SEC OFFICIAL SAYS DEFRAUDED INVESTORS "DESERVE THEIR DAY IN COURT"

FROM:  SEC
Statement by Commissioner:
Defrauded Investors Deserve Their Day in Court
Dissenting Statement Regarding the Study on the Cross-Border Scope of the Private Right of Action Under Section 10(b) of the Securities Exchange Act of 1934 as required by Section 929Y of the Dodd-Frank Wall Street Reform and Consumer Protection Act
by
Commissioner Luis A. Aguilar
U.S. Securities and Exchange Commission
Washington, D.C.
April 11, 2012
Today the Commission has authorized that a Study expressing the views of the Staff be sent to Congress. However, my conscience compels me to write separately to record my views on the Study. I write to convey my strong disappointment that the Study fails to satisfactorily answer the Congressional request, contains no specific recommendations, and does not portray a complete picture of the immense and irreparable investor harm that has resulted, and will continue to result, due to Morrison v. National Australia Bank, Ltd.1
In the United States we have a strong belief that, whether rich or poor, we are all entitled to our day in court. Sadly, for many American investors this is no longer true.
If American investors are defrauded by a company that they have invested in – and that company is listed on a foreign exchange – investors may be unable to have their day in court and seek redress against this company for its lies and misrepresentations. Thus, investors have been stripped of a traditional American right.
This was not always the case. For decades, federal courts applied the same standard to determine whether U.S. federal securities law applied to frauds that took place, in whole or in part, outside of the United States. Under that standard, Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and other antifraud provisions applied “when there was ‘significant U.S. fraudulent conduct that directly caused the plaintiffs losses’ (the conduct test) or when there were ‘significant effects’ on the U.S. securities markets (the effects test).” 2
Under the conduct test, an investor could bring a Section 10(b) claim if a sufficient level of conduct comprising the fraud occurred in the United States, even if the victims or the purchases and sales were overseas. 3
Under the effects test, an investor could bring a Section 10(b) claim in a transnational securities fraud when the conduct occurring in foreign countries caused foreseeable and substantial harm to U.S. interests. 4
As a result of the conduct and effects test, if an American investor was lied to or defrauded in a securities transaction, that investor had the ability to have his or her day in court and seek legal recourse, even if the securities transaction was overseas.
However, this dramatically changed when, in Morrison, the Supreme Court severely restricted the extraterritorial scope of Section 10(b) of the Exchange Act. After Morrison,investors are restricted to bringing Section 10(b) claims related to frauds in connection with the “purchase or sale of a security listed on an American stock exchange, and the purchase or sale of any other security in the United States.”5 As a result of Morrison, investors have been stripped of the ability to seek redress against those who have harmed them in a transnational securities fraud.
The United States Congress, realizing the danger, immediately responded to mitigate the Supreme Court’s decision. The first step was to fully restore the ability of the Securities and Exchange Commission (“SEC” or “Commission”) and the Department of Justice (“DOJ”) to bring enforcement actions6 under Section 10(b) in cases involving transnational securities fraud pursuant to the pre-Morrison tests of conduct and effect.7 The second step was to request that the Commission conduct a Study on the Extraterritorial Scope of the Private Rights of Action under Section 10(b) of the Exchange Act (“Study”).8
Section 929Y of Title IX of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires that the Commission’s Study provide recommendations to Congress on whether private rights of action under the antifraud provisions of the Exchange Act should be extended to cover:
Conduct within the United States that constitutes a significant step in the furtherance of the violation, even if the securities transaction occurs outside the United States and involves only foreign investors; and

Conduct occurring outside the United States that has a foreseeable substantial effect within the United States.9
The Study falls far short of providing Congress with an informed recommendation and falls far short in fulfilling the Commission’s mission to protect investors. I am particularly astonished that the Study states (at pages 58-59) that an option “would be for Congress to take no action” and, thus, would continue to deny American investors who have been harmed by fraud the ability to seek redress in court.
The evidence post-Morrison is stark and compelling. All of the predictions of the harm that the Morrison decision would inflict on investors have come to pass.10 It is clear thatMorrison has deprived investors of their private rights of action under the Exchange Act with respect to a wide range of potentially fraudulent conduct that the United States has a compelling interest to regulate.
The answer to the Congressional query about whether to re-establish extraterritorial private rights of action under Section 10(b) of the Exchange Act through the application of the pre-Morrison tests of conduct and effect is an unequivocal yes.
The Study is incomplete in many ways, but I will just highlight the following:
It Fails to Adequately Explain how Private Rights of Action are a Vital Complement to SEC Actions and Essential to Investor Protection;

It Overstates the International Comity Concerns Associated with Restoring Investors’ Rights to Assert Private Claims Under Section 10(b);

It Does Not Accurately Portray Investor Harm Resulting from Morrison and Fails to Convey a Sense of Urgency as to the Harm Being Suffered; and

It Provides as an Option That Congress Take No Action at All Despite the Continuing Harm to Investors.
The Study should have recommended that Congress enact for private litigants a standard that is identical to the standard set forth in Section 929P of the Dodd-Frank Act – the standard for SEC and DOJ actions. The harm that has resulted and continues to result to investors is significant, and Congress should act to rectify this with haste.
A Private Right of Action Is a Vital Complement to an SEC Action and Essential For Investor Protection
The Study did not substantially address the importance of private rights of action as an essential tool for investor protection. The primary purpose of the Exchange Act is to “protect investors.”11 Given the explicit mandate provided in the Dodd-Frank Act to apply the U.S. securities laws to transnational frauds with strong connections to the United States,12 the purpose of the Exchange Act and the Commission’s core mission to protect investors, it is clear that investors must have private rights of action co-extensive with the Commission’s under Section 10(b). It is unrealistic to expect that the Commission will have the resources to police all securities frauds on its own, and as a result, it is essential that investors be given private rights of action to complement and complete the Commission’s efforts.
Congress has long recognized the importance of a private action. In the Private Securities Litigation Reform Act of 1995, Congress reaffirmed that “[p]rivate securities litigation is an indispensable tool with which defrauded investors can recover their losses without having to rely upon government action. Such private lawsuits promote public and global confidence in our capital markets and help deter wrongdoing and to guarantee that corporate officers, auditors, directors, lawyers, and others properly perform their jobs.”13
The Supreme Court itself also “has long recognized that meritorious private actions to enforce federal antifraud securities laws are an essential supplement to criminal prosecutions and civil enforcement actions brought, respectively, by the Department of Justice and the Securities and Exchange Commission.”14 The Supreme Court has stated that this is especially true when it comes to actions under Section 10(b): “a private right of action under Section 10(b) of the [Exchange] Act and Rule 10b-5 has been consistently recognized for more than 35 years.”15
Private litigation has historically played a complementary role to government enforcement in the Section 10(b) context, and to preclude private litigation, even where government actions are theoretically available, would lead to a material deficiency in the enforcement of Section 10(b). If one aspect of Section 10(b) enforcement (the protection of U.S. investors in connection with their non-U.S. securities transactions) is reserved solely to the SEC and DOJ, and private actions remain limited, a serious gap in the securities law framework is created. This gap strips investors of the right to seek accountability and redress directly when they have been harmed.
The Study fails to adequately address the negative effects of the SEC’s limited resources on investor protection in transnational securities fraud matters. By contrast, our senior management has publicly spoken about SEC actions being detrimentally impacted by budget constraints.16 The truth of the matter is that the SEC, does not, and will not, ever have enough resources to investigate all of the fraud cases that exist. The SEC will never be able to seek justice in all of the potential transnational securities fraud matters. Thus, the SEC will not be able to seek redress for all investors who are harmed by those who violate the securities laws. Knowing this, we should support providing investors with the ability to protect themselves.
In fact, even if the SEC exercises its discretion to bring a case, rarely are investors made whole. Quite often, investors receive only pennies on the dollars for their losses.17Moreover, issuers, aware of the SEC’s inability to pursue all fraud, will not be incentivized to obey the law when they know that investors are barred from seeking accountability for wrongdoing.
Private litigation provides investors the opportunity to seek redress against those who harmed them.18 In light of the limited resources available to the SEC, private enforcement of the federal securities laws is a necessary tool to combat securities fraud. The currentMorrison prohibition of private litigation where government actions are permitted is resulting in harm to investors now.19
Historically, the Commission has consistently advocated private rights of action precisely because they are a vital complement to the Commission’s enforcement program in deterring misconduct.20 Investors who have been harmed must have the ability to seek redress. I believe that private litigation is critical to investor protection, especially in light of the Commission’s limited resources.
The Study Overstates the International Comity Concerns Associated with Restoring Investors’ Rights to Assert Private Claims under Section 10(b)
The Study provides that the enactment of the “Commission and DOJ conduct and effects tests for Section 10(b) private actions would involve policy trade-offs that could carry significant implications in many areas, including … international comity.”21 The Study states that “[i]nternational comity is frequently implicated in the context of transnational securities fraud, particularly given that issuers and investors may be located in multiple jurisdictions and various parts of their securities transactions may occur in each of these jurisdictions.”22 However, the Study did not provide a single instance where private securities fraud litigation has actually interfered with a non-U.S. sovereign’s ability to independently regulate its own securities market.
I do not believe that international comity should prevent investors from seeking to assert private claims under Section 10(b). The doctrine of international comity is implicated only when there is a true conflict between American law and the law of a foreign jurisdiction.23The Supreme Court has found that there is no conflict for purposes of comity “where a person subject to regulation by two states can comply with the laws of both.”24 In determining whether comity is implicated, courts will look to whether the respective laws or policies contradict one another, not to whether one set is stronger or more effective in achieving similar objectives.25
While I recognize that foreign nations have a significant interest in determining the legal remedies their own residents should receive, I believe the United States has a legitimate interest in making that determination for its citizens in the context of transnational securities, regardless of where the actual securities transaction occurred. I agree with the 42 law professors who signed a comment letter stating that international “comity does not require that the U.S. tolerate or protect fraudulent conduct that emanates from or has significant effects within its borders.”26 I believe it is also important to point out that international comity was not undermined by the application of the conduct and effects test in the 40 years of transnational securities fraud cases preceding Morrison. 27
In fact, comity concerns argue in favor of permitting even foreign fraud victims a remedy under the U.S. securities laws, to the extent they were damaged by conduct in the United States, even if the fraud relates to a security purchased on a foreign exchange.  Failure to accord such a remedy would allow the United States to be a platform for fraud and leave some fraud victims with no recourse in any jurisdiction.  As Judge Friendly noted:
This country would surely look askance if one of our neighbors stood by silently and permitted misrepresented securities to be poured into the United States.28
The conduct and effects test was designed, in part, to prevent the U.S. from being used as a launching pad for the exporting of fraud. Allowing investors the ability to bring a transnational fraud claim within the parameters of the conduct and effects test would, in fact, enhance international comity by promoting a global marketplace in which investors are protected.

