HSBC to pay record $1.9B fine

British-owned bank HSBC is paying $1.9B to settle a US money-laundering probe. The bank was investigated for involvement in the transfer of funds from Mexican drug cartels and sanctioned nations like Iran. (Dec. 11)

HSBC has agreed to pay a record $1.92 billion fine to settle a multi-year probe by U.S. prosecutors, who accused Europe's biggest bank of failing to enforce rules designed to prevent the laundering of criminal cash.

The U.S. Justice Department on Tuesday charged the bank with failing to maintain an effective program against money laundering and conduct due diligence on certain accounts.

In documents filed in federal court in Brooklyn, it also charged the bank with violating sanctions laws by doing business with Iran, Libya, Sudan, Burma and Cuba.

HSBC Holdings Plc admitted to a breakdown of controls and apologised for its conduct.

"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organisation from the one that made those mistakes," said Chief Executive Stuart Gulliver.

"Over the last two years, under new senior leadership, we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters."

The bank agreed to forfeit $1.256 billion and retain a compliance monitor to resolve the charges through a deferred-prosecution agreement.

The settlement offers new information about failures at HSBC to police transactions linked to Mexico, details of which were reported this summer in a sweeping U.S. Senate probe.

The Senate panel alleged that HSBC failed to maintain controls designed to prevent money laundering by drug cartels, terrorists and tax cheats, when acting as a financier to clients routing funds from places including Mexico, Iran and Syria.

The bank was unable to properly monitor $15 billion in bulk cash transactions between mid-2006 and mid-2009, and had inadequate staffing and high turnover in its compliance units, the Senate panel's July report said.

HSBC on Tuesday said it expected to also reach a settlement with British watchdog the Financial Services Authority. The FSA declined to comment.

U.S. and European banks have now agreed to settlements with U.S. regulators totalling some $5 billion in recent years on charges they violated U.S. sanctions and failed to police potentially illicit transactions.

No bank or bank executives, however, have been indicted, as prosecutors have instead used deferred prosecutions - under which criminal charges against a firm are set aside if it agrees to conditions such as paying fines and changing behaviour.

HSBC's settlement also includes agreements or consent orders with the Manhattan district attorney, the Federal Reserve and three U.S. Treasury Department units: the Office of Foreign Assets Control, the Comptroller of the Currency and the Financial Crimes Enforcement Network.

HSBC said it would pay $1.921 billion, continue to cooperate fully with regulatory and law enforcement authorities, and take further action to strengthen its compliance policies and procedures. U.S. prosecutors have agreed to defer or forego prosecution.

The settlement is the third time in a decade that HSBC has been penalized for lax controls and ordered by U.S. authorities to better monitor suspicious transactions. Directives by regulators to improve oversight came in 2003 and again in 2010.

Last month, HSBC told investors it had set aside $1.5 billion to cover fines or penalties stemming from the inquiry and warned that costs could be significantly higher.

Analyst Jim Antos of Mizuho Securities said the settlement costs were "trivial" in terms of the company's book value.

"But in terms of real cash terms, that's a huge fine to pay," said Antos, who rates HSBC a "buy".

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CPS head, lawmaker vow to work on truancy after Tribune series

A top state lawmaker and the head of the Chicago Public schools on Monday vowed to support a high-level task force aimed at combating the crisis in K-8 grade absenteeism and truancy exposed by a recent Tribune series.

Speaking at a drop-out prevention forum, House Majority Leader Barbara Flynn Currie and district CEO Barbara Byrd-Bennett pledged to tackle a daunting problem that they acknowledged has not been addressed in the past, essentially foreclosing the futures of tens of thousands of Chicago students.

“While the district has not fully owned this problem in the past, we will own it now,” Byrd-Bennett told the gathering of educators, politicians and community leaders at the Union League Club of Chicago. “We must work to shut down the drop-out pipeline.”

