[Federal Register Volume 62, Number 148 (Friday, August 1, 1997)]
[Notices]
[Pages 41414-41420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20209]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. AIG Trading Corp.; BP Exploration & Oil, Inc.;
and Cargill International, S.A., Civil No. 97CIV5260, (S.D.N.Y., Filed
July 18, 1997)
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16 (b)-(h), that a Stipulation and Order
(``proposed Order'') and Competitive Impact Statement have been filed
with the United States District Court for the Southern District of New
York in the above-captioned case.
On July 18, 1997, the United States filed a complaint to enjoin and
restrain the defendants from violating Section 1 of the Sherman Act, 15
U.S.C. 1, as amended. The complaint alleges that the defendants and
others conspired to exchange current and prospective brokerage
commission information with the purpose and effect of lowering
brokerage commissions paid to brokers in the United States for
arranging certain types of transactions, namely the purchase and sale
of Brent spread contracts and contracts for differences (``CFDs''),
involving Brent blend crude oil, a crude oil produced in the North Sea.
Specifically, the complaint alleges that, in furtherance of this
conspiracy, the defendants and others communicated with each other
concerning current and prospective brokerage commission information on
Brent spread contracts and CFDs and reduced such commissions. As a
result of the conspiracy, the brokerage commissions paid to brokers on
the purchase and sale of Brent spread contracts and CFDs were reduced.
If entered by the Court, the proposed Order will prohibit each
defendant from agreeing with any other trader, unrelated to such
defendant, to (1) fix, lower, raise, stabilize or maintain any
brokerage commission for Brent spread contracts and CFDs or (2)
exchange any information for that purpose. The proposed Order will also
prohibit each defendant from requesting or advising any other trader,
unrelated to such defendant, to lower, raise or change any brokerage
commission for Brent spread contracts and CFDs.
If entered, the proposed Order will require each defendant firm to
designate an antitrust compliance officer to instruct traders and
company officials about the requirements of the proposed Order.
Public comment is invited within the statutory 60-day period. Such
comments will be published in the Federal
[[Page 41415]]
Register and filed with the Court. Comments should be addressed to
Ralph T. Giordano, Chief, New York Office, U.S. Department of Justice,
Antitrust Division, 26 Federal Plaza, Room 3630, New York, New York
10278 (telephone: (212) 264-0390).
Rebecca P. Dick,
Deputy Director of Operations, Antitrust Division.
United States District Court for the Southern District of New York
United States of America, Plaintiff, v. AIG Trading Corporation;
BP Exploration & Oil Inc.; and Cargill International, S.A.
Defendants.
Stipulation and Order
Whereas, plaintiff, United States of America, having filed its
complaint on July 18, 1997, and plaintiff and AIG Trading Corporation,
BP Exploration & Oil, Inc. and Cargill International, S.A.
(``defendants''), by their respective attorneys, having agreed to the
entry of this stipulation and order without trial or adjudication of
any issue of fact or law herein and without this stipulation and order
constituting any evidence against or an admission by any party with
respect to any such issue;
Now, Therefore, before the taking of any testimony and without
trial or adjudication of any issue of fact or law herein,
Plaintiff and defendants hereby agree as follows:
I Jurisdiction and Venue
This Court has jurisdiction over the subject matter of this action
and over each of the parties consenting hereto. Venue is proper in the
Southern District of New York.
II Definitions
As used in this stipulation and order:
A. Brent contract means a commercial transaction (i) calling for
the delivery FOB at Sullom Voe, United Kingdom, of Brent blend crude
oil, a crude oil produced in the North Sea, in cargo lots of 500,000
barrels (plus or minus a 5% operational tolerance at the buyer's
option) on an unspecified day in a given month forward; (ii) where the
seller is obligated to give notice, by 1700 hours London time, not less
than fifteen (15) days prior to the first loading day, of a three day
loading range within which the buyer must take delivery; (iii) at a
price fixed at the time of that contract; (iv) with payment within
thirty (30) days of the bill of lading date; and (v) the contract is
governed by English law, with jurisdiction over disputes in the English
courts, or should any of these terms be changed or amended, any
successor contract for a future purchase of Brent blend crude oil.
