Citi loses fight to recoup mistaken payments

The recipients of roughly $500m (£360m) that US banking giant Citigroup wired erroneously will get to keep the money, a US judge has ruled.

Judge Jesse Furman said Citi was not entitled to recoup its funds, even though they were “indisputably transferred by mistake”.

The bank was supposed to have sent interest payments on behalf of its client, Revlon, but instead fully repaid the cosmetic company’s loans.

Citi said it would appeal the decision.

“We believe we are entitled to the funds and will continue to pursue a complete recovery of them,” a spokeswoman said.

Citi, which was acting as an administrator for Revlon’s 2016 loans, was supposed to send $7.8m in interest payments on behalf of the firm. Instead, last August, it wired nearly $900m to the firm’s lenders – paying off its debts.

After recognising the mistake, Citi managed to recoup some of the money, but 10 firms, including Brigade Capital Management and Allstate Investment, refused to return it, prompting Citi to sue.

Judge Furman in Manhattan said he was bound by New York law, which has previously found that funds received to recoup a debt do not need to be returned, if “they discharge a valid debt, the recipient made no misrepresentations to induce the payment, and the recipient did not have notice of the mistake”.

“The non-returning lenders believed, and were justified in believing, that the payments were intentional,” Judge Furman wrote.

“To believe otherwise – to believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1bn – would have been borderline irrational.”

Citi was fined $400m by US authorities last year for lapses in internal controls and risk management.

Grenfell: Arconic boss says fire safety tests were not his priority

The boss of the company that made the Grenfell Tower cladding has said it was not his “priority” to understand fire safety tests and certificates.

Claude Schmidt, president of Arconic, told the inquiry into the fire that he only learned about a key British fire safety standard after the disaster.

It also heard claims the French firm “arranged” for some fire tests to pass.

Arconic is being investigated for not informing a British standards board about failed tests.

The inquiry is looking into how Grenfell Tower came to be covered in combustible materials, leading to the fire killed 72 people in June 2017.

Arconic manufactured the cladding panels in France and the product was never put through the standard test widely used in the UK construction industry.

Mr Schmidt was asked by the inquiry’s lead counsel Richard Millett QC why, when he became managing director in 2007, he did not “seek to understand thoroughly the testing and certification which supported that product”.

Speaking in French through an interpreter, Mr Schmidt replied: “Because it wasn’t my priority”.

“This is to do with fire safety and life safety. Why wasn’t it your priority?” Mr Millett asked.

Mr Schmidt said he thought these words were “a bit too strong”.

There are a number of ways that building materials can comply with regulations in order to be used on high-rise buildings.

One of them is meeting the British standard, known as Class 0. Though some sections of the government guidance on which standards are required for certain products are disputed.

Arconic was awarded a product certificate for its cladding in the UK by the British Board of Agrément (BBA) in 2008.

This said Arconic’s Reynobond PE cladding panel “may be regarded” as having met the Class 0 standard. The UK building industry relied heavily on it.

Across the country, and at Grenfell, cladding suppliers believed that if the cladding had a BBA certificate and was Class 0, it could be used on tall buildings.

But the inquiry heard on Tuesday that the standard British test had not, in fact, been carried out. The French arm of Arconic relied, instead, on European tests that were similar.

On top of that, there were a series of issues with the tests which were done.

Some versions of the panel, when it was shaped into “cassettes” or boxes, had “failed spectacularly”, Mr Millett said.

Arconic did not tell the BBA, so the product certificate remained in use right up to the decision to use the cladding on Grenfell Tower.

A statement from Claude Wehrle, a technical manager who worked for Arconic, said the company believed the test was a “rogue result”, the inquiry heard.

The inquiry chairman, Sir Martin Moore-Bick, asked Mr Schmidt to respond to the view that Arconic was “irrational and irresponsible not to carry out further tests”.

Mr Schmidt said: “Yes… extra tests should have been carried out.”

When another version of the cladding was put through the European test in 2005 it was given a Class B rating, on a scale where A1 is the best and F is the worst. This meant it could be used on high-rise buildings.

But on Tuesday the inquiry was shown an email 11 years later in which Mr Wehrle said the Class B rating had been achieved “by ‘arranging’ the system to pass”.