Byrd-Bennett said she would expand a small “Check & Connect” pilot program that pairs trained mentors with roughly 450 truant elementary students and has shown signs of promise in its second year.

But these “incremental and tiny steps ... are not enough for the magnitude of our problem,” Byrd-Bennett added. “We need to find new ways to work together and engage other government agencies.”

The Tribune series, published last month, found that nearly 32,000 K-8 students -- or roughly one in 8 -- missed four weeks or more of class during the 2010-11 school year as the cash-strapped district did little to stem the devastating problem.

The elementary grade absences were especially severe for African-American children and those with learning and emotional disabilities. For children born into poverty, the flood of missed days threatens to swallow any hope for a better life, while the empty seats undermine efforts to boost achievement and cost the district millions in attendance-based funding, the Tribune found.

“I was shocked when I read the series in the Chicago Tribune ... showing the extent of the truancy problem,” said Currie, D-Chicago.

In response to the Tribune series, state Rep. Linda Chapa LaVia, D-Aurora, has introduced a House resolution to create a task force on K-8 grade school absenteeism that will include representatives from the governor's office, the Chicago's mayor office, city police and other agencies and community groups.

The resolution is currently awaiting action in the house rules committee and likely will be voted on in January. Currie said Monday: “That resolution I confidently predict will pass.”

dyjackson@tribune.com

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Google's GMail service suffers disruption

SAN FRANCISCO (Reuters) - Several Google Inc Web products, including the popular GMail service, appeared to go dark for users on several continents on Monday.

Google confirmed that "service disruptions" had affected GMail and Google Drive, its online storage service. The two products are part of Google's Apps suite, a Microsoft Office rival that caters to both consumers and businesses.

By 10:10 a.m. Pacific Time (18:10 GMT), Google's Apps Dashboard monitoring service reported that GMail and Drive service had resumed. The company did not specify how many users were affected, or where, but the outage prompted widespread complaints on social media on both coasts in the U.S. and other major markets, from the United Kingdom to Brazil.

Some users additionally reported that the outage had affected Google Docs, the company's word-processing and spreadsheet programs, while Chrome, Google's Internet browser, also crashed unexpectedly.

"We are currently experiencing an issue with some Google services," Google spokeswoman Andrea Freund said in a statement. "For everyone who is affected, we apologize for any inconvenience you may be experiencing."

Firmly entrenched in the consumer market, GMail is one of Google's most popular and important product offerings. The search giant, which has been pushing a corporate version of the email service and its Apps suite to businesses to compete with Microsoft, said this month that the package will no longer be free to business customers.

(Reporting By Gerry Shih; Editing by Andrew Hay and Nick Zieminski)

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Redskins coach Shanahan says RG3 has mild sprain

ASHBURN, Va. (AP) — Washington Redskins coach Mike Shanahan said Monday that Robert Griffin III has a mild sprain of a ligament in the right knee and hasn't been ruled out for the upcoming game against the Cleveland Browns.

Shanahan said the injury is a Grade 1 sprain of the lateral collateral ligament on the outside of the knee, caused when the rookie quarterback was hit at the end of a scramble late in regulation in the Redskins' 31-28 overtime win Sunday over the Baltimore Ravens.

Shanahan says Griffin has mild swelling and is receiving treatment multiple times a day.

"He's definitely not ruled out for the Cleveland game," Shanahan said.

The LCL is one of four ligaments in the knee. A Grade 1 sprain typically means the ligament is stretched or has some minor tears.

The most severe knee injury usually associated with sports is a season-ending torn ACL, the anterior cruciate ligament. Griffin tore the ACL in his right knee while playing for Baylor in 2009, but Shanahan said Griffin's reconstructed ACL "looks great" and that there's "no problem there."

Fellow rookie Kirk Cousins will start if Griffin can't. Cousins threw a touchdown pass with 29 seconds remaining in the fourth quarter and ran in the game-tying 2-point conversion after Griffin was hurt.

