U.S. AIR FORCE WAGES WAR AGAINST WALDO CANYON FIRE

FROM:  U.S. AIR FORCE
Air Force firefighters taking fight to Colorado Springs wildfire 
6/28/2012 - Helicopters dump water on the Waldo Canyon Fire that has spread to the outskirts of the Air Force Academy, Colo., June 28. The Waldo Canyon fire has destroyed more than 18,000 acres in the Colorado Springs area. (U.S. Air Force photo by Staff Sgt. Christopher Boitz)

ACCOUNTING FOR NAVAL FAMILIES IN COLORADO

FROM:  U.S. NAVY
120627-N-WR119-014 COLORADO SPRINGS, Colo. (June 27, 2012) The Waldo Canyon fire burns on the south end of the United States Air Force Academy campus. The fire displaced 15 Navy Operational Support Center Fort Carson personnel and burned 15,324 acres as 32,000 people were evacuated. (U.S. Navy Photo by Mass Communication Specialist 2nd Class Gilbert Bolibol/Released)


Navy Issues Order To Account For Navy Families In Colorado
From Navy Personnel Command Public Affairs
MILLINGTON, Tenn. (NNS) -- The Navy has issued an order to account for Navy personnel and their families affected by the Colorado wildfires according to a Navy message released June 28.

NAVADMIN 196/12 requires commanders to conduct a personnel accountability muster of all Navy personnel and families in the Colorado counties of El Paso, Douglas, and Teller. Navy figures show approximately 3,100 Navy personnel residing in the affected geographical area.

This order includes active and Reserve component Sailors, Navy government service employees and family members.

Additionally, commanding officers are responsible for ensuring the muster is entered in the Navy Family Accountably and Assessment System (NFASS) at https://navyfamily.navy.mil.

Individuals who are unable to contact their command should log on to NFAAS and muster on the Navy Family Members' section. Impacted personnel unable to contact their command or the NFAAS website can call the NFASS Help Desk at (866) 946-9183.

Navy personnel and families, who are severely impacted, must log into NFAAS athttps://navyfamily.navy.mil to update contact information and complete a needs assessment survey at their earliest convenience. Affected personnel can contact the Navy Personnel Command (NPC) Emergency Coordination Center (ECC) (877) 414-5358 for further assistance once their needs assessment survey is submitted.

NFAAS standardizes a method for the Navy to account, manage, and monitor the recovery process for personnel and their families affected and/or scattered by a wide-spread catastrophic event.

For more information read the NAVADMIN at www.npc.navy.mil

DOD News Briefing with Gen. Edward Rice Jr. from the Pentagon

DOD News Briefing with Gen. Edward Rice Jr. from the Pentagon

PRESIDENT OBAMA'S REMARKS ON SUPREME COURT RULING REGARDING THE AFFORDABLE CARE ACT

FROM:  THE WHITE HOUSE
President Barack Obama talks on the phone with Solicitor General Donald Verrilli in the Oval Office, after learning of the Supreme Court's ruling on the “Patient Protection and Affordable Care Act,” June 28, 2012. (Official White House Photo by Pete Souza) 

Remarks by the President on Supreme Court Ruling on the Affordable Care Act
East Room
12:15 P.M. EDT
THE PRESIDENT:  Good afternoon.  Earlier today, the Supreme Court upheld the constitutionality of the Affordable Care Act -- the name of the health care reform we passed two years ago.  In doing so, they've reaffirmed a fundamental principle that here in America -- in the wealthiest nation on Earth – no illness or accident should lead to any family’s financial ruin.

I know there will be a lot of discussion today about the politics of all this, about who won and who lost.  That’s how these things tend to be viewed here in Washington.  But that discussion completely misses the point.  Whatever the politics, today’s decision was a victory for people all over this country whose lives will be more secure because of this law and the Supreme Court’s decision to uphold it.

And because this law has a direct impact on so many Americans, I want to take this opportunity to talk about exactly what it means for you.

First, if you’re one of the more than 250 million Americans who already have health insurance, you will keep your health insurance -- this law will only make it more secure and more affordable.  Insurance companies can no longer impose lifetime limits on the amount of care you receive.  They can no longer discriminate against children with preexisting conditions.  They can no longer drop your coverage if you get sick.  They can no longer jack up your premiums without reason.  They are required to provide free preventive care like check-ups and mammograms -- a provision that's already helped 54 million Americans with private insurance.  And by this August, nearly 13 million of you will receive a rebate from your insurance company because it spent too much on things like administrative costs and CEO bonuses, and not enough on your health care.
There’s more.  Because of the Affordable Care Act, young adults under the age of 26 are able to stay on their parent's health care plans -- a provision that's already helped 6 million young Americans.  And because of the Affordable Care Act, seniors receive a discount on their prescription drugs -- a discount that's already saved more than 5 million seniors on Medicare about $600 each.

All of this is happening because of the Affordable Care Act. These provisions provide common-sense protections for middle class families, and they enjoy broad popular support.  And thanks to today’s decision, all of these benefits and protections will continue for Americans who already have health insurance.  

Now, if you’re one of the 30 million Americans who don’t yet have health insurance, starting in 2014 this law will offer you an array of quality, affordable, private health insurance plans to choose from.  Each state will take the lead in designing their own menu of options, and if states can come up with even better ways of covering more people at the same quality and cost, this law allows them to do that, too.  And I’ve asked Congress to help speed up that process, and give states this flexibility in year one.

Once states set up these health insurance marketplaces, known as exchanges, insurance companies will no longer be able to discriminate against any American with a preexisting health condition.  They won’t be able to charge you more just because you’re a woman.  They won’t be able to bill you into bankruptcy. If you’re sick, you’ll finally have the same chance to get quality, affordable health care as everyone else.  And if you can’t afford the premiums, you'll receive a credit that helps pay for it.

