Compliance Resources to Help you Stay Current

Royal Bank of Scotland receives a fine of £28.6m for disclosing confidential loan details with Barclays. The Office of Fair Trade (OFT) on March 30th, 2010 announced a fine of £28.6m for breaching the Competition Act after RBS admitted the fault of its staff in divulging how much they intended to charge professional services companies, such as solicitors, estate agents and accountants, for loans to its rival staff at Barclays.

What is Competition Act?

At present, the Competition Act 1998 along with the Enterprise Act 2002 is a major source of competition policy. This act provides an efficient and modernized framework to categorize and deal with restrictive business practices and to put stop to abusive dominant market position.

The act was introduced to create open and vigorous competition as it offers lower price, better quality and increased choice to the consumers. Along with consumers, fair-dealing businessmen also get opportunity to flourish in competitive markets.

The Competition law works to harmonize the UK with EU competition policy. Any anti-competitive behavior is restricted in UK by two major ways:

Anti-competitive agreements–Chapter I of the Competition Act 1998 (CA98) and Article 81 of the EC Treaty prohibits anti-competitive agreements between businesses. This chapter talks about prohibiting business agreements that put stop, limit or misrepresent competition or are tried to do so and which affect trade in the UK and/or EU.

Abuse of a dominant position- Chapter II of CA98 and Article 82 of the EC Treaty prohibits dominant market holders from abusing the dominant position in a market. In a dominant position, a business usually becomes dominant enough to behave independently which can result into charging excessive high price, restrictive production, refusal of product supply and etc. Hence, to eradicate the mentioned problems from a market, the chapter II attempts to put a stop to abusing the dominant position in the market.

Role of OTF

OTF or the Office of Fair Trading works as the authority of consumers and competition in order to make markets more accessible and fair for the consumers.

By stopping hardcore or deliberate offenders, OTF functions to encourage businesses to comply with competition and consumer law and improves their trading practices through self-regulation. The agency also empowering consumers with the knowledge and skills to make informed choices and get the best value from markets, and helping them resolve problems with suppliers through Consumer Direct.

What Went Wrong for RBS

Between October 2007 and February or March 2008, two staffs of RBS’s Professional Practices Coverage Team disclosed pricing and loan related information to counterparts at Barclays. According to Barclays Bank’s disclosure, both generic and specific details about their bank's loan facilities have been leaked by the staffs, either over the phone or during social, client or industry events.

OFT’s investigation revealed that Barclays’ staff then used the information to fix its own pricing.

During the time of credit crunch, when banks found it much harder, and more expensive, to borrow from each other in the wholesale money markets, the offences took place, investigation suggests.

While RBS has blamed two of its employees for this ‘regrettable and isolated case’ and lent its cooperative hands to OFT, Barclays also claimed that it had, too, "voluntarily notified" the OFT about the fraudulent action of RBS staff.

Fine Low Down for RBS

Initially, RBS was fined with £33.6m, but the OFT considered the partially nationalized bank’s acknowledgement of penalty and cooperativeness throughout the investigation thereby reducing the fine to £28.6m. Barclays, however, escapes any fine or other penalty.

Cases of OFT Fines

In 2007, British Airways was fined £121m by the Office of Fair Trading (OFT) for the former’s anti-competitive behavior. The fine amount till date is the largest penalty OTF has levied against a single company. The charge against BA was price fixing and collaborating with Virgin Airways over the price of fuel surcharges.

In 2008, Connaught, Balfour Beatty, Carillion received penalties from OFT for various price fixing cases.

In 2009, OFT fined Hays with £30m. Hays, a recruitment firm was charged for forming a cartel that fixed prices and was accused for boycotting another firm in the construction job market.

Now in 2010, RBS is fined for price fixing.

OFT believes this case will prove that companies indulging disclosure of confidential information, will risk serious penalty.

Ali Nikpay, the OFT's senior director of cartels and criminal enforcement, priding OFT’s commitment to protect fair competition in market, announces "It is important that companies operating in the UK understand the seriousness of such conduct and ensure effective competition compliance throughout their organisation".

