Hong Kong billionaire Joseph Lau faces bribery charge

BBC News, 24 May 2012

Related Stories 

• Third Kwok brother arrested in HK

Property values in Macau soared as
 it overtook Las Vegas as the biggest
gambling destination

A billionaire Hong Hong-based property tycoon is facing charges in Macau of bribery and money laundering in the world's top gambling city.

The arrest of Joseph Lau comes on the heels of several other high-profile corruption cases involving politicians and real estate moguls.

Mr Lau, head of Chinese Estate Holdings, has denied any wrongdoing.

Allegations against Mr Lau surfaced in the trial of Ao Man-long, Macau's former secretary of transport.

Mr Ao was the highest-ranking official ever arrested by Macau's anti-corruption agency.

Prosecutors allege that Mr Lau and another tycoon offered a bribe to Mr Ao, in exchange for a successful bid for a valuable parcel of land.

Property values in Macau have soared in the last few years, as it overtook Las Vegas as the world's top gambling destination.

This case comes just months after Hong Kong's wealthiest property developers, the Kwok brothers, and a former senior government official were arrested on suspicion of bribery.

No charges have been filed against the brothers, but the unprecedented arrests have shocked residents in Hong Kong.

Trading in shares of Chinese Estates Holdings were suspended in Hong Kong after it emerged that Mr Lau will face prosecution.

Mr Lau's fortune has been estimated at $6.5bn (£4bn) by the Sunday Times Rich List, making him one of the richest people in the world.

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Russia pays tribute to US budget

Pravda, 21.05.2012

There are many elementary things that recieve no attention at all, although they can be extremely important. If you take a Russian banknote in your hands, you will see that it says: "Note of the Bank of Russia." If you take a look at Soviet banknotes, you will see that they say: "State Treasury Note." It means that it is not the Russian state that makes the money that all Russians use in their everyday lives today. This is a consequence of 1991 - the time when the Soviet Union collapsed.

Modern-day bank notes are made in today's Russia on the base of the Constitution, as well as on the base of the laws about the Central Bank. The production volumes of today's banknotes in Russia are proportionate to the volume of the purchased virtual foreign currency. In other words, in order to pay, let's say, a note of 100 rubles to a cashier in a supermarket, the Russian economy has paid the United States of America the face value of this note.

If we add the structure of the Russian reserves, the general systems of balance of payments, the crediting mechanism - i.e. the elements of economic sovereignty, which Russia does not have, - then we will see that today, Russia pays nearly $200-300 billion to the US. This amount corresponds to the taxes, which Russian tax-payers pay - without customs payments.

Conditionally, every Russian citizen pays two taxes. One of them goes to the Russian budget, and the other one - in the same amount - goes to the American budget. Russia spends this money on the inflation mechanism, because this money is withdrawn from the economy. Therefore, Russia will never solve the inflation problem until it solves the problem of the Central Bank. Hungary tried to do it, for example, but was punished for it.

Russia is not alone here, of course. America defeated many countries of the world. The above is not a specific problem of Russia. That is why the USA consumes a half of the world's GDP because they collect tribute from everyone, not just Russia. 

Sergey Fyodorov

State Duma deputy

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Facebook IPO: banks investigated for allegedly keeping negative news secret

Morgan Stanley, JP Morgan and Goldman Sachs are said to have shared with big investors while keeping public in the dark

guardian.co.uk, Tom McCarthy in New York, Tuesday 22 May 2012

Facebook stock charted a lackluster performance in its first day of trading
 before falling steeply at the start of this week. Photograph: Brendan
Mcdermid/Reuters

Financial regulators are to investigate whether the banks in charge of Facebook's initial stock offering broke the rules by selectively releasing negative news about the company before shares went on sale.

The financial industry regulatory authority (Finra) is looking into allegations that Morgan Stanley and other banks released reduced revenue forecasts for Facebook to big investors – but not the general public – before Friday's IPO. Such activity could constitute a violation of securities law.

Mary Schapiro, chairwoman of the securities and exchange commission, said it also had concerns. Speaking to reporters outside a Senate banking committee hearing into JP Morgan's financial reporting, she said: "I think there is a lot of reason to have confidence in our markets and in the integrity of how they operate, but there are issues that we need to look at specifically with respect to Facebook."