"Both of them will have a game plan," Shanahan said. "And obviously Robert can do some things in the running game that Kirk can't."

The Redskins (7-6) have won four straight and trail the New York Giants by one game in the NFC East.

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Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL

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Tech guru McAfee’s legal appeals win him respite in Guatemala

GUATEMALA CITY (Reuters) – U.S. software pioneer John McAfee, facing deportation from Guatemala to Belize to answer questions over the death of a neighbor, has bought himself some time with legal appeals, the Guatemalan government said on Sunday.

McAfee’s lawyers have filed a request with a local court to grant him leave to stay in Guatemala until his legal appeals against deportation have been settled, which could take months.

“The government of Guatemala respects the courts and we have to wait for them to make a decision,” said Francisco Cuevas, a spokesman for the Guatemalan government.

The government initially said it would deport him straight away after rejecting McAfee’s request for asylum on Thursday.

Guatemala has been holding the former Silicon Valley millionaire since he was arrested on Wednesday for illegally entering the country with his 20-year-old Belizean girlfriend.

Officials in Belize want to question McAfee as a “person of interest” in the killing of fellow American Gregory Faull, his neighbor on the Caribbean island of Ambergris Caye.

The court has up to 30 days to rule on his request, but McAfee’s lawyers said on Sunday they expect a ruling in the American’s favor as early as Monday.

“We are filing a series of papers with the court to attempt to keep me here long enough for the world to see the injustice of sending me back to Belize,” McAfee said in an online news conference on Sunday evening.

McAfee has been evading Belizean officials for nearly a month, saying he fears they want to kill him, and that he is being persecuted for speaking out about corruption in the country’s ruling party. Belize’s prime minister has rejected McAfee’s claims, calling him paranoid and “bonkers.”

McAfee’s attorney, Telesforo Guerra, said that if his request with the court is successful, McAfee would be allowed to stay in the country until the legal suits have been resolved.

His lawyers have filed several injunctions against government officials, alleging McAfee’s rights were violated because his asylum request was not given proper consideration.

McAfee said on Saturday he wanted to return to the United States, and Guerra said he had filed a motion that would require Guatemalan authorities to deport him there and not to Belize.

The eccentric tech pioneer, who made his fortune from the anti-virus software bearing his name, has been chronicling life on the run in a blog, www.whoismcafee.com.

(Editing by Dave Graham; editing by Todd Eastham)

Celebrity News Headlines – Yahoo! News

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Surprise: New insurance fee in health overhaul law

WASHINGTON (AP) — Your medical plan is facing an unexpected expense, so you probably are, too. It's a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama's health care overhaul.

The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.

Employee benefits lawyer Chantel Sheaks calls it a "sleeper issue" with significant financial consequences, particularly for large employers.

"Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it," said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.

Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.

The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines.

Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014.

The program "is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all," the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to "contributions" without detailing the total cost and scope of the program.

Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees.

The $25 billion fee is part of a bigger package of taxes and fees to finance Obama's expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income.

But the insurance fee had been overlooked as employers focused on other costs in the law, including fines for medium and large firms that don't provide coverage.

"This kind of came out of the blue and was a surprisingly large amount," said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues.

Word started getting out in the spring, said Young, but hard cost estimates surfaced only recently with the new regulation. It set the per capita rate at $5.25 per month, which works out to $63 a year.

America's Health Insurance Plans, the major industry trade group for health insurers, says the fund is an important program that will help stabilize the market and mitigate cost increases for consumers as the changes in Obama's law take effect.

But employers already offering coverage to their workers don't see why they have to pony up for the stabilization fund, which mainly helps the individual insurance market. The redistribution puts the biggest companies on the hook for tens of millions of dollars.

"It just adds on to everything else that is expected to increase health care costs," said economist Paul Fronstin of the nonprofit Employee Benefit Research Institute.