Source:

http://www.oft.gov.uk/advice_and_resources/resource_base/legal/competition-act-1998/

http://www.independent.co.uk/news/business/news/hays-and-oft-in-row-over-16330m-fine-for-role-in-cartel-1795713.html

http://www.oft.gov.uk/about/

http://www.businessweek.com/news/2010-03-30/rbs-fined-43-million-for-giving-prices-to-barclays-update1-.html

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article2183054.ece

Natural Wellness is informing its consumers to restrain from buying or consuming its well known dietary supplement, MasXtreme Capsules, as the product contains undeclared drug ingredient.

30th march, 2010, FDA notified consumers about presence of undeclared amount of aildenafil and Phentolamine, an alpha-adrenergic blocker, in MasXtreme capsules which can cause adverse effects on human health.

Natural Wellness is informing its consumers to restrain from buying or consuming its well known dietary supplement, MasXtreme Capsules, as the product contains undeclared drug ingredient. On 30th march, 2010, FDA notified consumers about presence of undeclared amount of aildenafil and Phentolamine, an alpha-adrenergic blocker, in MasXtreme capsules which can cause adverse effects on human health.

Recently FDA has shown “some concern” about bisphenol A or BPA for causing adverse effects on brain, behavior; and prostates of fetuses, infants, and young children and now, in the wake of FDA’s concern, EPA also is gearing to launch investigation about BPA’s effect on water supply and environment.

According to the FDA advisory system, there are five levels of concern of which “some concern” constitutes the third. Earlier, FDA faulted in judging the negative impacts of BPA on human health; only when hundreds of researches proved this chemicals’ relation with a number of diseases and disorders, FDA reversed its position and opinion about the chemical and marked it with “some concern”.

On 29th of March, 2010 EPA announced its planning for launching investigation against BPA. Interestingly, even on the report published by EPA on 30th December, 2009, BPA was not categorized as amongst first four deadly chemicals subject to more stringent labeling and monitoring. Incessant pressure from scientists and advocates may be viewed as the reason for sudden role reversal of the EPA.
 
However, EPA will initiate its investigation on BPA first by looking at the levels of presence of the chemical in ground water and drinking water. Also, the agency will “look for ways to reduce unnecessary exposures, including assessing substitutes”.

What is BPA?

BPA, the controversial chemical, is a plastic hardener used in polycarbonate manufacturing. BPA can commonly be found in food and beverage cans, CDs, paper receipts and in any other plastic products. BPA is mainly used for preventing leaks and contamination of canned foods. However, scientists believe that continuous intake of BPA may cause serious adverse effects on human health. Health problems associated with BPA are:

As the baby bottles contain BPA, infants may become prone to diseases caused by BPA and can’t get rid of the chemical

BPA can cause cancer, early onset puberty, obesity, and type-II diabetes

If consumed regularly, BPA can cause heart disease and liver-enzyme abnormalities

What Scientists Say

Over 900 peer-reviewed studies have found and established BPA’s negative effect on human health. Scientists believe retention of BPA in human body not only affects the particular human body but also affects future generations. Moreover, FDA standard for permissible BPA is also high and potent enough to cause serious damages.

An overwhelming number of reports on relation between BPA and human health, published or waiting to be published, affirm possibilities of significant disruption of endocrine system, cardiovascular disease, intestinal dysfunction, disrupted liver functioning, and disturbed chemotherapy treatment and so on.

Source:

http://www.newsinferno.com/archives/19440

http://www.newsinferno.com/archives/19451

http://current.pic.tv/2008/10/30/bpa-do-you-know-whats-in-your-plastic-bottles/

 

NHS again came under fire of criticisms when the MPs announced that the local chiefs are ‘too passive’ to keep a track on the hospitals in England.

Adding to that, MPs said that managers working in 152 PCTs lack sufficient knowledge and skill required for the job. The Commonwealth Health committee said continuous reorganizations and high turnover may partly be responsible for the deteriorating performance of the managers and the committee has also requested the government to support the managers for better performance.

An advisory panel of the U.S. Food and Drug Administration has shown red signal to pixantrone as it failed to impress them.

