details this week, despite being enthusiastic about the Trump administration's signals that it is in trade negotiations over the last month. Gene Goldman said that investors are relieved to see that progress is being made on trade agreements. He added that it "seems like the administration is going in the right direction." Goldman added that the U.S. and British agreement, which is still under development, "provides some optimism heading into weekend negotiations with China." Indexes on Wall Street extended gains following the announcement. At 11:51 am (1551 GMT), Dow Jones Industrial Average rose by 573.16, or 1.39 percent, to 41.685.11, S&P 500 gained 77.14, or 1.37 percent, to 5,708.56, and Nasdaq Composite increased by 311.92, or 1.76 percent, to 18,050.09. The MSCI index of global stocks rose by 5.72 points or 0.68% to 849.75, while the pan-European STOXX 600 rose by 0.44. Investors are still digesting Wednesday's U.S. Federal Reserve policy update, in which it maintained its interest rate range at 4.25%-4.5% for the third consecutive meeting. As it navigated the economic uncertainty caused by Trump's policies, the U.S. Central Bank warned of increased risks for higher inflation and unemployment. The pound has lost ground in terms of currencies after the recent trade agreement and the widely anticipated quarter-point cut by the Bank of England. Sterling fell 0.14% to $1.327. The dollar index measures the greenback in relation to a basket including the yen, the euro and other currencies. The price of 100.44 rose by 0.55%. The dollar gained 1.16% against the Japanese yen to reach 145.49. Sweden and Norway have also hinted that they may also lower rates in the second half of this year. The Swedish crown fell 0.48% against the dollar, to 9.704. The yield on the benchmark 10-year U.S. notes increased 5.5 basis point to 4.33% from 4.275% on Wednesday. Meanwhile, the 30-year bond's yield increased 2.9 basis points, to 4.8011%. The yield on the 2-year note, which moves typically in line with Fed expectations for interest rates, increased 7.3 basis points from 3.793% to 3.866%. On the commodities market, oil futures, which had dropped by more than $1 Wednesday, rose on Thursday on hopes that the United States will reach a trade agreement with China, the two biggest oil consumers in the world. U.S. crude climbed 3.29%, to $59.98 per barrel. Brent rose to $62.93 a barrel, up by 2.96% for the day. Spot gold dropped 1.09% to $3.327.49 per ounce. U.S. Gold Futures dropped 1.48% to an ounce of $3,331.30. (Reporting and editing by Sinead carew, Johann M Cherian and Marc Jones, with Chizu Nomiyama, Will Dunham, and Will Dunham).
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What is the US-UK Economic Deal?
The United States announced on Thursday a deal with Britain to lower tariffs for some goods. U.S. duties on steel and cars will be reduced, and both sides will gain better access to the agriculture market. Here are some key points of the agreement. Basic 10% Tariff Howard Lutnick, the U.S. Secretary of Commerce, said that the basic tariff rate of 10% would remain in effect. CAR TARIFFS The British government announced that the agreement will reduce tariffs for some British-made vehicles from 27,5% to 10%. The British government announced that British carmakers would be allowed to export 100,000 cars per year at a lower tariff rate. This is almost what Britain exported in the past year. STEEL TARIFFS The British government has also announced that the 25% tariffs on British steel exported to the U.S. would be reduced to zero. PLANES Lutnick stated that British companies will now be able export parts of planes to the United States without tariffs. Boeing planes worth $10 billion are expected to be purchased by a British airline in return. AGRICULTURAL TARIFFS The British government announced that there would be a "reciprocal access to the market on beef", with British farmers receiving a quota of 13,000 metric tons free of tariff. Britain will also eliminate tariffs on U.S. beer ethanol. MOVIES The U.S. president Donald Trump has said that the talks with Britain about his plan to impose a tariff on film imports will take place separately from the agreement. He said, "James Bond is not in danger." SPEAK UP AGAIN Both sides will try to reach an agreement on a wider deal, which will include pharmaceuticals as well as a reduction of the remaining tariffs. The U.S. also agreed to give the UK preferential treatment for any future tariffs imposed in Section 232 investigations, which gives the U.S. President the power to restrict imports if it is found that they threaten national security. The UK Digital Services Tax is unchanged.