The fee will be assessed on all "major medical" insurance plans, including those provided by employers and those purchased individually by consumers. Large employers will owe the fee directly. That's because major companies usually pay upfront for most of the health care costs of their employees. It may not be apparent to workers, but the insurance company they deal with is basically an agent administering the plan for their employer.

The fee will total $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016. That means the per-head assessment would be smaller each year, around $40 in 2015 instead of $63.

It will phase out completely in 2017 — unless Congress, with lawmakers searching everywhere for revenue to reduce federal deficits — decides to extend it.

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'Skyfall' launches back to top spot with $10.8M

LOS ANGELES (AP) — The James Bond blockbuster "Skyfall" has risen back to the No. 1 spot at the weekend box office, taking in $10.8 million.

That brought its domestic total to $261.4 million and its worldwide haul to a franchise record of $918 million.

The top 20 movies at U.S. and Canadian theaters Friday through Sunday, followed by distribution studio, gross, number of theater locations, average receipts per location, total gross and number of weeks in release, as compiled Monday by Hollywood.com are:

1. "Skyfall," Sony, $10,780,201, 3,401 locations, $3,170 average, $261,400,281, five weeks.

2. "Rise of the Guardians," Paramount, $10,400,618, 3,639 locations, $2,858 average, $61,774,192, three weeks.

3. "The Twilight Saga: Breaking Dawn — Part 2," Summit, $9,156,265, 3,646 locations, $2,511 average, $268,691,029, four weeks.

4. "Lincoln," $8,916,813, 2,014 locations, $4,427 average, $97,137,447, five weeks.

5. "Life of Pi," Fox, $8,330,764, 2,946 locations, $2,828 average, $60,948,293, three weeks.

6. "Playing For Keeps," FilmDistrict, $5,750,288, 2,837 locations, $2,027 average, $5,750,288, one week.

7. "Wreck-It Ralph," Disney, $4,859,368, 2,746 locations, $1,770 average, $164,402,934, six weeks.

8. "Red Dawn," FilmDistrict, $4,236,105, 2,754 locations, $1,538 average, $37,240,920, three weeks.

9. "Flight," Paramount, $3,130,305, 2,431 locations, $1,288 average, $86,202,541, six weeks.

10. "Killing Them Softly," Weinstein Co., $2,806,901, 2,424 locations, $1,158 average, $11,830,638, two weeks.

11. "Silver Linings Playbook," Weinstein Co., $2,171,665, 371 locations, $5,854 average, $13,964,405, four weeks.

12. "Anna Karenina," Focus, $1,544,859, 422 locations, $3,661 average, $6,603,042, four weeks.

13. "The Collection," LD Entertainment, $1,487,655, 1,403 locations, $1,060 average, $5,455,328, two weeks.

14. "Argo," Warner Bros., $1,482,346, 944 locations, $1,570 average, $103,160,015, nine weeks.

15. "End of Watch," Open Road Films, $751,623, 1,259 locations, $597 average, $39,989,766, 12 weeks.

16. "Hitchcock," Fox Searchlight, $712,544, 181 locations, $3,937 average, $1,661,670, three weeks.

17. "Talaash," Reliance Big Pictures, $449,195, 161 locations, $2,790 average, $2,397,909, two weeks.

18. "Taken 2," Fox, $387,227, 430 locations, $901 average, $137,700,304, 10 weeks.

19. "Pitch Perfect," Universal, $305,765, 387 locations, $790 average, $63,517,408, 11 weeks.

20. "The Sessions," Fox, $218,973, 197 locations, $1,112 average, $4,948,342, eight weeks.

