Monthly Archive November 21, 2014

Banks Fined – Litigation Tsunami Expected

A tidal wave of civil litigation is in expected after City watchdog the Financial Conduct Authority (FCA) fined five banks a total of £1.1bn for rigging the £3.4trn-a-day foreign exchange market (forex) on the 12th November.

The five – Citibank, HSBC, JP Morgan Chase, Royal Bank of Scotland and UBS – can all expect to be hit by claims from clients including pension funds, foreign property owners and other foreign exchange houses, according to solicitors in London who have been quietly lining up litigants for the last two years.

A vital component of any successful action will be proving that a bank behaved in such a way that it profited at the expense of its customers.

The FCA statement said: ‘It is completely unacceptable for firms to engage in attempts at manipulation for their own benefit and to the potential detriment of certain clients and other market participants. Our final notices include examples where each bank’s trading made a significant profit.’

The final notices also all contain references to collusion between traders at different banks using online messaging and chatrooms. The FCA cites one example of such chatroom manipulation which netted Citibank a profit of £62,581 and another in which HSBC banked £102,425.

The notices could prove a boon for those bringing cases because they also contain examples of traders congratulating themselves after successfully manipulating forex rates. This, from one UBS trader, is typical: ‘The best fix of my UBS career’ – after he used a chatroom to move rates to produce a profit for £328,100 for UBS.

Chancellor George Osborne has said a share of the fines will be taken by the Treasury and ’used for the wider public good’.

Tracey McDermott, the FCA’s director of enforcement and financial crime, said: ‘Firms could have been in no doubt, especially after Libor, that failing to take steps to tackle the consequences of a free for all culture on their trading floors was unacceptable. This is not about having armies of compliance staff ticking boxes. It is about firms understanding, and managing, the risks their conduct might pose to markets.

‘Where problems are identified we expect firms to deal with those quickly, decisively and effectively and to make sure they apply the lessons across their business. If they fail to do so they will continue to face significant regulatory and reputational costs.’

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London’s Hot £1bn Office Buying Frenzy

There’s a red hot property market prevailing in London at the moment according to commercial conveyancing solicitors with pressure on for completions before Christmas.

The Gherkin was speedily bought recently by Joseph Safra for £726 million according to industry insiders.

The strength of the capital’s economy and the reasonably high returns on investment are proving to be a sweet temptation for purchasers of London’s commercial buildings.  Such transactions include the purchase of Bow Bells House near St Paul’s for £300 million by Fubon Life the insurance megalith from Taiwan; it also has recently added neighbouring One Carter Lane to its portfolio for £139 million.

Other hot purchases are Milton Gate, Vintners Place, Thames Court and Cannon Bridge House which are expected to achieve in excess of £800 million.

The Abu Dhabi-backed flats developer Northacre is the suspected purchaser of Victoria’s New Scotland Yard, home of the Metropolitan Police, for £300 million and a takeover bid for the Canary Wharf developer by Qatari and Canadian Investors has been tabled.

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Immigration Law changes on 6/11/14

On the 16th October 2014 the Home Office published its latest statement of changes to the Immigration Rules. This update outlines the key changes made.

Business visitors

A new category has been added for overseas lawyers who are employees of international law firms with offices in the United Kingdom. The change will allow the business visitor to provide direct advice to clients in the United Kingdom on litigation or international transactions, provided that they remain paid and employed overseas.

Tier 2

The Home Office will now make an assessment as to whether a genuine vacancy exists for Tier 2 (Intra-company transfer) and Tier 2 (General) applications. This change empowers entry clearance officers and in-country caseworkers to refuse applications where there are reasonable grounds to believe that the job described by the sponsor does not genuinely exist, has been exaggerated to meet the Tier 2 skills threshold, or – in respect of Tier 2 (General) – has been tailored to exclude resident workers from being recruited, or where there are reasonable grounds to believe that the applicant is not qualified to do the job. As the Sponsor Licence Unit already performs this function when assessing restricted certificate of sponsorship applications, it will be a duplication of effort if entry clearance officers also perform this genuine vacancy assessment. For those migrants earning in excess of £153,500, the resident labour market test requirements do not apply.

An existing requirement in the published guidance for sponsors is that Tier 2 migrants cannot be sponsored to fill a position, undertake an on going routine role or provide an on going routine service for a third party which is not the sponsor. This requirement is being replicated in the Immigration Rules. This enables applications by individuals for entry clearance or leave to remain and applications by sponsors for restricted certificates of sponsorship to be refused in line with any wider compliance action relating to the sponsor in question. This applies to so-called ‘contract cases’ where migrants are based at a client site and is of particular significance for the IT sector. These cases will now incur greater scrutiny to ensure there is a genuine provision of services by the sponsor and no disguised employment by the third party.

A change is being made to the Tier 2 (General) provisions for extension applications where the applicant is continuing to work in the same occupation for the same sponsor. Such applicants are exempt from the resident labour market test; at present, the exemption applies only if the applicant still has current leave as a Tier 2 (General) migrant when they make their extension application. The change will enable the applicant to benefit from the extension if his or her previous leave as a Tier 2 (General) migrant expires no more than 28 days before the extension application is made.

A temporary provision dating back to 2009, which waives the £20,500 minimum salary threshold where companies are reducing their employees’ hours to avoid redundancies, is being removed.

Tier 5 Youth Mobility Scheme

The annual allocations for participating countries on the scheme are being set for 2015. The allocations for New Zealand have been increased (16%).

Tier 2 (Sportsperson) and Tier 5 (Temporary worker – creative and sporting)

A change is being made to the table of governing bodies to include information on the tier(s) in which each body may endorse applicants. Updates are also being made to the list of sports governing bodies.

These changes came into effect on the 6th November 2014.

Original reporting by the International Law Office 14/11/14

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