Facebook stock charted a lackluster performance in its first day of trading before falling steeply at the start of this week. News of the Finra investigation drove the stock down more than 8% Tuesday.

It is the second regulatory investigation tied to the Facebook IPO. The SEC announced Friday that it was looking into reports of breakdowns in trading mechanisms at the Nasdaq exchange as the stock went on sale.

And the SEC investigation isn't the only headache for Nasdaq after the Facebook IPO. An investor is suing the exchange, accusing it of negligence in handling trades that resulted in losses for traders, Reuters reports.

All three banks that worked on the Facebook deal – Morgan Stanley, JP Morgan and Goldman Sachs – will be investigated for allegedly sharing the negative news with institutional investors but not the public at large, Finra chairman Richard Ketchum told Reuters.

"If true, the allegations are a matter of regulatory concern to Finra and the SEC," Ketchum said.

The Facebook underwriters already had come under criticism for rolling out the stock at a price the market could not sustain, although the aggressive pricing netted $16bn for Facebook owners.

Barry Ritholtz, the widely followed financial blogger and chief market strategist at Fusion IQ in New York, criticised all sides – Facebook, Morgan Stanley and Nasdaq.

"Thus, what we see are a series of bad decisions made by Facebook's executives going back many years," he wrote on his blog Tuesday. "The insiders got greedy, too clever by half, in how they used secondary markets. They picked a bad banker and an awful exchange," Ritholtz said.

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Bush and Blair's pre-Iraq conversation must be disclosed, tribunal rules

Foreign Office loses appeal against release of extracts from phone call that took place a few days before invasion

guardian.co.uk, Richard Norton-Taylor, Monday 21 May 2012

Tony Blair and George Bush are believed to have discussed UN resolutions
 in the phone conversation. Photograph: Reuters Photographer / Reuters

Extracts of a phone conversation between Tony Blair and George Bush a few days before the invasion of Iraq must be disclosed, a tribunal has ruled.

The Foreign Office lost an appeal against an order by the information commissioner, Christopher Graham, to disclose records of the conversation between the two leaders on 12 March 2003. Graham's order was made in response to a freedom of information request by Stephen Plowden, a private individual who demanded disclosure of the entire record of the conversation.

"Accountability for the decision to take military action against another country is paramount," Graham had said in his original order.

Upholding that ruling on Monday, Judge John Angel, president of the information tribunal, said Foreign Office witnesses had downplayed the importance of a decision to go to war, a view the tribunal found "difficult to accept".

The tribunal added: "Also in our view, particularly from the evidence in this case, the circumstances surrounding a decision by a UK government to go to war with another country is always likely to be of very significant public interest, even more so with the consequences of this war."

It said parts of the phone call between Blair and Bush recording what the former British prime minister said must be disclosed. The two men are believed to have discussed UN resolutions on Iraq and a television interview given by Jacques Chirac, then French president, on 10 March 2003. Blair repeatedly blamed Chirac for the failure to get a second UN security council resolution backing an invasion of Iraq.

Jack Straw, then foreign secretary, claimed in evidence to the Chilcot inquiry into the Iraq war that Chirac made it clear France would not back a fresh UN resolution "whatever the circumstances".

Straw added: "I don't think there was any ambiguity."

The issue is important because the Blair government claimed Chirac's interview killed off all hope of a diplomatic solution. Straw's claims were contradicted by Sir John Holmes, then UK ambassador to France. He told Chilcot that Chirac's words were "clearly ambiguous". One interpretation, Holmes said, was that Chirac was simply warning that France would veto a fresh UN resolution at that time as UN weapons inspectors had not been given a proper chance to do their job.

Clare Short, international development secretary at the time, accused Blair in the tribunal hearing of "clearly, deliberately misleading the French position".

Angus Lapsley, a Foreign Office official responsible for US-UK relations, argued against disclosure on the grounds that Britain had "a uniquely close and privileged relationship with the US". He added that there was "no comparator" in terms of the "breadth and depth" of the UK's relationship with the US, which was vital to Britain's national interests.

A spokesman for the Foreign Office, which has 30 days to disclose the information or appeal, said it was "obviously disappointed by the decision of the tribunal". He added: "We will want to study the terms of the judgment more closely over the coming days."

