Economy

NEW YORK (Reuters) -Swiss private bank Banque Pictet has admitted to helping U.S. taxpayers hide more than $5.6 billion from the Internal Revenue Service (IRS) and has entered into a deferred prosecution agreement with the Justice Department, federal prosecutors said on Monday.According to prosecutors, U.S. taxpayers with Pictet accounts in Switzerland and elsewhere evaded about $50.6 million in taxes between 2008 and 2014. As part of the agreement, Banque Pictet agreed to pay $122.9 million to the U.S. Treasury. “This case should provide a clear message to others who try to hide their assets and income offshore,” Jim Lee, the chief of the IRS’ criminal investigation division, said in a statement.As part of the agreement, Pictet, which oversees 632 billion Swiss francs ($724 billion) in client assets, will implement remedial measures and cooperate with the authorities’ investigation. If it complies for three years, U.S. prosecutors will move to dismiss charges of conspiring to defraud the IRS. “Pictet is pleased to have resolved this matter and will continue to take steps to ensure its clients meet their tax obligations,” the bank said in a statement.U.S. authorities have long accused Swiss banks of helping wealthy Americans evade taxes, and Pictet signalled it had been in contact with the U.S. for more than a decade. Credit Suisse in 2014 agreed to pay a $2.5 billion fine for helping Americans evade taxes in a conspiracy that spanned decades. The bank has since been taken over by former rival UBS.In 2016, two former Julius Baer bankers pleaded guilty to helping American clients dodge taxes, and the bank agreed to pay $547 million to resolve the criminal case.Prosecutors said that while Pictet adopted some measures to ensure U.S. clients complied with the law, it helped some customers hide funds from the IRS in offshore accounts. The bank’s disgorgement of funds includes $52 million in fees that Pictet earned from the undeclared accounts, $32 million in unpaid taxes, and a $39 million penalty, prosecutors said. The agreement comes as Renaud de Planta, senior partner at Pictet since 2019, prepares to step down from the helm to be succeeded by Marc Pictet from July 1. ($1 = 0.8732 Swiss francs) More

By Fabio TeixeiraRIO DE JANEIRO (Reuters) – The former co-CEO of Sigma Lithium (TSXV:SGML), a leader in Brazil’s budding lithium sector, was fired earlier this year for trading its shares during a quarterly earnings blackout period, according to legal correspondence in a civil lawsuit, trading data and two people familiar with the matter.Vancouver-based Sigma Lithium, which did not reply to questions about the dismissal, gave no reason to investors when announcing the exit of Calvyn Gardner, who was co-CEO with his wife Ana Cabral-Gardner until January 2023.Gardner’s ouster touched off a series of lawsuits in Brazil and the United States, along with a broader management shakeup, revealing boardroom turmoil at the lithium miner as it tries to sell itself to car firms and big battery industry players.Gardner and Cabral-Gardner, who are getting divorced, did not respond to requests for comment. Previously unreported legal correspondence show the company told Gardner’s lawyers in a July letter that he was dismissed over share sales in January. His lawyers acknowledged those trades in a letter to Sigma in August, but said he had been unaware of the firm’s restrictions on what they described as “routine” trading.Public data from Canada’s System for Electronic Disclosure by Insiders (SEDI) shows that Gardner sold 500,000 shares for about $13.3 million between Jan. 11 and 12, ahead of Sigma’s planned annual report.It is not a crime to trade during a blackout period, two legal experts told Reuters, but any trades based on material nonpublic information would be considered a violation under North American securities law.The company said in its July 31 letter to Gardner’s lawyers that he “possessed and may have used” privileged information “relating to the company’s ongoing M&A process” in the trades. In their Aug. 4 reply, his lawyers denied he had traded using any non-public material information.Sigma, which is listed in Toronto and New York, did not respond to questions about its restrictions on insider trading.The Canadian Securities Administrators did not reply to a request for comment on whether Gardner’s trades could be a securities violation and whether they were under investigation.A U.S. Securities and Exchange Commission spokesperson declined to comment.Blackout periods for trading by insiders are a common corporate restriction ahead of quarterly results, when executives and board members are most likely to have nonpublic information that could affect share prices. Stephen Cohen, head of the regulatory practice at Sidley Austin LLP, said corporate discipline can vary for executives trading during blackout periods. Minor violations can lead to a warning, while trading with material nonpublic information is often a fireable offense, he said.Gardner’s lawyers accused Sigma in the correspondence of acting disproportionately and in “bad faith” when it fired him. They cited the fact that another Sigma insider, Vicente Lobo Cruz, traded during a blackout period and went unpunished. Cruz, who is co-chair of the Sigma board’s technical committee, sold 184,190 shares on Aug. 5, 2022, two weeks ahead of Sigma’s quarterly results, according to SEDI data.Cruz did not reply to a request for comment. Reuters could not determine if Cruz was investigated or punished by Sigma.Two people with knowledge of the situation said tension had been mounting last year between the co-CEOs, and Cabral-Gardner seized on her husband’s trading as justification to convince Sigma’s board members to fire Gardner. After leaving Sigma, Gardner filed at least four lawsuits against his wife in Brazilian courts seeking to revert her decisions involving their shared assets. One of them included his lawyers’ correspondence with Sigma about his dismissal over the January trading.In August, Sigma sued Gardner in New York, for allegedly misappropriating documents from the firm. Gardner has not commented on the case. More

