krautinthecity UK

Long time no see

2009-06-23T01:21:00.001-07:00

With reference to some earlier posts, I just wanted to mention that I saw an old acquaintance on the FT-Deutschland's webpage today (http://www.ftd.de/). Interestingly, the .jpg file is called "Mrs Dax".

Winnie the Pooh meets H1N1

2009-06-09T10:06:00.000-07:00

Seen in the Huffington Post

Epi - a recommendation from the new "city"

2009-06-07T13:17:00.001-07:00

Having moved back to Cologne, we noted with great pleasure that patisserie/boulangerie EPI (www.epi-cologne.eu) offers a range of authentic French bakery products within walking distance from our new home. If you would like to taste a piece (or a drop) of France when you are in Cologne, I strongly recommend a visit at Epi in Neusser Str. 32

Back to the future

2009-02-24T06:10:00.000-08:00

On Febraury 28th my time as a "Kraut in the City" comes to an end. I am leaving the firm to take on a new position as Legal Counsel Continental Europe for an insurance company in Cologne (Germany) the city where I worked before moving to London.

Therefore this website will be "mothballed" at today's status until it becomes clear whether I have time to continue blogging in the future.

Andreas Laupichler

Best espresso in the City

2009-02-19T03:51:00.001-08:00

Here is another recommendation for the City. In my view the best espresso is made on the back of the little three-wheeler (see picture above) that can be found at the corner of Rood Lane and Great Tower Street . The coffee tastes great and is always prepared and served with a friendly chat.

[Yes, I did accept a double espresso as a thanks for this posting]

Almighty (and all-knowing?)

2009-02-12T07:52:00.000-08:00

Following op on a post from 7 November 2008: The former Nebraskan State senator who filed a court case against god that was dismissed because the court found that it could not be served on the defendant, is trying to re-start the action.

A God who is "all-knowing'' should know when he's being sued, even without being served notice of the lawsuit, said former State Sen. Ernie Chambers of Omaha. After all, Chambers wrote to the Nebraska Court of Appeals, courts already invoke the Almighty in oaths to witnesses that they tell the truth "so help me God. ''He said it was inconsistent for the Douglas County District Court "to take judicial notice of God in order to administer oaths and to enter an order to dismiss . . . yet simultaneously deny that the all-knowing God has notice of the petition,'' Chambers stated in written arguments submitted Monday. [to be continued]

via Kearnyhub.com

Who needs lawyers?

2009-02-09T06:31:00.000-08:00

NRC reports: Ex-Ahold executives sentenced (and they got off lightly if you ask me)

2009-01-29T09:33:00.000-08:00

The Amsterdam appeals court sentenced three former executives of Dutch supermarket group Ahold on Wednesday to suspended sentences and fines over an accountancy fraud revealed by the company in 2003. In the Netherlands' biggest ever corporate accountancy fraud, Ahold had revealed massive bookkeeping irregularities at its US Foodservice business and other foreign subsidiaries, overstating profits by almost 1 billion euros.

Former chief executive Cees van der Hoeven was sentenced to pay a fine of 30,000 euros, while former chief financial officer Michiel Meurs was given 240 hours of community labour, a fine of 100,000 euros and a six-month suspended sentence. Former management board member Jan Andreae was given a three-month suspended sentence and a fine of 50,000 euros. Former supervisory board member Roland Fahlin was acquitted, a confirmation of the lower court's ruling. The new sentences were lighter than those imposed by a lower court in May 2006.
[via NRC Handelsblad online]

Soseki

2009-01-29T07:04:00.001-08:00

Admittedly, I did not have much time for new postings recently. But now I'm taking a short break from all the legal questions on my desk to introduce you to the restaurant where I ate a delicious meal today. At Soseki, chef Kurokawa-san and his team prepare excellent food and serve it in an oasis of peace, right next-door to the Gherkin.

If you want to have a confidential meeting, away from the eyes and ears of competitors or colleagues, you can book a table for 2 or 4 in a separate "compartment". If you would like to watch how the food is being prepared, take a seat at the bar.

What if...?

2009-01-20T14:33:00.000-08:00

A slightly different topic for today's post. It had to be the day when the new US president was inaugurated that I stumbled about this amusing "what if" presentation at English Russia. One of the designs I liked most was the 500 Euro note (see above).

via Cynical-C

Play the bailout game!

2009-01-16T06:10:00.001-08:00

Only the future will tell, whether the bailout packages that have been put together in the western industrialised countries will turn out to have been a good idea. If you think you would have done a better job, demonstrate your skills by playing "the bailout game" (click here to play). If you need help, you can always "ask a Greenberg"

Good luck!!

via (http://www.ritholtz.com/blog)

On the road again...

2009-01-13T10:22:00.001-08:00

I'm on a business trip, so the next post will appear only after I have returned.

Yum yum!

2009-01-13T05:45:00.001-08:00

Whenever a restaurant in or near the City is particularly good, I gladly mention it in a posting. This applies even more if it is a new place that may not yet be so well known.

Hence my recommendation for "The Modern Pantry". The restaurant has its own website (http://www.themodernpantry.co.uk/) for more information and - being situated at St John's Square in Clerkenwell - can easily be reached from the City.

2008 was the year of bad news

2009-01-12T08:13:00.000-08:00

Hence it could not end without the employee of the Frankurt stock exchange that I have mentioned several times before (see here, here, here and here) appearing once more - on the same level as Barack Obama! (see Financial Times - Weekend Eedition before Christmas)

Gimme the money!

2009-01-12T07:52:00.001-08:00

According to a report by the Times (click here) sharholders of Northern Rock are due to claim that the value of their shares (5 pence) established during the nationalisation wrongly assumed that the bank was no longer a "going concern" and demand compensation.

Interestingly the state's "deep pockets" remain to be a more attractive target to the sharholders of Northern Rock than those of the bank's leadership (and their D&O insureres).

I wish you a very merry christmas and a healthy, happy and successful New Year!

