RTR - Despite hurdles, Delphi's liability in GM recall could be tested

(Reuters) - Delphi Automotive's name does not appear on the outside of the 2.6 million vehicles recalled by General Motors Co since February, but the company is getting drawn into a mounting wave of litigation for its role in producing the faulty ignition switch that prompted the recalls.

Plaintiffs have now named Delphi, one of the largest auto parts suppliers in the world, in at least two lawsuits stemming from the recall. One was filed by a former Delphi employee whose daughter was killed in a 2013 crash involving a recalled 2006 Chevy Cobalt, the other by customers who claim the ignition problems caused their cars to lose value.

Delphi's legal exposure may hinge on how much control it had over decisions involving the design of the switch, and the terms of its four-year bankruptcy, which ended in 2009.

While Delphi made the part, GM set the specifications and ultimately approved its use, according to documents from civil litigation and congressional investigations.

Delphi spokeswoman Claudia Tapia declined to comment, except to say that the company was "working cooperatively with GM on this matter." The company has not yet filed responses to the two lawsuits. GM spokesman Jim Cain said that Delphi owned the intellectual property for the switch but declined to comment on questions of liability or lawsuits.

The February and March recalls center on concerns that ignition switches supplied by Delphi could unexpectedly turn off engines during operation and leave airbags, power steering and power brakes inoperable.

GM has linked the defect to 13 deaths and has apologized for how it handled the recall and said it is committed to helping affected customers.

BANKRUPTCY SHIELD

Even though there's no doubt that Delphi made the ignition switch, the company would likely benefit from defenses that are not available to GM, which itself faces a spate of lawsuits over the recall.

Like GM, Delphi went through bankruptcy and emerged in 2009 as a different legal entity. In purchasing "old" Delphi's assets, the new company largely shed liability for past actions. The terms of Delphi's bankruptcy asset sale preclude "successor liability," meaning that the new entity would generally not assume liabilities created by its predecessor.

GM went through a similar process and also has a so-called shield from certain kinds of liabilities. But Delphi's shield is stronger.

GM agreed to modify the terms of its bankruptcy exit to allow "new" GM to assume liability for post-bankruptcy accidents involving pre-bankruptcy products.

Delphi, which emerged from a four-year trip through bankruptcy just months later, did not.

For Delphi, "there's that potential that there's just no responsibility at all" said Larry Coben, a plaintiffs' attorney with the firm Anapol Schwartz, who represented GM product liability claimants during its bankruptcy.

To penetrate this shield, plaintiffs' lawyers could mount a two-pronged argument. First, they would have to convince a judge that Delphi was engaged in an ongoing cover-up of the defects, and second, that because of this cover-up, the court should invoke "successor liability" and allow the suits to proceed against "new" Delphi.

LONG-TIME PARTNERS

If plaintiffs can get past the bankruptcy issue, Delphi may also be able to invoke what is known as the "component parts doctrine" and argue that it doesn't bear the same responsibility as GM, since it only supplied the part and was not responsible for the overall vehicle.

But if Delphi is found to have played a meaningful role in the design decisions, "then they're liable," said Mark Geistfeld, a professor at New York University School of Law who specializes in civil litigation.

Delphi began as a GM subsidiary and was spun off into an independent company in 1999. GM is Delphi's largest customer, accounting for approximately 17 percent of its net sales, according to Delphi's latest annual report.

Delphi told congressional investigators that GM approved the original part in 2002, despite the fact that it did not meet GM's own specifications, according to a memo released by the U.S. House of Representatives Energy and Commerce Committee.

During a hearing on the recall on Tuesday, Rep. Marsha Blackburn, a Republican from Tennessee, said that both GM and Delphi engineers worked on the switch.

The two companies, Blackburn said, "have a shared responsibility and liability in this entire issue."

But that's easier said than proved in court.

"Ultimately, it would be up to a jury," said Lance Cooper, a plaintiffs' attorney from Georgia who is involved in litigation against GM. "If Delphi makes the switch and they know it's a bad switch, they could point the finger at GM, but that's not going to keep them out of a courtroom."

(RTR) EU Parliament votes to end roaming fees by 2016, protect 'net neutrality'

EU Parliament votes to end roaming fees by 2016, protect 'net neutrality'

(Reuters) - The European Parliament voted overwhelmingly in favour of ending mobile phone roaming fees on Thursday, a move that will cheer Europe's consumers even as it frustrates telecoms companies.

In a full sitting of the parliament in Strasbourg, lawmakers backed legislation that will phase out roaming fees across the 28-country European Union by December 2015.

"This vote is the EU delivering for citizens," said Neelie Kroes, the European commissioner for digital affairs and an ardent advocate for ending the charges.

