Mar 28 - Apr 03, 2005







US regulators have fined four of the country's largest finance companies for failing to provide full information about sales of mutual fund investments.
Citigroup, American Express, JP Morgan Chase and Putnam Investments were fined $81.25m in total to settle claims that brokers were paid to recommend funds.
Regulators also alleged that the firms steered some customers to costlier funds with high levels of commission.
The firms in question neither denied nor accepted wrongdoing.



Authorities launched an investigation into the marketing and selling of mutual funds which are popular with small investors across America eighteen months ago.

A number of banks have already been fined for a practice known as market-timing, in which institutions make short term trades to the detriment of long-term investors.

Last week, the Securities and Exchange Commission (SEC) handed out civil fines worth $20m and $40m respectively to Citigroup, the world's largest financial services company and Putnam Investments, a subsidiary of Marsh & McLennan.

In a connected move, the National Association of Securities Dealers said Citigroup, American Express and JP Morgan Chase had agreed to pay $21.25m in total for alleged violations in the sale of mutual funds.

The SEC said Citigroup failed to tell customers buying mutual funds through its Smith Barney retail unit that it only marketed funds which offered incentive payments in return for being promoted.

The watchdog also alleged that Citigroup recommended and sold funds offering a lower level of return to investors because they delivered higher levels of sales commission.


French president Jacques Chirac has called the UK's 3bn rebate from the European Union "unjustified".

Speaking after a summit meeting he said unless it was put up for discussion the EU would never be able to reach agreement on its medium term finances.

Earlier Foreign Secretary Jack Straw said the UK was prepared to veto any bid to reduce the rebate secured by Margaret Thatcher in 1984.

He said it remained justified because less EU farm money came to the UK.

Mr Chirac told reporters in Brussels: "One can only have a reasonable budgetary balance if we put back on the table the British cheque. It can no longer be justified. It was from the past."

But a UK Government official responded: "Even with the rebate, the UK pays two and a half times more than France contributes to the EU budget. Without it we would pay 14 times as much as France.

"There can be no deal on future financing which does not protect the rebate."

The 25-member EU is gearing up for tough negotiations on its budget plans for the period 2007-2013, with the bloc's Luxembourg presidency hoping to strike a deal at a June summit.

Earlier Conservative Graham Brady said the rebate was a "crucial test" of how firmly ministers were prepared to stand up for Britain.

EU Commission president Jose Manuel Barroso has indicated he wants the rebate to come to an end.

Mr Straw said that as well as the veto over the rebate the UK wanted to keep a tight rein on national contributions.


European Union leaders have agreed on the need for a "far reaching" revision of controversial proposals to free up Europe's huge services sector.

French President Jacques Chirac earlier told an EU summit in Brussels that the planned changes were "unacceptable".

It follows fears the plans may endanger workers' rights and lead to job losses.

Mr Chirac could face a humiliating loss in France's 29 May referendum on the EU constitution, with the No vote fuelled by protests over the services proposal.

EU leaders announced they would seek to rewrite plans to liberalise Europe's services sector shortly after Mr Chirac voiced his opposition.




A Tory government would bring spending under control and safeguard the Bank of England's independence, said party leader Michael Howard.

Only the Conservatives could stop control of interest rates being handed to the European Central Bank, he said.

They would bring spending under control and use money saved to keep taxes down and repay borrowing, he said.

Labour says the Tories plan 35bn spending "cuts". The Lib Dems say taxes will rise whoever wins the election.

Mr Howard said the Conservatives were the only party which would not adopt the euro so only his party could guarantee the Bank of England's independence.

He also said the country could not keep spending more than it was earning, and the government must learn to live within its means.


Russian President Vladimir Putin has told business chiefs there will be no more reviews of the privatisations of the 1990s that made many of them rich.

At a rare meeting with industrialists at the Kremlin last Thursday, he vowed to "help the business community" by guaranteeing property rights.

There have been increasing jitters over the business climate in the wake of the Kremlin break up of oil giant Yukos.

Analysts welcomed the move, saying it could help revive investment in Russia.

Mr Putin backed a proposed new law that will exempt property privatisations which took place more than three years ago from future criminal inquiries.

Such a move would safeguard the empires of many of the so-called oligarchs, who made billions in the post-Soviet era by buying state assets at knockdown prices.


Japan's trade surplus fell in February, the second month in succession it has fallen compared with a year earlier.

Economists blamed the decline on the recent surge in oil prices, which increased the value of imports into the country. Yet exports were also weak.

Official Japanese data showed that the surplus fell 21.7% in February to 1.093 trillion yen ($10.36bn; 5.49bn).

However, February's trade surplus decline was less than the 60% drop recorded by Japan in January.

Japanese exports, in value terms, rose 1.7% year-on-year in February, driven by the automotive and steel sectors, but this rise was substantially less than the double-figure percentage growth seen last year.

In terms of volume, Japan's exports actually fell 4.3% year-on-year, with a 6.7% decline to Europe and a 3.6% fall to Asia.