Restoring Private Litigants’ Ability to Bring Transnational Fraud Claims Would Not Result In a Flood of Litigation in U.S. Courts
The Study failed to adequately discuss the evidence illustrating that restoring private litigants’ ability to bring transnational fraud claims would not result in a flood of litigation involving foreign issuers in U.S. courts. Section 929P itself includes limits that preclude the prosecution of Section 10(b) claims that have an insignificant connection to the U.S.29Accordingly, cases without sufficient material ties to the U.S. – whether in the context of significant conduct in the U.S. or a significant effect on U.S. investors – would not be prosecuted in its courts.30

In addition, the number of securities class actions against foreign issuers has historically been a small fraction of the number of securities fraud cases litigated under the U.S. federal securities laws. From 1996 through 2009, on average, only 9.7% of securities actions filed were against foreign issuers.31 Moreover, only 11% of the securities actions filed through the third quarter of 2010 (i.e., prior and subsequent to the Morrison decision in June 2010) were against companies domiciled in a foreign country.32 Of the over 530 suits settled in 2009, only approximately 50 of them were against defendants domiciled in a country outside the U.S.33 Statistical data indicates that restoring U.S. investors’ ability to bring transnational fraud claims would not result in a flood of litigation in U.S. courts.
The Study also fails to adequately discuss the fact that many meritorious litigation claims involving thousands upon thousands of investors are now no longer being brought. UnderMorrison, for example, cases such as In re Tyco International Ltd.,34 would have been dismissed. In this matter, Tyco International Ltd. (“Tyco”) misrepresented the value of several different companies Tyco acquired and misreported its financial condition. U.S. investors received, in part, $3.2 billion in monetary relief as a result of this private litigation.35 After Morrison, Tyco investors may not have had their day in court.
Thus, not only is there not a flood of litigation – there is now a severe curtailment of the ability of investors to seek redress as to fraudulent activity.
Morrison Weakens the Federal Securities Laws and Strips Investor Protections
The Study also did not adequately focus on how Morrison has harmed investors by weakening the federal securities laws and stripping investor protections. Under Morrison, the private right of action only reaches the purchase or sale of a security listed on an American stock exchange, or other domestic transactions.36 However, determining whether a transaction occurred domestically can prove difficult, and can result in anomalous results for investors worldwide.
Under Morrison, as applied, a private plaintiff trading outside the U.S. may not be able to recover for fraud “even if the securities at issue were registered and listed on a U.S. exchange unless it also can establish that the particular shares it traded were registered and listed on a U.S. exchange.”37  But in today’s global economy, many investors may not know where purchase orders for particular securities are actually carried out. As commentators have noted, “markets are moving to a point where the site of a trade is happenstance.”38 Investors cannot be certain when they place an order to purchase or sell securities – even those listed on a U.S. exchange – that their brokers will not use a foreign exchange to execute the order.  Many securities are often listed on at least two exchanges – one foreign and one domestic. In fact, such household names as GE, IBM, Pfizer, and Bank of America are traded on multiple domestic and foreign exchanges.39 As a result, depending on how these shares were purchased, holders of these securities may not have private rights of action, should fraud occur at these companies.
The Morrison test fails to recognize the realities of today’s modern global trading environment, and it punishes investors who often do not know whether their respective securities transactions were ultimately executed on a U.S or foreign exchange.40
As Justice Stevens’ concurrence in Morrison points out, the current Morrison test for private rights of action is also at odds with the primary purpose of the Exchange Act: to protect the interests of investors.41 Morrison and its recent progeny increasingly are making it clear that the anti-fraud protections of the Exchange Act will not be extended to those U.S. investors who purchase securities listed on non-U.S. exchanges, regardless of the extent of the fraudulent conduct that took place in the United States, or the effect of the effect of fraudulent conduct on the United States or on U.S. citizens.42 U.S. investors have been deprived rights to sue, even though the fraud is perpetuated upon them within the United States. The inability of investors to hold those responsible for committing fraud within the U.S. accountable for their actions leaves investors harmed and weakens confidence in the market as a whole.
In sum, the Morrison test disadvantages investors and is at odds with the very purpose of the securities laws.
The Study Did Not Adequately Address the Lack of Available Remedies Outside of the United States
The Study also did not adequately detail the lack of remedies available to investors if private rights of action were precluded for transnational securities fraud. Although remedies for U.S. investors are theoretically available outside of the United States, in reality, a number of hurdles exists – such as the need for U.S. investors to retain foreign counsel, the uncertainty about laws governing investors’ rights (including whether U.S. residents are even protected by foreign law), the lack of a developed class action mechanism, and the lack of contingency fee litigation. These are obstacles that effectively preclude a majority of U.S. investors from pursuing any relief for injuries suffered from securities purchased outside of the United States.43
The danger investors’ face is real. The practical reality is that investors have been stripped of certain legal remedies to address fraudulent activity that may occur in connection with their securities transactions.
Given this new harsh and tragic reality, it is only rational that the staff should issue a study that actually advocates for investors by recommending a clear direction that would enhance investor protection - and that supports over four decades of federal court jurisprudence that provided investors access to the federal securities laws in order to protect against fraud arising from purchased securities, even if purchased on foreign markets. Unfortunately, the staff has failed investors by shirking this basic obligation.
Conclusion
As I have stated above, Morrison and its recent progeny increasingly are making it clear that the anti-fraud protections of the Exchange Act will not be restored to those U.S. investors who purchase securities listed on non-U.S. exchanges, regardless of the extent of the fraudulent conduct in which foreign companies engage in the United States, or the effect of such conduct in the United States or on U.S. citizens.
Investor protection is at the core of the SEC’s mission; supporting all of its other responsibilities. Properly functioning financial markets require the protection of investors’ rights. U.S. investors expect to be protected by U.S. securities laws, regardless of where the securities transaction ultimately occurs. It is my view that investors should have a private right of action under the antifraud provisions of the Exchange Act in transnational securities fraud cases, in accordance with the conduct and effects test. This would be consistent with the authority granted by Congress to the SEC and DOJ, as has been the case for 40 years prior to the Morrison decision.