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Robin Hood gesture: Tesco CEO waives $588,000 bonus

RT.com, 22 May, 2012

Tesco CEO Philip Clarke (Reuters/Suzanne Plunkett)

Tesco chief Philip Clarke has turned down an annual bonus of $588,000 as he was disappointed by weak performance from the world’s third-largest retailer at the British market.

“I decided at the beginning of the year that I would decline my annual bonus for 2012,” Clarke said in a statement to Reuters. “I wasn't satisfied with the performance in the UK and I won't take the bonus. I'm confident that we're tackling the right issues.”

Shares in Tesco have lost almost a quarter of their value this year after the company posted its first drop in UK sales and profits for at least 30 years due to the recession. However, the group saw surging profits from overseas business last year. Now the company is going to invest about one billion pounds in shops and services in Britain in order to boost sales.

However, Clarke’s fellow board members didn’t follow his example. Last week Tesco revealed that its top 5,000 managers will receive a reduced annual bonus of 16.9% of the maximum payable under their scheme. Executive directors will receive 13.54% of the maximum.

Tesco reviewed its pay policy for top executives after high-profile shareholders voiced outrage over pay rises despite weak financial results at the firm. The phenomenon dubbed the "shareholder spring" has been seen in many underperforming companies, forcing Aviva chief Andrew Moss, and Sly Bailey, head of newspaper group Trinity Mirror to leave their positions this month.

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Voldermort losses at JPMorgan 'have now doubled to £4.4bn'

Daily Mail, by Damien Gayle, 21 May 2012

 

Losses at JPMorgan Chase's embattled London trading operation could be as much as £4.4billion, more than double what it had forecast.

The new estimate of the cost of the catastrophic trading blunder announced two weeks ago threatens to make it one of the biggest financial disasters in City history.

The claims come as chief executive Jamie Dimon announced that the bank is suspending plans to buy back $15billion worth of shares.

Catastrophic trading blunder: Finance industry sources believe the
 mammoth loss racked up by JPMorgan's London office could as
much as £4.4billion

'It's an embarrassment, it's a black mark,' Mr Dimon said of the trading loss. But he added that the bank's balance sheet was 'barely nicked' by the loss.

JPMorgan, the U.S.'s biggest bank and once seen as on of the safest on Wall Street, is still trying to unwind the mammoth trading positions taken by London-based French trader Bruno Michel Iksil.

Rival traders working on desks specialising in the derivatives the bank used to make its trades now reckon the losses could total nearly $7billion (£4.4billion).

JPMorgan had last week estimated that the losses could hit $3billion. 

Stress: JP Morgan boss
 Jamie Dimon has announced
 the curtailment of the
 bank's $15billion share buy
back

'The market knows roughly what [JPMorgan] has and what the sizes are,' a source with knowledge of the bank's positions told CNN Money.

JPMorgan's trades were built around contracts tied to corporate bonds in which it sold protection against risk on an index of 125 highly rated bonds.

If the market had continued to rally then the bank stood to make huge gains, however the ongoing eurozone crisis which has dragged down markets worldwide took its toll on the positions.

Speaking at a meeting with investors today, Mr Dimon did not provide an update on the size of the losses suffered through the trading blunder, merely admitting that 'obviously, we're not going to make as much money'.

He said the bank has made progress working down the losing trades. 'We are going to wrestle the problem down,' he said.

JPMorgan's share price was down 2 per cent at $32.82 in early afternoon trading, 

underperforming relative to rival banks' stocks. The bank's stock has lost about $28billion of market value since the trading losses were announced on May 10.

Mr Dimon said the bank intends to restart stock buybacks once it has replenished the lost capital.

The bank is capitalised well enough to easily withstand the losses, according to analysts. It had $190billion of shareholder equity supporting $2.32trillion in assets at the end of March.

The tempest engulfing JP Morgan has already claimed the jobs of several senior officials. Achilles Macris, who ran the London desk that made the botched trades, was expected to depart along with one of his senior lieutenants, Javier Martin-Artajo. 

Gone: Ina Drew, 54, has been
forced out as head of JP Morgan's
 Chief Investment Office

They followed Ina Drew, JPMorgan's chief investment officer and one of the most powerful women on Wall Street, out of the door as shareholders demanded blood for the debacle.

Other departures in London were last week said to be likely, with Mr Iksil, the man said to be directly responsible for the trades, almost certain to be on the hit list.