The panelists unanimously agreed on the fact Pixantrone, Cell Therapeutics' (CTIC) lymphoma therapy, does not have adequate clinical data to support approval of the drug.

Single Clinical Trial – Was that enough for Pixantrone?

According to the Oncologic Drugs Advisory Committee, single that too an incomplete trail was not enough proof for the effectiveness of pixantrone in treating refractory aggressive non-Hodgkin's lymphoma.

Moreover, clinical trial done by the Cell Therapeutics managed to get only 140 out of 320 participants for clinical trial of the medicine.

Next Step for Cell Therapeutics

James Bianco, CEO of Cell Therapeutics said his company is “committed to working closely with the FDA to address the committee's comments as quickly as we can."

However, starting the process once again may not be very easy for Cell Therapeutics as generating new data to get approval from FDA will be a time consuming affair and will cost millions. Moreover, the company is already running on loss of $1.4 billion (as of December 31, 2009). Additionally, Novartis, its partner on the drug, is also withholding its option to license the drug, an event that would have delivered as much as $104 million in registration and sales milestones. Therefore, chance of Pixantrone to release soon is still in doubt.

Source:

http://seekingalpha.com/article/195948-fda-likely-to-deliver-blow-to-cell-therapeutics?source=feed

 

Outstanding performance in as participants in the Energy Star efficiency program has brought awards from the U.S. Environmental Agency for manufacturers, retailers, real estate services firms, local governments, schools, builders and other enterprises.

The annual award program categorized three levels of awards. The first is Sustained Excellence category, which 50 companies received, the Partner of the Year category – won by 40 enterprises, followed by the Award for Excellence – won by 20 companies.

After death of three infants, Infantino is finally recalling SlingRider Baby Slings, announced the U.S. Consumer Product Safety Commission (CPSC) and Health Canada (HC).

CPSC announced to stop buying or using the SlingRider and Wendy Bellissimo slings for children younger than four months. For free replacement of the slings, consumers can contact the san-Diego based Infantino. Additionally, the CPSC has given a strong advice “Do not attempt to fix these carriers”.

Declaration made by the Food and Drug Administration to hire a third-part inspector in order to keep up with quality-control standards, made shares of biotech firm Genzyme fell 4 percent to $55.25 in afternoon trading on Wednesday.

ISO has reduced the rate of Asbury Volunteer Fire Department to Class 5, which will result into lower insurance premiums for the residents of the coverage area.

About ISO

ISO is a member of the Verisk Analytics Family of Companies. Since 1971, ISO has been serving as an independent organization for insurance companies, fire departments, insurance regulators and providing them with information about risk. ISO’s Public Protection Classification has been used by insurance companies in marketing, underwriting, and pricing homeowner and commercial property insurance.

ISO Rating System

In the U.S., more than 46,000 fire districts have been classified by ISO. ISO assigns a Public Protection Classification rating from 1 to 10. While Class 1 generally represents exemplary fire protection, and Class 10 indicates the area’s fire-suppression program has failed to meet ISO’s minimum criteria.

Through ISO’s rating, amount of premium that the insured has to pay to the insurance company for coverage gets decided. According to ISO rating system, low ISO rating signifies low rate of premiums and higher rating equals to higher rate of premium.

How Asbury Volunteer Fire Department Received ISO Rate Reduction

Since 2005, Asbury VFD has maintained a Class 6 rating. From May 1, that rating will be lowered to 5, as decided by the ISO.

Modern equipments like tanker-dump tanks, brush trucks and a first-responder truck equipped with a Hurst rescue tool, heart defibrillator and other medical supplies along with six pumpers, including its original 1962 Ford pumper and a new 2005 Sterling pumper-tanker purchased with a Federal Emergency Management Agency grant, Asbury VFD has it all that needs to get a low ISO rating.

According to Asbury Fire Chief Albert Childress and Treasurer Ken Burns “This rating was accomplished by rigorous evaluation of all trucks and equipment owned by the department as well as available equipment and manpower provided by nearby departments.”