B. Brent spread contract means a commercial transaction in which
there is simultaneous: (i) Purchase of a Brent contract for a given
month forward; and (ii) sale of a Brent contract for a different month
forward.
C. CFD means a commercial transaction involving the purchase of an
instrument (a ``Contract for Differences'') the price of which is
determined by the difference between: (i) The published price of a
cargo of Brent blend crude oil already loaded or available to be loaded
on a specified day (``dated Brent'') and, (ii) the published price of a
cargo of Brent blend crude oil available to be loaded on an unspecified
day of the first month forward. The ``published prices'' referred to
are those reported presently in Platt's Oilgram Price Report.
D. Broker means any person, other than a trader, who is regularly
engaged in the business of providing, for remuneration, the service of
locating buyers for prospective sellers, or sellers for prospective
buyers, of Brent spread contracts or CFDs.
E. Brokerage commission means the amount of remuneration paid to a
broker for arranging the purchase and sale of Brent spread contracts or
CFDs by other persons.
F. Person means any individual, corporation, partnership, company,
sole proprietorship, firm or other legal entity.
G. Trader means any person who, in the ordinary course of its
business, purchases or sells Brent spread contracts or CFDs.
H. Any means one or more.
I. Or means and/or.
III Applicability
This stipulation and order applies to each defendant; to each of
its executive officers, directors, successors and assigns, during the
respective periods that they serve as such; and to any agents and
employees assigned to purchase or sell any Brent spread contracts or
CFDs or assigned to supervise the purchases and sale of such contracts.
IV Prohibited Conduct
Each defendant shall not, directly or indirectly:
(A) Agree with any other trader unrelated to such defendant to (1)
fix, lower, raise, stabilize or maintain any brokerage commission for
Brent spread contracts and CFDs or (2) exchange any information for
that purpose; and
(B) Request or advise any other trader unrelated to such defendant
to lower, raise or change any brokerage commission for Brent spread
contracts and CFDs to be paid by it.
V Limiting Conditions
A. Notwithstanding the provisions of Section IV, any defendant
shall be entitled to:
(1) Engage in any communication or other contract with any trader
when such action is taken: (a) To propose, negotiate, agree to, modify,
execute or cancel a purchase of sale of a Brent spread contract and CFD
with such trader as counter party or co-venturer; or (b) to allocate
between the defendant and such trader responsibility for payment or
negotiation of brokerage commissions relating to such purchase or sale.
(2) Engage in any communication or other contact with a broker when
such action is taken: (a) To propose, negotiate, agree to, modify,
execute or cancel a purchase or a sale of a Brent spread contract(s) or
CFD(s) concerning which such broker may or will receive a brokerage
commission; or (b) propose, negotiate, agree to, or modify a brokerage
commission or commissions.
(3) Engage in any activity concerning the payment of a brokerage
commission that is required or authorized by the constitution, bylaws,
rules, regulations, resolutions or laws governing any market, whether
now existing or hereafter established, which is or may become subject
to the jurisdiction of either: (a) The Commodity Futures Trading
Commission; or (b) any government agency or self regulatory
organization whose responsibilities, pursuant to the laws of the United
States of America, include authority with respect to the purchase and
sale of Brent contracts, Brent spread contracts, or CFDs.
(4) Engage in any activity concerning the payment of a brokerage
commission to any broker located in a foreign country that is required
or authorized by the constitution, bylaws, rules, regulations,
resolutions or laws governing any market, whether now existing or
heretofore established, subject to the jurisdiction of either: (a) The
International Petroleum Exchange or (b) any government agency or self
regulatory organization whose responsibilities, pursuant to the laws of
any foreign country, include authority with respect to the purchase or
sale of Brent contracts, Brent spread contracts, or CFDs.
