- - Sunday, May 1, 2011

FINANCIAL SERVICES

Dubai fines E-Trade for anti-laundering laxity

DUBAI, United Arab Emirates | A Dubai market regulator has fined a division of online discount broker E-Trade Financial at least $200,000 over what it described as deficiencies in its anti-money laundering system.

The Dubai Financial Services Authority said Sunday the Dubai branch of E-Trade Securities agreed to pay the fine. It faces another $100,000 in penalties if it fails to take steps to address the financial watchdog’s concerns.

The DFSA says a 2010 assessment found E-Trade failed to obtain sufficient documentation on the source of clients’ funds and did not have adequate procedures to address clients’ money laundering risk, among other concerns.

E-Trade said in an emailed statement it is cooperating fully and is “pleased to be working toward a resolution.”

TREASURY

Pass on new rules given to some companies

Treasury Secretary Timothy F. Geithner has decided to let companies continue to trade certain contracts used to guard against swings in currency values outside regulators’ view.

New rules require that many such trades occur more transparently, on exchanges where regulators can see them. But Mr. Geithner is exempting certain contracts used by companies to hedge currency rates.

The new financial overhaul law authorized Mr. Geithner to carve out such an exemption to stricter regulation.

Business groups argue that tighter oversight of such contracts would be costly and unnecessary. But critics, including some regulators, counter that the entire market for financial contracts called over-the-counter derivatives should face stricter supervision.

TOBACCO

Philip Morris USA, others win favorable verdict

RICHMOND | Philip Morris USA and other major tobacco companies won a lawsuit Friday filed by 37 Missouri hospitals seeking more than $455 million for treating sick smokers.

Philip Morris USA was one of six tobacco companies involved in the lawsuit. The case was filed as the City of St. Louis v. American Tobacco Co.

The hospitals had claimed cigarette companies delivered an “unreasonably dangerous” product. They were seeking reimbursement back to 1993 for treating sick smokers who had no insurance and did not pay their bills.

AUTOS

Kia small cars recalled for fuel tank glitch

DETROIT | Kia Motors Corp. is recalling more than 58,000 Spectra compact cars registered in cold-weather states because the gas tanks could fall off and cause a fire.

The recall affects Spectra LD models from the 2004 to 2007 model years in 20 states and Washington, D.C., the National Highway Traffic Safety Administration said on its website Friday.

The cars, built from Nov. 7, 2003, through March 6, 2007, have straps that hold the gas tank to the frame. When exposed to road salt, the straps can rust and the tank can fall to the ground, causing a fuel leak and possibly a fire.

Kia said in a statement Friday it is not aware of any fires caused by the problem.

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