2008-12-19T03:10:00.000-08:00

The cartoon that goes with the previous post:

2008-12-17T14:16:00.000-08:00

How Computer Models Doomed the Markets

2008-12-16T01:18:00.000-08:00

A recent Article in the Scientific American (click here) analyses how certain presumptions that served as the basis of computer-models to estimate the level of financial risk of a portfolio for a set period at a certain confidence level contributed to the recent financial crash. I am looking forward to hearing about statements from European insurers and their regulators in this respect, as comparable models form a vital component of the preparations for the future "Solvency II" regulatory regime.

(via The Big Picture)

NY State Insurance Department on "duty to defend"

2008-12-12T09:43:00.000-08:00

In a recently published memo (click here for a full version), the NYSID states that a D&O liability policy may not include a provision that places the duty to defend upon the insured, rather than the insurer.

Click here for a comment by Carrie Cope, a Chicago based lawyer, who disagrees with the department's view both from a legal as well as a practical standpoint.
(via D&O Diary)

On the road...

2008-12-11T06:10:00.001-08:00

I have been travelling a bit in the last few days, so there have been no new posts for a while. Waiting for my flight at Stansted airport I noticed this:

I wonder about the story behind this overload of obvious information.

Our scooter dealer

2008-12-08T13:16:00.000-08:00

In London you don't get anywhere in a car, even at the weekend when the congestion charge is not due. That's why it was one the best ideas of 2008 to buy a scooter (Vintage 1960) and just zoom past everyone in the traffic jam. We bought our Vespa at Scooter Emporium. Marco and his team import them directly from Italy and restore them beautifully. Definitely worth a visit, not just because the shop is close to famous Brick Lane.

How credit cards become asset-backed bonds

2008-12-06T02:37:00.000-08:00

How credit cards become asset-backed bonds from Marketplace on Vimeo.

(via boingboing)

What has happened or will be going on...

2008-12-06T02:21:00.001-08:00

in London is nicely described at Londonist. This website is part of a group of blogs that are all ending in -ist and they all describe what their contributors have experienced in their respective cities or informs readers about interesting events that are coming up.

I look forward to reading the answer to this one...

2008-12-04T09:29:00.000-08:00

Here is a copy of the letter that Rep. Elijah E. Cummings (D-Md.), a senior member of the House Committee on Oversight and Government Reform and a member of the Joint Economic Committee, sent Edward Liddy, President & CEO of AIG.

December 1, 2008

Mr. Edward M. Liddy
Chief Executive Officer

American International Group, Inc.

70 Pine StreetNew York

NY 10270

Dear Mr. Liddy:

I write today to request that American International Group (AIG) fully disclose to the public the extent of the payments being made to senior company executives under your employee "retention program." The limited information that is currently available to the public about this program is insufficient to constitute the level of disclosure that the American taxpayers, who have bailed out this firm repeatedly in recent weeks, have the right to expect.

In form 8-K dated September 22, 2008, and filed with the Securities and Exchange Commission (SEC), AIG disclosed the following: "On September 22, 2008, a retention program of American International Group, Inc. ("AIG") became effective. The program applies to approximately 130 executives and consists of cash awards payable 60 percent in December 2008 and 40 percent in December 2009."

AIG has recently indicated that it will not provide performance bonuses in 2008. However, in what appears to be a disingenuous "slight of hand," AIG has announced its intention to continue to provide the retention program payments (commonly known as retention bonuses) previously announced in September - albeit some executives have apparently opted to delay receipt of these payments (but not to forgo them).

Thus, in form 8-K dated November 24, 2008, and filed with the SEC, AIG disclosed the following: "On November 24, 2008, the Executive Officers of American International Group, Inc. ("AIG") who participate in its previously disclosed retention program, including Chief Financial Officer David Herzog and Executive Vice President Jay Wintrob, volunteered to delay payments thereunder, with the first installment being delayed from December 2008 until April 2009 and the second installment being delayed from December 2009 until April 2010. Chairman and Chief Executive Officer Edward M. Liddy does not participate in this program."

In September of this year (and several days prior to the SEC filing announcing the "retention program"), the U.S. taxpayers provided a bailout loan of $85 billion to keep AIG afloat; in return, the federal government received an ownership stake in the firm. Subsequent actions increased the total size of the bailout to more than $150 billion - and restructured some of the initial loans provided to the firm.

Without taxpayer intervention, AIG would have ceased to exist and, to be blunt, all of its employees would have lost their jobs.Against this background - and given the massive layoffs occurring at other major financial entities, such as Citibank - the American taxpayers have a right to know why senior executives at AIG, who are frankly lucky to still have jobs, need to receive additional bonus payments of any kind to retain them at AIG.

To that end, I request that AIG disclose to the public the following information:

1. Which executives in which AIG divisions are receiving the retention payments - and how much is each executive receiving" What are the base salaries of the executives receiving the retention payments?

2. Are all executives delaying receipt of these payments until April 2009 - or, if any executive is not delaying receipt of the payments, which executive or executives is/are receiving payments in December 2008 and how much is each executive receiving?

3. Why is it necessary for any AIG executive to receive a retention payment - and why is it necessary that these be scheduled for April 2009 and April 2010?

4. What will be the source of the retention payments provided in 2009 and 2010?AIG has previously claimed in correspondence to me that it is working "to create a transparent, accountable culture to regain the trust of the American people."

The disclosure of the information requested here will be a first step toward providing the kind of transparency that the American people have the right to expect from a private firm to which they have provided more than $150 billion in financial assistance.

Sincerely,

Elijah E. Cummings
Member of Congress

via insurancenewsnet.com

Federal Bailout Application Form (Satire)

2008-12-04T04:05:00.001-08:00

Presenting the Federal Bailout Application Form that is “so simple, and easy to use, that even Skadden Arps should bill no more than $2.7 million to review it.”

(via Securitiesdocket)

Mrs. "Bad News" is back...

2008-12-03T02:09:00.000-08:00

The female employee of Deutsche Börse, who caught my attention in the past because she was frequently displayed on the front pages of newspapers and on internet websites in connection with bad news from the stock markets (see here, here and here) has made a new appearance at FTD Online today (see photo above). Unfortunately my whish that her image should be used in connection with positive news for a change was not fulfilled. The article below her image reports about the negative effects that the high losses reported by Infineon are having on the markets :-(

Nice discovery!