The highly paid banker was nicknamed the 'London Whale’ because of the huge trading positions he took in the credit markets.

JPMorgan's share price was down 2 per cent at $32.82 in early afternoon trading today, underperforming relative to rival banks' stocks.

The bank's stock has lost about $28billion of market value since the trading losses were announced on May 10.

Dimon said the bank intends to restart stock buybacks once it has replenished the lost capital. The bank is capitalised well enough to easily withstand the losses, according to analysts. It had $190 billion of shareholder equity supporting $2.32 trillion in assets at the end of March.

Read more:

CNNMoney: JPMorgan Chase loss only going to get worse

Exclusive: U.S. lets China bypass Wall Street for Treasury orders

Reuters, by Emily Flitter, New York, Mon May 21, 2012

(Reuters) - China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

The relationship means the People's Bank of China buys U.S. debt using a different method than any other central bank in the world.

The other central banks, including the Bank of Japan, which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions.

China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn't been necessary.

The documents viewed by Reuters show the U.S. Treasury Department has given the People's Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.

China can now participate in auctions without placing bids through primary dealers. If it wants to sell, however, it still has to go through the market.

The change was not announced publicly or in any message to primary dealers.

"Direct bidding is open to a wide range of investors, but as a matter of general policy we do not comment on individual bidders," said Matt Anderson, a Treasury Department spokesman.

While there is been no prohibition on foreign government entities bidding directly, the Treasury's accommodation of China is unique.

The Treasury's sales of U.S. debt to China have become part of a politically charged public debate about China's role as the largest exporter to the United States and also the country's largest creditor.

The privilege may help China obtain U.S. debt for a better price by keeping Wall Street's knowledge of its orders to a minimum.

Primary dealers are not allowed to charge customers money to bid on their behalf at Treasury auctions, so China isn't saving money by cutting out commission fees.

Instead, China is preserving the value of specific information about its bidding habits. By bidding directly, China prevents Wall Street banks from trying to exploit its huge presence in a given auction by driving up the price.

It is one of several courtesies provided to a buyer in a class by itself in terms of purchasing power. Although the Japanese, for example, own about $1.1 trillion of Treasuries, their purchasing has been less centralized. Buying by Japan is scattered among institutions, including pension funds, large Japanese banks and the Bank of Japan, without a single entity dominating.

Granting China a direct bidding link is not the first time Treasury has gone to great lengths to keep its largest client happy.

In 2009, when Treasury officials found China was using special deals with primary dealers to conceal its U.S. debt purchases, the Treasury changed a rule to outlaw those deals, Reuters reported last June. But at the same time it relaxed a reporting requirement to make the Chinese more comfortable with the amended rule.

Another feature of the U.S.-China business relationship is discretion: The Treasury tried to keep its motivation for the 2009 rule change under wraps, Reuters reported.

Documents dealing with China's new status as a direct bidder again demonstrate the Treasury's desire for secrecy -- in terms of Wall Street and its new direct bidding customer.

To safeguard against hackers, Treasury officials upgraded the system that allows China to access the bidding process.

Then they discussed ways to deflect questions from Wall Street traders that would arise once the auction results began revealing the undeniable presence of a foreign direct bidder.

"Most hold the view that foreign accounts only submit 'indirect bids' through primary dealers. This will likely cause significant chatter on the street and many questions will likely come our way," wrote one government official in an email viewed by Reuters.

In the email, the official suggested providing basic, general answers to questions about who can bid in Treasury actions.

"For questions more extensive or probing in nature, I think it prudent to direct them to the or Treasury public relations area," the official wrote.

The granting to China of direct bidder status may be controversial because some government officials are concerned that China has gained too much leverage over the United States through its large Treasury holdings.

For example, economist Brad Setser, who is a member of the National Economic Council and has also served on the National Security Council, has argued China's large Treasury holdings pose a national security threat.

Writing for the Council on Foreign Relations in 2009, Setser posited that China's massive U.S. debt holdings gave it power over U.S. policy via the threat of a swift, large sale of U.S. debt that could send the market into turmoil and drive up interest rates.

But Treasury officials have long maintained that U.S. debt sales to China are kept separate from politics in a business relationship that benefits both countries. The Chinese use Treasuries to house the dollars they receive from selling goods to the United States, while the U.S. government is happy to see such strong demand for its debt because it keeps interest rates low.