Today, the Supreme Court also upheld the principle that people who can afford health insurance should take the responsibility to buy health insurance.  This is important for two reasons.

First, when uninsured people who can afford coverage get sick, and show up at the emergency room for care, the rest of us end up paying for their care in the form of higher premiums.

And second, if you ask insurance companies to cover people with preexisting conditions, but don’t require people who can afford it to buy their own insurance, some folks might wait until they’re sick to buy the care they need -- which would also drive up everybody else’s premiums.

That’s why, even though I knew it wouldn’t be politically popular, and resisted the idea when I ran for this office, we ultimately included a provision in the Affordable Care Act that people who can afford to buy health insurance should take the responsibility to do so.  In fact, this idea has enjoyed support from members of both parties, including the current Republican nominee for President.

Still, I know the debate over this law has been divisive.  I respect the very real concerns that millions of Americans have shared.  And I know a lot of coverage through this health care debate has focused on what it means politically.

Well, it should be pretty clear by now that I didn’t do this because it was good politics.  I did it because I believed it was good for the country.  I did it because I believed it was good for the American people.

There’s a framed letter that hangs in my office right now.  It was sent to me during the health care debate by a woman named Natoma Canfield.  For years and years, Natoma did everything right.  She bought health insurance.  She paid her premiums on time.  But 18 years ago, Natoma was diagnosed with cancer.  And even though she’d been cancer-free for more than a decade, her insurance company kept jacking up her rates, year after year.  And despite her desire to keep her coverage -- despite her fears that she would get sick again -- she had to surrender her health insurance, and was forced to hang her fortunes on chance.

I carried Natoma’s story with me every day of the fight to pass this law.  It reminded me of all the Americans, all across the country, who have had to worry not only about getting sick, but about the cost of getting well.

Natoma is well today.  And because of this law, there are other Americans -- other sons and daughters, brothers and sisters, fathers and mothers -- who will not have to hang their fortunes on chance.  These are the Americans for whom we passed this law.
The highest Court in the land has now spoken.  We will continue to implement this law.  And we'll work together to improve on it where we can.  But what we won’t do -- what the country can’t afford to do -- is refight the political battles of two years ago, or go back to the way things were.

With today’s announcement, it’s time for us to move forward -- to implement and, where necessary, improve on this law.  And now is the time to keep our focus on the most urgent challenge of our time:  putting people back to work, paying down our debt, and building an economy where people can have confidence that if they work hard, they can get ahead.

But today, I’m as confident as ever that when we look back five years from now, or 10 years from now, or 20 years from now, we’ll be better off because we had the courage to pass this law and keep moving forward.

Thank you.  God bless you, and God bless America.

ATTORNEY GENERAL HOLDER ISSUES STATEMENT ON HOUSE CONTEMPT VOTE

FROM:  U.S. DEPARTMENT OF JUSTICE
Thursday, June 28, 2012
Statement of Attorney General Eric Holder on the U.S. House of Representatives Vote
Attorney General Eric Holder issued the following statement today:

“Today’s vote is the regrettable culmination of what became a misguided – and politically motivated – investigation during an election year.   By advancing it over the past year and a half, Congressman Issa and others have focused on politics over public safety.   Instead of trying to correct the problems that led to a series of flawed law enforcement operations, and instead of helping us find ways to better protect the brave law enforcement officers, like Agent Brian Terry, who keep us safe – they have led us to this unnecessary and unwarranted outcome.

“During this time, the men and women of the Department of Justice – and I – have remained focused on what should and must be our government’s top priority: protecting the American people.

“When concerns about Operation Fast and Furious first came to light, I took action – and ordered an independent investigation into what happened.   We learned that the flawed tactics used in this operation began in the previous administration – but I made sure that they ended under this one.   I also made sure that agents and prosecutors around the country knew that such tactics must never be used again.   I put in place new policies, new safeguards, and new leadership to make certain of this – and took extraordinary steps to facilitate robust congressional oversight.   Let me be very clear – that was my response to Operation Fast and Furious.   Any suggestion to the contrary simply ignores the facts.

“I had hoped that Congressional leaders would be good-faith partners in this work.   Some have.  Others, however, have devoted their time and attention to making reckless charges – unsupported by fact – and to advancing truly absurd conspiracy theories.   Unfortunately, these same members of Congress were nowhere to be found when the Justice Department and others invited them to help look for real solutions to the terrible problem of violence on both sides of our Southwest Border.   That’s tragic, and it’s irresponsible.  The problem of drugs and weapons trafficking across this border is a real and significant public safety threat – and it deserves the attention of every leader in Washington.

“In the face of these and other challenges, the Justice Department has continued to move forward in fulfilling its critical law enforcement responsibilities. Whether it is with regard to prosecuting financial and health care fraud, achieving a record mortgage settlement, taking aggressive action in protecting the most vulnerable among us, or challenging proposed voting changes and redistricting maps that could disenfranchise millions of voters – this Department of Justice has not been afraid to act.

“Some of these enforcement decisions were not politically popular and help to explain the action taken today by the House.   As Attorney General, I do not look to do that which is politically expedient – on behalf of the American people whom I am privileged to serve, I seek justice.

“In recent weeks, the Justice Department secured its seventh conviction in the most serious terrorist plot our nation has faced since 9/11.   And just two days ago, the Department awarded more than $100 million in grants to save or create law enforcement jobs, including more than 600 jobs for recent veterans.

“This is the kind of work that leaders in Washington should be striving together to advance.   At a time when so many Americans are in need of our help, I refuse to be deterred from it.   And I will not let election-year politics and gamesmanship stand in the way of continued progress.