1130 S. Ct. 2869 (2010).
2Linda J. Silberman, Morrison v. National Australia Bank: Implications for Global Securities Class Actions, New York University School of Law, Public Law & Legal Theory Research Paper Series, Working Paper No. 11-41 (June 2011). See, e.g.Alfadda v. Fenn, 935 F. 2d 475, 478 (2d. Cir. 1991), Itoba Ltd. v. LEP Group PLC, 54 F.3d 121-22 (2d Cir. 1995). Courts also applied an admixture of the two tests. See generally, Dennis R. Dumas, United States Antifraud Jurisdiction Over Transnational Securities Transactions: Merger of the Conduct and Effects Tests, 16 U. PA. J. Int’l Bus. L. 721 (1995).
3Psimenos v. E.F. Hutton & Co. , 722 F.2d 1041, 1045 (2d Cir. 1983), S.A. v. Banque Paribas London, 147 F.3d 118, 125 (2d Cir. 1998).
4Mak v. Womcom Commodities Ltd. , 112 F.3d 287, 289 (7th Cir. 1997) (quoting Tamari v. Bache & Co. (Lebanon) S.A.L., 730 F.2d 1103, 1108 (7 th Cir. 1984)). See also, Banque Paribas London, 147 F.3d at 125; S.A. v. Edperbrascan Corp. , 23 F. Supp. 2d 425, 430 (S.D.N.Y. 1998).
5Supra Note 1 at 2888. See also, Morrison, 130 S. Ct. at 2884 (“[I[t is in our view only transactions in securities listed on domestic exchanges, and domestic transactions in other securities, to which § 10(b) applies.”).
6With respect to Commission and DOJ actions under Section 10(b), Dodd-Frank Act Section 929P(b) codified, the pre-Morrison view that the extraterritoriality inquiry is one of subject matter jurisdiction by adding the following provision to Section 27 of the Exchange Act:
(b) EXTRATERRITORIAL JURISDICTION. – The district courts of the United States and the United States courts of any Territory shall have jurisdiction of an action or proceeding brought or instituted by the Commission or the United States alleging a violation of the antifraud provisions of this title involving –
(1) conduct within the United States that constitutes significant steps in furtherance of the violation, even if the securities transaction occurs outside the United States and involves only foreign investors; or
(2) conduct occurring outside the United States that has a foreseeable substantial effect within the United States.
7Section 929P of the Dodd-Frank Act was intended to negate the harmful effects of theMorrison decision and to protect investors affected by transnational frauds by codifying the authority to bring proceedings under the conduct and the effects tests developed by the federal courts regardless of the jurisdiction of the proceedings. Cong. Record, June 30, 2010, p. H5237, available at http://www.gpo.gov/fdsys/pkg/CREC-2010-06-30/html/CREC-2010-06-30-pt1-PgH5233.htm.
8As required by Section 929Y of Title IX of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
9Supra Note 6.
10See, e.g., In re Royal Bank of Scotland Grp. PLC Sec. Litig. , No. 09 Civ. 300 (DAB), 2011 WL 167749 (S.D.N.Y. Jan. 11, 2011); Plumbers’ Union Local No. 12 Pension Fund v. Swiss Reinsurance Co., No. 08 Civ. 1958 (JGK), 2010 WL 3860397; In re Alstom SA Securities Litigation, No. 03 Civ. 6595 (VM), 2010 WL 3718863 (S.D.N.Y. 2010); In re Societe Generale Sec. Litig., No. 08 Civ. 2495 (RMB), 2010 WL 3910286 (S.D.N.Y. Sep. 29, 2010);Cornwell v. Credit Suisse Group, 729 F. Supp. 2d 620 (S.D.N.Y. 2010); In re BancoSantander Securities – Optimal Litig., 732 F. Supp. 2d 1305 (S.D. Fla. 2010); andTerra Secs. ASA Konkursbo v. Citigroup, Inc., No. 09 Civ. 7058 (VM), (S.D.N.Y. Aug. 16, 2010)
11See, Morrison , 130 S. Ct. at 2894 (“it is the ‘public interest’ and ‘interest of investors’ that are the objects of the statute’s solicitude”) (Stevens, J., concurring).
12Supra note 6.
13Securities Litigation Reform Act, Conference Report, H.R. 104-369, 104 th Cong., 1 st Sess. (Nov. 28, 1995), available at http://www.gpo.gov/fdsys/pkg/CRPT-104hrpt369/pdf/CRPT-104hrpt369.pdf.
14Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 28, 313 (2007); J.I. Case Co. v. Borak, 377 U.S. 426, 432 (1964) (private rights of action under the securities laws are a “necessary supplement to Commission action.”).
15Herman & McLean v. Huddleston , 459 U.S. 375, 380 (1983).
16Testimony on Budget and Management of the U.S. Securities and Exchange Commission by Robert Khuzami, Division of Enforcement, Meredith Cross, Director, Division of Corporation Finance, Robert Cook, Director, Division of Trading and Markets, Carlo di Florio, Director, Office of Compliance Inspections and Examinations, Eileen Rominger, Director, Division of Investment Management, Before the United State House of Representatives Committee on Financial Services, Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises, (March 10, 2011), available athttp://www.sec.gov/news/testimony/2011/ts031011directors.htm. Testimony on the President’s FY 2012 Budget Request for the SEC by Chairman Mary Schapiro, Before the United States Senate Subcommittee on Financial Services and General Government, Committee on Appropriations (May 4, 2011), available athttp://www.sec.gov/news/testimony/2011/ts050411mls.htm.
17Although the SEC recovered $140 million for investors defrauded by Enron, investors recovered more than $7 billion in private suits. See, Thomas C. Pearson, Enron’s Banks Escape Liability (2010), available athttp://www.bus.lsu.edu/accounting/faculty/lcrumbley/jfia/Articles/FullText/2010v2n1a5.pdf.
18See, e.g., Itoba Ltd. v. LEP Group PLC, 54 F.3d 118 (2d Cir. 1995); In re DaimlerChryslerAG Sec. Litig., Case No. 00-993 (D. Del.); and In re Nortel Networks Corp. Sec. Litig., 238 F. Supp. 2d. 613 (S.D.N.Y. 2003).
19Supra note 10.
20With respect to implied rights under Section 10(b) and Rule 10b-5, the Commission filed amicus briefs in Matheson v. Armburst, 284 F.2d 670 (9 th Cir. 1960), cert. denied, 365 U.S. 870 (1961) (opposition to petition for certiorari only); Hooper v. Mountain States Sec. Corp., 282 F.2d 195 (5 th Cir. 1960), cert. denied, 365 U.S. 814 (1961); Errion v. Connell, 236 F.2d 447, 454 (9 th Cir. 1956); Fratt v. Robinson, 203 F.2d 627, 628 (9 th Cir. 1953);Slavin v. Germantown Fire Ins. Co., 174 F.2d 799, 800 (3d Cir. 1949); Herman & MacLean v. Huddleston, 459 U.S. 375 (1983); and Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723 (1975).
21Study by the Staff of the U.S. Securities and Exchange Commission: “Study on the Extraterritorial Scope of the Private Right of Action Under Section 10(b) of the Securities Exchange Act of 1934” at 60 (March 2012).
22Id. at 10.
23Hartford Fire Ins. Co v. California , 509 U.S. 764, 798 (1993).
24Id. (citing , Restatement (Third Foreign Relations Law, Section 403)).
25In re South African Apartheid Litig. , 617 F. Supp. 2d 228, 283 (S.D.N.Y. 2009).
26Comments by Forty-Two Law Professors, SEC File No. 4-617 (February 18, 2011),available at http://www.sec.gov/comments/4-617/4617-28.pdf.
27See, e.g., Alfadda v. Fenn , 935 F.2d 475, 478 (2d Cir. 1991); Grunenthal GmbH v. Hotz, 712 F.2d 421, 425 (9th Cir. 1983); Continental Grain(Australia) Pty. Ltd. v. Pacific Oilseeds, Inc., 592 F.2d 409, 421 (8th Cir. 1979); SEC v. Kasser, 548 F.2d 109 (3d Cir. 1977); Mak v. Wocom Commodities Ltd., 112 F.3d 287, 289 (7th Cir. 1997) (quoting Tamari v. Bache & Co. (Lebanon) S.A.L., 730 F.2d 1103, 1108 (7th Cir. 1984)). See also, Banque Paribas London, 147 F.3d at 125. See also,Interbrew S.A. v. Edperbrascan Corp., 23 F. Supp. 2d 425, 430 (S.D.N.Y. 1998). In re Parmalat Sec. Litig 375 F. Supp. 2d 278 (S.D.N.Y. 2004); In re Tyco International Ltd. 535 F. Supp. 2d 249 (D.N.H. 2007); In re Nortel Networks Sec. Litig 238 F. Supp. 2d. 613 (S.D.N.Y. 2003); and In re Deutsche Telekom AG Sec. Litig F. Supp 2d 277 (S.D.N.Y. 2007). According to a group of sixty-nine institutional investors from outside of the United States (with over 2 trillion U.S. dollars in assets under management) restoring investors’ rights to assert private claims under Section 10(b) to the extent the Commission or DOJ is permitted will not undermine international comity. See, February 18, 2011 Letter from AGEST Superannuation Fund; Alecta pensionsförsäkring, ömsesidigt; AMF Fonder AB; AMF Pensionsförsäkring AB; APG Algemene Pensioen Groep N.V.; ASSETSuper Superannuation Fund; ATP - Arbejdsmarkedets Tillægspension; AUST (Q) Superannuation Fund; Australian Catholic Superannuation & Retirement Fund; Australian Institute of Superannuation Trustees; Australian Reward Investment Alliance; Australian Superannuation Fund; Australia’s Unclaimed Super Fund; AustSafe Superannuation Fund; AVSuper Superannuation Fund; Catholic Superannuation Fund; Construction & Building Industry Superannuation Fund; Danica Pension; Danske Invest Management A/S; Electricity Supply Industry Superannuation Fund; Emergency Services & State Superannuation Fund; Energy Industries Superannuation Scheme; FIL Investments International; FirstSuper Superannuation Fund; Folksam; Forsta AP-Founden; GMB Trade Union; Health Employees Superannuation Trust Australia; Health Superannuation Fund; HOSTPLUS Superannuation Fund; Industriens Pension; KLP Kapitalforvaltning; Labour Union Co-operative Retirement Fund; Legalsuper Superannuation Fund; Local Government Superannuation Scheme; Local Super (SA-NT) Superannuation Fund; Maritime Superannuation Fund; Media Superannuation Fund; Merseyside Pension Fund; Motor Trades Association of Australia Superannuation Fund; Non-Government Schools Superannuation Fund; Nordea Fondbolag Finland AB; Nordea Fondene Norge AS; Nordea Fonder AB; Nordea Investment Funds Company I S.A.; OMERS Administration Corporation; PFA Pension; PGGM Vermogensbeheer B.V. (PGGM Investments); Raiffiesien Capital Management; Retail Employees Superannuation Trust; Royal Mail Pension Plan; Sampension KP Livsforsikring A/S; SKAGEN A/S; Skandinaviska Enskilda Banken AB; SPEC Superannuation Fund; State Superannuation Scheme // SAS Trustee Corporation; Statewide Superannuation Fund; Sunsuper Superannuation Fund; Swedbank Robur Fonder AB; Syntrus Achmea; Tasplan Superannuation Fund; Telstra Superannuation Fund; The Australian Council of Superannuation Investors; TWUSUPER Superannuation Fund; UniSuper Superannuation Fund; Universities Superannuation Scheme; Varma Mutual Pension Insurance Company; VicSuper Superannuation Fund; and VisionSuper Superannuation Fund (AGEST, et al.”), available at http://www.sec.gov/comments/4-617/4617-42.pdf.
28IIT v. Vencap, Ltd ., 519 F.2d 1001, 1017 (2d Cir. 1975).
29Dodd-Frank Act Section 929P(b) requires “conduct within the United States that constitutes significant steps in furtherance of the violation, even if the violation is committed by a foreign adviser and involves only foreign investors; or conduct occurring outside the United States that has a foreseeable substantial effect within the United States.”
30U.S courts often have sustained defense motions for dismissal for lack of subject matter jurisdiction over foreign investors under Fed. R. Civ. P. 12 (b) (l) and, in class actions, at the class certification stage. In addition to these grounds, where a defendant has successfully shown that an adequate forum is available elsewhere, and that the private and public interests implicated in the case weighs strongly in favor of dismissal or removal to another forum courts have also dismissed actions under forum non conveniens. See,Sinochem Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp., 504 U.S. 422, 436 (2007).
31See, Cornerstone Research, Securities Class Action Filings – 2010 Year in Review (2011).
32See, Advisen Quarterly Report – Q3 2010, at 11-12.
33See, Risk Metrics Blog, “Morrison v. National Australia Bank – the Dawn of a New Age” (June 25, 2010), available at http://blog.issgovernance.com/slw/2010/06/morrison-v-national-australia-bank---the-dawn-of-a-new-age.html.
34535 F. Supp. 2d 249 (D.N.H. 2007)
35In re Tyco International Ltd. 535 F. Supp. 2d 249 (D.N.H. 2007) – The plaintiffs (the lead plaintiffs were several U.S. pension funds) also alleged that the individual defendants looted the company by misappropriating corporate funds in the form of undisclosed cash bonuses and forgiven loans. The proceeds were then used to reward the individual defendants for their participation in the accounting fraud scheme. The plaintiffs argued that this looting and accounting fraud scheme defrauded the investing public in violation of the federal securities laws. The plaintiffs also claimed that the defendants made materially false and misleading statements and omitted material information in various registration statements and publications, which concealed the corporate misconduct and mismanagement. Other example of pre-Morrison cases that would have been dismissed under Morrison include: In re Deutsche Telekom AG Sec. Litig. F. Supp. 2d 277 (SDNY 2002) – In this matter the prospectus and registration statement issued in connection Deutsche Telekom’s IPO were alleged to be materially false and misleading on the grounds that the documents (1) failed to disclose that Deutsche Telecom was at that time engaged in advanced merger talks with VoiceStream Wireless Corp., and (2) overstated Deutsche Telekom’s real estate portfolio by at least $1.8 billion dollars. U.S investors received in part $120 million in monetary relief as a result of this litigation. In re Nortel Networks Sec. Litig 238 F. Supp. 2d. 613 (2003 SDNY) – In this matter Nortel issued false and misleading press releases about its financial strength and projected growth. U.S. investors received in part $1.14 billion in monetary relief as a result of this litigation. In re Parmalat Sec. Litig. 375 F. Supp. 2d 278 (2004 SDNY) – In this matter Parmalat allegedly underreported its debts by nearly $10 billion and over-reported its net assets by $16.4 billion. The complaint alleged that insiders at Parmalat created a scheme involving misleading transactions and off-shore entities that created the appearance of financial health. U.S. investors received in part $86.8 million in monetary relief as a result of this litigation. In re Royal Ahold N.V. Sec. Litig 351 F. Supp. 2d 334 (2004 Dist MD) – In this matter accounting irregularities and discrepancies were discovered, which stemmed mainly from two company practices: (1) the company inflated the reporting of its income from vendor rebates or promotional allowances by its subsidiary USF; and (2) the company improperly attributed its revenues from joint ventures in which it did not have a controlling stake. As a result, on May 8, 2003 the company announced an $885 million restatement. U.S. investors received in part $1.1 billion in monetary relief as a result of this litigation.
36130 S. Ct. at 2888 (“Section 10(b) reaches the use of a manipulative or deceptive device or contrivance only in connection with the purchase or sale of a security listed on an American stock exchange, and the purchase or sale of any other security in the United States.”).
37Supra Note 26 at page 13.
38Supra Note 26 at page 7.
39See, General Electric Co. Investor Relations available athttp://www.ge.com/investors/personal_investing/index.html; International Business Machines Investor Relations available at http://www.ibm.com/investor/faq/item/stock-exchanges.wss; Pfizer Inc Investor Relations available athttp://www.pfizer.com/investors/shareholder_services/shareholder_faqs.jsp; and Bank of America Investor Relations available at http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-contact
40See, e.g., letters from AGEST, et al, available at http://www.sec.gov/comments/4-617/4617-42.pdf; CalPERS, available at http://www.sec.gov/comments/4-617/4617-43.pdf; National Association of Shareholder and Consumer Attorneys (“NASCAT”), available athttp://www.sec.gov/comments/4-617/4617-18.pdf; Leandro Perucchi, available athttp://www.sec.gov/comments/4-617/4617-40.pdf; California State Teachers’ Retirement System (CalSTRS), Colorado Public Employees’ Retirement System, Delaware Public Employees’ Retirement System, State Board of Administration of Florida, North Carolina Department of State Treasurer, Connecticut Treasurer’s Office, Maryland State Retirement and Pension System, Pennsylvania Public School Employees’ Retirement System, Rhode Island General Treasurer, Pennsylvania State Employees’ Retirement System, New York City Employees’ Retirement System, New York City Police Pension Fund, Teachers’ Retirement System of the City of New York, New York Fire Department Pension Fund, Board of Education Retirement System of the City of New York, Pension Reserves Investment Management Board Commonwealth of Massachusetts (“CalSTRS, et al.”), available athttp://www.sec.gov/comments/4-617/4617-13.pdf.
41See, Morrison , 130 S. Ct. at 2894
42See, e.g., In re Royal Bank of Scotland Grp. PLC Sec. Litig. , No. 09 Civ. 300 (DAB), 2011 WL 167749 (S.D.N.Y. Jan. 11, 2011); Plumbers’ Union Local No. 12 Pension Fund v. Swiss Reinsurance Co., No. 08 Civ. 1958 (JGK), 2010 WL 3860397; In re Alstom SA Securities Litigation, No. 03 Civ. 6595 (VM), 2010 WL 3718863 (S.D.N.Y. 2010); In re Societe Generale Sec. Litig., No. 08 Civ. 2495 (RMB), 2010 WL 3910286 (S.D.N.Y. Sep. 29, 2010);Cornwell v. Credit Suisse Group, 729 F. Supp. 2d 620 (S.D.N.Y. 2010); In re BancoSantander Securities – Optimal Litig., 732 F. Supp. 2d 1305 (S.D. Fla. 2010); andTerra Secs. ASA Konkursbo v. Citigroup, Inc., No. 09 Civ. 7058 (VM), (S.D.N.Y. Aug. 16, 2010)
43See, John W. Moka III, et al., 2010 a Record Year for Securities Litigation – An Advisen Quarterly Report – 2010 Review, Advisen (Only “[t]hree percent of [securities suits] were filed in courts outside the United States”), available athttps://www.advisen.com/downloads/sec_lit_Q42010_report.pdf. See also, e.g., Johnathan Stempel and Sinead Cruise “Olympus investors may find courthouse door closed” Thomson Reuters (November 9, 2011), available athttp://newsandinsight.thomsonreuters.com/Legal/News/2011/11_-_November/Analysis__Olympus_investors_may_find_courthouse_door_closed/.