2008-12-02T06:01:00.001-08:00

During a recent visit at Spiegel Online I made one of the most interesting discoveries with regards to cartoons for quite a while. The artist has a website (click here). Fluency in German required to understand most of the jokes.

The one above says: "Do you also use bamboo-milk in the shower?"

Gimme more, gimme more!

2008-12-01T04:21:00.000-08:00

Pointing out that Bayern LB is a "system-relevant" bank, a term that has been used by the government to denote banks that the could expect to be saved from collapse without mentioning specific names, the State of Bavaria (whose heraldic animal is a lion) has recapitalised the bank by EUR 10 billion. Bayern LB's loss-making ABS investment portfolio has been ringfenced by an injection of a further EUR 6 billion and by applying for a EUR 15 billion guarantee from the German Financial Market Stabilisation Fund (SoFFin). The Bavarian Sparkassen (regional savings banks) - previously large shareholders in Bayern LB - were apparently unwilling to take the risk of further investments and abstained from participating in this raise of the bank's capital.

The announcement of the above mentioned measures comes with plans to dramatically reduce the bank's headcount. Around 5,600 staff out of the Group’s total 19,200 will be affected. Staff reductions will be implemented over the five years to 2013. At least 1,000 jobs will be lost at BayernLB in Munich and the branch offices, about 200 outside Germany.

The banks press statement (click here) announced a new business model, re-focussing on Bavaria, Germany and certain European countries. International activities will be scaled down considerably. In a contradictory statement the bank announced that "BayernLB will be exiting from Asia completely. The Hong Kong and Shanghai branches and Beijing, Tokyo and Mumbai representative offices will be closed down, along with, in Europe, the Milan branch. The New York and London branches, which are key to the German customer business, will be streamlined considerably."

In the next sentence the "complete withdrawal from Asia" is relativised sentence by stating that "the German Centres in Shanghai and Delhi.Gurgaon, where BayernLB will continue offering support to German middle market companies looking to do business in the emerging markets of China and India" will be unaffected.

Countries that I have been to

2008-11-28T06:36:00.001-08:00

Create your own map at:

http://bighugelabs.com/flickr/map.php

Quote of the day!

2008-11-28T03:42:00.000-08:00

"It seemed the world was divided into good and bad people. The good ones slept better while the bad ones seemed to enjoy the waking hours much more."

- Woody Allen

EU neighbours love German drivers

2008-11-28T02:04:00.000-08:00

Spiegel Online (click here) today quotes an international study commissioned by insurer AXA according to which Germans are the best drivers in Europe. Approximately 7200 participants from nine European countries ranked the Germans as No.1 in five countries and as No.2 in four others. Britsh and Swiss drivers came out second and third in the overall ranking.

Germans, however, rated the driving style of their own countrymen as "audacious" and "agressive".

Further details:

approximately 80% of those questioned think that women are better drivers than men.
a large majority thought that not keeping a safe distance is the biggest risk when driving.
approximately 25% of all Germans admitted to not keeping a safe distance when driving .
41 % of Germans feel the safest on country roads.
the largest proportion of fatal accidents in Germany happen on country roads.

Stand-by duty for board members

2008-11-27T01:36:00.000-08:00

A report by Financial Times Deutschland (FTD) Online describes today that Germany's Financial Services Supervisor BaFin has instructed insurers to nominate a board member who will be available on short notice during the period from 22.12.2008 to 11.01.2009. The dynamics of the current financial crisis may require the ability to act quickly, BaFin said in a letter to the insurers, demanding a mobile telephone number and the availability to personally attend a meeting at BaFin's seat in Bonn within half a day's notice.

Whilst some insurers critcised the letter, FTD quotes industry sources that BaFin may merely be reacting to some prominent board members' comments that they would not tolerate disturbances during their winter vacations.

Lunch is not part of a trial

2008-11-26T08:08:00.000-08:00

A German Rechtsanwalt who had acted as a court appointed counsel in an appeal case had applied for his fees and expenses to be assesd at EUR 1,546.76. The cost draftsperson at the court assessed the total amount to be lower. In her opinion the additional fee under Nr. 4128 VV RVG did not apply because the Rechtsanwalt did not attend a trial lasting between 5 and 8 hours. The trial, lasting from 9.00h to 14.20h, had actually been interrupted for lunch from 12.07h to 14.00h. The Rechtsanwalt appealed to the Regional Court and won. A further appeal against that decision was decided by the Higher Regional Court in Munich, which upheld the original decision by the costs draftsperson. (via Beck Aktuell)

Almost like home

2008-11-26T05:54:00.000-08:00

If, like me, you are from the left bank of the lower Rhine, the pubs of Belgium and the Netherlands are also "familiar territory". That's why it feels "almost like home" to me, when I go to the "Lowlander" (Creechurch Lane, London EC3A 5AY). In additon to a large selction of Dutch and Belgian beers the Lowlander also offers some very tasty and filling meals.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

2008-11-25T09:14:00.000-08:00

Today "The big picture" features an interesting post (Big bailouts Bigger Bucks) that compares the cost of the current bailout programme and other not so inexpensive items that the US has been paying for in the past.

"If we add in the Citi bailout, the total cost now exceeds $4.6165 trillion dollars. People have a hard time conceptualizing very large numbers, so let’s give this some context. The current Credit Crisis bailout is now the largest outlay In American history.

Jim Bianco of Bianco Research crunched the inflation adjusted numbers. The bailout has cost more than all of these big budget government expenditures – combined:

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion

• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion

• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion

• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion

• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion

• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)

• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion

• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion

• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion
________________________________________________________

(data courtesy of Bianco Research)

That is $686 billion less than the cost of the credit crisis thus far."

Click here for a pie chart.

