DealBook: Bank of England to Investigate Foreign Exchange Manipulation Claims

DealBook: A Stock Exchange Expands Its Global Reach

Flaws in Enrollment Records for Insurance Exchange

Even now, the administration said, it may be sending incomplete or erroneous information to insurers on one out of every 10 people who try to enroll.

Julie Bataille, a spokeswoman at the federal Centers for Medicare and Medicaid Services, said the agency was working with insurers to correct the errors and resolve discrepancies in records kept by the government and by insurers.

In some cases, the government did not notify insurers of people who enrolled online at HealthCare.gov. The government refers to these people as “C.M.S. orphans” because the consumers successfully completed the application process and selected health plans, but the government did not send the information to the insurers.

An administration official said the government would do everything possible to “rescue the orphans.”

In other cases, Ms. Bataille said, the government sent more than one enrollment notice for the same person to an insurer. And in some instances, she said, the information sent was incorrect. A child may have been listed as a parent, a name may have been misspelled, or an address may be wrong.

Moreover, officials said, some people who signed up for a health plan are listed in insurance company records but not in the government’s records. In those cases, consumers may have canceled enrollment in a health plan, but the government failed to inform the insurer.

The errors and omissions resulted from technical problems that crippled the website in its first weeks, Ms. Bataille said.

With hundreds of hardware upgrades and software changes, Ms. Bataille said, the site now works well for the vast majority of consumers who use it. However, insurers say they are still seeing problems in “back-end systems,” which are supposed to deliver consumer information to insurers.

DealBook: S.E.C. Fines Options Exchange for Lax Oversight

Scott Olson/Getty ImagesThe Standard & Poor’s 500-stock index options pit at the Chicago Board Options Exchange.

The Securities and Exchange Commission fined the Chicago Board Options Exchange and an affiliate $6 million on Tuesday for what it called breakdowns in regulatory oversight, including a failure to enforce rules to prevent abusive short-selling.

The agency said the financial penalty against the exchange and its affiliate, C2 Options Exchange, was the first action related to an exchange’s responsibility to self-police its market.

The case stemmed in part from oversight of OptionsXpress, a firm now owned by Charles Schwab, which was accused by the S.E.C. of engaging in an abusive naked short-selling scheme, or selling shares before borrowing them first. An S.E.C. judge on Friday ordered OptionsXpress, its former chief financial officer and a customer to pay $4.8 million in fines and to return $4.2 million.

In a statement, the S.E.C. said: “Self-regulatory organizations must enforce the federal securities laws as well as their own rules to regulate trading on their exchanges by their member firms. In doing so, they must sufficiently manage an inherent conflict that exists between self-regulatory obligations and the business interests of an S.R.O. and its members. An S.E.C. investigation found that C.B.O.E. failed to adequately police and control this conflict for a member firm that later became the subject of an S.E.C. enforcement action. C.B.O.E. put the interests of the firm ahead of its regulatory obligations by failing to properly investigate the firm’s compliance” with the regulation against abusive short-selling and then interfered with the S.E.C. investigation into the firm.

The S.E.C. added that the exchange had an ineffective surveillance program that failed to detect wrongdoing despite numerous red flags that its members were engaged in abusive short-selling and also did not live up to its regulatory and compliance responsibilities in several other areas over four years.

“This settlement marks a significant step in putting the S.E.C. matter behind us, but our commitment to maintaining the very highest standards in regulation and compliance will be carried forward throughout our organization,” the exchange said in a statement.

“In addition to working proactively with the S.E.C. throughout its investigation, we voluntarily launched our own exhaustive, internal assessment of regulatory and compliance practices across our entire organization, assisted by third-party consultants and independent outside counsel. All actions either required or recommended by the S.E.C., as well as those resulting from our rigorous self-review, have been or are now being implemented,” it said.

New Exchange Hopes to Be Nasdaq for IP

Are companies ready to buy and sell patent rights the way investors buy shares of stock?

Sharp Exchange Between Lawyers Marks Day Seven of Priest Abuse Trial Deliberations

At the end of the seventh day of jury deliberations in the Philadelphia priest sex-abuse trial, the jury asked for an alleged sex-abuse victim?s two-day testimony to be read back to them, as well as the alleged victim?s mother?s testimony and the interview done by a church investigator with the priest who allegedly abused M.B.

Bill Would Deny Iran Access to Foreign Exchange Reserves

The legislation, which has strong support, would be the first major new sanction confronting Iran since its inconclusive round of negotiations with the big powers last month on its disputed nuclear program. Despite Iran’s repeated denial, the West suspects it is aiming to be able to build nuclear weapons.

The United States and the European Union have enacted a broad range of economic sanctions aimed at pressuring Iran in those negotiations, but sponsors of the legislation contend that Iran is not bargaining in good faith while it continues to enrich uranium.

Part of the reason, they say, is that Iran has been able to work around the worst effects of the sanctions by tapping its foreign currency reserves overseas, which are largely beyond the reach of current restrictions.