SUBMARINERS HONORED AFTER 112 YEARS OF SERVICE

FROM:  U.S. NAVY
HONOLULU (April 11, 2012) Sailors from Commander Submarine Force, U.S. Pacific Fleet, pay tribute to past submariners during a plaque rededication ceremony at the National Cemetery of the Pacific in commemoration of 112 years of submarine history. (U.S. Navy photo by Mass Communication Specialist 2nd Class Ronald Gutridge/Released)

DAILY PRESS BRIEFING

FROM:  U.S. STATE DEPARTMENT
Mark C. Toner
Deputy Spokesperson
Daily Press Briefing
Washington, DC
April 13, 2012
TRANSCRIPT:

12:57 p.m. EDT
MR. TONER: Hey, everybody. Welcome to the State Department. Just a brief statement at the top, and then perhaps can answer some of your questions about the situation in Guinea-Bissau.
We strongly condemn the attempt by certain elements of the military to undermine the legitimate civilian leadership of Guinea-Bissau. We regret that they have chosen to disrupt the democratic process, which already was challenged by the opposition’s call to boycott the second round of presidential elections. We urge all parties to put down their weapons, release government leaders immediately, and restore legitimate civilian leadership. And we’re clearly deeply concerned about the safety of all those in Bissau today, and we’re going to continue to work with our partners in the region and beyond as we monitor developments.
Matt.
QUESTION: That’s it?
MR. TONER: Sure.
QUESTION: To say – have you decided – no decision has been made about – on aid or anything like that?
MR. TONER: No. I mean it’s – look. It’s – we’ve got a situation that’s still developing, events still unfolding. But as I mentioned, since the evening of April 12th, it looks like military forces have taken control of radio and television stations. They remain off the air, as well as seized the headquarters of the ruling party for the independence of Guinea-Bissau and Cape Verde party and are attempting to restrict movement. So we obviously strongly condemn this attempt to undermine the civilian authority there. We want it restored as soon as possible.
QUESTION: Right. Okay. Well, then, in the interest of saving time on a beautiful Friday afternoon --
MR. TONER: Sure.
QUESTION: -- I’ve got three really quick ones.
MR. TONER: Okay.
QUESTION: One, two, three. You can just – do you have anything new to say about North Korea that hasn’t been said by the Secretary – what is she – the White House Secretary or Susan Rice at the UN?
Two, do you anything new to say about the Pakistani parliament and the rules of engagement, or whatever they’re calling them, that wasn’t said in Toria’s statement of last night?
And three, do you have anything new to say about the P-5+1 talks tomorrow?
MR. TONER: No, no, and no. (Laughter.) But I think I’ll still get the questions. I don’t think everyone’s as single-minded as you are. But thanks, Matt. I appreciate that, actually. Any other questions you want to –
QUESTION: I have one on North Korea? (Laughter.)
MR. TONER: Sure. Go ahead.
QUESTION: Just about the IAEA --
MR. TONER: I couldn’t resist.
QUESTION: -- monitors. Yeah. Is this – does the U.S. still support sending IAEA monitors into North Korea after the launch?
MR. TONER: It’s a fair question. I mean, obviously, that’s something for you to ask the IAEA. I know – I don’t – I’m not aware of where they’re at, frankly, on deliberations about that monitoring mission. I mean, obviously, what we’ve seen in the past week or so since – or two weeks or so since North Korea announced its intention and then moved ahead with this launch has been the same old, same old with North Korea. And we’re obviously very concerned about the situation there, so – yeah, go ahead.
QUESTION: Just two, like a short one and a kind of longer.
MR. TONER: Sure. Go ahead.
QUESTION: First, on the food aid. Will – nothing had been delivered, right? There was no --
MR. TONER: No.
QUESTION: So is there any technical thing that we have to look at in terms of food aid? Do you just stop it? Nothing happens? There’s nothing in the pipeline floating around Asia that might has to be – have to be pulled back, or anything like that?
MR. TONER: I don’t believe so. My understanding where we were at shortly after the Leap Day agreement or statement was that they – a team tried to finalize some of the arrangements to be made on food assistance. But then when we had the announcement by North Korea that it was moving ahead with this satellite launch, then we suspended that program.
QUESTION: And then a longer format question.
MR. TONER: Yeah, go ahead.
QUESTION: Just in terms of the approach and the policy of the United States right now, I mean, where does engagement go? Is this – we just turn our backs and say you have done what the world didn’t want you to do, and we don’t talk? Because the President did leave open the door, still, of engagement. But realistically, what happens?
MR. TONER: Well, you are correct that the White House statement yesterday did note that the door does remain open for engagement, or that we’re prepared to engage constructively with North Korea. But as we’ve said many times, we’re not going to reward bad behavior with engagement. And in fact – and we don’t, as you’ve often heard us say, don’t want to engage in talks for talks’ sake.
And so as we move forward – you talked about where we’re at diplomatically. I mean, I think first, we’re in intensive consultations with all our Six-Party colleagues. And in fact, the Secretary has already spoken today, I believe, with China – Chinese Foreign Minister Yang, and then yesterday with South Korea’s Foreign Minister Kim, and of course, with the G-8 here, she also had the opportunity to speak intensively on this matter with Foreign Minister Lavrov, as well as -- where am I forgetting, who else she spoke with --
QUESTION: (Off-mike.)
MR. TONER: Sorry?
QUESTION: (Off-mike).
MR. TONER: But anyway, these consultations continue intensively, and moving forward, we’re going to continue to talk with them as we talk about next steps. Obviously, discussions are ongoing today, and Ambassador Rice just gave a readout, in fact, of the Security Council meeting on North Korea’s launch. But I think it’s going to be – I guess if I was trying to characterize it, we’re going to consult, we’re going to move together in a unified manner, and we’re going to – when we do take action, we’re going to do so in a deliberate way.
QUESTION: And just one other thing. The Secretary indicated, and I think Toria in her previous briefing, said often actions from North Korea come in twos or threes. So the obvious next step would be for them to move toward some type of nuclear testing. Is the U.S. picking up any indications from them that they are – I’m not talking about even spies, but – or that type of intelligence, but are you picking up any indication that they are now going to move to that?
MR. TONER: Well, first of all, my do-over. When I was talking about Foreign Minister Lavrov and then, of course, had my brain freeze – that’s what a week in Florida will do to you – I meant Foreign Minister Gemba to add as well. So she’s had a chance to consult with the Japanese, with the Russians, and now reached out subsequently after the launch with South Korea and China.
QUESTION: (Off-mike.)
MR. TONER: Thank you. Anyway, to answer your – your question was about talk about a nuclear test. I mean, obviously, I can’t talk about intelligence matters from the podium. In the past we’ve seen a pattern, if you will, to North Korea’s bad behavior, but I can’t talk, obviously, about any intelligence matters. So –
QUESTION: On North Korea, did you – what the Chinese are saying – what kind of a role they have played or – in this process or as far as missile launch is concerned?
MR. TONER: Just rewinding Goyal, the first part of your question was who?
QUESTION: What role you think Chinese played in this process with North Korea as far as missile launch?
MR. TONER: Well, the Secretary, as I just said, had a good opportunity – or an opportunity to have a good conversation with the Chinese foreign minister this morning. One of the things that she stressed was the need to obviously consult closely with other members of the Six-Party team, if you will, and that we move together in a deliberate and unified way to speak out and condemn this action. So we’re cooperating closely, consulting closely with China. And obviously they’ve got a very important role.
Sorry, to just finish up --
QUESTION: Sorry.
MR. TONER: They’ve – we’re asking them to use their relationship with North Korea to convey our concern about their recent actions.
QUESTION: And finally, what are you telling the regional nations like South Korea and Japan and others now, because they were angry before that they will take action? And where do we stand now as far as regional nations are concerned of the threat in the region?
MR. TONER: Where do we stand now with other – well, as I said, I think the international community is rightly concerned, as I said, given North Korea’s launch yesterday but also its behavior in the past, this pattern of bad behavior. And so we’re going to consult very closely with other Six-Party colleagues as we move forward and speak out in a unified voice.
QUESTION: Could I follow up on North Korea?
MR. TONER: Yeah.
QUESTION: Just with the food aid, the nutritional assistance.
MR. TONER: Sure. Thank you.
QUESTION: As far as the U.S. is concerned, is this completely null and void, the Leap Year agreement and everything, in light of what North Korea has done? Or could food aid potentially – if their behavior changes in the weeks and months to come, could food aid be resumed or the plan for food aid be resumed, or is this completely over at this point?
MR. TONER: I guess I would answer that by saying that North Korea’s behavior to date since we signed this agreement has – as we’ve discussed several times, has raised doubts about their ability to live up to their obligations and their commitments. And so given their willingness to flout international obligations and move ahead with a launch that was clearly in violation of UN Security Council resolutions, that we don’t feel we can move forward at any level, including at the nutritional assistance level, because we don’t feel that we can frankly trust the North Koreans that this will end up in appropriate hands.
QUESTION: Is that – I mean, in your view, is that linking politics with the humanitarian situation? I mean, are there still concerns about – I mean, aid groups --
MR. TONER: I think it’s – I think it’s simply acknowledging that if you can’t trust the government to live up to its commitments on – in one aspect of – then you can certainly not expect it to live up to its commitments on another aspect. And so these – as we’ve talked about all along, nutritional assistance needs to be credibly monitored. We need to ensure that it goes in the hands of the people who need it and who it’s designed for. And so if we can’t trust North Korea to live up to its commitments in terms of its activities and launch of ballistic missiles, then we feel that we can’t trust it on the nutritional assistance that it will get to the appropriate people.
QUESTION: And just – the February 29th agreement as a whole, is the United States still looking for North Korea to comply with that, or is that – as far as you’re concerned, that’s just – that’s over, that’s (inaudible)?
MR. TONER: I would say – I mean, the word I’d say is “suspended” given the current state of –
QUESTION: (Inaudible.)
MR. TONER: Yeah.
QUESTION: Another subject?
QUESTION: Pakistan, please?
QUESTION: Still on North Korea?
MR. TONER: Let’s go – yeah, you had your hand up for Pakistan.
QUESTION: Yes.
MR. TONER: Are we done with North Korea?
QUESTION: No. Still on North Korea.
MR. TONER: North Korea. Sorry. Tomoko, finish up with that.
QUESTION: Would you say one of the reason that they failed the launch is the current sanction on North Korea?
MR. TONER: Look, you’re asking me to – I have absolutely no idea. I would point you in the direction of NORAD or NORTHCOM, who can provide you with a detailed technical analysis of the launch, or to the Government of North Korea, which I think acknowledged the launch’s failure.
Yeah. Go – oh, are you still on North Korea?
QUESTION: Yes.
MR. TONER: Sure. Sorry. I will get to Pakistan. Sorry.
QUESTION: You’ve been referring to the missile launch activity as “deal breaker.” And I remember you using the word “abrogation” as well. But you just said the White House statement still leaves some room open for some talk. Has your position changed? Is the Leap deal agreement effective as of today?
MR. TONER: I just – the White House statement, I think, simply said that we’re prepared to engage constructively with North Korea, but only a North Korea that wants to engage constructively with the rest of the world. And until we see that type of pattern of behavior, then that’s not going to be possible.
QUESTION: So is a deal – was a deal breaker? Did it break the deal? Is the deal still effective?
MR. TONER: We think it was a deal breaker. Yeah.
Yeah, go ahead. Now Pakistan.
QUESTION: Okay. Thank you, Mark. These rules of engagement, these are actually recommendations from the Pakistani parliament to negotiate a future relationship with the United States. So do you plan to reengage them? Do you plan to discuss a future relationship with them? Do you have any schedule in mind – future meetings, visits? Are you looking for a midway for building a new relationship particularly on the issue of drones and other issues that they have raised?
MR. TONER: I mean, I – it’s a very good question. I mean, I don’t have any announcements to make today about upcoming trips or travel. I do --
QUESTION: You’ve got someone pretty senior there right now.
MR. TONER: Well, I was going to – I was getting there. I was going to say that our USAID Administrator Raj Shah is on the ground right now in Pakistan. And I think that speaks to what we talked about a little bit in the past weeks, is that we’ve already seen in the past weeks and month or so a reengagement at a high level both with the President’s conversation with President Zardari and then subsequent visits by Deputy Secretary Nides and others. We’ve been reengaging already with – at a high level with the Pakistani Government.
But nothing to announce in terms of next steps or next – or upcoming trips or travel, beyond the fact that what we said yesterday, which is that we are ready to engage with the Pakistani Government on this parliamentary review and on the issues that it has raised. We want to build a very constructive relationship with Pakistan and one that is based on mutual understanding.
QUESTION: Are you looking for a meeting point? I mean, they have come up with certain demands, and you would probably have something --
MR. TONER: I’m sorry. I didn’t hear your question. Are we looking for --
QUESTION: A meeting point for a future relationship. I mean, you probably would go with some of your points, some of your demands. And so do you think – how would you build up this relationship? What will be the basis for this?
MR. TONER: I do think we’re ready to have – as we’ve said many times, we’re awaiting the end of this parliamentary review. And my understanding, in fact, is that this still has to be – obviously, there’s still a little bit left in this political process. It still has to be approved by the cabinet, is my understanding.
But as we move forward, we definitely want to engage, to talk about the breadth of issues that have been raised in this parliamentary review and to come to a better understanding of our relationship.
QUESTION: Did they tell you that these are not binding on the government?
MR. TONER: Did they --
QUESTION: Did they tell you that these recommendations are not binding on the government; the government does not have to follow them in letter and spirit?
MR. TONER: Well, again, I think we’re – we’ve talked a lot about this parliamentary review. We’re going to engage with the Pakistani Government in a way that listens to their concerns, recognizes their needs in the relationship, recognizes that this is a shared relationship and a shared commitment, and move forward.
Yeah. Go ahead.
QUESTION: Who is Shah seeing while he’s there, and will he be discussing any of the things that are in the Pakistani demands, list of demands?
MR. TONER: He did actually meet with Foreign Minister Khar today, and that is all I have just from – I’m not sure – was he supposed to meet with President Zardarai? Thank you. Yes. But I’m not sure when that meeting is taking place.
QUESTION: Do you know if they’ll be talking about any of --
MR. TONER: Not to my understanding. No, he’s – I mean, he’s there to talk about our civil assistance – civilian assistance, rather.
QUESTION: Is there – and what about that? Is there some --
MR. TONER: Well, that’s been --
QUESTION: What are the issues with that?
MR. TONER: I mean, that has continued throughout this parliamentary review and throughout the turmoil, if you will, in the relationship post November 26. So that’s been ongoing. That has not stopped. So he’s there to review those programs.
