April 2, 2023

BBC Faces New Allegations of Sexual Abuse

Thirty-six of the new accusations are from complainants who were under the age of 18 at the time of the alleged assaults.

The disclosures raise new questions about the workplace culture at the BBC, the behavior of its employees, and what it may have condoned or overlooked over the years. They also show how the broadcaster is still consumed with the fallout from the case of Mr. Savile, a larger-than-life BBC star who died in 2011 at the age of 84 and who was later unmasked as a serial sexual predator with dozens of victims over four decades.

The new figures were first reported by The Daily Telegraph, which unearthed them through a Freedom of Information request. The BBC subsequently made its response available to other news organizations.

The broadcaster would not comment on any specific cases, but it said in a statement that it was “appalled” by the allegations.

“We have launched a series of reviews that aim to understand if there are any issues with the current culture of the BBC or the historic culture and practices from as far back as 1965,” the statement said, “to see what lessons can be learned to prevent this happening again.”

The report shows that 40 of those accused currently work for or contribute to the BBC, while 41 are dead or employees from long ago. Of the 152 separate complaints, 48 involve Mr. Savile, who died before the revelations about him came to light.

Some of the allegations did not involve criminal acts and were investigated internally, the BBC said, while the rest were reported to the police. The police have investigated or are investigating the allegations against 25 of the current employees or contributors, the broadcaster said. So far, the investigations have led to the conviction of one person who is “no longer employed by the BBC” and is awaiting sentencing, the report says.

That is most likely a reference to Stuart Hall, 83, a former BBC personality who recently admitted molesting 13 girls, ages 9 to 17, from 1968 to 1986.

The Savile case provoked a crisis in the BBC, Britain’s public broadcaster, and led to the resignation of its director general and to numerous personnel and structural changes. The broadcaster now faces the prospect of lawsuits brought by victims of Mr. Savile and Mr. Hall and a long period of more investigations into its culture, involving current practices and events from as long ago as the 1960s.

An independent report released in early May, one of many commissioned by the BBC in the aftermath of the Savile scandal, painted a picture of an organization with a “visible, frequent and consistent” culture of bullying, anxiety and fear.

“It may be bullying or harassment, it can be rudeness, victimization or verbal abuse, but whatever the definition or action, people recognize it as simply ‘wrong,’ ” said the report, prepared by a lawyer, Dinah Rose.

The report said that victims were afraid to complain, and that those who did often found their concerns “swept under the carpet or referred elsewhere,” never to be dealt with.

Tony Hall, the BBC’s director general, said at the time that the broadcaster was conducting a thorough overhaul of its culture.

“I want zero tolerance of bullying and a culture where people feel able to raise concerns and have the confidence they will be dealt with appropriately,” he said. “I also want people to be able to speak freely about their experiences of working at the BBC so we can learn from them.”

Article source: http://www.nytimes.com/2013/05/31/world/europe/bbc-receives-new-allegations-of-sexual-abuse-by-its-employees.html?partner=rss&emc=rss

Spain Recession Deepened in 4th Quarter

The Bank of Spain said gross domestic product (GDP) contracted 0.6 percent in the fourth quarter from the third, compared to a drop of 0.3 percent in the July to September period.

The forecast in the central bank’s monthly economic report precedes preliminary growth data from the National Statistics Institute on January 30.

“These numbers are slightly better than we thought, but it is a confirmation the economy is in a very bad state,” said Silvio Peruzzo, economist at Nomura.

“We expect a contraction of GDP of similar size in the first quarter of this year, with that to be protracted through this year.”

Spain’s economy fell into its second recession since 2009 at the end of 2011 on fallout from a burst property bubble and is struggling to return to growth amid efforts to cut high public and private debt and dire consumer sentiment.

A recent return by international investors to Spain’s battered debt market, where risk premiums have fallen significantly from euro-era highs hit over the last year, has not translated into the real economy, the central bank said.

“Despite positive developments in the international financial markets in the last few months of the year, a combination of a factors … meant a notable weakening of final demand in the fourth quarter,” the bank said.

While the government expects the economy to expand again before the end of 2013, many economists say this is optimistic.