(5) Engage in any activity concerning the payment of a brokerage
commission to any broker located in the United States that is required
or authorized by the constitution, bylaws, rules,
[[Page 41416]]
regulations or laws governing any market, whether now or hereafter
established, subject to the jurisdiction of either (a) the
International Petroleum Exchange or (b) any government agency or self-
regulatory organization whose responsibilities pursuant to the laws of
any foreign country include authority with respect to the purchase or
sale of Brent contracts, Brent spread contracts or CFDs, provided that,
if the activity is otherwise prohibited by Section IV, the plaintiff
has not objected to such proposed activity within sixty (60) days
following written notice to the New York Office of the Antitrust
Division of the United States Department of Justice by a defendant of
an intention to engage in such activity.
B. Nothing in this stipulation and order shall prohibit defendants
from engaging in any activity lawful under the Foreign Trade Antitrust
Improvements Act, 15 U.S.C. Sec. 6a.
C. No finding of any violation of this stipulation and order may be
made based solely on parallel conduct.
VI Compliance Program
In order to ensure compliance with the provisions of Section IV of
the stipulation and order:
(A) Each defendant shall maintain an antitrust compliance program
which shall include designating, within sixty (60) days of entry of
this stipulation and order, an Antitrust Compliance Officer with
responsibility for implementing the antitrust compliance program and
achieving full compliance with this stipulation and order. The
Antitrust Compliance Officer shall, on a continuing basis, supervise
the review of the current and proposed activities of his or her
defendant company to ensure that it complies with this stipulation and
order.
(B) The Antitrust Compliance Officer shall, on a continuing basis,
be responsible for the following:
(1) Distributing, within thirty (30) days from the effective date
hereof, a copy of this stipulation and order to each of the officers
and employees of the defendant whose duties or responsibilities include
determining, changing, proposing, approving, disapproving or
implementing any brokerage commission.
(2) Distributing in a timely manner a copy of this stipulation and
order to any officer or employee who succeeds to a position described
in Section VI(B)(1).
(3) Briefing annually those persons who shall then have the duties
identified in Section VI(B)(1) or (2) on the meaning and requirements
of this stipulation and order and of the antitrust laws, and advising
them that the defendant's legal advisors are available to confer with
them regarding compliance with both the stipulation and order and the
antitrust laws.
(4) Obtaining from each person who shall then have the duties
identified in Section VI (1) or (2), an annual written certification
that he or she: (i) Has read, understands, and agrees to abide by the
terms of this stipulation and order; (ii) is not aware of any violation
of this stipulation and order that has not been reported to the
Antitrust Compliance Officer; and (iii) has been advised and
understands that his or her failure to comply with this stipulation and
order may result in an enforcement action for civil or criminal
contempt of court against the defendant or any other person who
violates this stipulation and order.
(5) Maintaining (i) a record of all certifications received
pursuant to Section VI(B)(4); (ii) a file of all documents in existence
at the commencement of and related to any investigation by the
Antitrust Compliance Officer of any alleged violation of this
stipulation and order; and (iii) a record of all non-privileged
communications generated after the commencement of any such
investigation and related to any such alleged violation, which shall
identify the date and place of the communication, the persons involved,
the subject matter of the communication, and the results of any related
investigation.
(C) If a defendant's Antitrust Compliance Officer learns of any
violations of any of the terms and conditions contained in this
stipulation and order that defendant shall immediately take appropriate
action to terminate or modify the activity so as to comply with this
stipulation and order.
VII Certification
A. Within seventy-five (75) days after the entry of this
stipulation and order, each defendant shall certify to the plaintiff
whether it has designated an Antitrust Compliance Officer and has
distributed the stipulation and order in accordance with Section VI(B)
above.