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Proxy advisor opposes Holcim Chairman's $58 Million compensation package
Ethos, a proxy advisor, has urged Holcim shareholders not to accept the company's proposed remuneration. It said that Jan Jenisch would be the highest paid manager in Swiss blue-chip firms by 2024 if he received the estimated compensation of 48 million Swiss Francs ($58 million). Ethos calculated Jenisch's realised compensation based on his share options in 2020. Since the announcement that the company intends to spin off its North American business by January 2024, these options have gained significant value. Vincent Kaufmann (CEO of Ethos Foundation) said that Jan Jenisch's variable compensation for 2024 is unacceptable. It is 25 times the base salary he received as Holcim CEO. He called on the board to eliminate the option plan. Ethos reported that Holcim is one of only a few Swiss companies still granting share options with a leveraged effect. Holcim's response to Ethos' misleading framing Jenisch's compensation was given by Holcim when asked for comment. Holcim's spokesperson stated that Ethos had misrepresented the value of the option scheme, as it was based on a rolling five-year program reflecting record performance for a period of five years, and not an annual compensation. According to Ethos, share options that were worth 890'001 Swiss Francs in 2020 are now valued at more than 36,6 million Swiss Francs. The proxy advisor stated that the package totaled 48 million Swiss francs when you add up Jenisch's compensation for his four months in the CEO role last year, his chairman compensation for the eight remaining months of 2024 and the other shares awards. This figure is dwarfed by the 19.2 million Swiss francs that Novartis CEO Vas Nairsimhan received in compensation, which prompted criticism at its AGM. $1 = 0.8249 Swiss Francs (Reporting and writing by Oliver Hirt; editing by John Revill, David Evans, and Ariane Luthi)
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What is the US-UK Economic Deal?
The United States announced on Thursday a deal with Britain to lower tariffs for some goods. U.S. duties on steel and cars will be reduced, and both sides will gain better access to the agriculture market. Here are a few of the key points in the agreement. Basic 10% Tariff Howard Lutnick, the U.S. Secretary of Commerce, said that the basic tariff rate of 10% would remain in effect. CAR TARIFFS The British government announced that the agreement will reduce tariffs for some British-made vehicles from 27,5% to 10%. The British government announced that British carmakers would be allowed to export 100,000 cars per year at a lower tariff rate. This is almost what Britain exported in the past year. STEEL TARIFFS The British government has also announced that the 25% tariffs on British steel exported to the U.S. would be reduced to zero. PLANES Lutnick stated that British companies can now export parts of planes to the United States without paying tariffs. Boeing planes worth $10 billion are expected to be purchased by a British airline in return. AGRICULTURAL TARIFFS The British government announced that there would be a "reciprocal access to the market on beef", with British farmers receiving a quota of 13,000 metric tons free of tariff. Britain will also eliminate tariffs on U.S. beer ethanol. SPEAK UP AGAIN Both sides will try to reach an agreement on a wider deal, which will include pharmaceuticals as well as reducing any remaining tariffs. The U.S. also agreed to give the UK preferential treatment for any future tariffs imposed in Section 232 investigations, which gives the U.S. President the power to restrict imports if it is found that they threaten national security. The UK Digital Services Tax is unchanged.
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Talen Energy considers alternative options for data center supply after Amazon's setback
Talen Energy, the U.S. energy company, is looking at alternative arrangements for supplying electricity to data centres after regulators rejected a plan that would have fuelled an Amazon data centre directly from Talen’s Pennsylvania nuclear plant. The prospect of striking direct deals with Big Tech data centers has sparked a huge interest in independent U.S. energy producers such as Talen. This is what has pushed the shares of these companies to new highs. Co-located arrangements in which power plants are located near or at the data centers could eliminate the year-long waiting times for connecting to the wider electrical grid. Nevertheless, some companies are now making alternative plans after the Federal Energy Regulatory Commission ruled against their arrangements. Mac McFarland, CEO of Talen, said that there were multiple ways to power data centers during a conference call with investors. Talen is also considering data center deals that include the connection of the centers to grids as part of commercial power contracts. Giant Independent Power Producer Constellation Energy earlier this week After considering co-located deals for data centers at a number of its nuclear plants, the company said that it would also focus on more conventional power arrangements in data centers. Talen and Amazon's co-located data center agreement, announced in 2024, is a world first. Talen's power agreement with Amazon would see the nuclear plant in Susquehanna supply electricity to the data center up to 960 megawatts. FERC ruled in response to this deal last year that the power Amazon uses for its data center would be limited to 300 megawatts. This was due to concerns over power reliability and cost for the broader community. Talen executives confirmed that they continue to supply electricity to Amazon's data center and plan to reach 120 Megawatts by the year end. Talen is appealing FERC’s decision, and anticipates a court date on the case within the next few weeks. (Reporting and editing by Laila K. Kearney)
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Why is Saudi Arabia interested in a nuclear civil deal with the US