GDP shrank 1.3 percent in 2012 year-on-year, the Bank of Spain said, better than an official forecast of a 1.5 percent drop and after growing 0.4 percent a year earlier.

The economy contracted 1.7 percent in the fourth quarter from a year earlier, the central bank said, after falling 1.6 percent year-on-year in the third quarter.

(Reporting By Paul Day; Editing by Sonya Dowsett)

Article source: http://www.nytimes.com/reuters/2013/01/23/business/23reuters-spain-growth.html?partner=rss&emc=rss

Hitachi’s Revival Isn’t So Good for the City of Hitachi

Since its 787 billion yen, or $9.2 billion, loss in 2009, Hitachi has staged an impressive turnaround, booking a record 347 billion yen ($4 billion) in net profit in the year through March 2012, while rivals like Sony, Sharp and Panasonic continue to struggle.

But in Hitachi, a city of 190,00 and the company’s longtime production hub, there is little celebrating. Instead, the deserted streets and shuttered workshops speak of the heavy toll levied by the aggressive streamlining, cost-cutting and offshoring that has underpinned Hitachi’s recovery.

The divergent fortunes of Hitachi and its home city highlight an uncomfortable reality: The bold steps that could revive Japan’s ailing electronics giants are unlikely to bring back the jobs, opportunities and growth that the country desperately needs to revive its economy.

The way forward for Japan’s embattled electronics sector, for now, is a globalization strategy that shifts production and procurement from high-cost Japan to more competitive locations overseas. As Japan’s manufacturing giants become truly global, a country that has so depended on its manufacturers for growth must look to other sources of jobs and opportunity, like its nascent entrepreneurs — a transformation far more easily said than done.

“Closing plants in Japan is a big deal, and we don’t take cutbacks lightly,” Hiroaki Nakanishi, Hitachi’s president and chief executive, said in a year-end interview in Tokyo. “But to return to growth, we have to cut loose what doesn’t bring profit. We have to be decisive.”

Japan is still grappling with the fallout from a decade-long, seemingly unstoppable decline of its electronics sector, once a driver of growth and a bedrock of its economy. Japan’s two biggest electronics companies, Hitachi and Panasonic, each have more in sales than the country’s entire agricultural sector, and other big electronics firms come close.

But for more than a decade, these technology companies have experienced little growth. Annual sales growth over the last 15 years at Japan’s top eight tech companies averages around zero, according to Eurotechnology Japan, a research and consulting company in Tokyo.

To blame are plunging prices across the board for their products, brought about by intense competition from rivals in South Korea and Taiwan as electronics increasingly become widely interchangeable. Overstretched and unfocused, Japan’s tech giants also ceded much of their cutting edge to more innovative companies like Apple. Japan’s failure to keep up with a shift in the industry to software and services has compounded those woes.

Above all, the high costs of operating in Japan, made worse by a strong yen, weighs heavily on exporters’ finances. In the year through March 2012, Panasonic, Sony and Sharp lost a combined $19 billion — more than the gross domestic product of Jamaica.

Still, even among its peers, Hitachi stood out for the depth of its losses. After a decade of little or negative growth, Hitachi fell first and hardest, booking its big loss at the height of the global financial crisis because of large write-downs and losses in its electronics businesses.

Local media went into a frenzy over what it called “Hitachi shock,” while the company’s shares slumped to a third of precrisis levels. Hitachi executives warned the company’s future was on the line.

“Can a massive elephant, one that has always sat on its behind instead of changing, hope to change now?” an editorial in the Nikkei business daily wondered at the time.

Hitachi’s appraisal of its operations since then, and its willingness to wield the ax to money-losing businesses, has surprised even the most dismissive of analysts.

Hitachi once had almost 400,000 employees at a thousand often overlapping and competing groups, making products as diverse as televisions, hard disk drives, chips, heated toilet seats, elevators and nuclear reactors. Under the leadership of Mr. Nakanishi, who took the helm in 2010, the company has substantially shrunk or sold money-losing businesses, including those making chips, flat-panel TVs, liquid crystal displays, mobile handsets and personal computers.