Mr Wehrle, a French national, has refused – despite repeated requests – to come to the inquiry to give evidence, because of legal advice he says he has received.

When asked how Mr Wehrle might have “arranged” the system to pass, Mr Schmidt said: “I don’t have an answer.”

The issue of which standards the Arconic cladding met, and what testing was done on it, is at the centre of this phase of the public inquiry – and is an important component of the Metropolitan Police investigation.

It is also one of the factors behind the building safety crisis affecting hundreds of thousands of people across the country.

Immediately after the fire, residents of the Chalcots Estate in Camden, North London had to leave their homes when the fire risk of Arconic Reynobond PE aluminium composite cladding was realised.

Arconic’s position has always been that it simply produced the raw materials for cladding systems, and it didn’t necessarily know how they would be used, so could not know that they might not meet building regulations.

But on Tuesday, Mr Schmidt was asked by Mr Millett about “occasions when Arconic did understand what project the product would be used for.”

Asked whether Grenfell Tower was “an example of that”, Mr Schmidt said: “Yes.”

Harry Dunn: Civil claim against Anne Sacoolas to remain in US

A civil claim for damages against Harry Dunn’s alleged killer will remain in the US due to her “refusal” to return to the UK, a judge has ruled.

Mr Dunn, 19, died in a crash near RAF Croughton in Northamptonshire in 2019.

The suspect Anne Sacoolas returned to the US, claiming diplomatic immunity, and an extradition request was blocked.

Mrs Sacoolas, 43, had applied to dismiss the case on the grounds it should be heard in the UK.

The move came despite her legal team admitting she would not agree to face trial due to a “concern” she would not “receive fair treatment”.

Mrs Sacoolas has been charged with causing the teenager’s death by dangerous driving but an extradition request was rejected by the US government in January last year.

A court hearing in the eastern district of Virginia had previously been told her work in intelligence was “especially a factor” in her departure and that she “fled” the UK for “issues of security”.

But judge Thomas Ellis said: “While it is commendable that defendant Anne Sacoolas admits that she was negligent and that her negligence caused Harry Dunn’s death, this does not equate acceptance of responsibility.

“Full acceptance of responsibility entails facing those harmed by her negligence and taking responsibility for her acts where they occurred, in the United Kingdom.”

The judge said he also took into account the “firm support” of Foreign Secretary Dominic Raab, who submitted a letter to the court which read: “I strongly support [the Dunn family’s] right to bring the case.

“It is of course for the US courts to decide the issue of venue but for our part, the British government takes the view that British citizens can bring their case in whichever court they think appropriate.”

Due to her “refusal” to return to the UK, the Dunn family said they brought a civil claim for damages against her as “a last resort”.

Mr Dunn’s mother Charlotte Charles said: “We are pleased and relieved at the court’s decision.

“We only took this step as a last resort following the denial of justice in the extradition case on strong advice from our legal team.”

Other motions Sacoolas’s legal team submitted to dismiss the case will be heard on 3 March in Virginia.

Black McDonalds owner sues for racial discrimination

A former professional baseball player who was once the largest black McDonald’s operator in the US has sued the company for racial discrimination.

Herb Washington said the firm had denied black owners the opportunities it gave to whites, including by steering them to stores to “distressed, predominantly black” areas.

He accused the company of retaliating against him after he raised concerns.

McDonald’s blamed his troubles on “mismanagement”.

In a statement, the firm said it was reviewing the complaint, adding that Mr Washington was facing “business challenges that we don’t want for anyone in our system.”

“This situation is the result of years of mismanagement by Mr Washington, whose organisation has failed to meet many of our standards on people, operations, guest satisfaction and reinvestment,” the company said.

“His restaurants have a public record of these issues, including past health and sanitation concerns, and some of the highest volumes of customer complaints in the country.”

McDonald’s has faced similar claims from black franchise owners before. In a lawsuit last year, more than 50 former franchise owners accused the company of steering them to stores in less desirable neighbourhoods.

Mr Washington, who opened his first McDonald’s franchise in 1980 at the age of 29 after a brief stint playing for the Oakland Athletics, said the firm had repeatedly hindered his business.