B. For five (5) years after the entry of this stipulation and
order, on or before its anniversary date, each defendant shall file
with the plaintiff an annual statement as to the fact and manner of its
compliance with the provisions of Section VI.
VIII Plaintiff Access
A. For the sole purpose of determining or securing compliance with
this stipulation and order, and subject to any legally recognized
privilege or work product protection, from time to time duly authorized
representatives of the Department of Justice shall, upon written
request of the Attorney General or of the Assistant Attorney General in
charge of the Antitrust Division, and on reasonable notice to any
defendant at its principal office, be permitted:
(1) Access during office hours of such defendant, which may have
counsel present, to inspect and copy (or to require the defendants to
produce copies of) all records, documents, and tape recordings in the
possession or under the control of such defendant, and which relate to
compliance with this stipulation and order; and
(2) Subject to the reasonable convenience of such defendant and
without restraint or interference from the defendant, to interview
officers, employees, or agents of such defendant, each of whom may have
counsel present, regarding compliance with this stipulation and order.
B. Upon the written request of the Attorney General or the
Assistant Attorney General in charge of the Antitrust Division made to
any defendant, such defendant shall prepare and submit such written
reports, under oath if requested, relating to defendant's compliance
with this stipulation and order as may be requested.
C. No information, tape recordings, or documents obtained by the
means provided in Sections VI, VII, and VIII shall be divulged by
plaintiff to any person other than a duly authorized representative of
the Executive Branch of the United States, except in the course of
legal proceedings to which the United States is a party, or for the
purpose of securing compliance with this stipulation and order, or as
otherwise required by law.
D. If at the time information, tape recordings, or documents are
furnished by any defendant to plaintiff, such defendant represents and
identifies in writing the material in any such information or documents
to which a claim of protection may be asserted under Rule 26(c)(7) of
the Federal Rules of Civil Procedure and said defendant marks each page
of such material, ``Subject to Claims of Protection under Rule 26(c)(7)
of the Federal Rules of Civil Procedure,'' then plaintiff shall give
ten (10) business days notice to such defendant at its Office of
General Counsel prior to divulging such material in any legal
proceeding (other than a grand jury proceeding) to which that defendant
is not a party.
[[Page 41417]]
IX Rescission by Plaintiff
The parties agree that the Court may enter this stipulation and
order, upon motion of any party or upon the Court's own motion, at any
time after compliance with the requirements of the Antitrust Procedures
and Penalties Act, 15 U.S.C. Sec. 16, and without further notice to any
party or other proceedings, provided that the plaintiff has not
notified the parties and the Court that it wishes to rescind its
agreement to entry of the stipulation and order. Plaintiff may rescind
its agreement to entry of the stipulation and order at any time before
entry of the stipulation and order by the Court by serving notice
thereof on the defendants and by filing that notice with the Court. In
the event plaintiff rescinds its agreement to entry of the stipulation
and order, the stipulation and order shall be of no effect whatever,
and the agreement among the parties shall be without prejudice to any
party in this or any other proceeding.
X Jurisdiction Retained
Jurisdiction shall be retained by the Court to enable any of the
parties to this stipulation and order to apply at any time for such
further orders and directions as may be necessary or appropriate for
the construction or implementation of this stipulation and order, for
the enforcement or modification of any of its provisions, or for
punishment by contempt.
XI Expiration of Stipulation and Order
This stipulation and order shall expire ten (10) years from its
date of entry by the Court.
For Plaintiff United States of America:
Joel I. Klein (JK-3481),
Acting Assistant Attorney General.
A. Douglas Melamed (AM-4601),
Principal Deputy Assistant Attorney General.
Rebecca P. Dick (RD-5481),
Deputy Director of Operations.
Ralph T. Giordano (RG-0114),
Chief, New York Office.