Makiko Inoue contributed research from Tokyo.

Article source: http://www.nytimes.com/2012/12/29/business/hitachis-revival-isnt-so-good-for-the-city-of-hitachi.html?partner=rss&emc=rss

DealBook: New Fraud Inquiry as Trading Loss Mounts at JPMorgan

Jamie Dimon, chief of JPMorgan Chase, entered his bank's Manhattan headquarters on Friday.Jin Lee/Associated PressJamie Dimon, chief of JPMorgan Chase, entered his bank’s Manhattan headquarters on Friday.

9:07 p.m. | Updated

JPMorgan Chase disclosed on Friday that losses on its botched credit bet could climb to more than $7 billion and that the bank’s traders may have intentionally tried to obscure the full extent of the red ink on the disastrous trades.

Mounting concerns about valuing the trades led the company to announce that its earnings for the first quarter were no longer reliable and would be restated. Federal regulators, who were already examining the trades, are now looking at whether employees of the nation’s biggest bank by assets intended to defraud investors, according to people with knowledge of the matter.

The revelations left Jamie Dimon, the bank’s chief executive, scrambling for the second time within two months to contain the fallout from the trading debacle. It has already claimed one of his most trusted lieutenants, compelled Mr. Dimon to appear before Congress to account for the blunder and prompted the bank to claw back millions in compensation from three traders in London at the heart of the losses. A top bank official said that the board could also seize pay from Mr. Dimon, but did not indicate that it would do so.

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Since announcing initial losses of $2 billion in May, Mr. Dimon, once vaunted for his risk prowess after navigating the bank deftly through the financial crisis, has worked to prove that any flaws in risk management are limited to the chief investment office, a once-obscure unit with offices in London and New York. But the latest news is prompting fresh questions about whether risk controls throughout the bank are weak.

“This points to fundamental and potentially widespread risk management failure,” said Mark Williams, a professor of finance at Boston University, who also served as a Federal Reserve Bank examiner.

Much more than profits are at stake for Mr. Dimon. The mounting problems from the soured bets strengthen the hand of lawmakers in Washington who have been pushing to curtail the kind of risk-taking that led to the trading losses.

The possible deceptions came to light in a regulatory filing early Friday just before the bank reported its second-quarter earnings. While the bank posted a profit of nearly $5 billion despite the trading losses of $4.4 billion for the quarter, some analysts and regulators zeroed in on the valuation of the trades.

“If traders misrepresented a fact with the intent to defraud, they can be subject to criminal charges,” said Alan R. Bromberg, a securities law expert at Southern Methodist University.

In contrast, investors appeared to accept Mr. Dimon’s pledges that the bank had rooted out the problems and could reap record annual profits. They rallied behind the bank, sending its shares up nearly 6 percent, the best among its peers on an overall strong day for American stocks.

If the trades had been properly valued, the bank said it would have lost $1.4 billion on the position in the first quarter, bringing the total losses to $5.8 billion so far this year. In a conference call with analysts on Friday, Mr. Dimon said that the trade, under the worst market conditions, could result in another $1.7 billion in losses.

In a rare move, the bank seized millions in pay from three managers in the unit’s London office who had “direct responsibility” for the blunder. People with knowledge of the clawbacks said that pay was taken back from Achilles Macris, Javier Martin-Artajo and Bruno Iksil, the trader who gained infamy as the London Whale for his large credit trades.

A lawyer for Mr. Makris declined to comment. A lawyer for Mr. Martin-Artajo could not be reached. Raymond Silverstein, a lawyer for Mr. Iksil, said his client believed he had “done nothing wrong and that he will be exonerated in due course.” While the company did not indicate the total tally for the clawbacks, Douglas Braunstein, the bank’s chief financial officer, said the bank could claim roughly two years of total compensation, including stock options.

Ina R. Drew, the senior executive who resigned as head of the chief investment office shortly after the trading losses, volunteered to give back her pay. The giveback is a precipitous fall for Ms. Drew, once one of Mr. Dimon’s most trusted executives. Ms. Drew earned roughly $14 million last year, making her the bank’s fourth-highest-paid officer. Ms. Drew declined to comment.