“Today’s vote may make for good political theater in the minds of some, but it is – at base – both a crass effort and a grave disservice to the American people.   They expect – and deserve – far better.

“As a result of the action taken today by the House, an unnecessary court conflict will ensue.  My efforts to resolve this matter short of such a battle were rebuffed by Congressman Issa and his supporters.  It’s clear that they were not interested in bringing an end to this dispute or obtaining the information they claimed to seek.  Ultimately, their goal was the vote that – with the help of special interests – they now have engineered.

“Whatever the path that this matter will now follow, it will not distract me or the men and women of the Department of Justice from the important tasks that are our responsibility.   A great deal of work for the American people remains to be done – I’m getting back to it.   I suggest that those who orchestrated today’s vote do the same."

U.S.-DENMARK RELATIONS

Map:  U.S. Department Of State
FROM:  U.S DEPARTMENT OF STATE
U.S. Relations With Denmark
Bureau of European and Eurasian Affairs
Fact Sheet
June 15, 2012
Denmark and the United States have long enjoyed a close and mutually beneficial relationship. The two countries consult closely on European and other regional political and security matters and cooperate extensively to promote peace and stability well beyond Europe’s borders. Denmark largely shares U.S. views on the positive ramifications of North Atlantic Treaty Organization (NATO) enlargement. Danish troops support International Security Assistance Force-led stabilization efforts in Afghanistan.

The U.S. Air Force base and early warning radar facility at Thule, in northwest Greenland, serves as a vital link in Western and NATO defenses. In 2004, the Danish and Greenland Home Rule governments signed agreements allowing for an upgrade of the Thule early warning radar in connection with a role in the U.S. ballistic missile defense system. The same agreements also created new opportunities for both sides to enhance economic, technical, and environmental cooperation between the United States and Greenland.
American culture--and particularly popular culture, from jazz, rock, and rap to television shows and literature--is very popular in Denmark. More than 300,000 U.S. tourists visit Denmark annually.

Bilateral Economic Relations
Denmark's active liberal trade policy in the European Union (EU), Organization for Economic Cooperation and Development, and World Trade Organization largely coincides with U.S. interests. There have been differences of opinion between the U.S. and the EU on how to manage and resolve recent global and regional financial crises, but not on the importance of action. Denmark's role in European environmental and agricultural issues and its strategic location at the entrance to the Baltic Sea have made Copenhagen a center for U.S. agencies and the private sector dealing with the Nordic/Baltic region.
The U.S. is Denmark's largest non-European trade partner. Among major Danish exports to the United States are industrial machinery, chemical products, furniture, pharmaceuticals, canned ham and pork, windmills, and plastic toy blocks (Lego). In addition, Denmark has a significant services trade with the U.S., a major share of it stemming from Danish-controlled ships engaged in container traffic to and from the United States (notably by Maersk-Line). Over 400 U.S. companies have subsidiaries in Denmark.

Denmark's Membership in International Organizations
Danish foreign policy is founded upon four cornerstones: the United Nations, NATO, the EU, and Nordic cooperation. Denmark and the United States belong to a number of the same international organizations, including the UN, NATO, the Organization for Security and Cooperation in Europe, Organization for Economic Cooperation and Development, International Monetary Fund, World Bank, and World Trade Organization.

HAUS EVACUATED BECAUSE OF WALDO CANYON FIRE

FROM:  U.S. AIR FORCE SPACE COMMAND
Default Cutline BUCKLEY AIR FORCE BASE, Colo. -- Haus, a military working dog from the 10th Security Forces Squadron, waits in his kennel June 27, 2012. Haus is one of eight military working dogs recently evacuated from the U.S. Air Force Academy due to the Waldo Canyon Fire. (U.S. Air Force photo by Airman 1st Class Phillip Houk)  

Buckley lodges Air Force Academy military working dogs
by Airman 1st Class Phillip Houk
460th Space Wing Public Affairs
6/27/2012 - BUCKLEY AIR FORCE BASE, Colo.  -- Eight military working dogs and two handlers were given orders to evacuate the Air Force Academy June 26, and were relocated here where their dogs are currently being provided shelter.

Staff Sgt. Timothy Bailey, 10th Security Forces Squadron military working dog trainer, said, "Due to their sensitivity, the primary mission was to get the dogs out due to the smoke and possible fire."

As evacuation plans were being established, Tech. Sgt. Justin Baker, 460th SFS kennel master, reached out and began making arrangements for their fellow dog handlers to come here.

"I started calling the chain of command and got their full support. We were just helping out the Academy," Baker said. "It's what we do."

Evacuation began yesterday afternoon and  progressed without issue. Within two hours of arrival, the dogs were housed and their handlers were placed in the dormitories.

"It all went very smoothly," said Bailey. "We are very thankful that Buckley was able to set us up, because we were not sure what to do next."

In addition to housing military working dogs, Buckley has provided the Air Force Academy a fire truck to assist in structural fires as needed.

ESA Portal - Portugal - Rochas marcianas que chegaram à superfície mostram que houve água debaixo da superfície de Marte

ESA Portal - Portugal - Rochas marcianas que chegaram à superfície mostram que houve água debaixo da superfície de Marte

Supreme Court Upholds Health Care Law

Supreme Court Upholds Health Care Law

2ND GENERATION AEGIS BALLISTIC MISSILE DEFENSE SYSTEM INTERCEPT FLIGHT TEST

FROM:  U.S. NAVY
120627-N-ZZ999-003 PACIFIC OCEAN (June 27, 2012) A Standard Missile-3 (SM-3) Block 1B interceptor is launched from the guided-missile cruiser USS Lake Erie (CG 70) for the second time during a Missile Defense Agency test in the Pacific Ocean. The SM-3 Block 1B successfully intercepted a short-range ballistic missile target that had been launched from the Pacific Missile Range Facility, located on Kauai, Hawaii. (U.S. Navy photo/Released) 

Second-Generation Aegis Ballistic Missile Defense System Completes Second Successful Intercept Flight Test
From Missile Defense Agency Public Affairs
PACIFIC MISSILE RANGE FACILITY, Hawaii (NNS) -- The Missile Defense Agency (MDA) and Sailors of USS Lake Erie (CG 70) successfully conducted a flight test of the Aegis Ballistic Missile Defense (BMD) system June 26.