A spokesman for the Chinese embassy in Washington did not respond to calls and emails seeking comment.

The United States has, however, displayed increasing anxiety about China as a cybersecurity threat. The change Treasury officials made to their direct bidding system before allowing access to China was to limit access to the system to a specially designed private network connection controlled by the Treasury.

China is among the most sensitive topics for bankers and government officials who court the country as a financial client because of its size and importance, and none would agree to comment on the record for this story.

A former debt management official at the Treasury who did not want to be identified said that as China's experience in the U.S. Treasury market has deepened over time, Chinese officials may have felt more comfortable taking the reins in the management of their holdings.

Their request to bid directly, in his view, came from a confidence that their money managers could buy U.S. debt more efficiently on their own than through Wall Street banks, which can often drive up the price of Treasuries at an auction if they know how much large clients are willing to pay. Such a practice that is not specifically illegal, though most traders would deem it unethical.

Evidence of China's growing sophistication as a money manager in the U.S. markets is clear in its expansion of operations in New York. Its money management arm, the State Administration for Foreign Exchange (commonly called SAFE), has an office in Midtown Manhattan and a seasoned chief investment officer -- former Pacific Investment Management Co derivatives head Changhong Zhu -- in Beijing.

A woman who answered the phone at SAFE's New York office said no one in the office was authorized to talk to the media.

(Editing by Martin Howell and Steve Orlofsky)

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NAACP backs same-sex marriage as civil right

Associated Press, May 19, 2012

MIAMI (AP) -- The NAACP has passed a resolution endorsing same-sex marriage as a civil right and opposing any efforts "to codify discrimination or hatred into the law."

(Credit: AP Photo/Gus Ruelas)

The Baltimore-based National Association for the Advancement of Colored People announced Saturday that its board voted at a leadership retreat in Miami to back a resolution supporting marriage equality. It said the position is consistent with the equal protection provision of the U.S. Constitution.

Same-sex marriage is legal in six states and the District of Columbia, but 31 states have passed amendments to ban it.

NAACP President Benjamin Todd Jealous, a strong backer of gay rights, says "civil marriage is a civil right and a matter of civil law."

Gay marriage has divided the black community, with many religious leaders opposing it.

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Dr. Robert L. Spitzer is a major architect of the modern

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Experience: I tried to 'cure' gay people

Jeremy Marks: 'I began to think that perhaps we’d got it
really wrong.' Photograph: Lydia Goldblatt for the Guardian

About the Challenges of Being a Gay Man – Oct 23, 2010 (Saint Germain channelled by Alexandra Mahlimay and Dan Bennack)

“ ... You see, your Soul and Creator are not concerned with any perspective you have that contradicts the reality of your Divinity – whether this be your gender, your sexual preference, your nationality – or your race, ethnicity, religious beliefs, or anything else.The only identity that has any fundamental or lasting relevance to your Soul is your Divinity. Any other way you may label or identify yourself is transitory. It changes from one incarnation to the next. ..."

"The Akashic System" – Jul 17, 2011 (Kryon channelled by Lee Carroll) - (Subjects: Religion, God, Benevolent Design, DNA, Akashic Circle, (Old) Souls, Gaia, Indigenous People, Talents, Reincarnation, Genders, Gender Switches, In “between” Gender Change, Gender Confusion, Shift of Human Consciousness, Global Unity,..... etc.)

Peaceful end to anti-bank protests in Frankfurt

Deutsche Welle, 19 May 2012

A rally by more than 20,000 critics of Europe's banking sector and eurozone austerities has passed off peacefully in Frankfurt, Europe's biggest financial hub, after fours days of strict crowd control by police.

Organizers of "Blockupy", a movement reminiscent of "Occupy Wall Street" in 2011, said their Frankfurt rally had demonstrated resistance against the "Europe-wide austerity dictate" of institutions such as the European Central Bank (ECB) and the EU.

Police squads totaling some 5,000 had removed a protest camp outside the ECB on Wednesday and temporarily detained some 400 sit-in demonstrators on Friday, prompting protesters to complain loudly that their basic rights had been curtailed.

Frankfurt city authorities had shut down adjacent commuter train stations, obtained court rulings to prohibit access to the ECB and numerous other events planned by "Blockupy" protesters, bringing the central city almost to a standstill. 