JPMorgan said that an internal investigation, led by Mike Cavanagh, a former chief financial officer at the bank, unearthed questions about how traders in the bank’s chief investment office were valuing their bets. After combing through thousands of e-mails and phone call records of traders, senior executives at the bank feared that traders, in an attempt to disguise the magnitude of the losses, improperly marked their trades.

“Certain individuals may have been seeking to avoid showing the full amount of the losses in the portfolio during the first quarter,” the bank said in a statement, but didn’t indicate how many traders may be embroiled in the mismarking.

Certain tough-to-exit trades can be extremely difficult to value, according to current and former traders in the chief investment office. On some positions, “valuing a trade is like throwing a ball at a target while blindfolded,” said a former trader who requested anonymity because of the continuing investigations into the trade. The Securities and Exchange Commission, which is one of several federal regulators investigating the trading losses, is interested in the valuation of the trades, according to a person briefed on the investigation.

Separately, federal regulators from the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York stationed at the bank’s Manhattan headquarters have been examining the valuation of the trades in weekly meetings with the staff at the chief investment office, according to current regulators who insisted on anonymity because the investigations have not concluded.

Mr. Cavanagh said that the executives within the unit were outmatched by the increasing complexity of the bets being made as the unit grew over the last several years. JPMorgan, Mr. Cavanagh, emphasized, is undertaking a “complete revamp of C.I.O. management.” Part of that change began Friday, when the bank announced that Irvin Goldman, who had overseen risk for the chief investment office, was resigning.

Started roughly five years ago, the unit, which grew from a sleepy operation into a profit center, was also torn by internal strife between deputies in New York and London, according to current and former traders.

Mr. Dimon emphasized that the investment office was going to focus on conservative investments. The bank has moved the majority of the soured trade to JPMorgan’s investment banking unit, where Mr. Cavanagh told analysts risk controls were strong.

Mr. Braunstein, the chief financial officer, told analysts that the decision to refile first-quarter earnings was made on Thursday, the day before the bank reported its second-quarter results. The change means that revenue for the first quarter fell by $660 million, and net income dropped by $459 million.

Mr. Dimon urged analysts Friday to focus on the bank’s overall strength.

The bank reported a $4.96 billion profit for the second quarter, down 9 percent from $5.43 billion a year earlier. Revenue also fell to $22.2 billion, down 17 percent from the same period last year.

“All of our client-driven businesses had solid performance,” Mr. Dimon said.

At one point during the earnings call, Mike Mayo, an analyst with Crédit Agricole Securities, asked whether the bank had reached a “tipping point” where it had become too unwieldy to manage.

Mr. Dimon answered with a succinct “no.”

JPMorgan, for its part, has emphasized that the trading loss is a blip in terms of the bank’s overall profitability. Mr. Dimon added that while the bank is “not proud of this moment, we are proud of this company.”

Article source: http://dealbook.nytimes.com/2012/07/13/jpmorgan-says-traders-obscured-losses-in-first-quarter/?partner=rss&emc=rss

DealBook: Marcus Agius, Chairman of Barclays, Resigns

Marcus Agius, the board chairman, has been a focus of investor dissatisfaction.Dylan Martinez/ReutersMarcus Agius, the board chairman, has been a focus of investor dissatisfaction.

2:36 a.m. | Updated

LONDON — Marcus Agius, the chairman of Barclays, resigned on Monday, less than a week after the big British bank agreed to pay $450 million to settle accusations that it had tried to manipulate key interest rates to benefit its own bottom line.

The resignation comes as Barclays tries to limit fallout from the case, which is part of a broad investigation into how big banks set certain rates that affect borrowing costs for consumers and companies. Since striking a deal with American and British authorities last Wednesday, the Barclays management team has faced increasing pressure from politicians and shareholders to take action.

“Last week’s events have dealt a devastating blow to Barclays’ reputation,” Mr. Agius said in a statement. “As chairman, I am the ultimate guardian of the bank’s reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside.”