Collective Action - conference at the Federal Minstry of Justice

2008-11-25T06:25:00.001-08:00

The German Federal Minstry of Justice published an interesting press-announcement (available here, but only in German) today to inform about a conference about "Collective action in Germany".

In light of an initative that the EU commission started regarding the same subject, the Ministry explains, amongst other points, that an "opt-out" solution requiring a potential claimant to act so that he or she would NOT automatically be a party to an action would be in contradiction to the constitutional right to be heard in court. A claimant must be given a choice whether to participate in an action or not ("opt-in" solution).

The press announcement further explains the various forms of collactive action currently existing in Germany:

Skimming of profits: In small cases costs and risks are disproportionate for individual claimants. Thus they usually refrain from enforcing their rights. In order to deter business models that count on this effect German competition and anti-monopoly laws have been amended in 2005 to enable a skimming of profits. If a company deliberately breaks competition or anti-monopoly laws the resulting profits can be "skimmed-off" and transferred to the state. Consumer protection organisations, chambers of trade and industry as well as other professional bodies are entitled to start a respective action.

"Einziehungsklage": When losses reach a certain amount, claimants are more likely to attempt to enforce their rights if the attached costs and risks are not disproportionate. To enable this a special kind of "opt-in" collective action, the so-called "Einziehungsklage" for consumer organisations has been introduced into German law in 2002. By way of this procedure a consumer organisation can be entitled to raise the claims of several consumers in its own name. This reduces costs and risks whilst querulatory claims are avoided at the same time.

"Kapitalanleger-Musterverfahrensgesetz" (KapMuG): Large product liability, prospectus liability or personal injury cases with several victims form a third category. In such cases the claimants are usually determined to enforce their rights. Courts, however, need the instruments to deal with large. multi-party cases in an efficient, quick and uniform way. For securities law the so called "Kapitalanleger-Musterverfahrensgesetz" (KapMuG - investor test-case procedure act) was introduced in 2005. The KapMuG opens the possibility of hearing a test-case for claims alleging incorrect, misleading or omitted information in relation to securities. If legal or factual questions are identical in at least ten cases, then they can be decided on the basis of a test case decided by the Higher Regional Court. The judgement in the test case is a binding precedent for all similar cases. The KapMuG has a sunset-clause with effect of 1. November 2010. Until then, legislators will evaluate, whether the test case procedure should be implemented as a general rule within the civil procedure law.

Verdict in the Siemens / AUB trial

2008-11-24T09:26:00.000-08:00

FTD-Online reported today that former Siemens board member Johannes Feldmayer was found guilty and received a 2 year suspended prison sentence. In the period from 2001 to 2006 Feldmayer had paid more than EUR 30.6m to his co-defendant Wilhelm Schelsky, who was the head of the AUB trade union. The transfers had been disuguised as payments for consulting contracts. Some of the transfers went through Feldmayers private bank accounts.

The court found that Feldmayer had misappropriated Siemens funds, illegaly influenced workers' council elections and committed tax fraud. Schelsky was sentenced to four for years in prison for abetting with embezzlement, fraud and tax evasion. The judges came to the conclusion that the trade union was just a stooge for the Siemens management.

Pearly King & Queen

2008-11-24T05:53:00.000-08:00

A short while ago I encountered a real "Pearly King" and his "Pearly Queen" for the first time (see photo). The history and origins of pearly kings & queens is explained quite well in the respective Wikipedia article (here). These two managed to confuse me with their "Cockney rhyming slang" as well. I was pleased to see that the tradition is being continued by what is probably the grand-child.

Tasty German bread rolls near the City

2008-11-21T06:06:00.000-08:00

If you work in London's financial centre and fancy a tasty German bread roll I wholeheartedly recommend Berlin Delicious, 129a Whitechapel High Street, London E1 7PT (click here to get to the website).

Also available there: Bionade!

SEC Settlements: A New Era Post-SOX

2008-11-21T05:12:00.000-08:00

NERA has reviewed the development of SEC-Settlements in the last few years and has found some interesting trends in a study that can be downloaded here. Whilst the settlement amounts have gone down since 2006 the number of insider trading cases has gone up again in 2008.

Only eight days left to apply

2008-11-20T03:38:00.000-08:00

As Times Online reports today, possible candidates have only eight more days to hand in their application for a position as a judge at the Supreme Court of the United Kingdom.

Probably only a few interested people outside the UK will know that the Constitutional Reform Act 2005 decided to establish this court. It is supposed to commence work in October 2009, once work on the court building, the former Middlesex Guildhall (see picture) has been finalised.

The Supreme Court of the United Kingdom will take over the judicial functions of the House of Lords. These were normally not exercised by the entire House of Lords, but by the Lords of Appeal in Ordinary (the so-called Law Lords).

The new court will be the highest court of appeal for all questions of English, Welsh and northern Irish law. Whereas the same applies to civil law questions in Scotland, criminal matters there will remain to be decided by the High Court of Justiciary.

In addition the functions of the Judicial Committee of the Privy Council, which has been the last instance of appeal above the highest courts of some Commonwealth states, will also be transferred to the Supreme Court.

Initially the Lords of Appeal in Ordinary will be the Supreme Court judges. But in light of the fact that three of those will retire before the new court will commence its activities, the current application procedure has been initiated.

In addition to the question who will be the new judges there are many other formal issues that have not yet been decided. Whilst the organisational issues for broadcasts from the court are still under review, the laying of cables has created the necessary factual conditions for television and webcasts.

This, however, leads to other open questions about the formalities of the Supreme Court’s judgements. In addition to the facts of the case (not a standard so far) it is being considered that a summary of the decision should be given.

Another question: Who is supposed to write the judgement? In the current practise each of the Law Lords can write their own opinion which can contradict those of their colleagues and thereby confuse even professional lawyers. It is still being discussed, if in future only one of the judges should write the judgement found be the majority whilst the others would only given an opportunity to voice their differing views in a footnote or a statement after the judgement.

It also still needs to be determined how many and which judges will sit to hear what kind of cases. All this will have to be clarified and decided before the court is supposed to start working next year

Good question!