Philip F. Cody (PC-3521)
John J. Greene (JG-8281)
Edward Friedman (EF-0245)
John W. McReynolds (JM-0441)
Attorneys, U.S. Department of Justice, Antitrust Division, 26 Federal
Plaza, Room 3630, New York, New York 10278, (212) 264-0390.
For Defendants.
Paul, Weiss, Rifkind, Wharton & Garrison,
Daniel J. Beller (DB-7312),
1285 Avenue of the Americas, New York, New York 10019-6064, Tel: (212)
373-3000.
Attorneys for AIG Trading Corporation,
Sullivan & Cromwell,
Garrard R. Beeney (GB-1345),
125 Broad Street, New York, New York 10004-2498, Tel: (212) 558-4000,
Attorneys for BP Exploration & Oil Inc.
Howrey & Simon
Margaret H. Fitzsimmons (MF-3327)
1299 Pennsylvania Avenue, N.W., Washington, D.C. 20004, Tel: (202) 783-
0800,
Attorneys for Cargill International, S.A.
Order of the Court
The Court having reviewed the Complaint and other filings by the
United States, having found that this Court has jurisdiction over the
parties to this stipulation and order, having heard and considered the
respective positions of the United States and the defendants [at a
hearing on __________] and having concluded that entry of this
stipulation and order is in the public interest, it is hereby Ordered:
That the parties comply with the terms of this stipulation and
order;
That the Complaint of the United States is dismissed with
prejudice;
That the Court retains jurisdiction to enable any of the parties to
this stipulation and order to apply to the Court at any time for such
further orders and directions as may be necessary or appropriate for
the construction or implementation of this stipulation and order, for
the enforcement or modification of any of its provisions, or for
punishment by contempt.
So ordered this ______ day of __________, 1997.
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United States District Court Judge.
United States District Court for the Southern District of New York
United States of America, Plaintiff, v. AIG Trading Corporation;
BP Exploration & Oil Inc.; and Cargill International, S.A.
Defendants.
Competitive Impact Statement
The United States of America, pursuant to Section 2 of the
Antitrust Procedures and Penalties Act (APPA), 15 U.S.C. Sec. 16(b),
submits this Competitive Impact Statement in connection with the
proposed Stipulation and Order submitted for entry with the consent of
defendants in this civil antitrust proceeding.
I Nature and Purpose of the Proceedings
On July 18, 1997 the United States filed a civil antitrust
complaint under Section 4 of the Sherman Act, as amended, 15 U.S.C.
Sec. 4, alleging that the defendants engaged in a combination and
conspiracy, in violation of Section 1 of the Sherman Act, 15 U.S.C. 1,
to exchange current and prospective brokerage commission information
with the purpose and effect of lowering commissions paid to brokers
located in the United States for arranging certain types of
transactions, namely the purchase and sale of Brent spread contracts
and contracts for differences (CFDs), involving Brent blend crude oil,
a crude oil produced in the North Sea. Specifically, the complaint
alleges that, in furtherance of this conspiracy, the defendants and
others:
(a) Communicated with each other regarding current and prospective
brokerage commissions; and
(b) Reduced brokerage commissions.
On July 18, 1997, the United States and the defendants also filed a
proposed Stipulation and Order (``proposed Order'') to resolve the
allegations in the complaint. The proposed Order will prevent each of
the defendants from agreeing with other traders to (1) fix, lower,
raise, stabilize or maintain any commission to be paid to a broker for
arranging the purchase and sale of Brent time spreads or CFDs or (2)
exchange any information for that purpose, and from requesting or
urging any other trader to lower, raise or change any such commission
to be paid by it.
The United States and the defendants have agreed that the Court may
enter the proposed Order after compliance with the APPA, unless the
United States withdraws its consent (Section IX of the proposed Order).
The proposed Order provides (as is standard in the Department's
settlements) that it shall not constitute evidence against or an
[[Page 41418]]
admission by any party with respect to any issue of fact or law.