Mr. Agius, the first casualty, will remain as chairman until a successor has been found. Michael Rake, a senior independent director on the Barclays board and a former chairman of the accounting firm KPMG, has been appointed deputy chairman, according to a statement from the bank.

Barclays also announced on Monday that it will conduct an independent audit of its business practices. The review will center on what led to the rate manipulation and how the issues will affect the bank’s business units in the future. The audit will be used to create new code of conduct for Barclays.

As head of the the British bank’s board, Mr. Agius has been a focus of investor dissatisfaction in recent years.

Shareholders balked at his decision to take capital from Mideast investors during the financial crisis, concerned that the deal did not protect the rights of existing investors. The board has also been criticized for signing off on the multimillion-dollar pay packages of the chief executive, Robert E. Diamond Jr., and other executives, as well as for the lackluster performance of the bank’s shares.

Now Mr. Agius is being held to account for the rate-manipulation scandal that took place under his watch.

A former banker at Lazard, Mr. Agius joined the Barclays board in 2006 and became its chairman in 2007. He is also the honorary chairman of the British Bankers’ Association, the organization that oversees one of the key rates in question, the London interbank offered rate, or Libor. It is unclear whether he will remain in that role after his departure from Barclays.

With the resignation of Mr. Agius, Barclays may be trying to deflect some of the attention away from Mr. Diamond, who ran Barclays’ investment bank during a period when authorities found wrongdoing by traders. Mr. Diamond has come under scrutiny from British politicians, and some have called for him to step down.

While he has dismissed those calls, Mr. Diamond has apologized for the bank’s missteps, saying the behavior was “wholly inappropriate.”

“This kind of conduct has no place in the culture of Barclays,” Mr. Diamond said in a letter to British politicians last week. He and other executives have also agreed to give up their bonuses this year.

Mr. Diamond will be in the line of fire on Wednesday, when he is scheduled to testify before Parliament. Local politicians are expected to question him about the actions within the bank that led to the multimillion-dollar fines from the Justice Department and the Commodity Futures Trading Commission in the United States and the Financial Services Authority in Britain.

“The public’s trust in banks has been even further eroded,” Andrew Tyrie, chairman of the British Parliament’s treasury select committee, said in a statement. “Parliament and the public need to know what went wrong and whether the perpetrators have been rooted out.”

The British government will also start an inquiry this week into a key rate at the center of regulators wide-ranging inquiry.

The rate, Libor, is currently set based on submissions from a number of the world’s largest banks about how much it would cost them to raise money in the capital markets. Such benchmarks are used to help determine the borrowing costs for $750 trillion worth of financial products, including mortgages, credit cards and student loans. The review of Libor is expected to be completed by the end of August.

The integrity of Libor and other key rates have come into question as a result of the multiyear investigation by regulators. A number of banks are under scrutiny, including HSBC, JPMorgan Chase and Citigroup.

In the Barclays settlement, regulators released evidence of what they called “pervasive” wrongdoing by the bank over four years that was aimed at improving its results.

Authorities found that employees in the bank’s treasury department, which helped set Libor, submitted artificially low figures at the request of the firm’s traders, who profited from buying and selling financial products. The two sides are supposed to be divided by so-called Chinese walls to ensure that confidential information is not improperly shared to make profits.

But e-mails showed that the two divisions regularly collaborated in an effort to bolster their profits and avoid scrutiny about the bank’s health at the height of the financial crisis. In part, Barclays wanted to keep its rates in line with those of rivals to keep its “ ‘head below the parapet,’ so that it did not get ‘shot off,’ ” according to regulators.

Mark Scott reported from London and Michael J. de la Merced from New York.

Article source: http://dealbook.nytimes.com/2012/07/01/chairman-of-barclays-is-expected-to-resign/?partner=rss&emc=rss

Rise of Consumer Credit in Chile and Brazil Leads to Big Debts and Lender Abuses

Ms. Silva was among 418,000 clients in Chile who fell behind on their payments and had their debts repackaged by the retailer La Polar, which raised interest rates and extended loan terms without their knowledge. In early June, it came to light that executives at La Polar had been unilaterally renegotiating clients’ debts for more than six years. The news stunned Chileans and has become one of the biggest financial scandals of Chile’s 20-year economic boom.