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Online:

http://www.hollywood.com

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Universal and Focus are owned by NBC Universal, a unit of Comcast Corp.; Sony, Columbia, Sony Screen Gems and Sony Pictures Classics are units of Sony Corp.; Paramount is owned by Viacom Inc.; Disney, Pixar and Marvel are owned by The Walt Disney Co.; Miramax is owned by Filmyard Holdings LLC; 20th Century Fox and Fox Searchlight are owned by News Corp.; Warner Bros. and New Line are units of Time Warner Inc.; MGM is owned by a group of former creditors including Highland Capital, Anchorage Advisors and Carl Icahn; Lionsgate is owned by Lions Gate Entertainment Corp.; IFC is owned by AMC Networks Inc.; Rogue is owned by Relativity Media LLC.

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McDonald's sales rebound in November

McDonald’s took Wall Street by surprise Monday morning, with a November same store sales report that beat expectations and showed particular strength in the U.S. business.

The news follows a weak performance in October that had some investors speculating about the future of the world’s largest restaurant company.

The Oak Brook-based burger giant reported U.S. same store sales up 2.5 percent on the strength of its breakfast business, value offerings, beverages and limited-time offers like the cheddar bacon onion sandwich. In Europe, same store sales grew 1.4 percent, and 0.6 percent in the chain’s Asia/Pacific, Middle East and Africa division.

Overall, same store sales increased 2.4 percent, beating expectations of a roughly flat performance. Company stock rose nearly 1 percent in early morning trading, to $89.35.

"We are strengthening our focus on the global priorities that are most impactful to our customers -- optimizing our menu, modernizing the customer experience and broadening accessibility to our brand to move our business forward," McDonald's CEO Don Thompson said in a statement.

While the sales report is likely to be a boon for the burger giant, investors don’t expect company performance to return to normal levels until early 2013. Winter is typically the slow period for fast food chains, with summer typically being the busiest season.

Baird analyst David Tarantino raised his fourth quarter earnings estimate by a penny Monday morning following the sales announcement. He wrote that while company performance "could remain soft" through the first quarter of 2013, "the November sales report supports our thesis that McDonald's can achieve better performance in 2013 as a whole, with results aided by planned initiatives (including increased emphasis on value plus premium offerings across markets), fewer cost pressures, and less negative currency translation."

The chain has taken a tough stance on slipping U.S. sales. The company’s October sales, which slipped 2.2 percent, marked the first decline in more than nine years. Days later, McDonald’s said U.S. president Jan Fields had resigned and would be replaced by Jeff Stratton.

eyork@tribune.com | Twitter: @emilyyork

MCD data by YCharts

MCD data by YCharts

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City on verge of 'snowless' record

No snow is in the forecast for the Chicago area, and if that proves correct, we'll tie the 1994 record of 280 days between measurable snowfalls today.

If Monday closes without snow, 2012 will break the record.

The key factor is the word "measurable," said state climatologist Jim Angel. Measurable snow is defined as one-tenth of an inch or more — any less is considered "trace," he said, such as the snow measured at O'Hare on Nov. 23.

There has been some snow in other north and northwest suburban areas. ChicagoWeatherCenter.com reports that Lake Geneva, Wis., got .4 inches Friday night into Sunday morning, and Roscoe, Wonder Lake and Harvard all got .1 inch.

Northern Illinois, including Rockford and counties farther west, is expected to see some accumulation today, according to the National Weather Service, and a stronger storm crossing northern Wisconsin and Michigan could leave up to 10 inches of snow on the ground today, according to ChicagoWeatherCenter.com.

In Chicago, though, we're expected to see nothing but unseasonably warm temperatures in the 40s and a light rain that will taper off as the day goes along. Monday's forecast, which includes slightly cooler temperatures, is similar, with some "scattered snow flurries and snow showers," according to the National Weather Service.

The timing of this year's first snow has stumped Angel, who said the average number of days between last and first snowfalls recorded at O'Hare, Chicago's official weather recording station, is 224.

"I've already lost in the office pool for the first measurable snow this year," Angel said. "My pick was Nov. 27."

