Bank of Moscow bailout sparks accusations
MOSCOW, July 2 (UPI) -- Russian Finance Minister Alexei Kudrin has demanded an investigation of the Bank of Moscow, amidst accusations of fraudulent loans.
One-third of the bank's assets -- valued at $9 billion -- were discovered to be bad loans, forcing the Russian central bank to give the Bank of Moscow a $14 billion rescue loan at 0.5 percent interest, the British Broadcasting Corp. reported Saturday.
The Financial Times reported the bad assets were uncovered as VTB increased its stake in the bank to 46.5 percent through a hostile bid.
The bailout is the largest bank rescue in Russian history, sparking a round of accusations seemingly from all corners.
Investors accused the central bank of lax oversight. Others wondered how VTB could make such an enormous purchase without a thorough investigation first.
Former Bank of Moscow President Andrei Borodin -- in London, fleeing a warrant for his arrest -- said the takeover of the bank was politically motivated. In Moscow, VTB charged the Bank of Moscow with "fraudulent lending," the BBC said.
Borodin and business partner Lev Allaluyev owned 20.3 percent of the bank. For the past month, they rejected VTB's offers and, instead, sold out their shares to businessman Vitaly Yusufov.
The terms of the bailout include a nominal 0.5 percent interest on a five-year loan. VTB is also expected to increases its share in the bank to 75 percent.
Retailers react to animal-abuse video
IOWA CITY, Iowa, July 2 (UPI) -- Several retailers said they would no longer buy pork from Iowa Select after a video of animal abuse was made public.
Costco Wholesale of Issaquah, Wash., said its supplier, JBS Swift, a Colorado company, would no longer be buying pork from a farm where a video showed piglets castrated without painkillers and thrown across a room, The Seattle Times reported Saturday.
Retailers Safeway and Kroger also said they would boycott Iowa Select products.
In a statement, Costco said it would "insist … through an ongoing audit that all such humane procedures are being followed."
Iowa Select called the video clip "unacceptable animal handling."
In the film, an employee says, "Pigs are very bouncy. It's like a roller-coaster ride for piglets," referring to the piglets being thrown around.
Several states are considering a different approach, Iowa among them.
That approach is to make filming factory farms a felony, the newspaper said.
WaMu settles investor complaints for $208M
SEATTLE, July 2 (UPI) -- A Washington Mutual shareholders' group has agreed to settle its complaints with the former bank for $208.5 million, court papers show.
The Seattle Times reported Saturday the settlement, which must be approved by U.S. District Judge Marsha Pechman, comes to 7 cents per common share -- 5 cents of which will go to shareholders of common stock and 2 cents for lawyer fees.
JP Morgan Chase purchased Washington Mutual for $1.9 billion in 2008 after federal regulators seized the bank.
The lawsuit targeted bank executives and accountants, alleging the bank took undue risks in the mortgage business after reassuring investors their money was safe.
The lawsuit said the bank pledged "the company's rigorous underwriting standards and meaningful risk controls would protect the company against losses from borrower defaults."
"These assurances were false," the lawsuit says.
The former bank's insurance company will pay $105 million out of the settlement, if the deal is approved.
Securities companies will pay $85 million and accounting firm Deloitte & Touche will pay $18.5 million.
New York revisits Merrill Lynch rescue
ALBANY, N.Y., July 2 (UPI) -- New York State prosecutors said they were not done investigating Bank of America's potentially fraudulent behavior when it purchased Merrill Lynch & Co.
A spokeswoman for New York Attorney General Eric Schneiderman's office said the attorney general "remains committed to this case and is in the process of routine discovery," The Wall Street Journal reported Saturday.
The federal government urged Bank of America to step in and purchase Merrill Lynch in 2008 in the same period that financial giants Bear Stearns and Lehman Brothers went bankrupt.
Allegedly, Bank of America did not disclose what it knew about the depth of Merrill Lynch's problems, holding back on full disclosure until after shareholders voted to approve the acquisition.
Schneiderman has issued new subpoenas to the bank and to former Chief Executive Officer Kenneth Lewis and former Chief Financial Officer Joe Price.
Gov. Andrew Cuomo, Schneiderman's predecessor as attorney general, initiated the case that has already completed its course with the Securities and Exchange Commission, which accepted a settlement of $150 million, but did not include the bank admitting culpability.
Lewis, who resigned in 2009, once called the case "an ill-founded attempt to lay blame where it does not belong."