"This is what the EU is all about - getting rid of barriers to make life easier and less expensive. We should know what we are buying, we should not be ripped-off, and we should have the opportunity to change our mind."

At the same time, the parliament voted in favour of maintaining "net neutrality", effectively declaring that all traffic on the Internet should be treated equally, regardless of the source or the content.

The decision is a move to limit the ability of network operators to provide quicker Internet access to content providers in exchange for a fee and is another decision in favour of consumers.

Both steps are part of Kroes's plans to overhaul Europe's telecoms sector and try to make it more competitive with rivals in the United States and Asia. But they also come just two months before EU elections, when more than 300 million Europeans will vote for candidates to the European Parliament.

Putting an end to mobile roaming - and the phone-bill shock that affects those who use their phones abroad - has been a banner issue for legislators over the past three years, leading to tense exchanges with the powerful telecoms industry.

Sector analysts estimate telecoms revenues could fall around five percent without roaming fees, although the Commission argues that since more consumers will use their mobiles as a result, some of the impact will be offset.

European lawmakers also set restrictions on the kind of online services that telecoms operators can charge popular, bandwidth-hungry content providers such as Facebook, Google and Netflix in exchange for delivering their services at faster speeds.

Operators are fighting for a share of the profits from video streaming and music downloads to offset declining revenues in their traditional phone services. Sales are forecast to fall for the fifth consecutive year in 2014.

The industry says charging for different services and speeds would help fund network upgrades. But Internet activists say that goes against the spirit of an open Internet and would lead to the creation of a two-speed system.

The European Parliament's vote on Thursday effectively sides with consumers and Internet activists, backing "net neutrality".

Lobbying group ETNO, whose members include Deutsche Telekom, Orange, Telefonica and Telecoms Italia, said the parliamentary vote was a step in the wrong direction.

"Today's vote risks derailing the original objectives of the Connected Continent Regulation, namely a strong European digital industry igniting growth and jobs creation," ETNO head Luigi Gambardella said.

Following parliament's backing, the measures will become law after they are approved by the European Council, which represents the EU's member states. After further discussions, the Council is expected to take a decision in October.

>>> US Early premarket gappers

Early premarket gappers
Gapping up: ISR +5.8%, PLUG +5.6%, ACTG +4.2%, EJ +3.6%, MCP +3.5%, CTRP +3.5%, WBAI +3%, CYTR +2.4%, IRBT +2.3%, CTRP +2.2%, ONNN +2.1%, MNKD +2.1%, KNDI +2%, GILD +1.9%, BBRY +1.8%, SUNE +1.3%, FIO +1.2%, TSLA +1.2%, ALLT +1.2%, HE +1.1%, CY +1.1%, PACW +1%, CHL +1%, WFT +0.7%

Gapping down: SGOC -29.6%, CACI -8.9%, APPY -7.7%, BGMD -6.2%, KIN -4.8%, BLDP -4.1%, EXAS -3.9%, CPRX -3.6%, PEIX -2.6%, YELP -2.6%, LQDT -2.6%, EXAR -2.5%, RIO -1.7%, JOBS -1.5%, TTM -1.4%, JNPR -1.3%, MANT -1.1%, C -1.1%, GDX -1.1%, RYAAY -1.1%, LYG -1%, TXI -1%, BRCM -0.5%

>>> U.S. regulators warn banks about rise in cyber-attacks --> +ve for Security

>>> U.S. regulators warn banks about rise in cyber-attacks --> +ve for Security stocks Cyber Security Stocks: PANW, FEYE, FTNT, CHKP, IMPV, SYMC

U.S. regulators warn banks about rise in cyber-attacks

(Reuters) - A group of top U.S. regulators on Wednesday warned about the threat of rising cyber-attacks on bank websites and cash machines, urging the industry to put proper measures in place to guard against fraud.

The Federal Financial Institutions Examination Council (FFIEC) said it had seen a rise of so-called denial-of-service attacks on bank websites, which were sometimes a cover for criminals committing fraud.

The group described one recent case in which criminals stole $40 million from just 12 accounts - far exceeding the actual balance held by clients - in a sophisticated scheme known as an "Unlimited Operations" fraud.

Massive client data breaches at retailers Target Corp and Neiman Marcus Group LLC put the focus on cybersecurity last month, leading banks and retail groups to join forces to try and fix the issues.

The problems described by the FFIEC, which comprises top officials from the Federal Reserve and other bank regulators, are of a different nature, if no less harmful.

In the "Unlimited Operations" fraud, criminals might begin an attack by installing malicious software on a bank's computers through phishing emails, and then hack into control panels to raise limits on how much a cash machine can dispense.