The test resulted in the intercept of a separating ballistic missile target over the Pacific Ocean by the Navy's newest missile defense interceptor missile, the Standard Missile-3 (SM-3) Block 1B.

At 11:15 pm Hawaii Standard Time (5:15 am EDT June 27), the target missile was launched from the Pacific Missile Range Facility, located on Kauai, Hawaii. The target flew on a northwesterly trajectory towards a broad ocean area of the Pacific Ocean. Following target launch, USS Lake Erie detected and tracked the missile with its onboard AN/SPY-1 radar. The ship, equipped with the second-generation Aegis BMD 4.0.1 weapon system, developed a fire control solution and launched the SM-3 Block IB missile.

Lake Erie continued to track the target and sent trajectory information to the SM-3 Block IB missile in-flight. The SM-3 maneuvered to a point in space, as designated by the fire control solution, and released its kinetic warhead. The kinetic warhead acquired the target, diverted into its path, and, using only the force of a direct impact, engaged and destroyed the threat in a hit-to-kill intercept.

Today's test event was the second consecutive successful intercept test of the SM-3 Block IB missile and the second-generation Aegis BMD 4.0.1 weapon system. The first successful SM-3 Block IB intercept occurred May 9, 2012. Today's intercept is a critical accomplishment for the second phase of the President's European Phased Adaptive Approach consisting of the SM-3 Block 1B interceptor employed in an Aegis Ashore system in Romania in 2015.

Initial indications are that all components performed as designed resulting in a very accurate intercept.

This was the 23rd successful intercept in 28 flight test firings for the Aegis BMD program. Across all Ballistic Missile Defense System programs, it is the 54th successful hit-to-kill intercept in 68 flight tests since 2001.

Aegis BMD is the sea-based midcourse component of the MDA's Ballistic Missile Defense System and is designed to intercept and destroy short to intermediate-range ballistic missile threats. The MDA and the U.S. Navy cooperatively manage the Aegis BMD Program.

SEC ALLEGES MISAPPROPRIATION OF ASSETS AND MARKET MANIPULATION SCHEME

FROM:  SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., June 27, 2012 — The Securities and Exchange Commission today filed fraud charges against New York-based hedge fund adviser Philip A. Falcone and his advisory firm, Harbinger Capital Partners LLC for illicit conduct that included misappropriation of client assets, market manipulation, and betraying clients. The SEC also charged Peter A. Jenson, Harbinger’s former Chief Operating Officer, for aiding and abetting the misappropriation scheme. Additionally, the SEC reached a settlement with Harbinger for unlawful trading.

In a separate, settled action, the SEC charged Harbert Management Corporation, whose affiliates served as the managing members of two Harbinger-related entities, as a controlling person in the market manipulation.

The SEC alleges that Falcone used fund assets to pay his taxes, conducted an illegal “short squeeze” to manipulate bond prices, secretly favored certain customers at the expense of others, and that Harbinger unlawfully bought equity securities in a public offering, after having sold short the same security during a restricted period.

“Today’s charges read like the final exam in a graduate school course in how to operate a hedge fund unlawfully,” said Robert Khuzami, Director of the SEC’s Division of Enforcement.  “Clients and market participants alike were victimized as Falcone unscrupulously used fund assets to pay his personal taxes, manipulated the market for certain bonds, favored some clients at the expense of others, and violated trading rules intended to prohibit manipulative short sales.”

The SEC filed actions in U.S. District Court for the Southern District of New York against Falcone, Jenson, and Harbinger, and, in connection with the illegal trading scheme, separately instituted and settled administrative and cease-and-desist proceedings against Harbinger.

In particular, the SEC alleges that: Falcone fraudulently obtained $113.2 million from a hedge fund that he advised and misappropriated the proceeds to pay his personal taxes;

Falcone and two Harbinger investment managers through which Falcone operated manipulated the price and availability of a series of distressed high-yield bonds by engaging in an illegal “short squeeze;”

Falcone and Harbinger secretly offered and granted favorable redemption and liquidity rights to certain strategically-important investors in exchange for those investors’ consent to restrict redemption rights of other fund investors, and concealed the arrangement from the fund’s directors and investors; and

Harbinger engaged in illegal trades in connection with the purchase of common stock in three public offerings after having sold the same securities short during a restricted period.

“Not only are hedge fund managers expected to be savvy investors, they are supposed to serve the interests of their clients. Here, in addition to raiding a fund for personal benefit and cutting secret deals with favored investors, Falcone then lied to investors about what he had done,” said Bruce Karpati, Chief of the Asset Management Unit in the SEC’s Division of Enforcement.

Describing the illegal short squeeze, Gerald W. Hodgkins, Associate Director of the SEC’s Division of Enforcement said, “After he took control of an entire issue of high-yield bonds, Falcone kept buying with an eye toward rigging the market and punishing short sellers to settle a score. In the process, Falcone hijacked the market for the bonds and illegally manipulated their price and availability. The Division will continue to police the bond market to make sure it operates as an efficient market, free of the corrosive effects of manipulators such as Falcone.”