Saudi Arabia and the United States are discussing a deal to cooperate on the kingdom's ambitions to develop a civil nuclear industry, talks that have long been complicated by regional politics and concerns over weapons proliferation. Here are some of the main issues at play: WHY DOES SAUDI ARABIA WANT A NUCLEAR PROGRAMME? As the world's largest oil exporter Saudi Arabia may not seem an obvious candidate for nuclear power, but it aims to reduce carbon emissions and free up crude for export under Crown Prince Mohammed bin Salman's Vision 2030 economic plan. The U.S. Energy Information Administration said last year that 68% of Saudi electricity was generated by burning gas and 32% by burning oil, with 1.4 million barrels a day of crude being used for power generation during the peak month of June. Atomic power could displace some of that, including for energy-intensive water desalination and air conditioning, allowing the kingdom to make more money from oil sales. However, Saudi Arabia has also said that if old foe Iran develops a nuclear weapon it would have to follow suit - a declaration apparently aimed at ramping up pressure on Tehran, but which has also fuelled concern about its own ambitions. In January it said it would enrich uranium - a process that can also be used as part of a military programme - to create 'yellowcake' fuel for nuclear power generation that it could sell. Any deal with Washington would likely address safeguards to assuage worries about military ambitions, on top of Saudi Arabia's existing commitment not to pursue a bomb under the nuclear Non-Proliferation Treaty (NPT). WHAT'S IN IT FOR THE UNITED STATES? There could be strategic and commercial gains. Civil nuclear cooperation was an important inducement along with security guarantees in an effort by Trump's predecessor Joe Biden to broker a deal for Saudi Arabia and Israel to normalize relations. However, those two issues are now uncoupled, has reported, though a nuclear deal could be a sweetener in U.S. diplomatic efforts with the kingdom. Riyadh has ruled out normalizing ties with Israel without Palestinian statehood. U.S. Energy Secretary Chris Wright met Saudi Energy Minister Prince Abdulaziz bin Salman in April and said the two countries were on "a pathway" to a civil nuclear agreement. He made no mention of a wider deal over other issues such as normalisation. A deal would put U.S. industry in a prime spot to win contracts to build Saudi nuclear power plants as well as providing insight into the kingdom's atomic programme that could alleviate any U.S. worries over weapons proliferation. Under Section 123 of the U.S. Atomic Energy Act of 1954, the U.S. may negotiate agreements to engage in significant civil nuclear cooperation with other nations. It specifies nine nonproliferation criteria those states must meet to keep them from using the technology to develop nuclear arms or transfer sensitive materials to others. U.S. law stipulates congressional review of such pacts. SAUDI ARABIA HAS OPTIONS Should the U.S.-Saudi talks fail, several countries with established nuclear industries have expressed interest or are seen as potential partners for Saudi Arabia's nuclear programme. State-owned China National Nuclear Corp (CNNC) reportedly submitted a bid in 2023 to construct a nuclear plant. Russia's state nuclear firm Rosatom, which built a nuclear plant in Egypt, has also signed preliminary cooperation agreements with Riyadh. Other potential contenders include South Korea, which built reactors in the neighbouring United Arab Emirates, and France. The choice of partner will likely depend on technological offerings, financing, and geopolitical alignment, including conditions related to nuclear fuel handling. URANIUM ENRICHMENT A key issue is whether Washington might agree to build a uranium enrichment facility on Saudi territory, when it might do so, and whether Saudi personnel might have access to it or it would be run solely by U.S. staff in a "black box" arrangement. Without rigorous safeguards built into an agreement, Saudi Arabia, which has uranium ore reserves on its territory, could theoretically use an enrichment facility to produce highly enriched uranium, which, if purified enough, can yield fissile material for bombs. Another issue is whether Riyadh would agree to make a Saudi investment in a U.S.-based and U.S.-owned uranium enrichment plant and to hire U.S. companies to build Saudi nuclear reactors. There are diplomatic issues too: Washington's top regional ally Israel has repeatedly voiced opposition to the idea of a Saudi civil nuclear programme.
Gold prices fall as Trump signals a potential trade agreement with Britain
Gold prices fell slightly on Thursday ahead of President Donald Trump's expected announcement of a possible trade agreement between the United States of America and Britain.
As of 1318 GMT spot gold fell 0.1%, to $3,362.19 per ounce, after rising by 1% in the previous session. U.S. Gold Futures fell 0.7% to $3368.50.
The gold market has been extremely volatile. Jeffrey Christian, managing director of CPM Group, said that short-term investors are buying and selling gold based on headlines.
Prices could be as low as $3.050 on a long-term basis or as high at $3.500.
Trump announced on Truth Social that he will hold a news conference in the Oval Office at 10:00 a.m. ET (1400 GMT) to discuss a "major deal" with representatives of an important and highly respected country.
The New York Times had reported earlier in the day that the United States and Britain were likely to announce an agreement.
Bullion is widely considered a hedge to geopolitical unrest. It has risen over $300 since Trump announced his tariffs.
Treasury Secretary Scott Bessent, U.S. trade representative Jamieson Greer and China's top economist will meet on Saturday in Switzerland.
Two people with first-hand knowledge of the situation said that China's central banks has also approved commercial banks purchasing foreign currency to pay for imports of gold under newly increased quotas.
Theoretically this move could boost gold prices, as the increased demand from China is a factor. The current market dynamics, however, are dominated by the developments around tariffs," Zain Vawda said, an analyst at MarketPulse.
The Federal Reserve, which is responsible for monetary policy in the United States, held interest rates at the same level on Wednesday, but warned that the risks of inflation and unemployment were rising as policymakers struggled to deal with the impact tariffs.
Silver spot was up by 0.2%, at $32.52, platinum rose 1% to $884.15 while palladium gained 0.2% to $973.92. (Reporting from Ashitha Shivaprasad, Anjana Anil and Sarah Qureshi in Bengaluru. Editing by Krishna Chandra Eluri.)
(source: Reuters)