BENGALURU (Reuters) – Global property prices in most major markets will rise over the next two years, albeit at a slightly slower pace than predicted three months ago as strong demand and tight supply overshadow higher interest rates, a Reuters poll found.Home prices across the developed world have defied analysts’ expectations, as they predicted at the start of the year prices would register double-digit falls from COVID-19-era peaks. In most markets they will end the year on a positive note.While price rises are expected to continue into next year and 2025, higher mortgage rates and the lack of supply of affordable homes will restrict prices from rising too much.The latest Reuters polls of over 100 housing market strategists taken between Nov. 15 and Dec. 4 showed property prices rising in five of the eight major property markets surveyed for next year and in all of them in 2025.”Values are underpinned at the moment by the fact there’s low stock availability and that is defending prices. The fact prices haven’t fallen very much and actually in many markets are beginning to rise again is down to the fact the stock is very low,” said Liam Bailey, head of research at Knight Frank.”Very few vendors are bringing their properties forward into the market at the moment because they’re either trying to protect their current debt costs by not moving properties and not porting their mortgages,” he said.Of the major housing markets polled – U.S., Britain, Canada, Australia, New Zealand, Germany and Dubai – prices were forecast to go up between 1.3% to 5% in 2025, while estimates for India were set to surpass 7%.That outlook was still good news for property owners who at the beginning of the year were anticipating a significant dip in value of their homes over expectations the global economy will enter a recession this year.But that would also mean affordability will remain a concern, especially for first-time buyers who for years have been waiting on the sidelines to get on the property ladder.Still, a strong 71% majority, 65 of 91 housing strategists, who answered an additional question said purchasing affordability for first-time homebuyers will improve over the coming year.While many analysts, 51 of 84, who answered a separate question said the supply of affordable homes will improve over the coming two to three years, only 10 among them expected it to improve to a point where it can sufficiently address the demand.”If you look at construction cost plus land costs, it’s difficult to deliver affordable housing viably. I think lack of housing is probably likely to be a feature of most developed markets…for the medium-term (5 years),” added Knight Frank’s Bailey.Average U.S. home prices were seen rising 2.7% this year and 1.8% in 2024. That was higher than a September survey where prices were forecast to flat line in both years.Australian home prices, which have recovered all of their 2022 losses since finding a floor in January, were expected to rise 8.0% this year and another 5.0% next year.New Zealand property prices were forecast to rise 4.0% next year and 5.0% in 2025 compared with expected rises of 5.0% and 6.0% in an August poll.While home prices in Germany and Britain were predicted to fall 2.8% and 2.0% respectively next year, in both markets they were forecast to rise around 2-3% in 2025.The once red-hot Canadian housing market, where prices surged about 50% during the coronavirus pandemic, is expected to stagnate in 2024 and then rise 3.3% in 2025.Buoyed by demand from high earners, home prices in India will beat consumer inflation to rise 6.8% this year and next.(Other stories from the Reuters quarterly housing market polls) More