Misappropriation Scheme
In the misappropriation scheme, the SEC alleges that Falcone unlawfully used fund assets to pay his personal taxes. In 2009 Falcone owed federal and state authorities $113.2 million in taxes. Declining to pursue other financing options, such as pledging his personal assets as collateral for a bank loan, Falcone elected instead to take a $113.2 million loan from the Harbinger Capital Partners Special Situations Fund, L.P. – the same fund from which Harbinger had earlier suspended investors from redeeming.

Falcone authorized the transfer of fund assets to himself in a transaction that Jenson helped structure. Falcone and Harbinger never sought or obtained consent from investors prior to using the fund's assets to benefit Falcone.

As part of the misappropriation scheme, the SEC alleges that Falcone and Harbinger, aided by Jenson, made several material misrepresentations and omissions in seeking legal advice regarding the loan and in subsequent communications with investors, including, among other things:
the financing alternatives available to Falcone; the circumstances that led to Falcone’s need for the loan; the ability of the Special Situations Fund to furnish the loan, without disadvantaging investors;

the terms and conditions of the loan, including the interest rate charged and the amount of collateral posted by Falcone; and the role of Harbinger’s outside legal counsel in vetting the transaction.
The SEC also alleges that Falcone and Harbinger delayed disclosing the loan for approximately five months because of their concern that disclosure of Falcone’s financial condition might have a negative impact on investor withdrawals and on Falcone’s ability to attract more investments for other Harbinger funds. Falcone repaid the loan in 2011, after the Commission commenced its investigation.

Market Manipulation / Illegal Short Squeeze
In a separate civil action, the SEC alleges that from 2006 through early 2008 Falcone and two Harbinger investment management entities manipulated the market in a series of distressed high-yield bonds issued by MAAX Holdings Inc. In this fraudulent scheme, Falcone and the Harbinger entities allegedly orchestrated an illegal “short squeeze” – a market manipulation scheme in which an investor constricts the supply of a security, through large purchases or other means, with the intent of forcing settlement from short sellers at arbitrary and inflated prices.

The SEC’s complaint alleges that at Falcone’s direction, Harbinger purchased a large position in the MAAX bonds during April and June of 2006. After hearing rumors that a Wall Street financial services firm was shorting the MAAX bonds and also encouraging its customers to do the same, Falcone decided to seek revenge. In September 2006, Falcone directed the Harbinger-managed funds to buy every available bond in the market, often purchasing the bonds from short sellers. Ultimately, Falcone raised the funds’ stake to approximately 13 percent more than the available supply of the MAAX bonds.

At one point, Harbinger had purchased 22 million more bonds than MAAX had ever issued. Contemporaneously with these purchases, Falcone locked up the MAAX bonds the Harbinger funds had purchased in a custodial account at a bank in Georgia to prevent his brokers from lending out the bonds to sellers seeking to deliver the bonds to purchasers after short sales.

Having seized control of the supply of the MAAX bonds, Falcone then demanded that the Wall Street firm and its customers settle their outstanding MAAX short sales, not disclosing that it would be virtually impossible to find bonds available for delivery. The Wall Street firm bid daily for the bonds, which quickly doubled in price. Then, Falcone engaged in a series of transactions with certain short sellers at arbitrary, inflated prices, while at the same time valuing the funds’ holdings on his books at a small fraction of the prices he charged the covering short sellers.

Preferential Redemption Scheme
In its action alleging misappropriation, the SEC also alleges that in a further breach of Falcone and Harbinger’s fiduciary duties to their clients, Falcone and Harbinger engaged in unlawful preferential redemptions for the benefit of certain favored investors.

In 2009, while soliciting required investor approval to restrict withdrawals from another Harbinger fund, Falcone and Harbinger secretly exempted certain large investors that Falcone deemed to be strategically important from soon-to-be imposed liquidity restrictions – provided those investors voted to approve restrictions that would temporarily stabilize the decline in Harbinger’s assets under management.

Ultimately, pursuant to these ‘vote buying’ agreements, Falcone and Harbinger allegedly permitted these investors who were connected to certain favored institutional investors to withdraw a total of approximately $169 million. Harbinger concealed these quid pro quo arrangements from the independent directors and from fund investors.

Other Illegal Trading by Harbinger
In a separate administrative and cease-and-desist proceeding, the SEC found that between April and June 2009, Harbinger violated Rule 105 of Regulation M of the Securities Exchange Act of 1934 (Exchange Act). Rule 105 is an anti-manipulation rule that prohibits short selling securities during a restricted period and then purchasing the same securities in a public offering.

The Commission’s Order censures Harbinger and requires the firm to cease and desist from committing or causing any violations of Rule 105 now or in the future. Harbinger will pay disgorgement in the amount of $857,950, prejudgment interest in the amount of $91,838, and a civil monetary penalty in the amount of $428,975. Harbinger consented to the issuance of the Order without admitting or denying any of the Commission’s findings.

Settlement with Harbert Management Company
In a separate complaint also filed in U.S. District Court for the Southern District of New York, the SEC filed a settled civil action against Harbert and two related investment entities – HMC-New York Inc. and HMC Investors, LLC – for their role in the illegal short squeeze described above.

The SEC alleges in its complaint against Harbert that during the entire period of the short squeeze, Defendants Harbert, HMC-NY and HMC Investors, directly or indirectly, possessed the power to control Falcone and the investment managers through which he operated. HMC-NY and HMC Investors, two entities controlled by Harbert, served as the managing members of two limited liability companies that acted as the general partners of the funds advised by Falcone.

Harbert and its affiliates also provided hedge fund administrative, legal, compliance, risk assessment and other services to the funds. In these capacities, Harbert, HMC-NY and HMC Investors knew of Falcone’s trades in the MAAX bonds, but failed to take appropriate steps to address Falcone’s manipulative conduct. The SEC charged the Harbert defendants as controlling persons pursuant to Section 20(a) of the Exchange Act, alleging that they are jointly and severally liable for Falcone’s and the Harbinger investment managers’ violations of the antifraud provisions of the Exchange Act.