Entry of the proposed Order will terminate this civil action as to
the defendants, except that the Court will retain jurisdiction for
further proceedings that may be required to enforce or modify the order
entered, or to punish violations of any of its provisions by contempt.
II Description of Practices Giving Rise to the Alleged Violation of the
Antitrust Laws
Each of the defendants acted as a trader of Brent spread contracts
and CFDs. Traders, including the defendants, regularly employed the
services of brokers in connection with the purchase and sale of Brent
spread contracts and CFDs. The brokerage commission paid by traders to
brokers in connection with such purchases and sales is usually
expressed in terms of an amount per barrel purchased and sold. In
connection with Brent spread contracts and CFDs, a broker was usually
paid a full brokerage commission by each party to the transaction.
Beginning at least as early as July 1992, representatives of the
defendants agreed with one another and other traders during various
telephone conversations and in person in Europe and the United States
to exchange current and prospective brokerage commission information on
commissions paid to brokers, including brokers located in the United
States, for arranging the purchase and sale of Brent spreads and CFDs.
The purpose of these exchanges was to facilitate a reduction in the
amount of commissions paid, and as a direct result of this agreement,
defendants and other traders were able to reduce such commissions in
July and August 1992.
III Explanation of the Proposed Stipulation and Order
Format. The settlement of this civil action is in the form of a
Stipulation and Order rather than a Final Judgment to ameliorate the
likelihood that the settlement of this action will trigger (1) the
institution of regulatory proceedings involving or (2) the imposition
of regulatory sanctions against defendant AIG Trading Corporation (AIG
Trading), its corporate parent and subsidiaries of the corporate parent
in connection with various regulated businesses unrelated to the
subject matter of this action.
Defendant AIG Trading is a subsidiary of AIG Trading Group Inc.
(Trading Group) which is a subsidiary of American International Group,
Inc. (AIG). AIG and it subsidiaries comprise a large, diversified
financial service organization operating in 130 countries and
jurisdictions. They are engaged in the businesses of insurance, money
management, financial risk management, mutual fund advisory services
and operation, and trading in the foreign exchange, interest rate,
precious and base metals and crude oil and natural gas markets. In
1994, AIG and its consolidated subsidiaries generated revenues of over
$22 billion.
Because of their involvement in the highly regulated insurance and
investment businesses, AIG and its subsidiaries are subject to
supervision and review by the state departments of insurance in all
fifty states, more than one hundred foreign insurance and bank
regulatory agencies, the Securities and Exchange Commission (SEC) and
securities regulators in the United States and various foreign
countries as well as by various self regulatory organizations, which
typically regulate both membership and the conduct of its members and
their affiliates.
During the period covered by the Complaint in this action, energy
trading represented about seven percent of Trading Group's profit and
the purchase and sale of Brent spread contracts and CFDs, the subject
matter of the Complaint, represented only a very small part of all
energy-related revenues and profits. In the case of the parent
corporation, AIG, the purchase and sale of Brent spread contracts and
CFDs by defendant AIG Trading generated only a minuscule portion of
total AIG revenues.
The entry of a Final Judgment against defendant AIG Trading in this
case could, and in some instances would, trigger further inquiry and
investigation by a host of regulatory entities, both in the United
States and abroad, to determine whether AIG and its subsidiaries will
be permitted to continue to engage in various regulated businesses as
they have done in the past, or whether sanctions are appropriate.
The triggering of such regulatory inquiries and investigations and
the imposition of any such sanctions in connection with their
businesses unrelated to the purchase and sale of Brent spread contracts
and CFDs, would be burdensome to AIG and its subsidiaries. In light of
the limited scope of the violation, this result is unwarranted.
In view of the practices of various regulatory authorities and the
provisions of certain applicable regulatory laws and rules, it is
believed that settlement of this action in the form of a stipulation
and order will likely expose AIG and its subsidiaries to fewer
regulatory inquiries, investigations and possible sanctions in
connection with businesses unrelated to the subject matter of this
action than would entry of a Final Judgment containing identical
relief. Accordingly, the proposed Order in settlement of this action is
in the form of a stipulation and order.