That included by blocking him from buying stores from a white franchise owner and denying him financial assistance comparable to that offered to white operators.

Despite the challenges, Mr Washington said he at one point ranked as the company’s largest black operator in the US, with 27 restaurants. He continues to own 14 stores.

“I always held out hope that they would live up to their promises and put an end to a two-tiered system,” he said at a press announcing the lawsuit, which was filed in federal court in Ohio. “I believed that McDonald’s was going to do the right thing.”

Since 2017, he said the company had targeted him for “extinction” in retaliation for his speaking up about racial disparities, pushing him to sell certain stores in exchange for contract extensions on others.

At the press conference, he rejected the firm’s characterisation of his business, saying that McDonald’s wouldn’t have allowed him to be a franchisee for 40 years if he were consistently “bringing down the brand”.

“When I stood up for myself and other black franchisees, McDonald’s began to dismantle my life’s work,” he said. “I didn’t quit on McDonald’s. McDonald’s quit on me.”

In his lawsuit, Mr Washington said the company’s discriminatory policies worsened after British-born Steve Easterbrook took over in 2015.

Mr Easterbrook was fired from the company in 2019 for having a consensual relationship with a subordinate in violation of the firm’s policies.

During his tenure, the company implemented remodelling initiatives that were “designed to force black franchisees out of the McDonald’s system,” the lawsuit says.

The number of black McDonald’s franchisees has dropped from 377 to 186 since 1998, even as the firm’s store count has more than doubled, the lawsuit says. It also says black-owned restaurants average $700,000 less in sales annually than white-owned ones.

“These numbers are not a coincidence; they are the result of McDonald’s intentionally racist policies and practices toward black franchisees,” the lawsuit says.

McDonald’s, which announced a diversity initiative in July amid the Black Lives Matter protests, said the company did not place franchisees in specific locations, but made recommendations. Nearly 30% of its franchises are “ethnically diverse” it said.

Manchester Arena Inquiry: Terror offender unfit to give evidence

A convicted terror offender who was the Manchester Arena bomber’s friend “is unfit to give evidence” to the inquiry into the attack, his lawyer has said.

Abdalraouf Abdallah was visited by the bomber Salman Abedi in prison in the months before the 2017 attack.

He has refused to appear at the inquiry but families of the attack’s victims want to know why he cannot be forced.

A hearing was told a decision on whether the families could access his medical reports would be made later.

Abdallah, who is in prison, is refusing to give evidence to the Manchester Arena Inquiry even though he has been described as having had a significant relationship with Abedi.

Abedi detonated a homemade device in the foyer of Manchester Arena as people left a concert on 22 May 2017, killing 22 people and injuring hundreds more.

The families of those who died have been told there are medical reasons why Abdallah cannot be forced to give evidence, but they want to see the reasons for themselves.

After giving a “no comment” interview to lawyers before the inquiry began, forensic psychiatrist Dr John Kent was instructed to interview Abdallah in prison but he refused and instead was interviewed by a psychiatrist suggested by his legal team, Dr Richard Latham, whose report was then reviewed by Dr Kent.

Dr Latham’s report concluded Abdallah was unfit to give evidence and making him do so could risk self-harm.

Abdallah wants only a “gist” of both reports to be disclosed and his lawyers on Tuesday applied for the full report to be withheld.

Abdallah was jailed in 2016 after being found guilty of helping people travel to Syria to join the Islamic State group and was returned to prison in January, a few weeks after being released on licence.

The inquiry heard he has cited a privilege against self-incrimination as a reason to refuse to questions from the inquiry.

Rajiv Menon QC told the inquiry that Abdallah was “not involved in any way” in the attack.

“He did not groom or radicalise Salman Abedi,” he said.

“He had no knowledge whatsoever of the planning and preparation of the terrorist attack at Manchester Arena.

“He heard about the attack for the very first time in prison after it had been reported in the press. He is unfit to give evidence.”

He said his client did not believe he would be treated fairly by the inquiry, adding that he had been legally advised “in the strongest possible terms” to exercise his right to silence.