“I share blame in this, but this company should have been more honorable and transparent,” said Ms. Silva, 30. “They were targeting people with more modest means. This became a vicious cycle that was never going to end.”

The scandal has underscored how South American countries — including Chile and Brazil, two of the region’s healthiest economies — are going through growing pains as the use of credit grows. The credit-fueled spending has driven extensive economic growth. But it has also opened the door to abuses, as credit issuers have used predatory techniques to lure customers, particularly young and less affluent ones, in countries where regulation is scant, annual interest charges can top 220 percent and consumers cannot seek bankruptcy protection, economists and consumer defense groups say.

“They are learning every trick that was learned in the United States to make credit cards the most valuable part of the banking business,” said Lewis Mandell, a professor emeritus at the State University of New York at Buffalo, who wrote a book on the history of the credit card industry. “And unfortunately, the problems this caused in the United States are likely to repeat themselves in Latin America.”

As La Polar was dealing with the fallout over the disclosure of its lending practices in Chile, the federal prosecutor’s office in Rio de Janeiro filed suit this month against three of Brazil’s biggest banks, accusing them of imposing more than $300 million in illegal bank charges on clients from 2008 to 2010.

The cases reveal troubling undercurrents in the South American economic boom: indiscriminate lending, lax regulation and ballooning over-indebtedness of large parts of the population, especially those with lower incomes.

The widespread proliferation of credit has been both rapid and relatively recent, developing over the past decade and spurring a consumer revolution across South America. Retail chains like La Polar in Chile and Casas Bahia in Brazil, which sell electronics and housewares, have thrived by offering relatively low-priced goods and extending easy credit terms to entire classes of people who had never had access to it.

The household debt-to-income levels in Brazil and Chile still trail that in the United States, where it has hovered around 140 percent, largely because of high mortgage balances. But they are rising fast. In Brazil, it reached a record high of 40 percent in April, up from 22 percent in 2006, according to LCA Consultores, an economic consulting firm. In Chile, where consumer debt rose by 254 percent, to roughly $34 million, between 2001 and 2008, the debt-to-income level topped 70 percent at the end of 2010, according to the Central Bank.

“We have turned ourselves into modern slaves,” said Osvaldo Oyarce, a filmmaker who is trying to make a movie about Chilean consumerism. National economic success, he said, has come at a cost: “A population that is highly indebted, with high levels of depression and frustration.”

A bank superintendent closely monitors bank-issued credit cards, but cards issued for in-store use by retailers like La Polar are subject to “much lighter” regulation, said Kevin Cowan, a director in the financial policy division of Chile’s Central Bank. Last year, the bank began to include a chapter focused on household indebtedness in its risk reports. “We recognize that ultimately household debt could become a serious source of financial risk,” he said.

In Brazil, where credit card interest rates above 220 percent are among the highest in the world, the Central Bank has been trying for months to rein in household consumption, which grew by 10.4 percent in the last quarter of 2010. To better evaluate the risks of the credit expansion, the Central Bank will begin monitoring credit operations of as little as 1,000 reals, or roughly $640.

In both the La Polar and Brazilian bank overcharging cases, the creditors were reluctant to compensate consumers fully.

In Brazil, the prosecutor’s office opted to file its lawsuit, seeking double the amount it said the banks improperly charged customers, only after the three banks — Santander, Itaú-Unibanco and HSBC — ignored its appeals to fully compensate consumers, it said.

Brazil’s Central Bank had also told the banks that the fees they were charging were illegal and that they must stop the practice.

HSBC and Santander declined to comment on the case. Itaú stopped charging clients a commission in late 2008 after the warning, and it agreed to pay enough restitution to satisfy the Central Bank, said Claudia Politanski, executive legal director at the bank. She added that Itaú considered the restitution demands as “not having backing in jurisprudence.”

Pascale Bonnefoy and Aaron Nelsen contributed reporting.

Article source: http://www.nytimes.com/2011/07/24/business/global/abuses-by-credit-issuers-in-chile-and-brazil-snare-consumers.html?partner=rss&emc=rss