To withstand the scrutiny of an ISO evaluation, the department practiced hours to perfect the necessary procedures. Childress and Burns said the water supply of Asbury Water Systems and location of hydrants also factored into the rate reduction.

Burns said “The major test required a drop tank setup and fill, followed by a hookup to the pumper, and pumping at the prescribed pressure in less than five minutes…Practice didn’t stop until it could be done in less than half the time. When all practice and procedures were finalized, Chief Albert Childress called for the test and it was successful. With a smile he said, ‘Great. Maybe next time we can lower it to a 4.’”

Source:

http://sandmountainreporter.com/story.lasso?ewcd=5ddf125acc91d6da

http://www.iso.com/


 

The new healthcare legislation will bring a winning fortune for the big pharmas, believe analysts. However, their belief may get a toss as the ‘win’ of the two companies could be elusive to a large extent.

Healthcare Bill and Lifestyle Drugs

According to Pfizer and Merck, they cannot sell drugs to patients who do not go to doctors for treatments. Although cholesterol and diabetes cannot be labeled as medical emergencies, still without doctors’ approval, pharma will not be able to sell their drugs to the patients.

Now that the new healthcare legislation has increased opportunities for the insured people, analysts believe that the frequencies of doctor visits will increase visibly, which will result into increased selling of more lifestyle drugs like Pfizer’s Lipitor and Merck’s Vytorin. Moreover, manufacturing cost of most of the lifestyle drugs is extremely low compared to R&D and marketing expenses; increased volume could easily protect operating margins from lower prices. Therefore, profit will be on high for the big pharmas.

However, analysts’ beliefs may not prove right because insurance costs for both employees and individuals will continue to increase exponentially until 2014, so the number of insured could actually decrease in the short term. Additionally, generic competition from other companies will also increase by that time leaving a very small room for big pharmas like Pfizer and Merck for profit.

Healthcare Bill and Biological Based Drugs

In the new healthcare bill, patent protection of the biological based drugs has been extended which analysts find profitable for the pharma. But now scrutinizing this situation a little more can give a better picture. Development difficulties of these medicines coupled with government’s initiative to start doling out subsidies in 2014 will surely going to snatch the desired profit of the pharmas.

Therefore, still the question remains “how profitable is going to be the healthcare bill for the pharmas?” Let the coming days find out the right answer.

Source: http://seekingalpha.com/article/195143...

 

Suspecting the presence of mercury-derived preservative, the Washington state has call back the restriction on H1N1 vaccine again on March 23, 2010.

According to the state Department of Health, the H1N1 vaccine contains thimerosal, a mercury-derived preservative, which can create health complications for pregnant women and infants.

Six months ago, when doses were scarce during the peak of the swine flu season, the state Department of Health lifted the restriction for the H1N1 vaccine to give pregnant women access.

However, now mercury-free H1N1vaccines are readily available, said the Health Department.

Source:

http://www.goskagit.com/home/article/mercury_restriction_reinstated_for_h1n1_vaccine/

 

Tanning may cause skin cancer! That is what the FDA believes and hence, is working on issuing a new warning against tanning lamps and beds.



 

The historic Health bill which promises reform and revamp of nation’s health care system, got accolades from consumer groups, mixed reactions from the doctors and a negative response from the insurers.

Published in a recent article of CNNMoney (March 22, 2010), responses of all major groups of people are as follows:

EPA has decided to launch a study of hydraulic gas drilling or fracking. The focus of the study will be on finding the impact of the shale gas drilling on human health and environment.

Conspiracy to fraudulently market dietary supplements over the Internet with illegal claims landed the Springfield, Mo. Business owner pleading guilty in federal court.

Conspiracy of Springfield

Springfield, Mo., was involved in fraudulently market dietary supplements over the Internet with illegal claims that these supplements could prevent, treat or cure a number of diseases. Around $17 million worth of products has been sold during 2005 and 2006 through several web sites.

Who Pleaded Guilty

Charles Thao of Springfield pleaded guilty before U.S. District Judge Richard E. Dorr accepting his role in conspiracies to violate the Food, Drug and Cosmetic Act, to defraud the United States, to commit wire fraud, to commit mail fraud and to commit money laundering.