Without admitting or denying the allegations of the complaint, Defendants Harbert, HMC-NY and HMC Investors have agreed to pay a civil penalty in the amount of $1 million. The Harbert defendants also have consented to the entry of a judgment enjoining them from violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The proposed settlement with Harbert is subject to approval by the court.

In the pending federal court actions concerning the first three fraudulent schemes described above, the Commission seeks a variety of sanctions and relief including injunctions against Falcone and Harbinger from violations of the anti-fraud provisions of the Securities Act of 1933, the Exchange Act, and the Investment Advisers Act of 1940.

In addition, the Commission seeks to enjoin Harbinger and Falcone from controlling any person who violates the anti-fraud provisions of the Exchange Act. As for monetary relief, the Commission seeks disgorgement of ill-gotten gains, prejudgment interest, and civil money penalties from Falcone and Harbinger. The Commission further seeks to prohibit Falcone from serving as an officer and director of any public company. Against Jenson, the Commission seeks to enjoin Jenson from aiding and abetting future violations of the anti-fraud provisions of the Exchange Act and Advisers Act and seeks to obtain monetary penalties.

The SEC’s investigation was a coordinated effort between teams from the SEC’s headquarters and the New York Regional Office, including Conway T. Dodge, Jr., Robert C. Besse, Ken C. Joseph, Mark Salzberg, Brian Fitzpatrick, and David Stoelting. Messrs. Joseph, Salzberg, and Fitzpatrick are members of the Enforcement Division’s Asset Management Unit. Mr. Stoelting and David Gottesman will lead the SEC’s litigation team.

MILITARY FAMILIES OFFERED FREE ANNUAL PASS TO NATIONAL PARKS

FROM:  AMERICAN FORCES PRESS SERVICE
National Park Service Offers Military, Families Free Annual Pass
By Amaani Lyle
WASHINGTON, June 27, 2012 - The National Park Service extends free annual park passes far beyond the droves of Pentagon employees who lined up to take advantage of the offer today.

Through its America the Beautiful series, the National Park Service grants complimentary access to more than 2,000 federal recreation sites, national parks and wildlife refuges to active duty service members and activated Guardsmen and reservists and their families, said Kathy Kupper, National Park Service spokeswoman.

"The park service is just so grateful for the service of the military, so we've been looking for a way to show our gratitude," Kupper said. "It's taken a couple of years to get all the details worked out, but we're honored that we can pay back a little bit."
Service members can get a pass, valued at $80, by showing their military identification card. Family members can obtain their own passes, even if the service member is deployed or if they are traveling separately, Kupper explained.

A pass covers entry and standard amenity fees for a driver and all passengers in a personal vehicle at per-vehicle fee areas, or up to four adults at sites that charge per person. Children age 15 or under are admitted free. Wounded warriors or any American citizen with a disability can get a free lifetime pass to all national parks.

A 25-year National Park Service employee, Kupper recalled the organization's decades-long military ties, specifically to the Army, which oversaw national parks between the 1876 establishment of Yellowstone, the first national park, and the 1916 stand-up of NPS.
"For about 40 years, you had the U.S. Army, particularly the U.S. Cavalry, including Buffalo Soldiers, care for our first national parks," Kupper said. "Yellowstone, Yosemite, Sequoia and Kings Canyon all had roads set up, built, with trails established and wildlife protected ... by the U.S. Army."

Kupper added that even park ranger uniforms are inspired by the cavalry uniform, symbolizing the enduring bond.

"Many national parks were set aside for use strictly by military, whether for rest and relaxation trips ... or for training," the spokeswoman said, adding that through the years, the parks have been home to some of America's most iconic images of freedom.
"Our service members are fighting to protect our freedoms and a lot of them are manifested in these symbols like the Statue of Liberty, the Liberty Bell, Mount Rushmore -- all sites cared for by the Park Service," Kupper said. "These places inspire the military and remind them what they're fighting for so where better for them and their families to visit?"

SEC. OF DEFENSE PANETTA ANNOUNCES $60 MILLION IN GRANTS TO MILITARY SCHOOLS

FROM:  AMERICAN FORCES PRESS SERVICE
Panetta Announces $60M in Grants to Military Schools
By Lisa Daniel
GRAPEVINE, Texas, June 27, 2012 - The Defense Department recently awarded $60 million to three public schools on two military installations, the latest example of its efforts to invest in the education of military children, Defense Secretary Leon E. Panetta said at an education seminar here today.

The grants, to schools serving children at Fort Bliss, Texas, and Joint Base Lewis-McChord, Wash., are the first -- with more to come this summer – of a $500 million congressional appropriation for the department to improve facilities at 161 public schools on military installations, Panetta announced at the Military Child Education Coalition's 14th national seminar.

DOD also has awarded an additional $180 million in grants to more than 900 public schools that support 80 percent of the 1.5 million school-age military children, the secretary said. It has done that while also strengthening and modernizing the Department of Defense Education Activity schools, which serve 86,000 military children, he added.
"Educating military children is not only important to their future – and it is important their future – but it's critically important to the future of our military and our nation," Panetta told seminar participants. The coalition works to improve the education of all school-age military children, whether they are in DOD, public or private schools.

To underscore his point, Panetta noted that he is joined at the two-day seminar in this Dallas suburb by the chairman of the Joint Chiefs of Staff, the chiefs of the Army, Navy and Air Force, and the vice commandant of the Marine Corps.

"That tells you a lot," he told the hundreds of participants. "What you do relates to our ability to carry out the mission of defending the country. We are all here to say 'thank you.'
"In a democracy, we are dependent on good education," he added. "Education is the key to self-governance, the key to opportunity, the key to equality; and education is the key to freedom. It is the key to a better life."