Pete Weatherby QC, representing some of the families, said Abdallah had crucial evidence to give the inquiry about the radicalisation of Abedi and “whether the plot went further than the Abedi brothers themselves”.

He said Abdallah was an “important” witness who should be called to give evidence and the medical reports were “central” to whether he should be excused from going into the witness box.

The inquiry chairman Sir John Saunders will publish his decision on whether the reports should be disclosed at a later date to be confirmed.

Any argument about whether Abdallah will be called as a witness to the inquiry will take place at a later date.

Neil Woodford relaunch plans spark call for inquiry

Activists alarmed by fallen fund manager Neil Woodford’s plans to set up a new investment firm have called for an independent inquiry into the collapse of his previous venture.

Mr Woodford’s flagship fund was wound up in 2019 leaving small investors with big losses.

Campaigners said 300,000 people had been left “scrabbling to make ends meet” by the collapse.

Mr Woodford has said the fund could have recovered if not forced to close.

Activists Gina Miller and Alan Miller, co-founders of the True and Fair Campaign, which seeks improvements to consumer protection standards, wrote to the Treasury Select Committee on Tuesday urging an independent investigation.

“We believe it ought to be a very serious source of public policy concern that high profile individuals such as Mr Woodford can be allowed to recommence trading, with the slate ostensibly wiped clean, when over 300,000 people some of whom may be your own constituents, are scrabbling to make ends meet after seeing their life savings decimated and their prudent actions and hopes for a secure and comfortable future suddenly and unexpectedly dashed,” the activists said in a letter.

Gina Miller, who gained national prominence after winning two legal challenges against the government’s handling of Brexit, is a businesswoman and pensions campaigner.

Mr Woodford built his reputation as a star stock picker over 26 years at the City firm Invesco. An investment of £1,000 in his first funds would have returned £25,000 by the time he left.

But after he set up his own business, several investments turned sour, causing the value of his funds to plummet and investors – most of them not professionals – to pull out millions.

As a result, his flagship Woodford Equity Income Fund was first suspended, then shut down, with Mr Woodford removed as investment manager in October 2019.

He then said he would resign from his other remaining funds and wind down his investment company, Woodford Investment Management.

Speaking publicly about what happened for the first time since 2019, Mr Woodford told the Sunday Telegraph recently: “I’m very sorry for what I did wrong. What I was responsible for was two years of underperformance – I was the fund manager, the investment strategy was mine, I owned it and it delivered a period of underperformance.”

Equity income funds are normally bought into by amateurs who ask a fund manager to invest in different businesses for them.

But from reportedly being worth £10.2bn in May 2017, the fund struggled to plug holes as investors pulled out around £10m every day.

By the time it was suspended, the Woodford fund was worth £3.7bn.

Mr Woodford said he warned administrator Link Fund Solutions against closing the fund and said had investors stuck with him they would be “enjoying the fruits of that faith”.

Saying he was “very sorry for what I did wrong”, he added: “I can’t be sorry for the things I didn’t do. I didn’t make the decision to suspend the fund, I didn’t make the decision to liquidate the fund. As history will now show, those decisions were incredibly damaging to investors and they were not mine.”

Link Fund Solutions was approached for comment.

Mr Woodford’s new investment firm, called Woodford Capital Management Partners (WCM), will be based in Buckinghamshire and Jersey.

It will work with Acacia Research, a US investment company, to advise on a portfolio of life sciences company holdings. Acacia bought the portfolio from the Woodford Equity Income Fund’s administrators after it shut down.

Mrs Miller said the move “discredit[s] both the regulator, and the entire UK financial services sector at a time when trust in the sector has rarely been more crucial”.

“The British public deserve much better,” she wrote in the letter.She and Mr Miller also called for parliament to examine the role of the Financial Conduct Authority (FCA) in supervising Mr Woodford.

The events leading up to the fund’s collapse in October 2019 are still being investigated by the UK watchdog.

The FCA was approached for comment.

Others have said caution is warranted.

“Should Woodford be allowed to open a new fund to professional investors? Particularly as they might not know what risks they are taking on? I think not,” said Paul Resnik, chief ethics officer of the Suitable Advice Institute, an investment advice company.

“We need to see the result of the Financial Conduct Authority’s analysis and the outcomes of impending court cases and class actions first,” he told the BBC.