Chancellor Gordon Brown has said he is determined to stick to his plans to expand public investment even if they breach EU limits on budget deficits.

But he denied that he was ruling out British membership of the euro despite saying there would be no assessment of the five economic tests this year.

Mr Brown said that it was vital the UK continued to invest in infrastructure, science, and education in the future.

Otherwise it would be overtaken by the likes of China, he told MPs.

The chancellor said that the EU's planned changes in the growth and stability pact designed to ensure that countries in the euro zone do not borrow too much would force Britain to run a budget surplus of 1% over the economic cycle.


More than 500 Chinese human rights activists have sent an open letter to the European Union urging it not to lift its arms embargo on China.

The arms ban was imposed in 1989 after Beijing's bloody suppression of the protests in Tiananmen Square.

EU foreign policy chief Javier Solana says the embargo is unfair, as there has been some progress on human rights. But the US wishes to keep the ban and the UK seems to be taking a similar stance.


Nearly a million bank workers in India have taken part in a one-day strike, last week, in protest at reforms which unions believe will lead to job cuts.

The government has been encouraging 27 state-run banks to merge in order to compete better in the global economy.

Unions say the move will result in the closure of 22,000 branches nationwide.

About 50,000 staff at foreign and some private banks did work, but trading volumes on the foreign exchange market were affected.


Significant loopholes exist in the UK's fight against bribery and corruption, a new report warns.

The report from the Organisation for Economic Co-Operation and Development says there are too many organisations in the UK tasked to deal with bribery.

None of them, it warns, have sufficient resources to deal with UK companies which bribe foreign officials.

While two cases are being investigated and 11 are under review, not a single person or firm has been prosecuted.


A huge explosion at an oil refinery in Texas has killed at least 14 people and injured more than 100.

The blast at the Texas City plant, which belongs to Britain's BP, shook buildings five miles (8km) away.

Sections of the plant were reduced to cinders and rubble.

The refinery, the third-biggest in the US, processes 3% of the country's oil supply.

An inquiry into the cause of the blast is under way. Investigators say terrorism is not their main focus.

The refinery has had safety problems in the past. In March last year, it was evacuated after an explosion that cost the company $63,000 in fines.


Tuberculosis has reached alarming proportions in Africa, with a third of global TB deaths occurring there, says the World Health Organization.

While most areas of the world have seen a 20% drop in TB since 1990, rates in Africa have tripled, a WHO report says.

The rise continues, fuelled by high rates of HIV/Aids and poor healthcare, and now a third of the 1.7 million TB deaths a year occur in Africa. In Eastern Europe, drug resistance is to blame, the WHO says.


General Motors has said it may phase out one of its weaker car brands if sales fail to meet targets.

The US giant's vice chairman Bob Lutz did not say which brand might be discontinued, but described Buick and Pontiac as "damaged brands".

His comments come a week after falling sales prompted General Motors (GM) to announce a profits warning.

GM expects its earnings for 2005 to be down by as much as 80%, as it struggles to turn its fortunes around.


UK supermarket Sainsbury's has reported higher sales after supply improvements made more goods available for shoppers.

It said like-for-like sales had increased 3.7% during the 12 weeks to 26 March against a year earlier, while sales excluding petrol were up 1.7%.


US interest rates have continued to climb as the Federal Reserve raised its benchmark borrowing cost by a quarter of a percentage point to 2.75%.

The increase is the seventh time the Fed has tweaked rates since last June.

Despite saying that inflationary pressures had increased, the Fed said it would keep its "measured" pace of interest rate increases.

Analysts had voiced concerns that price pressures may prompt the Fed to take a more aggressive stance on future hikes.


US President George W. Bush has nominated Tim Adams to the senior US Treasury position of under secretary for international affairs.

Mr Adams, a former chief of staff at the Treasury, was most recently policy adviser to Bush's re-election campaign.

His new role, which requires Senate confirmation, is the Treasury's most senior international position and he will play a key part in dollar policy.

Mr Adams will replace John Taylor, who is to step down on 22 April.

In his new position, he will have a voice at the International Monetary Fund and World Bank.


Mobile phone use in Africa is growing faster than anywhere else in the world, according to a report.

The study, backed by the UK mobile phone giant Vodafone, said African countries with greater mobile use had seen a higher rate of economic growth.

The report, supported by the Centre for Economic Policy Research, studied the social and economic impact of mobiles.

Small businesses in South Africa rely on mobiles, the report said, while Nigeria's market is doubling annually.


UK manufacturers are struggling to bring in business, with orders falling at a sharper rate in March than in previous months.

The CBI's latest monthly industrial trends report showed a fall in the total order balance to 13 in March from 10 in the previous month.

Businessmen blamed high oil prices and slower consumer spending.

This latest report indicates that the revival in confidence seen in February was just temporary.

Consumer spending dipped sharply in the final quarter of last year, putting pressure on industry.

Separate figures from the Office for National Statistics show that household spending rose by just 0.2% in the fourth quarter, compared with a 0.7% growth rate in the previous quarter.