Panetta told of his own parents' immigration thousands of miles from their home in Italy to the United States, where his father's occupation was marked as "peasant" at Ellis Island, N.Y., all so their children could have a better life.

"That's the American dream," he said. "That's what all of us want for our children, and hopefully what they want for their children."

Helping to give future generations a better quality of life goes to the very heart of the military and what everyone at the seminar is doing, Panetta said, and a quality education is essential to a better life.

"I've long believed this country has an obligation to make education a top national priority," the secretary told the audience, adding that he has tried to do that in his four decades in government.

"I would not be here as secretary of defense were it not for the opportunities given to me by education," he said. "Now, as secretary of defense, I'm determined to do everything possible to give our military children the tools they need to succeed in the future."
About 44 percent of service members are parents, and they consistently rate the availability of quality education for their children as a high priority in their career decisions, Panetta said. "The quality of education available to our military children affects our overall readiness, our retention, and it affects the very morale of our force," he added.
"In equipping our military children with the best education, the best knowledge, the best skills they need for the future, the department is investing in its own future," he said. "Many of these young men and women will follow in the tracks of their parents and join the military themselves."

Education also is a national security priority, Panetta said, causing the department to support efforts such as those by the National Math and Science Initiative to build technical proficiency and to emphasize the need for foreign language skills.

"Our military is better able to defend our country when we address the long-term education needs of those who serve and their children," the secretary said.
Military children have many challenges, Panetta noted. More than a million have had a parent deploy to combat since 2001, and many are forever changed by war, he said. Most will move six to nine times before they graduate from high school, and 195,000 of them have special needs, he said.

The department can't meet the education needs of military children without the "active support and cooperation of all the stakeholders" – teachers, parents, community leaders, and state and local governments, the secretary said. Through such partnerships, the department has prompted 43 state governments to pass laws easing the transfer of school credits for military children as they move from state to state and from outside the country, he added.

"I want you to know that the Department of Defense has listened," he said. "It's not always easy to get that big bureaucracy to listen, but we have listened -- to school districts to organizations, to parents -- and we've listened to you. We will continue to fight to give our military children the best in educational opportunities."

DOD AND IMPORTANCE OF PTSD TREATMENT FOR SERVICE MEMBERS

FROM:  AMERICAN FORCES PRESS SERVICE 
Officials Say Progress Must Continue in PTSD Treatment
By Terri Moon Cronk
WASHINGTON, June 27, 2012 - Great strides have been made in treating service members with post-traumatic stress disorder, but progress must continue, military and medical leaders told an audience here today. The military's three surgeons general and the Army's senior sergeant major spoke at an event to mark the third-annual National Post Traumatic Stress Disorder Awareness Day.

Raymond Chandler III, the sergeant major of the army, called himself the poster child of someone with PTSD who is concerned about the stigma associated with seeking treatment, something which he says is an on-going issue for many.

His first brush with a life-threatening event in Iraq became life-altering, he said, adding that it caused him to do things that led to a "downward spiral."  For example, during his post-deployment health risk assessment, he wasn't completely honest about his situation because he was being redeployed.

"I felt that if I said truthfully what happened and what I was feeling, I wouldn't be able to succeed and move on. I've come a long way since 2005," he added, noting that he had turned off a good part of his life -- the emotional, spiritual and physical elements to deal with being the professional soldier.

Chandler finally entered a two-week behavioral health program which he said made a significant difference.

In 2011, when he interviewed with then-Army Chief of Staff Gen. George W. Casey Jr. for the job as Sergeant Major of the Army, he said Casey was glad to have him onboard with his experience in PTSD counseling, because Chandler could speak to the challenges and treatment.

Chandler got the job and went on to tell his story to service members and families.
"I think we've made a difference," Chandler said. "I know in many of our soldiers' lives and the many challenges of the past 10 years, we've made tremendous strides in our behavioral health care access, and our care and quality of care, [but] we still have a long way to go."

"I believe we will work through this and we will be better as a nation," he said.
Army Surgeon General Lt. Gen. Patricia D. Horoho told the audience "As a society in military medicine we must be able to provide care for the invisible wounds of war in the long run. As a nation, it is our opportunity to partner and lead the way in breaking the silence [of the invisible wounds].".

"While it is difficult to ask [for help], it is more difficult, and frankly, tragic to lose a loved one ... to suicide or any high-risk behavior," Horoho said. "Soldiers and families must come to realize that [cases of PTSD] resulting from deployment are curable with the proper care."

The majority of service members with PTSD return to productive and engaging lives, and remain on active duty, she said.

"We will not leave anyone behind," Horoho vowed.

Navy Surgeon General Vice Adm. Matthew Nathan said it "takes a village" to conquer PTSD -- and it begins with awareness across the military, the Department of Veterans Affairs, and the private sector.

Nathan, who also is the chief of the Navy's Bureau of Medicine and Surgery, said he is encouraged by the embedded teams of mental health care providers who treat service members, and that service members know what to look for in their battle buddies for signs of PTSD.

Air Force Surgeon General Lt. Gen. Charles Green noted that the good news is that there is recovery from PTSD, and veterans have access to the very best evidence-based care in both the Defense Department and the Department of Veterans Affairs.

"The hard part is choosing to share your experience, and choosing to recover from something you might not recognize, Green said, noting that more than 75 percent of service members treated for PTSD are returned to active duty.

COMPANY SETTLES CHARGES OF ALLEGED BRIBERY

FROM:  SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., June 27, 2012 –The Securities and Exchange Commission today charged that FalconStor Software, Inc., a Long Island, N.Y., data storage company, misled investors about bribes it paid to obtain business with a subsidiary of J.P. Morgan Chase & Co.