Read more from the investors who described Mr Woodford’s return as a “kick in the guts” here.

Emily Jones: Killed childs father fighting for NHS apology

A man whose seven-year-old daughter was killed by a psychiatric patient says it is insulting that he has not received an apology from the NHS.

Mark Jones claims an NHS trust’s failings left Eltiona Skana free to kill Emily in a park in Bolton.

“I will keep fighting until I get an apology,” Mr Jones told the BBC.

Greater Manchester Mental Health NHS Foundation Trust said it continued to send “deepest sympathies to everyone who loved and cared for Emily”.

A court heard Skana, who has paranoid schizophrenia, had not been taking her medication and slit Emily’s throat as she played in Queens Park on 22 March last year.

She is serving a life sentence with a minimum of 10 years and eight months after she admitted manslaughter on the grounds of diminished responsibility.

Skana, 30, was cleared of murder after the prosecution offered no further evidence and withdrew the charge.

Mr Jones blames a lack of medical supervision for the attack on his daughter, which he witnessed.

Speaking to Naga Munchetty on BBC Radio 5 Live, he said: “The brain protects you, it won’t let you go there all the time. But when I do, if I’m driving the car or wherever I have to pull over because it’s just horrendous.

“No-one should have to see their daughter like that.”

Emily was with her father riding her scooter in the park on Mother’s Day when she was killed.

The youngster spotted her mother, who was jogging, and was calling out to her as she scooted past a bench where Skana was sitting, alone and armed with a craft knife.

Skana, originally from Albania, grabbed Emily and slit her throat before running off.

Mr Jones said Greater Manchester Mental Health NHS Foundation Trust had “let their patient down” and said his daughter’s death “could have been prevented had they done a better job”.

“The fundamental thing is that she was un-medicated on the day and they had a suspicion,” he said.

The court heard Skana’s sister had indicated to the mental health team that she was not taking her medication.

Mr Jones said Skana had a history of not taking pills and the trust “bowed down to her demands to put her on oral medication”.

“She’d threatened children before, she’d threatened a friend’s daughter who was 13, she went round there with a knife,” he said.

“She’d attacked her mother with an iron, her sister had to lock herself in her room. This is a woman who’s got a history of violence when she’s un-medicated.”

Mr Jones said he was unhappy with the trust’s internal review of the case, which outlined failings but concluded Emily’s death was not preventable, and likened it to “marking your own homework”.

“It’s an insult to my family for Greater Manchester mental health not to admit some liability. I will keep fighting until I get an apology from them,” he said.

“It’s got to stop. There are dangerous people out there and the only people who can protect us are the authorities.”

An NHS review into Emily’s death is taking place.

Neil Thwaite, chief executive of the Greater Manchester Mental Health NHS Foundation Trust, said: “We welcome the decision to commission an independent investigation into this tragic incident.”

Harvey Tyrrell death: Electrician cleared over boys pub garden electrocution

An electrician has been cleared of killing a seven-year-old boy who was electrocuted by a set of poorly installed lights in a pub garden.

Harvey Tyrrell suffered a huge electric shock when he touched “defective” lighting at the King Harold in Romford, east London, on 11 September 2018.

Colin Naylor, who installed the lights, was acquitted of manslaughter by gross negligence at Snaresbrook Crown Court.

He will be sentenced for a health and safety offence on a date yet to be set.

Naylor, 73, was found guilty of failing to discharge a duty under the Health and Safety at Work Act by not taking reasonable care to limit the risk, or prevent the danger of, serious injury or death.

The court heard that Naylor, of Hockley Road in Rayleigh, Essex, worked on a range of electrical jobs at the King Harold pub between April and June 2018, including the garden lighting.

Harvey had been playing in the garden with a friend, the trial heard, when the other child went to get a bag of crisps. By the time he returned, Harvey was unresponsive.

An investigation into Harvey’s death found many defects at the pub that posed a risk of injury including electric shock.

During the trial, prosecutor Duncan Penny QC said experts were critical of the pub’s electrics. One described them as “the most dangerous thing he’s ever seen in 40 years”.

