- - Monday, November 28, 2011

CREDIT RATING

Fitch keeps U.S.’s debt at AAA level, dims outlook

Fitch Ratings said Monday that it will keep its rating for long-term U.S. debt at the top AAA level, despite a congressional panel’s failure to agree on long-term deficit cuts. But it is lowering its outlook to negative.

The rating agency said it has less confidence in the federal government’s ability to take the necessary steps to rein in the deficit.

A special congressional panel failed last week to reach agreement on $1.2 trillion in deficit cuts over the next decade. The impasse triggered automatic cuts of the same amount, which are scheduled to kick in beginning in 2013.

Moody’s Investors Services and Standard & Poor’s also left their ratings unchanged last week. But Moody’s and S&P warned that they could lower their ratings if Congress backed off the automatic cuts.

S&P downgraded long-term U.S. debt in August to the second-highest level, AA+ and switched its outlook to negative. It was the first time the credit rating agency had lowered the nation’s AAA rating since granting it in 1917.

SEC

$285 million Citigroup agreement rejected by judge

NEW YORK — A federal judge on Monday used unusually harsh language to strike down a $285 million settlement between Citigroup and the Securities and Exchange Commission, saying he couldn’t tell whether the deal was fair and criticizing regulators for shielding the public from the details of what the company did wrong.

U.S. District Judge Jed Rakoff said the public has a right to know what happens in cases that touch on “the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives.” In such cases, the SEC has a responsibility to ensure that the truth emerges, he wrote.

Judge Rakoff said he had spent hours trying to assess the settlement but concluded that he had not been given “any proven or admitted facts upon which to exercise even a modest degree of independent judgment.”

The SEC shot back in a statement issued by enforcement director Robert Khuzami, saying the deal was “fair, adequate, reasonable, in the public interest, and reasonably reflects the scope of relief that would be obtained after a successful trial.”

The SEC had accused the bank of betting against a complex mortgage investment in 2007, making $160 million in the process, while investors lost millions. The settlement would have imposed penalties on Citigroup but allowed it to deny allegations that it misled investors.

Citi said it was reviewing the decision and declined to comment.

OIL SPILL

BP, two others companies face more citations

The Obama administration says BP and two other companies are likely to face new citations for alleged safety and environmental violations stemming from last year’s Gulf of Mexico oil spill.

Michael Bromwich, head of the Bureau of Safety and Environmental Enforcement, says the upcoming notices stem from reviews that go beyond a federal government probe of the April 2010 Deepwater Horizon blast, which killed 11 workers and resulted in the nation’s worst offshore oil spill.

Federal regulators in October cited BP PLC for seven violations, and contractors Transocean Ltd. and Halliburton Co. for four violations apiece, stemming from the Gulf spill.

Mr. Bromwich said Monday that new notices of violation could be sent within two weeks. He steps down Thursday after 17 months as head of the offshore drilling agency.

AUTO

Free loaner cars offered to Volt owners

DETROIT — General Motors Co., concerned about the image of its Chevrolet Volt, is offering free loaner vehicles to owners who are worried about the electric cars catching fire.

The move comes after a government safety agency said Friday that it is investigating fires involving the Volt’s lithium-ion battery packs following crash tests. Thus far, the Volt tests have not raised concerns about the safety of other electric cars, the agency has said.

GM said Monday that the vehicle is safe, and that it will contact owners of the more than 5,000 Volts sold in North America since December 2010 to reassure them. It will also offer loaner cars to ensure that owners are satisfied and confident in their purchase. GM has not put a time limit on how long customers can keep the loaners, but it said the offer is not a response to demands from customers.

The National Highway Traffic Safety Administration said a Volt battery pack that was being monitored caught fire Thursday, a week after it was hit in a side-impact crash test. The agency said another battery that was crash-tested recently gave off smoke and sparks. The latest fires are in addition to a battery fire at a test facility in Wisconsin in June.

From wire dispatches and staff reports

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