2008-11-19T07:42:00.000-08:00

Who controls AIG, asks the deal professor.

1) The Federal Reserve

2) The Department of the Treasury

3) The current shareholders of A.I.G. (but not the government)

4) All of the above collectively

5) No one knows

It appears that the deal professor has come to the conclusion that it might be the trustees of the A.I.G. Credit Facility Trust. (via dealbook)

The scooter-MAN

2008-11-18T15:16:00.000-08:00

Their motto is: You drink, we drive. If you arrived in your own car and need to get home after a few drinks the scooter-MAN can help. He'll put his mini-motorcycle in the car's boot, drive the customer home and then get back on his two wheels. And when you wake up in the morning your car is waiting for you outside. A really good business model! (Tel.: 0870 24 26 999)

Ooops, we need it AEGAIN!

2008-11-18T07:26:00.000-08:00

AEGON, the Dutch insuranc group that needed to be convinced to accept a EUR 3bn capital injection by the state instead of EUR 2bn as initially requested (see earlier post) has reportedly asked the US Finance Ministry for funds under the TARP programme. The insurer's shares fell by 10% yesterday and a further 6,6 % today according to NRC Handelsblad.

Law - Made in Germany

2008-11-18T04:46:00.000-08:00

In an earlier posting I had already mentioned the "Alliance for German law". A brochure that is available here now provides information about the many benefits of using German law.

London Jazz Festival 2008

2008-11-17T04:13:00.000-08:00

Nigel Kennedy was the best performer at the opening event in the Barbican Hall (see above) last Friday. More information about the festival can be found here.

Suitable for all ages.. ;-)

2008-11-14T06:41:00.000-08:00

... I saw this one in a shop at lunchtime today.

Cease and desist order against Dresdner Bank

2008-11-14T06:16:00.000-08:00

According to the Federal Reserve, Dresdner Bank AG and its New York branch are now taking steps to correct "certain violations of law and deficiencies relating to the New York branch's compliance with applicable federal and state laws, rules and regulations relating to anti-money laundering." The Fed noted that the New York branch of Dresdner Bank provides significant banking services to non-U.S. branches and affiliates and also conducts U.S. dollar funds transfer clearing for corporate clients. Under the Fed's cease and desist order, the bank must direct and oversee a review of its New York branch's corporate governance and business accountability practices and report back to the Fed about actions taken to improve its compliance policies. Meanwhile, on Wednesday, Commerzbank AG received U.S. Federal Trade Commission approval to buy Dresdner from Allianz SE. Commerzbank has agreed to acquire Dresdner from Alliance in a two-part, EUR9.8 billion transaction announced in September. The takeover is set to be completed at the end of 2009. (via Marketwatch)

Big fine for AWD Group company in the UK

2008-11-12T06:49:00.000-08:00

The FSA has fined AWD Chase de Vere Wealth Management, a company that belongs to the large German AWD Group, £1.12m for recommending products to customers who already had sufficient pension provisions. The investigation also found that the customers were not always informed properly about the risks of the products. Full co-operation and an early settlement lead to a significant reduction of the fine, said an FSA enforcement officer. (via City A.M.)

See you in court!

2008-11-12T03:58:00.001-08:00

Ernie Chambers, a Senator in the US State of Nebraska filed notice last week that he intends to appeal a judge’s dismissal of his lawsuit against God. Chambers’ lawsuit asks for a permanent injunction against God, alleging that the defendant has caused “fearsome floods, egregious earthquakes, horrendous hurricanes, terrifying tornadoes, pestilential plagues, ferocious famines, devastating droughts, genocidal wars, birth defects and the like.” An atheist, Chambers has said he filed the lawsuit last year to uphold citizens’ rights to sue “anyone else, even God,” after his colleagues in the Legislature sought to limit so-called frivolous lawsuits.

A judge had dismissed the lawsuit saying there was no evidence that the defendant had been served. In his notice of appeal, Chambers says the same court he is appealing to acknowledges God. Chambers cites the invocation read each time Nebraska Supreme Court judges enter court: “God save the United States and this honorable court.” The state Supreme Court could uphold Polk’s decision without commenting, schedule oral arguments in the case or allow the matter to be reviewed by the Nebraska Court of Appeals.

(via Freep)

On the road...

2008-11-07T03:13:00.003-08:00

Regretfully I will not be able to post any new reports for a few days because I will be on a business trip.

Wilma has a go at the dinosaurus

2008-11-06T09:15:00.000-08:00

In a report published by Financial Wire (here) we learned that Ms Wilma Walker, a shareholder of AIG has filed a lawsuit against the company. Ms Walker says that her rights were violated when the company accepted the U.S. government's $85 billion bailout in September in exchange for a majority stake in the insurer. Her claim is based on the allegation that AIG's board of directors broke Delaware corporate law by refusing to allow shareholders to vote on a part of the bailout proposal that gives a 79.9 percent stake to the government in the deal. An application for class action status is pending.

The usual suspects

2008-11-06T04:25:00.000-08:00

Today, Spiegel Online reported (here) that KfW, the German bank that transferred hundreds of millions of Euros to Lehman Brothers on the day that the investment bank went bust and has become notorious as "Germany's dumbest bank", now has admitted to have sustained losses in relation to Icelandic banks as well.

A total amount of EUR 288m appears to have been invested there. Some of the money is expected to be lost, said a spokesperson for the bank on Thursday. A large proportion (EUR 150m) of the above mentioned amount relates to a credit that was given to Glitnir Bank. Another EUR 138 m had been invested by KfW in bonds issued by Kaupthing, Landsbanki and Glitnir, the three icelandic banks that are now under administration. It remains to be seen if KfW's hopes to claw back large amounts of these debts are realistic.

Hold onto something before you read this...

2008-11-05T07:26:00.000-08:00

In an interesting report published (here) by ADVISEN today, the company revises its forecast of $3.6 billion of insured losses to D&O insurers as a result of the meltdown of the subprime mortgage market and the ensuing credit crisis to a staggering $5.9 bn.

By the way, who gets the tip?