Section X of the proposed Order provides that its violation may be
punished by contempt.
Prohibited Conduct. The proposed Order will deter the recurrence of
conduct that violates Section 1 of the Sherman Act. Specifically,
Section IV of the proposed Order bars each of the defendants, unless
otherwise specifically permitted, in connection with the purchase and
sale of Brent spread contracts or CFDs, from:
(A) Agreeing with any other trader to (1) fix, lower, raise,
stabilize or maintain any brokerage commission or (2) exchange any
information for that purpose; and
(B) Requesting or urging any other trader to lower, raise or change
any brokerage commission to be paid by it.
Section V of the proposed Order contains certain limiting
provisions that clarify the scope of the prohibitions in Section IV.
Section V identifies specific activities that are not barred by the
proposed Order. Specifically, Section V (A) provides that each of the
defendants may (1) engage in contacts with any trader to (a) propose,
negotiate or cancel a purchase or sale of a Brent spread contract or
CFD with such trader as a counter party or co-venturer or (b) to
allocate between themselves the responsibility for payment or
negotiation of brokerage commissions relating to such a purchase or
sale; (2) engage in contracts with a broker in connection with the
purchase or sale of a Brent spread contact or CFD; (3) engage in
brokerage commission activity required or authorized by any markets
subject to the jurisdiction of either the Commodity Futures Trading
Commission or any governmental or self regulatory organization whose
responsibilities under United States law includes authority over the
purchase and sale of Brent contracts, Brent spread contracts or CFDs;
or (4) engage in activity concerning the payment of brokerage
commissions to any broker located in a foreign country that is required
or authorized by any market subject to the jurisdiction of either the
International Petroleum Exchange or any governmental or self regulatory
organization whose responsibilities under foreign law include authority
over the purchase or sale of Brent contracts, Brent spread contracts or
[[Page 41419]]
CFDs; and (5) engage in activity concerning the payment of brokerage
commissions to any broker located in the United States that is required
or authorized by either the International Petroleum Exchange or any
governmental or self regulatory organization whose responsibilities
under foreign law include authority over the purchase or sale of Brent
contracts, Brent spread contracts or CFDs, provided that, if the
activity is otherwise prohibited by Section IV of the Stipulation and
Order, the United States has not objected within sixty (60) days
written notice by a defendant of an intention to engage in such
activity.
Section V(B) provides that nothing in the Stipulation and Order
shall prohibit the defendants from engaging in activity lawful under
the Foreign Trade Antitrust Improvements Act, 15 U.S.C. Sec. 6a.
Section V(C) provides that no finding of any violation of the
proposed Order may be made based solely on parallel conduct.
Sections VI and VII require each defendant to maintain an antitrust
compliance program to assure compliance with the proposed Order and
with the federal antitrust laws. Under the compliance program, an
antitrust compliance officer, to be appointed by each defendant is
required to distribute copies of the proposed Order to each of its
officers and employees with duties or responsibilities that include
determining, changing, proposing, approving disapproving or
implementing any brokerage commission paid to a broker for arranging
the purchase or sale of Brent spread contracts or CFDs; to brief such
personnel annually on the meaning and requirements of both the
antitrust laws and the proposed Order; and to obtain from such
personnel certifications that they have read and agree to abide by the
terms of the proposed Order, and that they have been advised and
understand that a violation of the proposed Order by them may result in
their being found in civil or criminal contempt of court.
In addition, the proposed Order provides a method for determining
and securing the defendants' compliance with its terms. Section VIII
provides that, upon the request of the Department of Justice, a
defendant shall submit written reports, under oath, relating to the
defendant's compliance with the proposed Order. The Department of
Justice also is permitted to inspect and copy all books and records,
and to interview officers, employees and agents of the defendants.