QUESTION: Mark, there are four major demands. One, are you ready to apologize? They’re asking for the 24 Pakistani soldiers who were killed. Two, stop all the drone and other attacks. And three, that Pakistani should be treated just like you treat India. And fourth, finally, that Pakistan should be a given a nuclear – civil nuclear just like to India.
MR. TONER: Goyal, those are a nice try to get me to negotiate and talk about that ongoing relationship from the podium, but let’s let us sit down with our senior officials, sit down with Pakistan’s senior officials, and discuss it.
QUESTION: No, this is what --
MR. TONER: Sure, Goyal.
QUESTION: Sorry. This is what I am saying that this is what has been going on in the media in Pakistan every day and in discussions among those politicians and all that. That’s --
MR. TONER: No, I think we’re aware of some of the concerns that the parliamentary review raised. And they’re – frankly, some of them are not new to us, so we’re going to engage.
QUESTION: You said that you’d talk about the breadth of the whole thing, correct? That would be every subject that you’re willing to talk about with them?
MR. TONER: I don’t know if we would talk about every subject under the sun. We’d talk about --
QUESTION: No, no. Every subject that they raised, you’re willing to talk about, including --
MR. TONER: Well, we’re going to talk to them about our civilian cooperation as well as our counterterrorism cooperation, security cooperation --
QUESTION: So you’re willing to talk with them about the drone strikes?
MR. TONER: You know I can’t talk about any intelligence matters.
QUESTION: You can’t talk about it with us. Can you talk about it with them?
MR. TONER: Well, again, we have very robust counterterrorism cooperation with Pakistan.
QUESTION: Well, I mean, is this something – they put this on the table. Are you – is this something that’s on the table for the U.S.?
MR. TONER: I’ll just say that we’re going to talk about aspects – all aspects of our relationship moving forward.
QUESTION: You’re going to talk about all aspects of what they raised?
MR. TONER: Including counterterrorism cooperation, but you know --
QUESTION: Does that include – is that your understanding? Does that include drone strikes?
MR. TONER: I cannot address that point.
QUESTION: But wait – forget about the word – the two words “drone” and “strike.” You are willing – the U.S. is going to talk to them about everything that’s in this review?
MR. TONER: I think we’re willing to address their concerns moving forward and find a middle ground.
QUESTION: Well, without naming them, are there some issues that you’re not willing to talk about?
MR. TONER: Again, let’s let these conversations move forward until – and I’m not going to – we’re not going to take anything off the table or put anything on the table.
QUESTION: Can I talk about India-Pakistan relations going on now at the --
MR. TONER: Sure.
QUESTION: -- especially at the Atari border, a lot of activities are going on between India and Pakistan people-to-people and trades, and they want to open the borders and cultures and trade relations and opening. As far as Mr. Shah, sir, being in Pakistan today, is he discussing any of these things or that as far as opening of the – a lot of things that people-to-people between the two countries after especially the President Zardari’s visit to India?
MR. TONER: It’s a fair question, Goyal. I can’t tell you specifically whether it’s being raised in his conversations. Of course, you know where we stand. We support improved relations, better dialogue, more people-to-people exchanges. Everything you essentially just ran through we view as a very positive development. But I can’t preclude that he’s – it’s going to be raised in some of his conversations.
Yeah. In the back. Sorry.
QUESTION: Change of subject?
MR. TONER: Sure.
QUESTION: Staying in the region --
QUESTION: Can we stay on Pakistan, please?
MR. TONER: Yeah. Go ahead.
QUESTION: Pakistani Finance Minister Hafeez Shaikh is coming to town this week – weekend. Is he meeting anyone in this building next week?
MR. TONER: I’ll take the question.
QUESTION: Thanks.
QUESTION: India’s movie star Shah Rukh Khan was detained at a New York airport yesterday. Do you know why he was detained for the second time in two years, and what are the reasons? Is there something pending against him? Do you suspect something against him?
MR. TONER: Well, I can say we are certainly aware, as you stated, that he was temporarily delayed before admission at the White Plains, New York airport. He was – or is apparently, or was apparently traveling to an event at Yale University. And we have, obviously, the utmost respect for Mr. Khan and his work both as an artist and a humanitarian. And we offer our apologies for any discomfort or inconvenience he may have suffered as a result of this incident.
QUESTION: What were the reasons for delay, and how long was the delay?
MR. TONER: Well, I’d refer you to the TSA for any specific questions about the incident.
QUESTION: Have you received any official communication from Indian Government?
MR. TONER: We have. Both the Indian Ministry of External Affairs as well as the Indian Embassy in Washington have expressed their concern.
QUESTION: This for the second time that he was detained or delayed at the airport in U.S. And first time after he was detained, you had said this will not be repeated again. So what happened this time?
MR. TONER: Well, again, my understanding – you used the word “detained.” I’ve been told he was simply delayed. But in any case, I wouldn’t necessarily look at this as some sort of pattern but rather two separate incidents. Obviously, we’ve expressed our regret about the incident and recognize him – that he’s a very renowned artist and humanitarian. Obviously, he was going to Yale, I think, to receive a prestigious award there. And we apologize.
QUESTION: Thank you.
QUESTION: Sorry. You said – I’m not sure – quite sure I understand the --
MR. TONER: Yeah. Go ahead.
QUESTION: -- nuance of delay. Was he delayed in handcuffs in a cell? (Laughter.)
MR. TONER: No. No.
QUESTION: Well, what does that mean?
MR. TONER: Now my understanding, he was delayed actually --
QUESTION: Delayed – I mean, delay is what happened when there’s bad weather.
MR. TONER: -- actually disembarking from the airplane. There was a delay of an hour or so from him getting off the airplane.
QUESTION: Well, what does that mean?
MR. TONER: He wasn’t – that it wasn’t --
QUESTION: What, he couldn’t physically get off the plane?
MR. TONER: It wasn’t – that is not detention. That is a delay.
QUESTION: Well, was it delay because --
QUESTION: Was it tied to him?
MR. TONER: Sorry?
QUESTION: I mean, was the delay personally tied to him, or was it an airport thing?
MR. TONER: Again, I’d refer you to the TSA, but no, I don’t – they believe it was airplane related. But again, he wasn’t – but he wasn’t detained. He was simply delayed getting – disembarking.
QUESTION: Well, were all the other passengers on the plane delayed?
MR. TONER: I don’t know. I don’t think so.
QUESTION: Is that because --
QUESTION: Well, then this is not a delay. I’m sorry. I mean, if he was yanked off the plane – he was held on the plane?
MR. TONER: That is my understanding.
QUESTION: And he was not allowed to leave the plane?
MR. TONER: Again, I would refer you to the TSA for details of the incident.
QUESTION: This is really Orwellian. That’s a delay?
MR. TONER: That’s a delay.
QUESTION: Was he on some type of –
QUESTION: Is that because his name is Khan? That’s number one. And number two, in India, what discussions are going on now, Mark, that this is not the only one first incident only with Mr. Khan or a famous film star but also many other incidents took place with the high-class Indians. They named all of them and they were really concerned why it is happening, only somebody with a turban but he is in the Prime Minister Manmohan’s government and a high class and other – among other businessmen and so forth. So what can you assure them in the future what should be done or what can be done between these problems?
MR. TONER: Well, I mean, actually there is a program whereby travelers can alert – identify their status before they depart via the Embassy. And that’s one approach or avenue to take.
In answer to your first question, look, I really would have to refer you to the TSA in terms of their screening procedures, why this individual, why two times. Again, I don’t know. I don’t have the answers.
QUESTION: Just a follow-up on Goyal’s question, I think that the allegation that the Indians are making was that it was racial profiling, that – because he has a Muslim name. Is that --
MR. TONER: I mean, I think we all know that that’s clearly not the case. The fact of the matter is tens of thousands of Muslims travel to and from the United States every day and are not detained or delayed. (Laughter.) And --
QUESTION: Well, this one was.
MR. TONER: And so when something obviously goes wrong, we hear about it, but we don’t hear about the vast majority when – and it all goes smoothly. So no.
QUESTION: Sorry. One last thing on that.
MR. TONER: Yeah. Sure.
QUESTION: So you said that this is something that the TSA is sort of in charge of?
MR. TONER: Well, they’re responsible for airport screening, so I don’t know – I don’t have – they probably have a very detailed report about the incident. I don’t know. I don’t know why he was delayed.
QUESTION: But it’s not something that you then work with them on, especially after an Embassy and the foreign ministry calls the State Department to ask them about that. I mean, how – what kind of communication does the State Department and the TSA have on issues like this?
MR. TONER: Well, we respect very much that they have an important job in keeping passengers safe and keeping Americans safe and keeping all airline passengers who are traveling or transiting the United States safe. And so we’re very respectful of the important role that they play. Certainly, we’re always seeking – I don’t know, in this particular case, what the follow-up might be. I can certainly look into it. But I know in the past, we’ve certainly talked with them about procedures, but again, mindful of the fact that they’ve got – they have a job to do.
QUESTION: Just a clarification?
MR. TONER: Yeah. Sure.
QUESTION: You said that the incident happened, the apology has been given, but you said to stop it in future --
MR. TONER: And he went on to --
QUESTION: To inform the Embassy --
MR. TONER: -- to Yale, where he received his award.
QUESTION: No, no. To – yeah, but in future, to stop such things to happen, you said to inform the Embassy. What exactly is that, the details? Have you talked to the Indian ministry?
MR. TONER: I’d refer you to the Embassy in New Delhi, but it’s a program that they have where they can identify their status before they depart to address any difficulties that they may experience.
QUESTION: And finally, as far as the U.S. new ambassador, Madam Nancy Powell, is concerned, and she must be going through all this, facing all these questions when she arrives in Delhi. She must be briefed all this.
MR. TONER: Look, I’m – it’s a – as I think I’ve said, it’s an unfortunate incident. We’ve apologized. I don’t know what more there is to say beyond the fact that he went on and had a very fruitful visit and, I believe, made the – helped or encouraged – there’s a YouTube video, somebody told me, of him dancing with the director of admissions at Yale as though they were in a Bollywood musical. So all’s well that ends well.
QUESTION: (Off-mike.)
QUESTION: On another subject if they’re all done?
MR. TONER: It’s still – I’m sorry, are we still --
QUESTION: Was an apology issued to Mr. Kahn, or was it issued through the Indian Embassy – the Embassy of the U.S. and India?
MR. TONER: Well, I offered my sincere apologies that he may have experienced – I’m not sure that it was done on a personal level. I don’t have that information.
QUESTION: I just wondered, when might the advance team go to Syria ahead of or as part of this monitoring mission? And do you have to wait until you get some kind of clearance in New York, or what’s --
MR. TONER: It’s all being – yeah. I mean, that’s exactly what’s going on right now in New York. And obviously, they met this morning. Ambassador Rice emerged – talked about the conversation that they had deploring North Korea’s actions, and then went back in. The second part of the meeting, I think, is going to focus on Syria and next steps.
You heard the Secretary yesterday talk about a very robust monitoring mission is what we want to see, and we want to see that advance team out there. What we saw in the last day or so was a very fragile truce emerge, a very fragile first step. So now it’s important to get this advance team out there and to get a monitoring mission on the ground.
QUESTION: So right now you’re still waiting for some agreement in New York on that? You’re not thinking about just going ahead?
MR. TONER: That’s what they’re discussing. I mean, obviously, this is in support of Kofi Annan’s process here, and so it’s appropriate that that’s done through the council.
Yeah. Go ahead, Matt.
QUESTION: When you -- just on that, I mean, would you expect to be part of a monitoring mission?
MR. TONER: You know what? I don’t know if that’s – again, I don’t know if the composition’s been discussed or debated.
QUESTION: Do you think that the Syrians would welcome an American presence?
MR. TONER: I’m very doubtful, but the Secretary’s very clear that she wants to see as robust a mission as possible.
QUESTION: And you’re not going to barge your way in? You’re not going to just barge your way in and say hi, we’re here to monitor the ceasefire?
MR. TONER: We never barge.
QUESTION: Oh? I’ll remember to tell that to the Iraqis. (Laughter.)
QUESTION: To follow up, I mean, what’s your assessment of how the truce is holding? It’s been a day. There’s been some reports from human rights groups of deaths. I mean, what’s the assessment?
MR. TONER: Sure. I’ve heard there’s – sure – from – we do hear from these LCCs, these local coordination committees that sporadic fighting continues in parts of Syria. I’ve heard estimates of seven to ten people killed today. So again, this is – at best can only be described as fragile. But it is a first step; we want to try to build on it.
And obviously, as the Secretary was very clear about yesterday, as – there are still other elements to the Annan plan that need to be implemented by the Syrian Government. This is not a menu; this is a set of obligations, so we need to see them move forward on all of the elements of the plan, which is an inclusive, Syrian-led political dialogue and transition, a cessation of all forms of violence, humanitarian assistance, access to all areas and populations in need, the release of all political prisoners, and the freedom of movement, access for media and journalists, as well as freedom of assembly.
QUESTION: Did the Secretary discuss Syria yesterday with the Saudi defense minister?
MR. TONER: I promise you I will try to get you a readout. You, of course, saw that they walked out and did a – brief comments at the top of their meeting. I did not get a full readout of their meeting. I can certainly imagine that they discussed in some detail Syria.
QUESTION: Is the Reward for Justice – one, is it working as far as – and second, one person, Jubair Ahmad from Woodbridge, Virginia, a Pakistani citizen, he pled guilty that he was providing information and material support to the LET in Pakistan.
MR. TONER: Right. Geez, I left talking about that, and I come back a week later and still talking about it. Anyway, this will take some time, Goyal. These programs often do. They do have a very high success rate overall, which is why we use them, frankly. So let’s wait and see.
And in terms of your second question, I’m not familiar with the case, so I would refer you to the other – Department of Justice or local authorities.
QUESTION: Just a brief one. The health minister of Myanmar, Burma is here. I was just wondering if there was anything specific that the U.S. wanted to discuss or wanted to promote in the country during his visit.
MR. TONER: Well, I mean, obviously we’ve got the reopening of a USAID office in Burma, which is a positive first step. I can imagine many of the programs – again, I don’t have a detailed list or assessment in front of me, but many of our programs touch upon health matters – preventative health care, childhood communicable diseases, that kind of stuff. So – but I don’t know what – specifically who he’s meeting with.
QUESTION: Thank you.
MR. TONER: Oh, Samir, anything else? Are we done?
QUESTION: Do you have any reaction to the demonstrations in Egypt today against the military rule and the people from the Mubarak era not to run for the presidency?
MR. TONER: I don’t, beyond that it’s up to the Egyptian people to set the parameters of their political process and democratic transition moving forward, and they certainly have the right to peaceful assembly.
Thank you.