2008-11-05T05:02:00.000-08:00

It has always annoyed me that many bills in restaurants and cafes here in London "prescribe" a tip of 10%, sometimes even 12,5% under the item "Service". Being that one often pays by credit card this additional amount often slips through under the radar when one pays the bill. It is my understanding, however, that waiters and waitresses do receive at least the minimum wage here in the UK and other than e.g. in the US tips are not supposed to be their only source of income.

I don't like this method and have taken the whole amount off the final bill when the food or the service have been sub-optimal. This is how I learned that in some places the "tip" goes to the owner anyway and that only a fraction may reach the person who served you.

This has lead The Independent to start an intiative called "fair tips, fair pay". The newspaper seems to have been successful, as it reports that the government now backs the initiative. Regretfully, however , there will be no now law in this respect, but an approach is favoured by which customers are informed about the existing practise e. g. by way of a remark on the menu.

For my part, I have decided to only give cash as a tip and to give it directly to the person who served me.

The Wurst place in town

2008-11-04T14:03:00.000-08:00

For the first time in weeks we made it to Kurz & Lang today, my favourite sausage-restaurant in London. Here you can get a Krakauer, Frankfurter, beef sausage or a plain Bratwurst with Löwensenf or (gloriously artificial) Hela spicy ketchup. Instead of Becks, that is served everywhere in London nowadays, you can try a fresh Flesburger or a cool Tannenzäpfle beer as well.

If you live in London and you like German sausages and / or German beer I can wholeheartedly recommend Kurz & Lang.

P.S.: No I don't get any benefits from them for mentioning the place.

Interesting comparison

2008-11-04T13:59:00.000-08:00

Based on the figures published here I have prepared the above mentioned comparison between the SEC Commission's top ten fines of the last few years and the FSA's total fines awarded between 2001 and 2007.

Where would you like to have your company listed?

Quote of the day

2008-11-04T13:55:00.000-08:00

"He who sells what isn't his'n, must buy it back or go to pris'n"

Daniel Drew ( a 19th century short-seller)

Admittedly, I am a bit of a geek

2008-11-04T13:52:00.000-08:00

...but Google Earth on the iPhone is amazing, even if the rumors that it is not running absolutely stable may be true.

How it all happened

2008-11-04T13:50:00.000-08:00

A not too serious explanation of the reasons for the US sub-prime crisis

Fine for insufficient precautions agains money-laundering

2008-11-04T13:40:00.000-08:00

The Financial Services Authority (FSA) has reported that it has fined Sindicatum Holdings Limited (SHL) GBP 49,000 and its Money Laundering Reporting Officer (MLRO) 17,500 for not having adequate anti-money laundering systems and controls in place for verifying and recording client's identities. This is the first case where the FSA has fined not only a company but also an MLRO personally.

Even though there have been no indications of actual money-laundering at SLH the FSA clearly wanted to use this case to set an example and demonstrate the importance of the subject. It is worth noticing that the FSA also said that the amount of the fine was reached in view of the limited financial means of the company. In other cases the fines could very well be much higher.

Welcome to London - knife crime capital

2008-11-04T13:27:00.000-08:00

Spiegel Online recently addressed the subject of "knife-crime" that hits local headlines each time there is a new victim, but that seems to be far away from being resolved.

The German online nes source quotes a statistic published by UK newspaper The Independent according to which there have been approximately 14,000 people treated for cuts or stabbing wounds in the previous year.

Attempts by the authorities to convince teenagers that it is better to be on the street without a knife in your pocket don't seem to have been enormously successful. The Independent published another statistic that shows that the amount of pupils who have been carrying a knife in the street has gone up from 20% in 2002 to 30% in 2005.

In a further attempt to tackle the problem the police may now search young people even without specific suspicion. Although the Metropolitan Police is reporting a reduction of "knife-crime" by 10.2%, but it may take a while until one will be able, especially as a young teenager, to feel fairly safe on the streets of London again.

Now a Dutch insurer!

2008-11-04T13:11:00.000-08:00

NRC Handelsblad recently reported that after ING Bank now Dutch insurer AEGON has received a capital injection of EUR 3 bn . The bank also got two state appointed supervisory board members "thrown in" for free. The management also has to forfeit any bonus payment for the current year.

Surprisingly it seems like AEGON were encouraged by the government not to show false modesty with regards to the financial support. The insurer had apparently regarded EUR 2 bn as sufficient. But NRC Handelsblad reports that the state then offered an additional EUR 1 bn with more preferable conditions. Dutch finance minister Bos was quoted saying that AEGON was a financially sound company but that it was experiencing difficulties in rasing capital because both banks and investors behaved extremely risk-averse at the moment.

Masterpiece or a mess?

2008-11-04T09:44:00.001-08:00

About a year ago, on the 30th of October 2007 the Legal Services Act received royal assent.

Various parts of the reforms come into force at certain points in time until 2011 and some of the regulations are going beyond what the recent legal services act (Rechtsdienstleistungsgesetz) allows in Germany.

The so-called Legal Disciplinary Partnerships (LDP) are a form of co-operation that is supposed to enable different legal practitioners e.g. solicitors, licensed conveyancers, barristers, law cost draftsmen, notaries public, patent- and trademark agents to work in a common practice. Alternative Business Structures, however, are intended to enable a multi-diciplinary co-operation of lawyers and other professions. Non-lawyers will be able to own an ABS, in part or wholly and an ABS will even be able to be listed at a stock exchange.

These forms of organisation and the possibility of an equity stake by non-layers lead to a more complex situation with regards to organisational possibilities. At the same time the regulatory structure also gains in complexity.

In the course of the last legal reform the Law Society lost the authority to supervise its members to the Solicitors Regularory Authority (SRA). The Law Society's function is now "only“ to represent the intrests of solicitors. There is a smilar picture in respect of barristers, who are represented by the Council of the Bar but supervised by the Bar Standards Board (BSB).

The Legal Services Act created an additional institution, the so-called Legal Services Board (LSB) which will be a supervisory body above the level of the SRA and BSB. The LSB is also supposed to decide who wil be responsible for supervising Alternative Business Structures. The LSB will consist of 5 lawyers and 4 lay-persons and there will also be a consumer panel attached.