Police cleared sit-down protesters on
Friday

Major interruptions in central Frankfurt

Protesters were left on Saturday to hold their closing rally in central Frankfurt but only within sight of the ECB. However, a spokesman for "Blockupy," Roland Seuss, claimed it had been "enormously successful."

"Despite continuous defamation directed at our protest and the prohibition orgy of the city of Frankfurt, we have been able to bring European resistance against unsocial and undemocratic policies of cutbacks to the main financial location Frankfurt," Suess said.

A police spokesman said aside from a few stones thrown and some shoving, the rally had passed off peacefully.

EU, ECB and IMF focus of criticism

"Blockupy," an alliance of 40 organizations, including globalization critical groups such as Attac, leftist trade unionists and Germany's Left Party, had accused the EU and its commission, the International Monetary Fund and the ECB of imposing bailout deals that inflicted unjust cutbacks on the citizens of nations such as Greece, Spain and Portugal.

French protesters joined the Frankfurt rally

"We need a rescue mechanism for the people, not for the banks," Seuss said. "This policy of European impoverishment is not taking place in our name."

Banners carried by protesters read: "Break the banks' power," "International resistance against the austerity imposed by troika and governments," and "Euro-land is burnt out." Protestors chanted "A-Anti-Anticapitalista."

The chairman of Germany's Left Party, Klaus Ernst said a change of direction was needed in Europe's economic and financial policies. "We need democratic control of the banks and regulation of the financial markets," Ernst said. He also said he would seek parlamentary inquiries into the past week's tight prohibitions on planned Blockupy protests.

Germany, Europe's biggest economy, has largely escaped rash austerity measures, with the government of Chancellor Angela Merkel urging other EU nations to stick with spending cuts to get budgetary deficits under control.

Her conservative government has also so far dismissed calls by the new French President Francois Hollande to soften social hardship by fostering growth.

On Friday, commercial banks said their high rises in central Frankfurt alongside the ECB had operated uninterrupted but many had advised staff to dress down instead of wearing suits.

ipj/ng (dpa, AP, Reuters, AFP)

Bahrainis protest Saudi Gulf union proposal

Deutsche Welle, 18 May 2012

Opposition activists in Bahrain have rallied to protest a proposed union with neighboring Saudi Arabia. Some protesters view the plan as an attempt by Riyadh to end the uprising in the Gulf island nation.

Tens of thousands of demonstrators took to the streets of Bahrain on Friday, denouncing proposals for closer military and political cooperation with neighboring Saudi Arabia and other Gulf states.

The mainly Shiite demonstrators blocked one of the island nation's major highways outside the capital, Manama, in a rally that stretched for nearly five kilometers (three miles). The demonstrators chanted slogans such as "No, no unity" and "Bahrain is not for sale."

On Monday, the leaders of the Gulf Cooperation Council met for a summit meeting in the Saudi capital, Riyadh, to disclose closer union between the organization's six member states. The council is comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

The meeting postponed any decisions on closer political integration for later in the year. Some critics believe the proposal is a push by Saudi Arabia's Sunni monarchy to consolidate its regional power against its main rival, Shiite Iran.

Regional power politics

Bahrain, a small island state in the Persian Gulf, plays an important strategic role in the region: it is home to the US Navy's fifth fleet. Once a province of Iran, a Sunni monarchy currently rules over the majority Shiite population.

In February 2011, mainly Shiite activists - inspired by the revolts in Tunisia and Egypt - rose up against the Al Khalifa monarchy, calling for greater political participation. At least 50 people have died in the unrest so far. The monarchy blames the unrest on Iran.

Saudi Arabia, which has a large Shiite population in its eastern, oil-producing regions, deployed troops last year to help shore up the Al Khalifa family. Some opposition activists suspect that Riyadh wants to use the GCC proposal to secure control over Bahrain and deny Tehran influence in the region.

Protests against a Saudi-Bahraini union also took place in Iran on Friday, with the cleric Kazem Sediqi delivering a sermon broadcast live on state radio.

"This is an ill-fated plot that is taking place with the American and Zionist (Israeli) green light but they should know that the people of Bahrain and the region, Muslims around the world and in Iran will never tolerate it," Sediqi said.