TOKYO (Reuters) -Core consumer inflation in Japan’s capital Tokyo, considered a leading indicator of nationwide trends, hit 2.3% in November, slowing from the previous month in a sign of easing cost-push pressure in the world’s third-largest economy.The data will be among factors scrutinised by the Bank of Japan (BOJ) when it meets for a two-day policy meeting concluding on Dec. 19.The year-on-year rise in the Tokyo core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, compared with a median market forecast for a 2.4% gain and slowed sharply from a 2.7% increase in October.The rate of inflation matched a low marked in July last year as government subsidies pushed down fuel costs and price hikes for food moderated, the data showed.The so-called “core core” index that strips away both fresh food and fuel prices – closely watched by the BOJ as a gauge of broader price trends – rose 3.6% in November from a year earlier after a 3.8% gain in October, government data showed on Tuesday.Service prices rose 3.0% in November from a year earlier, marking the fastest pace since 1994, suggesting that prospects of higher wages are prompting firms to pass on increasing labour costs.The data underscores the BOJ’s view that rising wages and service costs will replace cost-push inflation, and help Japan see inflation sustainably meet the bank’s 2% target.The BOJ remains a dovish outlier among global peers, having maintained ultra-loose policy even as major central banks elsewhere raised interest rates aggressively to fight rampant inflation.With inflation having exceeded the BOJ’s 2% inflation target for more than a year, many market players expect the bank to phase out its massive stimulus some time next year with some betting on a shift as early as in January. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Growth in UK retail sales was lower than inflation last month, according to sector data published on Tuesday that suggests households continued to cut purchases in the run-up to Christmas.The value of retail sales rose by an annual rate of 2.7 per cent in November, well below the 12-month average of 4.1 per cent, according to the British Retail Consortium.The figure from the trade body was up slightly from 2.5 per cent in the previous month but also below October’s headline consumer price inflation reading of 4.6 per cent. It indicates shoppers are buying fewer goods despite spending more — a pattern seen since the second half of 2021. The BRC data, compiled with advisory firm KPMG, gives an early picture of consumer spending ahead of official retail sales data on December 22.It suggests that weakness in the sector, hit by the cost of living crisis, has continued into the festive season, the busiest spending period of the year. BRC chief executive Helen Dickinson said discount event Black Friday boosted sales in early November but that “the momentum failed to hold throughout the month, as many households held back on Christmas spending”.With less than a month to go and sales growth “limping along”, “the cost of living crisis has taken its toll on Christmas spending for many households”, she added.The BRC reported stronger grow in health and beauty products, but a year-on-year decline in non-food sales.The figures chime with statistics also published on Tuesday by Barclays, which showed that consumer card spending grew by 2.9 per cent year on year last month. That was up from 2.6 per cent in October, but still well below the rate of inflation.The payments company, which monitors almost half of UK credit and debit card transactions, said spending on non-essential items grew by an annual rate of 2.7 per cent in November, compared with 2 per cent in the previous month. The rise came as the retail sector received a boost from the early start to Black Friday sales and the late arrival of cold weather. However, spending on restaurants fell further last month, registering an annual contraction of 11.9 per cent compared with a 10.3 per cent fall in October. Spending on entertainment, furniture, electronics and home improvements also contracted year on year. Jack Meaning, economist at Barclays, said that although the data suggested consumers were continuing to spend more while getting less for their money, “the gap is narrowing as the rate of price increases slows, and we expect it to narrow further in the coming months”. More