Section XI makes the proposed Order effective for ten years from
the date of its entry.
The proposed order contains a proposed finding that entry of the
proposed Order is in the public interest. Under the provisions of the
APPA, entry of the proposed Order is conditional upon a determination
by the Court that the proposed Order is in the public interest.
The United States believes that the proposed Order is fully
adequate to prevent the recurrence of the violation of Section 1 of the
Sherman Act alleged in the Complaint, and that the disposition of this
proceeding without further litigation is appropriate and in the public
interest.
IV Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages suffered, as well as costs and reasonable attorneys' fees.
Entry of the proposed Order will neither impair nor assist the bringing
of such actions. Under the provisions of Section 5(a) of the Clayton
Act, 15 U.S.C. 16(a), the proposed Order has no prima facie effect in
any subsequent lawsuits that may be brought against the defendants in
this case.
V Procedures Available for Modification of the Proposed Order
As provided by the APPA, any person believing that the proposed
Order should be modified may submit written comments to Ralph T.
Giordano, Chief, New York Office, U.S. Department of Justice, Antitrust
Division, 26 Federal Plaza, Room 3630, New York, New York 10278, within
the sixty (60) days period provided in the Act. These comments, and the
Department's responses will be filed with the Court and published in
the Federal Register. All comments will be given due consideration by
the Department, which remains free to rescind its agreement to entry of
the proposed Order at any time prior to actual entry by the Court. The
proposed Order provides that the Court retains jurisdiction over this
action, and the parties may apply to the Court for any order necessary
or appropriate for modification, interpretation, or enforcement of the
Order, or for punishment of any violation thereof by contempt.
VI Alternative Forms of Relief Considered
The only alternative to the proposed Order considered by the United
States was a full trial on the merits and on relief. Such litigation
would involve substantial cost to the United States and is not
warranted because the proposed Order provides appropriate relief
against the violations alleged in the Complaint.
VII Determinative Materials and Documents
No materials or documents of the type described in Section 2(b) of
the APPA, 15 U.S.C. 16(b), were considered by the United States in
formulating the proposed Order. However, a letter, dated June 20, 1997,
from plaintiff's counsel to counsel for defendant Cargill
International, S.A. acknowledging Cargill International's right under
current law to seek relief from the compliance provisions of Section
VIII in the event it believes a conflict has arisen between any request
for information or documents under those provisions and foreign law,
was considered determinative by Cargill International in agreeing to
the proposed Order and is attached hereto as Exhibit A.
Dated: July 18, 1997.
Respectfully submitted,
Philip F. Cody,
John J. Greene,
Edward Friedman,
John W. McReynolds,
Attorneys, Antitrust Division, United States Department of Justice, 26
Federal Plaza, Room 3630, New York, New York 10278, (212) 264-0395.
July 14, 1997.
Margaret H. Fitzsimmons, Esq. Howrey & Simon,
1299 Pennsylvania Ave. NW., Washington, DC 20004-2402.
Re: Cargill International, S.A.
Dear Ms. Fitzsimmons: During our negotiations of a civil
settlement in this case, you suggested the possibility that a
conflict could arise between the plaintiff access provisions in
Section VIII of the proposed stipulation and order, which authorizes
the Assistant Attorney General to inspect documents or conduct
interviews and to request written reports, and the law or orders of
foreign governments, which may appear to prohibit compliance with
such provisions. Of course, we would attempt to work with Cargill
International, S.A. to avoid any such conflict in exercising our
rights under Section VIII. In the event we could not reach
agreement, Cargill International would be free to seek relief from
the U.S. order court from its obligations to comply with any Section
VIII request.
[[Page 41420]]
Sincerely yours,
Philip F. Cody,
Assistant Chief.
[FR Doc. 97-20209 Filed 7-31-97; 8:45 am]
BILLING CODE 4410-11-M