Thao admitted that he along with his wife, co-defendant Mai Lor, who was also associated with Springfield, contracted with co-defendant Tony T. Pham, 41, of Grand Rapids, Mich., to market and distribute the dietary supplements.

Although no clinical testing had been done to check the reliability of the product, but it had been  claimed that six products sold over the Internet had been proven reliable through clinical testing for the treatment and prevention of diabetes, irritable bowel syndrome, gout, high cholesterol, high blood pressure, heartburn and diarrhea.

Impact

According to the terms of plea agreement, Thao is supposed to dissolve his business, Nutrapha Research, LLC, and will not initiate the company under any name for similar business purposes.

Thao is also supposed to forfeit to the government $17,421,059, the amount for which he and his co-defendants are jointly and severally liable, which represents the amount of proceeds obtained as a result of the offenses, three real estate properties in Springfield, three vehicles and the funds credited to various bank accounts.

Under federal statutes, Thao is subject to a sentence of up to 20 years in federal prison without parole for conspiracy to commit money laundering, and up to five years in federal prison without parole on each of the other three conspiracy counts to which he pleaded guilty today, plus a fine up to $250,000 or twice the gross gain on each of the four counts. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office

Similar Food Fraudulent Cases

2008 Chinese Milk Scandal –The 2008 Chinese milk scandal was a food safety incident in the People's Republic of China involving milk and infant formula, and other food materials and components, tainted with melamine.

This incident caused China lose an estimated 300,000 victims, six infants dying from kidney stones and other kidney damage, and a further 860 babies hospitalized. The chemical appeared to have been added to milk in order to cause it to appear to have a higher protein content.

Basmati rice Fraudulence - In 2002 the UK's Food Standards Agency (FSA) carried out the first DNA survey of basmati rice sold in the UK. It found that only 54 per cent of the bags labelled as such contained pure basmati rice - defined as a particular species of grain grown in the plains around the Ganges in northern India and east Pakistan. All the other samples had been diluted with inferior varieties - some by more than 60 per cent. One FSA official calculated that the fraud swindled consumers out of over £5 million that year alone

SK Foods – in 2010 February, Frederick Scott Salyer, owner of SK Foods, company which used to grow, process and distribute tomatoes, was charged of racketeering, wire fraud, mail fraud, money laundering and obstruction of justice. Salyer is alleged to have manipulated the industry through price fixing, bribery and mislabeling. Specifically, he is alleged to have bribed purchasing managers at food companies to guarantee that the companies purchased SK Foods' products over its competitors and for its competitors' pricing information.

Source:

http://www.federalcriminaldefenseblog.com/2010/....-fraud-and-mislabeling/

http://www.newscientist.com/....rise-of-food-fraud.html

http://www.justice.gov/usao/mow/news2010/thao.ple.htm

http://news.bbc.co.uk/2/hi/8478195.stm

 

Funded by the American Recovery and Reinvestment Act of 2009, HHS announced an award of 372 Million in Prevention and Wellness Grants to 44 Communities around the Nation. The awards are part of the HHS Communities Putting Prevention to Work (CPPW) initiative to support [public health efforts in order to reduce obesity and smoking, increase physical activity and improve nutrition.

First Lady Michelle Obama believes "This is an unprecedented level of commitment to prevention… Investing in local communities will build a healthier America, and we aim to reach more than 50 million people who are living in the communities receiving these awards.”

According to Health and Human Services Secretary Kathleen Sebelius, “We’re looking to create the healthy community environments that will help prevent heart attacks, strokes, cancer, diabetes, and other serious health problems on a broad scale…And, by preventing and controlling chronic disease, we can start to turn around rising health care costs as well,” she said.

The new health care legislation in USA is promising a brighter and better future for the uninsured and low income people.

FDA is requiring the healthcare practitioners to temporarily stop using Rotarix vaccine, manufactured by GlaxoSmithKline (GSK) for rotavirus immunization in the US, as the FDA wishes to learn more about components of a superfluous virus detected in the vaccine. However, there is no evidence at this time that this finding poses a safety risk.