“Closing the foreign currency loophole in our sanctions policy is critical in our efforts to prevent Iran from acquiring a nuclear weapons capability,” the sponsors, led by Senator Mark Steven Kirk, an Illinois Republican, and Senator Joe Manchin III, a West Virginia Democrat, said in a statement on the new legislation, which they called “the Iran Sanctions Loophole Elimination Act.”

It would impose severe penalties on any foreign financial institution that conducts foreign exchange transactions on behalf of Iran’s central bank or other Iranian entity that is already blacklisted by other sanctions. It would also be retroactive to Thursday, regardless of the passage date.

Supporters of the legislation contended it sent a significant message of bipartisan resolve to Iran at a time when the efficacy of the sanctions strategy has been increasingly called into question, largely because it has not dissuaded Iran from continuing to enrich uranium.

“The strong support the bill enjoys from Senate Democrats demonstrates that Congress does not accept the argument advanced by some that pressure should be relieved,” said Mark Dubowitz, the executive director of the Foundation for Defense of Democracies, a Washington group that has advocated for more sanctions.

“It also demonstrates that the Obama administration understands that Iran cannot be allowed to exploit loopholes in international sanctions while it refuses to agree to a negotiated settlement over its nuclear program,” he said.

Blocking Iran’s access to billions of dollars’ worth of its own money in foreign markets could cause significant complications for the country, where presidential elections are set for next month and the economy’s troubles are a major issue.

Sanctions already in place have basically halved sales of oil, Iran’s most important export, contributed to surging inflation, caused shortages of imports and sharply reduced the value of the national currency, the rial. Foreign exchange reserves are considered an important pillar in keeping the rial from collapse.

Critics said the new legislation risked further alienating Iranians who suspect that the sanctions’ true purpose is not to pressure Iran in the nuclear negotiations, but to cause an economic implosion that would lead to regime change. Instead of forcing leaders to be more flexible on the issue, critics say, the legislation could harden their positions.

“When we’ve cemented a sanctions escalation path, we’re creating a trajectory toward actual confrontation,” said Trita Parsi, the founder of the National Iranian American Council, a Washington group that opposes sanctions. Some Iranian leaders, he said, see the sanctions “as a train that can only go in one direction and has no brakes.”

Alireza Nader, an Iran specialist at the RAND Corporation, said the timing of the bill also could send the wrong signal to Iranian leaders, who he contended are already scrambling because of the sanctions imposed so far — despite their projection of defiance.

DealBook: London Stock Exchange Revises Offer for Clearinghouse

LONDON — The London Stock Exchange Group said on Monday that it had revised the terms of its takeover proposal for LCH.Clearnet, citing the changing regulatory environment.

The London Stock Exchange provisionally agreed to pay 15 euros, or $20, a share for 60 percent of LCH.Clearnet, independent clearinghouse for financial transactions. In March, the London bourse offered 19 euros a share, plus 1 euro per share as a special dividend to be paid in five years.

The companies said the changes followed discussions over coming regulation that could force the LCH to raise more capital and crimp profits. European regulators have been proposing stricter rules for clearinghouses to safeguard their operations, forcing them to increase their reserves.

Like rivals, the London Stock Exchange has looked to deals in the face of increasing competition and weakness in its core equity business. With LCH, the London exchange may benefit from regulatory changes, capturing the increasing volume of over-the-counter derivatives that will move to clearinghouses. The stock exchange currently outsources clearing activities to LCH.

Such businesses have been especially attractive in the current conditions. Last week, the IntercontinentalExchange agreed to pay $8.2 billion for NYSE Euronext to create a trans-Atlantic trading giant with a major focus on derivatives.

Under the revised plan, the London Stock Exchange would pay 14 euros per LCH.Clearnet share on completion of the transaction and 1 euro per share in 2017, which would replace the special dividend, the two companies said. Both payments would be in cash. The firms also agreed on extending their takeover negotiations until Jan. 31 to finalize the details of the offer.

Sharp Exchange Between Lawyers Marks Day Seven of Priest Abuse Trial Deliberations

At the end of the seventh day of jury deliberations in the Philadelphia priest sex-abuse trial, the jury asked for an alleged sex-abuse victim?s two-day testimony to be read back to them, as well as the alleged victim?s mother?s testimony and the interview done by a church investigator with the priest who allegedly abused M.B.

Sharp Exchange Between Lawyers Marks Day Seven of Priest Abuse Trial Deliberations

At the end of the seventh day of jury deliberations in the Philadelphia priest sex-abuse trial, the jury asked for an alleged sex-abuse victim?s two-day testimony to be read back to them, as well as the alleged victim?s mother?s testimony and the interview done by a church investigator with the priest who allegedly abused M.B.

Sharp Exchange Between Lawyers Marks Day Seven of Priest Abuse Trial Deliberations

At the end of the seventh day of jury deliberations in the Philadelphia priest sex-abuse trial, the jury asked for an alleged sex-abuse victim?s two-day testimony to be read back to them, as well as the alleged victim?s mother?s testimony and the interview done by a church investigator with the priest who allegedly abused M.B.