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Citigroup ex-VP arrested in NYC on fraud charges
Business Law Info | 2011/06/27 20:18
A former Citigroup vice president embezzled $19.2 million from the bank in a one-man "inside job" involving a series of secret money transfers, federal prosecutors said Monday.

Gary Foster, 35, of Englewood Cliffs, N.J., surrendered Sunday at John F. Kennedy International Airport after arriving on a flight from Bangkok. He was released Tuesday on $800,000 bond after appearing in federal court in Brooklyn to face bank fraud charges carrying a maximum penalty of 30 years in prison.

Foster had been traveling in Southeast Asia when he received word of the case, defense attorney Isabelle Kirshner said after the court appearance.

"As soon as he became aware they were looking for him, he voluntarily contacted the FBI and arranged to return," Kirshner said.

Officials at Citigroup Inc. — where Foster was vice president of the treasury finance department until quitting in January — said in a statement that they were "outraged by the actions of this former employee" and hoped to see him "prosecuted to the full extent of the law."

Foster "used his knowledge of bank operations to commit the ultimate inside job," U.S. Attorney Loretta Lynch said in a statement.

According to a criminal complaint, Foster's department financed loans and processed wire transfers within Citigroup. From May 2009 through the end of last year, Foster siphoned funds from various Citigroup accounts, placed them in the bank's cash account and then wired the money into his private account at another bank in New York, the complaint alleged.

In one November 2010 transaction, Foster wired $3.9 million from a Citigroup fund in Baltimore to his New York account, the complaint says. That fraudulent transfer and seven others went undetected until a recent internal audit, it said.


Prescription drug data mining law struck down
Business Law Info | 2011/06/23 15:34

The Supreme Court ruled Thursday that states cannot limit drug manufacturers' use of information about which prescription drugs doctors like to prescribe.

The court voted 6-3 to strike down a Vermont data-mining law aimed at boosting the use of generic drugs by controlling the flow of information about brand-name medications. The ruling imperils similar laws in Maine and New Hampshire.

The laws prevent the sale of information about individual doctors' prescribing records without the doctors' permission.

Pharmacies get that information when they fill prescriptions. They sell the information, without patient names, to data mining companies that, in turn, provide drug makers with a detailed look at what drugs doctors choose for their patients.

Drug company sales representatives can use the information to tailor their pitch to individual doctors.

Justice Anthony Kennedy said in his majority opinion that the Vermont law violates the speech rights of the data-mining and pharmaceutical companies.

Kennedy said that law grew out of a desire to control health care costs by increasing the use of generic drugs. But he said, "the state cannot engage in content-based discrimination to advance its own side of a debate."

In dissent, Justice Stephen Breyer said the law should have been upheld as a constitutional regulation of business activity. Justices Ruth Bader Ginsburg and Elena Kagan also signed on to Breyer's dissent.



Banks lose battle to delay cap on invisible fee
Business Law Info | 2011/06/09 16:04
Merchants trumped bankers in a battle for billions Wednesday as the Senate voted to let the Federal Reserve slash fees that stores pay financial institutions when customers pay with debit cards.

Whether consumers will see any of that money remains to be seen.

The Fed will now issue its final rules on debit fees, called interchange fees, on July 21. It has recommended cutting the average 44 cents that banks and credit unions charge for each debit card transaction to no more than 12 cents, although the final plan could change slightly.

The fee is now typically 1 to 2 percent of each purchase. It produces $16 billion in annual revenue for banks, credit unions and the credit card companies that operate the huge payment networks, the Fed estimates.

Merchants say lower fees should let them lower prices. Banks warn that they'll have to recoup the lost revenue through other charges that likely will come directly from consumers' pockets, such as higher checking account fees.


Court says university, company co-owners of patent
Business Law Info | 2011/06/06 13:40

Ownership of a patent for technology to detect HIV levels in patients' blood was correctly split between Stanford University and the pharmaceutical giant Roche, the Supreme Court ruled Monday.

By a 7-2 vote, the high court upheld a lower court's decision making the company and the university co-owners of a patent for technology in HIV test kits.

Stanford asserted it owned the technology because its discoverer worked there. The 1980 Bayh-Dole Act allows universities to retain rights to research funded by federal grants.

But Stanford researcher Mark Holodniy also signed a contract that gave Roche the patent to anything that resulted from their collaboration. The U.S. Circuit Court of Appeals for the Federal Circuit made Roche and Stanford co-owners, and the high court agreed.

"Nowhere in the Act are inventors expressly deprived of their interest in federally funded inventions," said Chief Justice John Roberts, who wrote the majority opinion.

Justices Stephen Breyer and Ruth Bader Ginsberg dissented.

"I cannot so easily accept the majority's conclusion — that the individual inventor can lawfully assign an invention (produced by public funds) to a third party, thereby taking that invention out from under the Bayh-Dole Act's restrictions, conditions and allocation rules," Breyer said.



W.Va. court rejects bid to halt Massey Energy sale
Business Law Info | 2011/05/31 13:19

The West Virginia Supreme Court has declined to issue an order barring Massey Energy shareholders from voting on a proposed $7.1 billion sale to rival coal producer Alpha Natural Resources.

The court says in a ruling issued Tuesday it lacks jurisdiction in the case.

Three institutional investors had sought to prevent Wednesday's shareholder vote. The deal is expected to close pending approval by shareholders of the Virginia-based companies.

The investors argue that the April 5, 2010, explosion at Massey's Upper Big Branch mine that killed 29 miners and other actions damaged Massey's value.

Shareholders also sought a similar delay in a Delaware court last week. A ruling on that case is pending.



Hartford Courant wants plagiarism suit dismissed
Business Law Info | 2011/05/24 12:09

Lawyers for The Hartford Courant say in recently filed court documents that a $7.5 million plagiarism lawsuit filed by a competing newspaper should be dismissed because no copyright laws were broken.

The motion to dismiss filed on May 4 in Hartford federal court comes nearly two years after Courant CEO and Publisher Richard Graziano acknowledged that the newspaper had plagiarized competitors, but not intentionally.

The Journal Inquirer of Manchester first filed the lawsuit in state court in 2009, but withdrew it for technical reasons. The paper refiled the lawsuit in federal court in February, saying the Courant plagiarized at least 10 Journal Inquirer stories in violation of copyright laws.

The Courant says in the new court documents that there was no "substantial similarity" between the Courant and Journal Inquirer stories.



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