To strengthen what Jack Straw, the Minister of Justice, named as the main goal of the act i.e. to improve consumer protection there will also be a new institution in the form of the Office for Legal Complaints (OLC). The OLC is modelled on institutions like the Ombudsman in the Financial Services are and will be able to decide cases up to a certain amount within its own discretion.

Opinions differ whether there is actually a real demand for the participation of non-lawyers in the ownership of law firms and the possibilities of raising capital in this way.

Personally, I have doubts whether this simultaneous increase in complexity both on the level of supervison and in the forms of practising law will really lead to better results for clients. With regards to the answer to the question "Masterpiece or a mess?" one can only refer to Franz Beckbauer's famous quote: "Schaun' mer mal!" (Let's wait and see)

Opposing trends?

2008-11-04T09:29:00.000-08:00

On the same day as the German Federal Minister of Justice concluded an "Alliance for German Law" with representatives from all legal professions, London was fearing - once again - that it's reputation as a centre for interntional legal disputes may suffer.

The Times reported about a trial about the control over an aluminium smelter in Tajikistan that could cost up to GBP 90m. The Times states that there have only ever been two other commercial cases that have were more expensive.

This particular dispute has lead to litigation in several countries and is waging between two of the world's largest aluminium producers. One is Rusal, a russian company owned by Oleg Deripaska, the other one is the Norwegian compny Norsk Hydro.

It is expected that the costs of this trial will re-ignite a debate about costs in general. This is not surprising at a time when hourly rates have reached or maybe even brached the GBP 750 mark. This amount is apparently about equivalen to the annual income per-head in Tadjikistan.

English lawyers fear that this case might influence company's decisions to litigate disputes in jurisdictions that have lower costs.

In this connection I have (roughly) translated a part of the publication issued by the German Federal Ministry of Justice in relation to the "Alliance for German Law"

"Made in Germany" is a symbol of quality that also applies to German law. It is predictable, affordable and enforcable. It acheives a fair reconciliation of interests and an appropriate division of risks.

I look forward to seeing whether "Made in Germany" will also prevail on this level of global competition. Based on my personal experience it's "products" and "players" do not have to shy away from international competition.

third time in a row!

2008-11-04T09:27:00.001-08:00

The lady referred to before is now shown in an article at Financial Times Deutschland online on the 24th of October 2008 (also see previous post relating to Ocotber 22nd and 23rd).

Rating agency surprised by the markets

2008-11-04T09:11:00.000-08:00

Deven Sharma, President of Standard & Poors stated in front of the US House of Representatives' Oversight Committee that the agency had been surprised by the developments in the housing and mortgage markets:

"S&P is not alone in having been taken by surprise by the extreme decline in the housing and mortgage markets. Virtually no one -- be they homeowners, financial institutions, rating agencies, regulators, or investors -- anticipated what is occurring. Although we highlighted to investors looming issues we saw in the housing market as far back as early 2006, the reality remains that in publishing our initial ratings on many of these securities we never expected such severe, negative performance in thehousing and mortgage markets. There is no doubt that had we anticipated theextraordinary events that have occurred -- and we did not -- we would haveutilized different economic forecasts and would not have assigned many ofthe original ratings that we did."

I think this is a fairly embarrassing statement for a company that has a business model to evaluate the likelyhood of an asset's default based on careful research and analysis.

Investigations by the Oversight Committee have shown that S&P's own analysts were not always convinced that their ratings were accurate. Have a look at these excertps of an S&P internal IM conversation:

Rahul Dilip Shah: btw: that deal is ridiculous
Shannon Mooney: I know right ... model def does not capture half of the risk
Rahul Dilip Shah: we should not be rating it
Shannon Mooney: we rate every deal
Shannon Mooney: it could be structured by cows and we would rate it

When the head of the company says that S&P is not wiser than the other participants as far as market developments are concerned, it begs the question what the company's purpose actually is.

... and again!

2008-11-04T09:08:00.000-08:00

Another day, and here is the lady again that I referred to in the previous post (see below). On the 23rd of October she was on the front-page of CITY A.M. one of the free newspapers that are being handed out in the City every morning.

Unknown representative of Frankfurt's stock exchange

2008-11-04T09:02:00.000-08:00

On the 22nd of October I noticed that the lady in the picture above, who appears to be working at the Börse Frankurt, is depicted remarkably often when there are reports about Germany's largest stock exchange. (The rights to this photo are with Reuters).

The same person could be seen in various editions of the Financial Times in the last few weeks, when there were reports about the financial crisis. On October 22nd her face appeared in a report at SpiegelOnline , entitled "DAX steering toward this year's low".

I hope that the poor woman does not un-willingly turn into an icon for falling stocks but that she is also depicted when they rise again!

Young offender sentence for stealing virtual property

2008-11-04T08:50:00.000-08:00

Dutch newspaper NRC Handelsblad recently reported that two boys aged 14 and 15 years were sentenced to 200 and 160 hours of community service respectively by a court in Leeuwarden. They had harrassed and beaten a schoolmate until he transferred items to them that he had acquired in the online game "Runescape".

This is a unique verdict that virtual goods are considered as property as described in article 310 of the Dutch penal code.

Only in November last year the Dutch police had been dealing with a case where a suspect had stolen virtual furniture worth some 4,000 EUR from the "Habbo Hotel", an internet hang-out for teenagers. The online money required to buy the furniture has to be bought for real money. Back then the case was not prosecuted.

Read more (in Dutch) at NRC Handelsblad or Webwereld.nl.

Compassion with employees of HRE

2008-11-04T08:43:00.000-08:00

Until recently the local restaurant "Konditor & Cook" which is a tenant in the famous "Gherkin" building (see above) in the City of London just like the local office of Hypo Real Estate bank, showed compassion for the bank's employees. Upon presentation of their company ID card they received a free chocolate chip cookie.

Nowadays the menues that Konditor & Cook send out by e-mail every day no longer contain this offer.