The premises was “a death trap” and the fuse boards were a “dog’s dinner”, Mr Penny added.

Mr Naylor denied any wrongdoing, telling police at interview he believed his work to be “first class”.

David Bearman, 73, the pub’s owner and Mr Naylor’s brother-in-law, has pleaded guilty to Harvey’s manslaughter and to stealing electricity from an unmetered supply.

Bitcoin hits new record of $50,000

Digital currency Bitcoin has risen to a new record high of more than $50,000 (£36,000).

The so-called cryptocurrency, which was created by an unknown inventor, has risen about 72% this year.

Bitcoin and other cryptocurrencies are generated by computers. Part of its supposed value comes from the finite number that can be computed.

But regulators have warned that they are risky, since their value can change fast, both downwards and upwards.

Much of this year’s gain for Bitcoin came after Elon Musk’s Tesla bought $1.5bn of them and said it would accept them as payment for its cars.

Supporters say Bitcoin can act as a store of value, like a digital version of gold.

“If that narrative comes to fruition, then the growth potential is off the charts as $50,000 per bitcoin equates to a market cap of roughly $931bn, which is almost 9% of gold,” said John Wu, president at blockchain company Ava Labs.

“If BTC meets gold’s market cap, then that would be at least $500,000 per bitcoin.”

Unlike other commodities, however, Bitcoin cannot be used for anything else, merely bought and sold. This has made attempts to value it difficult.

Pricing is also susceptible to large swings because of the limited number which are traded. Many supporters are holding on to them in anticipation of higher valuations. Should they all sell at once, the price could tumble.

With no intrinsic value, unlike a physical asset such as land, and no ability to generate an income, unlike a company or bond, cryptocurrencies are extremely volatile and can crash as fast as they rise.

Critics point out that while Bitcoin may have a finite supply of units – 21 million – the number of cryptocurrencies is ever-growing and potentially limitless.

People have lost large amounts of money in steep drops in the value of cryptocurrencies and in hacks and scams associated with them.

Britain’s financial watchdog, the Financial Conduct Authority (FCA), opened 52 investigations into suspected cryptocurrency frauds in the year to 30 June 2020, according to a Freedom of Information request from law firm RPC.

That was fewer than the 59 opened in the previous 12 months, sparking speculation that the regulator was short of resources to tackle cryptocurrency frauds.

“Given explosive growth in high-risk cryptocurrency and related frauds, we would expect the number of FCA investigations to jump up and not fall away,” said Sam Tate, partner at RPC.

“The sheen of respectability now being given to cryptocurrencies is being taken advantage of by cyber-criminals and online fraudsters.”

The FCA declined to comment on the figures.

Bitcoin’s value dropped by $5,000 on 4 January to about $29,000 before recovering the lost ground. On 11 Jan, it dropped $9,000 to $32,000.

Because cryptocurrencies can pass international borders quickly and are not regulated in the same way as cash or regular investments, investigating thefts is hard.

Last month, the FCA issued a stark warning to investors in so-called cryptoassets.

The financial watchdog said investors should be “prepared to lose all their money” should their investment’s value collapse.

Married At First Sight Australia star Daniel Webb charged with fraud

Married At First Sight Australia star Daniel Webb has been charged with fraud.

Court documents show the 36-year-old appeared in Brisbane Magistrates Court on Tuesday.

According to the Australian Associated Press, 10 other people are also charged with fraud, while some face charges of money laundering.

The committal hearing started in Brisbane Magistrates Court on Monday.

Around 500 people are listed on the witness list for a trial over involvement in an alleged telemarketing scam.

Police began investigating the alleged cold-calling scheme in 2013.

Daniel Webb rose to prominence after appearing on the Australian version of Married At First Sight, which is currently available to watch in the UK on Channel 4.

There are spoilers about Daniel’s time on the reality show after this point.

The show has been a binge watching favourite in the UK during lockdown.

During the show, Dan was partnered with Tamara Joy but had an affair with co-star Jessika Power.

He and Jessika were controversially allowed to re-enter the experiment as a new couple after their secret was revealed.

The hearing is expected to last three weeks.

Newsbeat has contacted Daniel Webb’s representatives for comment, but they have yet to respond.

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