WGN-TV meteorologist Steve Kahn said the drought has much to do with this year's record-breaking weather. Last winter's snowfall measured only 19.8 inches — a little more than half of the 36.7 inches marked as the average at O'Hare.

"We had an early end to the snow season — last year was notable particularly for its warm March," Kahn said. "That's why we have this record on the table now."

Angel said the drought, coupled with a dry November, are to thank for the lack of snowfall. November measured 0.95 inch of precipitation at O'Hare — less than half of normal rainfall, he said.

The lack of snow so far doesn't mean much for overall snowfall this winter. On average, about 90 percent of Chicago's average seasonal snowfall typically comes after Dec. 9, Kahn said.

chicagobreaking@tribune.com

Twitter: @ChicagoBreaking

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Software guru McAfee wants to return to United States

GUATEMALA CITY (Reuters) - Software guru John McAfee, fighting deportation from Guatemala to Belize to face questions about the slaying of a neighbor, said on Saturday he wants to return to the United States.

"My goal is to get back to America as soon as possible," McAfee, 67, said in a phone call to Reuters from the immigration facility where he is being held for illegally crossing the border to Guatemala with his 20-year-old girlfriend.

"I wish I could just pack my bags and go to Miami," McAfee said. "I don't think I fully understood the political situation. I'm an embarrassment to the Guatemalan government and I'm jeopardizing their relationship with Belize."

The two neighboring countries in Central America are locked in a decades-long territorial dispute and voters in 2013 will decide in a referendum how to proceed.

Responding to McAfee's remarks, a U.S. State Department spokeswoman said U.S. citizens in foreign countries are subject to local laws. Officials can only ensure they are "treated properly within this framework," she said.

On Wednesday, Guatemalan authorities arrested McAfee in a hotel in Guatemala City where he was holed up with his Belizean girlfriend.

The former Silicon Valley millionaire is wanted for questioning by Belizean authorities, who say he is a "person of interest" in the killing of fellow American Gregory Faull, McAfee's neighbor on the Caribbean island of Ambergris Caye.

The two had quarreled at times, including over McAfee's unruly dogs. Authorities in Belize say he is not a prime suspect in the investigation.

Guatemala rejected McAfee's request for asylum on Thursday. His lawyers then filed several appeals to block his deportation. They say it could take months to resolve the matter.

The software developer has been evading Belize authorities for nearly four weeks and has chronicled his life on the run in his blog, www.whoismcafee.com.

McAfee claims authorities will kill him if he turns himself in for questioning. He has denied any role in Faull's killing and said he is being persecuted by Belize's ruling party for refusing to pay some $2 million in bribes.

Belize's prime minister has rejected this, calling McAfee paranoid and "bonkers.

BEATING HEAD AGAINST WALL

After making millions with the anti-virus software bearing his name, McAfee later lost much of his fortune. For the past four years he has lived in semi-reclusion in Belize.

He started McAfee Associates in the late 1980s but left soon after taking it public. McAfee now has no relationship with the company, which was later sold to Intel Corp.

Hours after his arrest, McAfee was rushed to a hospital for what his lawyer said were two mild heart attacks. Later he said the problem was stress. McAfee said he fainted after days of heavy smoking, poor eating and knocking his head against a wall.

He told Reuters he no longer has access to the Internet and has turned over the management of his blog to friends in Seattle, Washington. On Saturday, they began posting a series of files claiming to detail Belize's corruption.

Residents and neighbors in Belize have said the eccentric tech entrepreneur, who is covered in tribal tattoos and kept an entourage of bodyguards and young women on the island, had appeared unstable in recent months.

Police in April raided his property in Belize on suspicion he was running a lab to make illegal narcotics. There already was a case against him for possession of illegal firearms.

McAfee says the charges are an attempt to frame him.

"People are saying I'm paranoid and crazy but it's difficult for people to comprehend what has been happening to me," he said. "It's so unusual, so out of the mainstream."

(Editing by Dave Graham and Bill Trott)

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