(Reuters) – A look at the day ahead in Asian markets.An interest rate decision from Australia and key inflation readings from Japan and South Korea are the big market events for the Asia Pacific region on Tuesday, with investor sentiment cooled by Monday’s selloff across U.S. stocks and bonds.Currencies will probably be most sensitive to the data and the Reserve Bank of Australia’s guidance, while stocks could struggle to make much headway given the broad-based weakness across global equities on Monday.The relative weakness of Asian equities since the pandemic, magnified by China’s even more notable underperformance, has been quite something. But international investors appear to be in no rush to get back in en masse.The RBA, meanwhile, is expected to keep its cash rate on hold at a 12-year high of 4.35%, according to 28 of 30 analysts polled by Reuters. The other two are going for a 25 basis point hike.Assuming the RBA does stand pat, Governor Michele Bowman’s guidance will carry even greater weight. She has generally been more hawkish than her predecessor Philip Lowe, whom she replaced in September.The Aussie dollar spiked to a fresh four-month high of $0.6690 on Monday before closing the day lower.The Japanese yen, meanwhile, will be sensitive to the latest Tokyo inflation figures. Core consumer inflation in Japan’s capital likely grew in November but at slower pace than the month before, in a sign that price pressures may be easing.The annual rate of inflation is expected to have eased to 2.4% from 2.7% – breathing room for the Bank of Japan, and maybe more selling pressure on the yen.The U.S. dollar rose 0.5% on Monday against a basket of major currencies, supported by a rebound in U.S. bond yields as traders took some profits on last week’s sharp rally in fixed income, especially at the short end of the curve.The slump in bond yields last month weighed heavily on the dollar, which appears to have forced the hand of hedge funds and speculators – their long dollar position worth $10 billion only a couple of weeks ago has been almost fully unwound.If speculators go short dollars from here, Asian currencies could benefit. The relative U.S. interest rate outlook right now fits the weaker dollar narrative – futures markets have the Fed cutting rates next year more than any major or emerging market central bank.But will the Fed cut rates by 125 to 150 basis points next year? Maybe, but it does sound quite aggressive. And even if the Fed does go that far, other central banks are sure to lower their policy rates more than markets are currently predicting.Here are key developments that could provide more direction to markets on Tuesday:- Australia interest rate decision- Japan – Tokyo inflation (November)- South Korea inflation (November) (By Jamie McGeever; Editing by Josie Kao) More

NEW YORK (Reuters) -Underlying inflation pressures eased in October compared to the prior month, according to a report released on Monday by the Federal Reserve Bank of New York. The bank said that its Multivariate Core Trend (MCT) inflation reading for October stood at 2.6%, from September’s 2.88%. The higher level of the MCT relative to its pre-pandemic average “is in large part due to the sector-specific trends in housing and services ex-housing,” the bank said. The NY Fed MCT index is designed to measure inflation persistence and how broadly price pressures are changing. The report arrives as Fed officials are approaching their final policy meeting of the year, one in which they are broadly expected to keep their overnight interest rate target steady at between 5.25% and 5.5%. The current level of the central bank’s rate target appears to be its peak. Over recent weeks, a wide range of Fed officials have signaled that with inflation pressures well off their pandemic peak, they have the space to take in new data to see whether they need to increase rates again, or keep them steady. On Friday, Fed Chairman Jerome Powell said the economy is “better balanced,” and when it comes to the trajectory of the economy, “we are getting what we want.”On Thursday, New York Fed leader John Williams said “based on what I know now, my assessment is that we are at, or near, the peak level of the target range of the federal funds rate.”The NY Fed MCT reading has tracked a broader retreat in price pressures. The index peaked in June 2022, when it stood at 5.44%. October’s reading also closely matched the six-month trend of the personal consumption expenditures price index, which stood at a 2.5% rise in October. “While the lower inflation readings of the past few months are welcome, that progress must continue if we are to reach our 2% objective,” Powell said on Friday.Williams in his Thursday appearance said he expects the Fed to be closing in on its target in 2025. Officials will update their official outlook on inflation at the FOMC meeting scheduled for Dec. 12-13. More

Net income attributable to Kinder Morgan (NYSE:KMI) for 2024 is expected to be $1.21 per share, up 11% from its forecast of $1.09 per share for 2023, the company said.”We expect to continue benefiting from strong natural gas market fundamentals driving growth on our existing natural gas transportation, storage, and gathering and processing assets as well as expansion opportunities,” Kim Dang, chief executive officer of Kinder Morgan, said in a statement.The pipeline operator also anticipates to benefit from increased rates in refined products businesses, demand for renewable diesel and renewable diesel feedstocks, and demand for renewable natural gas.The company said it expects to get a boost from contract rate escalations in its products pipelines and terminals business units.Profits for oil and gas transportation have been helped by strong demand due to low U.S. inventory levels and increased exports, as buyers sought alternatives to Russian oil since Moscow’s invasion of Ukraine last year.Kinder Morgan is one of the largest energy infrastructure companies in North America and operates about 82,000 miles of pipelines.Canadian peers TC Energy (NYSE:TRP) and Enbridge (NYSE:ENB) also earlier estimated higher adjusted core earnings for 2024.Kinder Morgan expects to generate $8 billion of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2024, up 5% from the 2023 forecast of $7.6 billion.The company added that it expects to invest $2.3 billion in discretionary capital expenditures, including expansion projects and contributions to joint ventures. More