SAILORS FIGHT MOCK FIRE ON BOARD USS ENTERPIRSE

ARABIAN SEA (April 9, 2012) Sailors fight a simulated class bravo fire during a fuel station fire drill on the flight deck of the aircraft carrier USS Enterprise (CVN 65). Enterprise is deployed to the U.S. 5th Fleet area of responsibility conducting maritime security operations, theater security cooperation efforts and support missions as part of Operation Enduring Freedom. (U.S. Navy photo by Mass Communication Specialist 3rd Class Scott Pittman/Released)

TWO MEN IN KENTUCKY INDICTED ON ALLEGED SEXUAL ORIENTATION HATE CRIME

Thursday, April 12, 2012
Two Harlan County, Kentucky, Men Indicted for Federal Hate Crime Against Individual Because of Sexual OrientationThe Indictment Marks the First Case Charged Under the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act Involving Sexual Orientation
WASHINGTON – Two Harlan County, Ky., men were indicted today for their roles in kidnapping and assaulting a gay man because of his sexual orientation, the Justice Department announced today.

A federal grand jury in London, Ky., returned a three-count indictment charging David Jason Jenkins, 37, and Anthony Ray Jenkins, 20, for kidnapping and assaulting Kevin Pennington, and for conspiring with each other and with other unnamed individuals to commit the kidnapping.  The indictment charges the men with committing a hate crime in violation of the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, which expanded federal jurisdiction to include certain assaults motivated by someone’s sexual orientation.  This case marks the first federal hate crime charging a violation of the sexual orientation provision of the statute.