In the final phase, the criminals withdraw large amounts of money from a number of cash machines within four hours to two days with stolen bank cards, often on weekends because that is when there is more money in the machines.

Such operations can be accompanied by a denial-of-service attack, in which a bank's website is flooded with information requests so that it slows down or completely stops working for clients with legitimate requests.

There was an increase in such attacks in the latter half of 2012, the FFIEC said, although these were often also launched by politically motivated groups.

In 2012, Ally financial Inc, Bank of America Corp, Wells Fargo & Co and other banks suffered denial of service attacks. Sources at the time told Reuters the attacks could be part of a year-long cyber campaign waged by Iranian hackers to protest against an anti-Islam video on the Internet.

FT : Energy industry told to face reality of global warming

The UN’s top climate change official has issued an unusually blunt message to the oil and gas industry that it must radically overhaul its business model to meet the realities of global warming.
Three quarters of fossil fuel reserves need to stay in the ground if the world is to stop global temperatures rising beyond the internationally agreed limit of 2 degree Celsius, said Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change.

“And the fossil fuels we do use must be utilised sparingly and responsibly,” she told a meeting of IPIECA, the global oil and gas industry association for environmental and social issues.
Ms Figueres warned the industry its oil and gas assets may become “stranded” as climate regulations prevented them from being profitably developed.
Exxon, the US oil group, rejected such a suggestion earlier this week, saying it believed it “highly unlikely” governments would take the sorts of steps needed to keep temperatures rising beyond 2 degrees.
Exxon’s view is understandable.
The world’s governments have made two attempts to forge a global agreement to reduce the atmosphere-warming carbon dioxide emissions produced by burning fossil fuels in the past two decades.
The first was the 1997 Kyoto protocol treaty, followed by UN climate talks in 2009 in the Danish capital, Copenhagen.

Neither effort succeeded and countries are now negotiating a new treaty to be agreed at the end of 2015 in Paris.
However, Ms Figueres said the negotiations towards 2015 were just one of a series of policy pushes on climate change likely to affect the fossil fuel industry.
“At the city level, citizens are increasingly demanding policy that ensures public heath, energy security and water supply,” she said.
“At the national level, leaders are incentivising clean energy and efficiency and migrating toward resilient infrastructure and supply chains.”
Continued investment in expensive, difficult projects is already beginning to negatively affect the bottom line of fossil fuel companies, she said, even before considering stranded assets scenarios.
“Policy increasingly reflects these physical realities,” she said. “The highest CO2 concentration in over 800,000 years is potentially an unmanageable systemic risk not only to the environment but also to the global economy.
“Because of this, policy at all levels is undoubtedly and inevitably moving towards low-carbon.”
Many oil and gas companies have backed voluntary initiatives to address climate change, but these now needed to be stepped up, Ms Figueres said, adding: “The time for experimentation, for marginal changes and for conditional response is now over.”
The industry could diversify into cleaner forms of energy, or promote carbon pricing, or other steps to reduce its emissions of carbon dioxide, the main man-made greenhouse gas.
But to prevent the worst effects of climate change, a radical and fast transformation towards a low-carbon energy mix would be required.
The Panel, the world’s leading authority on climate change, last year presented its strongest case yet that humans were the main reason global temperatures have risen since the 1950s, mostly because of fossil fuels such as coal and gas, which are used to generate electricity around the world.
Temperatures have already risen by 0.8 degrees Celsius since the industrial revolution and governments formally agreed at UN climate talks in 2010 they should not rise beyond 2 degrees.
However, there has been little sign since then of any slowing of the carbon dioxide emissions from fossil fuel combustion that are the main man-made greenhouse gases scientists say are warming the atmosphere.

(BFW) EU Parliament Backs Limits to Payment Card Interchange Fees

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EU Parliament Backs Limits to Payment Card Interchange Fees 2014-04-03 10:12:10.547 GMT

By Jim Brunsden April 3 (Bloomberg) -- Lawmakers in the European Parliament vote to cap interchange fees banks charge for processing debt and credit card payments. * Assembly backs cap of 0.3 percent of transaction amount for credit card payments, and 0.2 percent for debit cards * Caps would apply to both cross-border and domestic transactions in the EU * EU Parliament votes in Strasbourg, France * Assembly backs proposals from EU Financial Services Commissioner Michel Barnier * Vote sets out parliament negotiating position on draft law * Rules require approval by the assembly and national governments to take effect * Assembly also backs update to EU consumer protection rules concerning bank payments

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To contact the reporter on this story: Jim Brunsden in Brussels at +32-2-285-4304 or jbrunsden@bloomberg.net To contact the editor responsible for this story: Anthony Aarons at +44-20-7673-2227 or aaarons@bloomberg.net