"Instead of surrendering to its own people, it (the Bahraini government) is surrendering its identity, with total abjectness, to another country," Sediqi said.

slk/jm (AP, Reuters)

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Gupta trial could feature big corporate stars

Reuters, by Grant McCool and Jonathan Stempel, NEW YORK, Thu May 17, 2012

Rajat Gupta, a former director of Goldman Sachs Group Inc., exits

 Manhattan Federal Court in New York February 7, 2012. (Credit: Reuters/

Brendan McDermid)

(Reuters) - Lloyd Blankfein, Warren Buffett and other well-known chieftains of corporate America might be called to testify at the insider trading trial starting on Monday of former Goldman Sachs Group Inc (GS.N) and Procter & Gamble Co (PG.N) director Rajat Gupta.

Blankfein, who runs Goldman, and Buffett, who runs Berkshire Hathaway Inc (BRKa.N) (BRKb.N), are among dozens of people that lawyers for the government and for Gupta said on Thursday might be mentioned or might testify at the trial, which is expected to last about three weeks.

Others on proposed witness lists filed on Thursday in the Manhattan federal court are A.G. Lafley, a former P&G chairman and chief executive, and Kenneth Chenault, the chairman and chief executive of American Express Co (AXP.N) and a P&G director.

Gupta, the former chief of consulting firm McKinsey & Co, is the most prominent corporate executive charged in a government crackdown on insider trading centered on hedge funds.

He was charged last October with leaking confidential information to his onetime friend, Galleon Group hedge fund founder Raj Rajaratnam, while serving on the Goldman and P&G boards in 2007 and 2008.

Gupta, 63, denies the charges, and has pleaded not guilty to five counts of securities fraud and one count of conspiracy. If convicted, he could face up to 25 years in prison.

His main lawyer, Gary Naftalis argues that the government's case is circumstantial and speculative.

Blankfein testified for the government at last year's high profile trial of Rajaratnam, saying that disclosure of boardroom talks by Gupta violated Goldman's confidentiality policies.

He spoke after jurors heard a wiretapped recording in which Gupta and Rajaratnam discussed Goldman's possibly buying a bank or insurer.

Rajaratnam was convicted and is serving an 11-year prison term, the longest sentence for insider trading in the United States.

Prosecutors have accused Gupta of giving Rajaratnam advance knowledge of Berkshire's $5 billion investment in Goldman at the height of the 2008 financial crisis and Goldman's surprise fourth-quarter loss that year.

They have also accused Gupta of providing non-public information in January 2009 about P&G's quarterly results and in June 2008 about that company's sale of its Folgers coffee unit to J.M. Smucker Co (SJM.N).

MORE THAN 100 NAMES

The defense list names 116 individuals and the government listed 51 people. A small number will actually testify at trial.

Among the other executives named on both lists are David Viniar, Goldman's chief financial officer and Gary Cohn, Goldman's chief operating officer.

Jon Moeller and Mark Belgya, respectively the chief financial officers of P&G and Smucker, are also on both lists. Buffett's name appears only on Gupta's list.

Goldman spokesman Michael DuVally declined to comment. Smucker spokeswoman Maribeth Baertscher said it is cooperating with the government on the Gupta case and that Belgya "has agreed to appear as a witness at the government's request."

P&G spokesman Paul Fox had no immediate comment. American Express spokeswoman Marina Norville declined to comment. Carrie Kizer, an assistant to Buffett, did not immediately respond to a request for comment.

The trial begins Monday before U.S. District Judge Jed Rakoff with jury selection and possibly opening arguments. The first government witness could be called on Monday or Tuesday.

Gupta suffered a blow on Wednesday when Rakoff said he intended to let jurors hear four wiretapped conversations, including the conversation between Gupta and Rajaratnam played at last year's trial.

The case is USA v. Gupta, U.S. District Court for the Southern District of New York, No. 11-907.

(Reporting by Grant McCool and Jonathan Stempel; editing by Andre Grenon)

Goldman Sachs Chairman and CEO Lloyd Blankfein testifies before the

 Senate Homeland Security and Governmental Affairs Investigations Subcommittee

 hearing on ''Wall Street and the Financial Crisis: The Role of Investment Banks'' 

on Capitol Hill in Washington April 27, 2010. (Credit: Reuters/Jason Reed)

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