The indictment alleges that on April 4, 2011, the two defendants kidnapped and assaulted Kevin Pennington because of Pennington’s sexual orientation.  According to the indictment, the defendants enlisted two women to trick Pennington into getting into a truck with the defendants, so that the defendants could drive Pennington to a state park and assault him.  According to the indictment, the defendants then drove Pennington a secluded area of the Kingdom Come State Park in Kentucky and assaulted him.
If convicted, the defendants face a maximum penalty of up to life in prison for each charge.

The Shepard-Byrd law, enacted in 2009, criminalizes acts of physical violence causing bodily injury motivated by any person’s actual or perceived race, color, national origin, religion, sexual orientation, gender, gender identity or disability.

This case was investigated by Special Agents Anthony Sankey and Mike Brown with the FBI.  This case is being prosecuted by Assistant U.S. Attorney Hydee Hawkins with the U.S. Attorney Office for the Eastern District of Kentucky and Trial Attorney Angie Cha with the Civil Rights Division.

NASA NASA Podcasts Update

NASA NASA Podcasts Update

THE NAVY COMMEMORATES THE WAR OF 1812

The Navy Commemorates the War of 1812

SECRETARY OF STATE HILLARY CLINTON REMARKS ON TRADE TREATY WITH UNITED KINGDOM

FROM:  U.S. STATE DEPARTMENT
U.S. Defense Trade Cooperation Treaty With the United Kingdom
Press Statement Hillary Rodham Clinton
Secretary of State Washington, DC
April 13, 2012
I am pleased to announce today’s entry into force of the Defense Trade Cooperation Treaty between the United States and the United Kingdom. This Treaty is a result of the close, longstanding relationship between the United States and the United Kingdom. It will help American and British troops get the best technology in the fastest way possible so they can continue to defend our interests and protect our national security around the world.

The UK is already one of the United States’ most significant defense trading partners. Through the creation of an approved community of users, it is now faster and easier for U.S. and UK industry to develop and field future technologies that support U.S. and British government interests. Our two countries share a deeply rooted history and an unbreakable friendship. This treaty will further strengthen our relationship as we work together to build a safer, more secure world.

STATE DEPARTMENT FACT SHEET ON PATHWAYS TO PROSPERITY IN THE AMERICAS

FROM:  U.S. STATE DEPARTMENT
Pathways to Prosperity in the Americas
Fact Sheet
Bureau of Western Hemisphere Affairs
April 12, 2012
Pathways to Prosperity in the Americas links Western Hemisphere countries committed to democracy and open markets in an initiative to promote inclusive growth, prosperity, and social justice.

Current Pathways countries are Belize, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru, Uruguay, and the United States. Brazil and Trinidad and Tobago have observer status. The Inter-American Development Bank (IDB), the Organization of American States (OAS), and the Economic Commission for Latin America and the Caribbean (ECLAC) are strategic Pathways partners.

On October 5, 2011, Secretary of State Hillary Rodham Clinton participated in the fourth Pathways Ministerial in the Dominican Republic. The Government of Colombia plans to host the next Pathways Ministerial meeting in Cali in October 2012, in conjunction with the Americas Competitiveness Forum. Ministers will review the progress of the initiative’s pillars and activities and discuss ways to increase the initiative’s impact.

Partnering to Expand Opportunities
Pathways is a policy-level dialogue through which countries learn from one another’s experiences and collaborate to spread the benefits of economic growth more broadly to all of our citizens. Pathways countries recognize that the gains from trade and economic growth have not always been equitably shared and that the promise of economic and social opportunity remains elusive for too many people in this hemisphere. Pathways seeks to close this gap by encouraging public policies and public-private partnerships to empower small farmers, small businesses, women, indigenous communities, Afro-descendants, youth, and vulnerable groups to participate effectively in the global economy. Through shared leadership, Pathways partner countries are committed to deepening cooperation on the following four pillars:
Empowering small businesses by building an enabling environment for micro, small, and medium-sized enterprises;
Facilitating trade by improving the systems, regulation, and infrastructure small firms need to trade more competitively across borders;
Building a modern workforce by supporting labor rights and emphasizing key requirements of education, training, and entrepreneurship; and
Developing responsible and sustainable business practices by improving environmental practices, protections, and cooperation.

Pathways Activities
Pathways events highlight best practices to expand economic opportunities and encourage effective implementation. Countries chairing Pathways pillar committees organize activities throughout the year that advance the Ministerial Action Plan. Uruguay, as the chair country of Pillar III, hosted a Digital Opportunities Conference in September 2011 with support from the United States government and ECLAC. The conference convened Pathways partners, technology experts, and civil society leaders from around the Americas to share best practices, build relationships, and raise digital literacy to expand educational opportunities and build a modern workforce by promoting access to information and communication technologies.

In 2011, Peru and the United States, co-chairs of Pillar IV, hosted workshops on policies and mechanisms for the conservation of biodiversity in the context of trade and sustainable development, and on public participation in the management of protected areas in high-conflict zones. Honduras’ Pillar I event in 2012 will focus on financial inclusion. As co-chairs of the trade facilitation pillar, Costa Rica and Chile are working on a customs-related event later this year, and Peru plans to host an environmental workshop with the United States.

ECLAC, a key institutional partner, compiled and published a new book on Pathways best practices that illustrates how sound, evidence-based government policies and public-private partnerships contribute to building prosperity for all sectors of society. The volume identifies country-level policies and projects, as well as regional programs the United States and its partners can build on under the Pathways initiative.

To make concrete progress toward Pathways goals, U.S. government agencies will provide $20 this year for technical assistance in priority areas such as small business development, financial inclusion, infrastructure financing, women entrepreneurs, greening the supply chain, and improving environmental practices, including:

The United States Government will contribute $5 million to a new Inter-American Development Bank-managed “Crossroads” fund that supports regional infrastructure projects reduce transport and trade cost to promote business development.

U.S. Department of Treasury regional advisors will assist Central America and the Dominican Republic in financing infrastructure through public-private partnerships and accelerating policies that promote greater financial inclusion.

The Millennium Challenge Corporation helped Honduras become a leader in secured transactions reform in Latin America and the Caribbean which will expand credit to small and medium enterprise by allowing collateralized borrowing.

In February 2011, the United States launched the Pathways Access Initiative in Peru to connect U.S. businesses with women-owned businesses.

The U.S. Department of State is working with Higher Education for Development and the World Environment Center to support the initiative, Pathways to Cleaner Production, launched in 2011. Under this initiative, Illinois Institute of Technology will lead a partnership with universities and National Cleaner Production Centers in Central America, the Dominican Republic, and Peru to enhance academic training and curricula in cleaner production and sustainable industrial development, and improve environmental performance and productivity of micro-, small- and medium-sized enterprises (MSMEs).

The Department of Commerce and U.S. Customs and Border Protection (CBP) are working through programs in Honduras, El Salvador and Costa Rica to improve and modernize border management around customs issues to ease the flow of goods and services as well as to increase hemispheric competitiveness.

TALIBAN LEADER CAUGHT; SUICIDE ATTACK PREVENTED

FROM:  AMERICAN FORCES PRESS SERVICE

Combined Force Captures Taliban Leader

Compiled from International Security Assistance Force Joint Command News Releases

WASHINGTON, April 13, 2012 - A combined Afghan and coalition security force today captured a Taliban leader who was planning a suicide attack against an upcoming gathering of local Afghan civilians in Afghanistan's Kunduz province, military officials reported.

As the security force approached the Taliban leader's suspected location, an insurgent armed with an assault rifle was killed as he prepared to fire, and the Taliban leader was wounded in the arm.

The security force provided medical treatment to the Taliban leader and later took him to a coalition medical facility. He is expected to fully recover and will be detained, officials said. Several other insurgents were detained in the operation.

In other operations today:

-- In Paktia province's Gardez district, security combined force captured a Taliban leader who coordinated suicide bombings and other attacks against Afghan and coalition security forces. He also provided weapons and ammunition to insurgents in the area. The security force also detained another insurgent in the operation.

-- An Afghan and coalition security force detained several suspected insurgents and destroyed more than 330 pounds (of bomb-making materials while searching for a Taliban leader in Wardak province's Sayyidabad district. The wanted man supervises construction and placement of roadside bombs and facilitates the movement of Taliban fighters from Pakistan into Afghanistan.

-- In Ghazni province's Khugyani district, Ghazni province, security combined force detained two suspected insurgents during an operation launched to capture a Taliban leader who plans kidnappings and conducts attacks against Afghan and coalition security forces. He also supplies local insurgents with weapons and equipment.

-- A combined force in Kandahar province's Shah Wali Kot district detained several suspected insurgents during an operation to capture a Taliban leader who directs attacks against Afghan and coalition security forces.

-- In Nangarhar province's Chaparhar district, security combined force detained several suspected insurgents an operation to capture a Taliban leader who directs attacks against Afghan and coalition security forces.

In other news, Afghan security forces supported by coalition troops found and destroyed 1,100 pounds of ammonium nitrate and a 115 mm rocket in Nangarhar province's Achin district yesterday. Ammonium nitrate is a fertilizer banned by the Afghan government because insurgents use it to make explosives.

And in an April 11 operation, a combined security force in Faryab province's Maimanah district killed Ammar Sahib, a senior facilitator for the Islamic Movement of Uzbekistan terrorist group.

Ammar Sahib, also known as Qyamuddin, provided weapons, ammunition, and equipment to terrorists across northern Afghanistan. He also recruited suicide bombers and coordinated with Islamic Movement of Uzbekistan leaders in Pakistan for newly trained fighters.

In 2006, he was arrested for a bombing that killed two civilians and two members of the coalition's provincial reconstruction team. He was sentenced to 20 years in prison, but served only six months.

The Islamic Movement of Uzbekistan organization is linked closely to al-Qaida and the Taliban. It operates in northern Afghanistan and other countries in Central Asia, officials said.

U.N. SECURITY COUNCIL DISCUSSIONS ON NORTH KOREA AND GUINEA-BISSAU

 FROM:  U.S. STATE DEPARTMENT
Remarks by Ambassador Susan E. Rice, U.S. Permanent Representative to the United Nations, at the Security Council Stakeout on North Korea and Guinea-Bissau, April 13, 2012
Susan E. Rice
U.S. Permanent Representative to the United Nations
U.S. Mission to the United Nations New York, NY April 13, 2012
AS DELIVERED
Good afternoon. The Council has discussed this morning both the situation with respect to DPRK and Guinea-Bissau, and I will brief you on both.
With respect to the first issue, the Council has just concluded consultations about the launch conducted yesterday by North Korea. The Council received a briefing from UN Assistant Secretary-General Oscar Fernandez-Taranco regarding the launch. Assistant Secretary-General Fernandez-Taranco reported that North Korea apparently launched a multi-stage rocket at 6:39 p.m. yesterday, Eastern Daylight Time. The launch was a failure.