Maybe a consequence of the bail-outs...

Kaupthing bank, a victim of the government's actions?

2008-10-31T07:03:00.000-07:00

Times Online recently reported that the British Government may have to face a judicial review legal of its decision to put the UK subsidiary of Kaupthing, the failed Icelandic bank, into administration.

The allegation includes the view that the Treasury acted outside its powers under the Banking (Special Provisions) Act 2008. This act had been put in force only a few months ago to enable the nationalisation of Northern Rock. Kaupthing also thinks, that the Treasury was unjustified in treatin it like the other icelandic Banks and that this may have caused or contributed to the collapse

As one of the first acts the deposits of some 160,000 UK clients had been transferred from Kaupthing to ING Direct Bank. The fact that only a few days later ING received a EUR 10bn capital injection from the Dutch state casts a particular light on this decision.

Kaupthings's lawyers allude to a scenario whereby putting the UK branch of Kaupthing under administration and the resulting transfer of funds may be (partly) responsible fot the collapse of the Bank in Iceland

This view of the events will probably not please PM Gordon Brown, who likes to see himself in the role of leader in the world-wide efforts to deal with the financial crisis. His government is also being criticized for freezing the assets of icelandic banks on the basis of legislation that was introduced to combat terrorism.

The most photographed car in London recently...

2008-10-31T06:53:00.000-07:00

must have been this HUMMER 3 pictured above.

It was parked behind the Royal Academy. But it was not, as one may have thought, the latest toy of some eccentric petrol-head. The waiter in a nearby restaurant told me that the car had arrived on normal tyres which were then swapped for the wooden wheels. Apparently the car had been there for over a week.

It looks like the owner is willing to accept all the parking tickets in exchange for every second passer-by invariably stopping, grinning and taking a photo of this unusual sight.

But, is it art...?

The Sun

2008-10-31T05:49:00.001-07:00

Fantastic photos of the sun's surface at thebigpicture

UK judges reject claims for US style damages

2008-10-31T05:10:00.000-07:00

According to a report by Times Online the Court of Appeal has rejected demands to award US-style damages in a recent decision.

The court upheld the principle that damages are limited to compensation for a claimant's provable losses. The judges did not agree with the claimants' demands to share their opponent's unlawfully-gained profits nor did they see it as necessary to deter other potential wrongdoers.

The verdict was reached in a case where a number of poultry farmers and animal feed producers had sued several large companies, including Sanofi-Aventis, BASF and Roche. These companies had been found guilty of breaching competition laws and had been fined 855 Mio. € for illegal price-fixing for vitamines.

The plaintiffs could not prove any financial loss, as they had passed on the supplier's high prices to their customers. Nevertheless they argued that they should receive a part of the cartel's profits. They also asked the court to award punitive damages to deter other cartels.

Both points had already been rejected by a High Court judge. He had found that the system of compensatory damages was adequate. Any demand for punitive damages were also regarded as unfair, as the cartel members had already been fined by the EU and should therfore not be punished twice.

The Court of Appeal confirmed these views. This is regarded as a blow to the government's plans to encourage British consumers and small businesses to pursue legal action against companies that breach competition law.

Francis Bacon - impressive exhibition at Tate Britain

2008-10-31T04:58:00.000-07:00

If you are in London some time before the 4th of January 2009 I can strongly recommend the retrospective about Francis Bacon's work that is on display at the Tate Britain.

Bacon, who was born on the 28th of October 1909 in Dublin and had englisher parents. His first retrospective at the Tate was in 1962 but he continued painting into his old age. The current retrospective shows paintings from all periods of his creative life.

Do London courts have to fear a flood of claims?

2008-10-31T04:49:00.000-07:00

In an interview with the FT (published here) former attorney general Lord Goldsmith warned that the flood of claims that could result from the finance crisis could overwhelm the ressources of London's courts.

After steping down from his position as attorney general Lord Goldsmith took on the role as "European Chair of Litigation" with US law firm Debevoise & Plimpton (a firm where I also had a short stint when I came to London). Lord Goldsmith sees that London's reputation as an international centre for settling commercial disputes could suffer if the courts do not prepare for the increase in litigation.

He quotes difficulties to find a room in the courts that are large enough to hold hearings in large multi-party cases.

The FT, however, notes that the wave of litigation expected after the collapse of Northern Rock has not materialised. The paper quotes lawyers sayint that there were some exisitig cases, but that the parties involved were reluctant to go to court because of the costs, but also beacuse of possible reputational damage.

Quote of the day

2008-10-31T04:45:00.000-07:00

Nothing to blog about, so here is another "quote of the day". Again, one of a former British prime minister.

"A lie gets halfway around the world before the truth has a chance to get its pants on."
Winston Churchill

Unusal taxis

2008-10-31T04:38:00.000-07:00

As reported by the local German newspaper "German Link" the world is changing for London's cab drives and their passengers.

Apparently German car maker Mercedes succeeded in passing the strict criteria that apply to vehicles that may operate as a London Taxi by building a special version of the VIANO van. Now the well-known "black cabs" face competition from abroad. As proven by the photo (see above), the new cabs can now be seen on the road.

I often use cabs and I look forward to the new experience. In a black cab one sits more or less on top of the rear axle and therfore feels any bump on the road (and there are quiet a few of those around here :-)

Quote of the day

2008-10-31T04:36:00.000-07:00

When I log into Google-Mail the website often displays some quotes. I would like to repeat one of them because I like it a lot, but also because it has a relation to my host-country:

"I am extraordinarily patient, provided I get my own way in the end."
Margaret Thatcher

My first posting

2008-10-31T04:31:00.000-07:00

Welcome to "Kraut in the City"!

I have been living and working in the City of London as a German Rechtsanwalt for more than a year now. The "square mile" is the heart of the banking- and insurance industry where deals relating to all quarters of the earth are being struck on a daly basis.

This is the environment where I earn a living as a "Registered European Lawyer" and I would like to offer my readers the chance to participate in the develpments and discoveries that catch my attention.

I hope you enjoy the read!