He noted that the Secretary-General had released a statement regarding the launch in which the Secretary-General called the launch "deplorable as it defies the firm and unanimous stance of the international community" and noted that the "launch is in direct violation of Security Council Resolution 1874 and threatens regional stability." The Secretary-General also renewed his call on North Korean authorities to work towards building confidence with neighboring countries and improving the lives of its people.
Following our discussion, Council members have asked me to say the following on their behalf:

The Security Council held consultations to address the serious situation and listen to the concerns arising from the launch by North Korea. Members of the Security Council deplored this launch, which is in violation of Security Council Resolutions 1718 and 1874.
Members of the Security Council agreed to continue consultations on an appropriate response, in accordance with its responsibilities, given the urgency of the matter.
Now I’ll turn to Guinea-Bissau. The Council received a briefing on the situation in Guinea-Bissau from Assistant-Secretary-General Zerihoun. He noted that the situation is evolving rapidly and that it is not easy to confirm information at this time.

The military has arrested the Prime Minister, as well as Acting President Herrera. Their whereabouts cannot be confirmed at this time. The Secretariat urged the international community to address the cycle of violence and impunity in Guinea-Bissau. The members of the Security Council condemned the military action and urged the immediate restoration of civilian authority.

Council members are now discussing a press statement.
I’m happy to take a few questions.

Reporter: Ambassador Rice, do you expect the US to be pushing for sanctions or interested in sanctions on North Korea? And do you expect a presidential statement, press statement or anything like that in the near future?

Ambassador Rice: I’m not going to characterize the form of the response. This is the subject of early stage discussions among Council members.

Reporter: Ambassador, though, with an appropriate response, you have an opinion in terms of your national capacity. Can you speak to that, perhaps?

Ambassador Rice: I--the United States’ view of this is quite clear. We have condemned the launch. We view it as a direct violation of Resolutions 1718 and 1874. We think it’s important that the Council respond credibly. And we will be working in that direction.
Reporter: Will that be a sanctions resolution?

Ambassador Rice: As I said, I think it’s premature, both in my national capacity and as president of the Security Council, to predict or characterize the form of the reaction. We think a credible reaction is important.

Reporter: Ambassador, will you be discussing DPRK later on today? (Inaudible.)
Ambassador Rice: We have a very full agenda, many issues are brewing simultaneously and we’re working them simultaneously.

Reporter: How soon do you want to reach an agreement on the next appropriate measure? I mean, you are discussing other urgent matters but North Korea is also very urgent, so how –

Ambassador Rice: It is, and we’re working on it. And we will let you know when we have more to say. Thank you very much.

U.S. SUBMARINE FORCE CELEBRATES 112 YEARS OF SERVICE

FROM:  U.S. NAVY

110909-N-OV802-222 NORFOLK (Sept.9, 2011) The Virginia-class submarine Pre-Commissioning Unit (PCU) California (SSN 781) gets underway from Naval Station Norfolk to conduct weapons systems acceptance trials. California is the eighth Virginia-class submarine and is scheduled to be commissioned Oct. 29. (U.S. Navy photo by Mass Communication Specialist 2nd Class William Jamieson/Released)

Happy Birthday, U.S. Submarine Force! Celebrating 112 Years of Undersea Dominance 
By Lt. Hayley Sims, Commander, Submarine Force, Atlantic Public Affairs
NORFOLK, Va (NNS) -- The submarine force was born April 11, 1900 when the U.S. Navy bought the submersible Holland VI from John Holland.

Since that historic day, undersea warfighters and submarines have used fortitude and creativity to sustain their superiority beneath the sea and develop the force into the indispensable asset that patrols world-wide today.

As submariners celebrate their birthday around the world this month, they will honor the heroes on eternal patrol and those who have served past and present.
Rear Adm. Frank Caldwell, commander, Submarine Force U.S. Pacific Fleet, understands the value of submariners.

"For 112 years, the broad military advantages created by undersea concealment have resulted in a wide range of undersea platforms and missions that have enhanced our national security," said Rear Adm. Caldwell. "Throughout history, what has remained constant is the bold character of submariners."

Throughout the last 11 decades, submariners have advanced through four generations. The first generation produced fleet boats with the speed, endurance, weapons and payload that would make the submarine a warfighting platform. The second generation, defined by World War II heroes, made a decisive difference in the war and dominated the seas which set high standards of performance. The third generation of undersea warfare during the Cold War was defined by the advent of nuclear power - in weapons and propulsion. This advanced technology prevented a nuclear world war and secured the nation's interests.

The current generation of submariners, Generation IV, is being defined by the increase of long-range precision sensors and weapons. Today's submariners stay ahead of these threats and work hard to preserve their superiority in the undersea environment with the help of the "Design for Undersea Warfare" a guiding document which articulates how undersea warfighters provide "Ready Forces, Effective Employment, and Future Forces."

Vice Adm. John M. Richardson, commander, Submarine Forces, recognizes the hard, outstanding work of submariners and their families.

"I am incredibly proud of each and every member of the undersea warfare team, including our families who sacrifice along with us," said Vice Adm. Richardson. "Just as earlier generations did before us, we fourth generation undersea warriors will be ready to surge to any crisis - first to arrive and last to leave. Let it always be a comforting reassurance to our friends and the worst nightmare for our enemies to know that the U.S. Submarine Force is on the job."

Today's submarine force consists of 53 attack, 14 ballistic-missile and four guided-missile submarines that enable the Navy and the nation to win wars, deter wars, defeat terrorists, and ease disasters.

Happy birthday U.S. Submarine Force and congratulations on 112 years of rich success running silent through history and running deep into the future.

JUSTICE, EDUCATION DEPARTMENTS AND UNIVERSITY OF CALIFORNIA REACH AGREEMENT OVER RACIAL HARASSMENT COMPLAINTS

FROM:  DEPARTMENT OF JUSTICE
Friday, April 13, 2012
Departments of Justice and Education Reach Agreement with the University of California, San Diego to Resolve Harassment Allegations
The Departments of Justice and Education reached a settlement agreement with the University of California, San Diego (UCSD), to resolve an investigation into complaints of racial harassment against African-American students on campus.  Titles IV and VI of the Civil Rights Act of 1964 each prohibit harassment based on race.

The complaints alleged multiple incidents of racial harassment on campus, including public displays of nooses and a Ku Klux Klan-style hood, and the hosting of an off-campus party where students were invited to dress as stereotypes of African-Americans.   After conducting an extensive investigation into the alleged incidents, and following the receipt of additional complaints of racial discrimination and harassment on campus, the Departments of Justice and Education worked collaboratively with the university to address concerns regarding racial hostility on campus.

UCSD voluntarily entered into a resolution agreement with the departments.   Under the terms of the resolution agreement, UCSD will take steps to prevent racial harassment on campus, respond appropriately to harassment that occurs, and eliminate any hostile environment resulting from harassment.   The university has agreed to revise its campus policies and procedures related to racial harassment to ensure they are consistent with federal civil rights laws; maintain an Office for the Prevention of Harassment and Discrimination to receive, investigate, and resolve complaints of harassment and discrimination; and provide mandatory trainings for staff and students on the university’s anti-discrimination policies and procedures.  The university also voluntarily initiated a number of additional programs to address campus climate issues, and the departments will monitor the implementation of those programs to evaluate their impact on resolving the departments’ concerns.

“Students have a right to seek and obtain an education without facing racial harassment.   UCSD, like all colleges and universities, has an obligation to make clear that racial discrimination and harassment on campus will not be tolerated, and this agreement is a significant step in the right direction,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “We commend the university for working with us to address this matter, and we recognize the importance of this agreement in the context of larger efforts by the UC system to create supportive and inclusive learning environments for students.   We look forward to working with UCSD as it implements the measures and programs called for in the agreement.”

“We salute UCSD for taking these steps and we hope the entire school community learns from this experience and works together to overcome ignorance and intolerance,” said Russlynn Ali, Assistant Secretary for the Education Department’s Office for Civil Rights.   “America is a country that has always celebrated its diversity.   Nowhere is that more important than in our classrooms and schools – at every level – from the earliest grades to our colleges and universities. The Department of Education and the Department of Justice will continue to work cooperatively with UCSD to ensure that all students are safe from harassment and discrimination.”

TREASURY TARGETS MAJOR METHAMPHETAMINE SUPPLY ROUTE

FROM:  U.S. DEPARTMENT OF THE TREASURY

Major Methamphetamine Supply Route Targeted with Today’s Action

WASHINGTON – The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) today designated Ezio Benjamin Figueroa Vasquez and his son, Hassein Eduardo Figueroa Gomez, as Specially Designated Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for their significant role in international narcotics trafficking, as well as 16 of their companies in Mexico and Panama. The Kingpin Act prohibits U.S. persons from conducting financial or commercial transactions with these individuals and entities, and it freezes any assets the designees may have under U.S. jurisdiction. 

Figueroa Vasquez and Figueroa Gomez lead an international precursor chemical trafficking organization responsible for the diversion and importation of multi-ton quantities of pseudoephedrine and ephedrine from Europe and sub-Saharan Africa into Mexico. The organization distributes these precursor materials to major Mexican drug trafficking organizations which manufacture methamphetamine in Mexico for ultimate distribution in the United States. 

“Working closely with the Government of Mexico, OFAC is today sanctioning two significant traffickers who for years circumvented Mexican drug control laws to import massive amounts of ephedrine and pseudoephedrine into Mexico,” said OFAC Director Adam J. Szubin. “Together with our colleagues in the U.S. and Mexican governments, we will continue to target the activities of these criminals and other precursor chemical networks.”

On November 2, 2011, Figueroa Vasquez and Figueroa Gomez were indicted by a federal grand jury in the Eastern District of Virginia. They are accused of conspiring to commit money laundering in connection with their alleged precursor chemical trafficking. The indictment was unsealed on April 11, 2012.

In September 2011, Mexican authorities arrested Figueroa Vasquez, and he remains in Mexican custody today. The 16 companies designated today in Mexico and Panama range in business activities from real estate and construction to pharmaceutical activity. Among these companies are Mexico City-based pharmaceutical companies Geofarma, S.A. de C.V. and Distribuidora Medica Hospitalaria, S.A. de C.V. as well as Guadalajara-based construction and housing development companies Promociones Citadel, S.A. de C.V. and Desarrollo Arquitectonico Fortia, S.A. de C.V.

Today's action would not have been possible without key support from the Drug Enforcement Administration and the United States Attorney's Office for the Eastern District of Virginia. The Government of Belgium also assisted OFAC in this action. This cooperation is part of a global effort to interdict Mexican drug trafficking organizations’ access to materials needed for the illicit production of methamphetamine.

“This organization for years served as a major facilitator on behalf of some of the most violent, brutal Mexico-based drug networks in the world,” said DEA Chief of Financial Operations John Arvanitis. “The biggest cartels in the world rely on organizations like this one to secure huge amounts of precursor chemicals like ephedrine and pseudoephedrine to produce massive amounts of meth that ends up in communities across the United States. Using every tool at our disposal, such as this Treasury designation, will go a long way towards ensuring that this organization is dismantled.”

Pursuant to the Kingpin Act, the Treasury Department has designated more than 1,000 individuals and entities linked to drug kingpins since June 2000. Penalties for violations of the Kingpin Act range from civil penalties of up to $1.075 million per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.