FalconStor admitted to the bribery scheme and agreed to pay a $2.9 million penalty and to institute enhanced compliance measures to settle the SEC’s civil lawsuit, filed in U.S. District Court for the Eastern District of New York. The settlement is subject to court approval. FalconStor will pay an additional $2.9 million as part of a deferred prosecution agreement with the U.S. Attorney’s Office for the EDNY, which filed a related criminal case against the Melville, N.Y., company.

According to the SEC, FalconStor’s now deceased co-founder, chairman, and former chief executive ordered the bribes, which were paid to three executives of the subsidiary, JPMorgan Chase Bank, National Association, and their relatives, starting in October 2007. Lavish entertainment at casinos, and payments in cash, traveler’s checks, gift cards, and grants of FalconStor options and restricted stock, helped FalconStor secure a multi-million dollar contract with the J.P. Morgan Chase subsidiary, the SEC said.

The J.P. Morgan Chase subsidiary became one of FalconStor’s largest customers and FalconStor touted the relationship in earnings calls and releases as proof of the strength of its products and its strides in moving to direct sales rather than relying on third-party distributors. The SEC said FalconStor never told investors about the bribes and inaccurately recorded the payments as “compensation,” “sales promotion,” or “entertainment” expenses.

“FalconStor overstepped the bounds in its pursuit of business. This case shows that when such conduct results in securities law violations, the Commission will not hesitate to hold wrongdoers accountable,” said David Rosenfeld, Associate Director of the SEC’s New York Regional Office, adding, “FalconStor claimed the contract was a vindication of the company’s technology, but neglected to tell investors that the contract derived from the bribes that it paid.”

FalconStor’s CEO resigned in September 2010, after admitting that he had been involved in improper payments to a customer, and FalconStor’s stock fell by more than 22 percent on the news.

According to the SEC’s complaint, FalconStor made materially misleading statements in earnings releases filed with the SEC in April 2008 and February 2009. The SEC said FalconStor also granted restricted stock and options to relatives of two of the JP Morgan Chase executives even though they provided no bona fide services to the company, making the grants ineligible under FalconStor’s incentive stock plan. In addition, the SEC said FalconStor failed to accurately record the expenses associated with the bribes on its books and records, and lacked effective internal controls to detect or prevent bribery, which violated state law and FalconStor’s own policies. The complaint charges FalconStor with violating the books-and-records and internal controls provisions of U.S. securities laws, and violations of the offering registration provisions and certain antifraud provisions.

The SEC thanks the U.S. Attorney’s Office for the Eastern District of New York and the Federal Bureau of Investigation for their assistance in this matter, and acknowledges the cooperation of the New York County District Attorney’s Office in the investigation.

Leslie Kazon, Joseph P. Ceglio, Christopher C. Mele, and Preethi Krishnamurthy of the SEC’s New York Regional Office conducted the SEC’s investigation.

THE HORNET IN THE HANGER

An F/A-18C Hornet is in the hangar bay of the aircraft carrier USS Nimitz (CVN 68). Nimitz is underway conducting carrier qualifications in preparation for Rim of the Pacific (RIMPAC) 2012, the world'??s largest international maritime exercise. U.S. Navy photo by Mass Communication Specialist 3rd Class Ian A. Cotter (Released) 120625-N-IR734-00

U.S. EXPORT-IMPORT BANK GRANTS LOAN OF $75.7 MILLION FOR HELICOPTER EXPORT TO BRAZIL

Map Credit:  Wikimedia/CIA
FROM:  U.S. EXPORT-IMPORT BANK
Ex-Im Approves $75.7 Million in Financing for Export of U.S. Helicopters to Brazil
Washington, D.C. – The Export-Import Bank of the United States (Ex-Im Bank) has authorized a $75.7 million loan guarantee for Líder Taxi Aéreo S.A.—Air Brasil that will support the export of three Sikorsky Aircraft Corporation S-92® helicopters to Brazil.

Ex-Im Bank 's support enabled Sikorsky to win the order in competition with government-backed European competitors and will sustain approximately 500 jobs at the company’s facilities in Connecticut and Pennsylvania.

Likewise, the loan guarantee has proved to be an invaluable resource for Líder Taxi, which had insufficient access to financing on acceptable terms to purchase the helicopters.

“The financing support for these helicopters illustrates the unique ability of Ex-Im Bank to provide essential financing to ensure American exporters can compete in the international marketplace,” said Ex-Im Bank Chairman and President Fred P. Hochberg. “Our support leveled the playing field and kept 500 highly-skilled American workers on the job.”

Headquartered in Stratford, Conn., Sikorsky Aircraft Corporation is a manufacturer of commercial and military helicopters. Its S-92 model is a heavy-mission helicopter designed for offshore transport, medical emergencies, and search-and-rescue missions.

“The Export-Import Bank of the U.S. often plays a vital role in the sale of Sikorsky commercial helicopters to the offshore oil and gas industry worldwide,” said Bob Kokorda, Sikorsky vice president for sales and marketing. “These three S-92 helicopters will enable Líder Taxi to fly Brazilian workers to offshore rigs in deeper water farther from shore. And they will help maintain a healthy U.S.-based supply chain for the aircraft while sustaining a highly skilled workforce at our helicopter manufacturing facilities in the United States.”

Líder Taxi, established in 1958 and the largest air taxi company in Brazil, plans to use the helicopters to shuttle personnel and equipment to offshore oil platforms.

The transaction is the sixth Ex-Im Bank has approved since 2004 with the Belo Horizonte-based company.

Brazil is one of Ex-Im Bank’s nine key markets and accounted for $2.7 billion of the Bank’s worldwide credit exposure at the end of FY 2011.

ISAF JOINT COMMAND NEWS RELEASE JUNE 27, 2012

Photo:  Blackhawk Helicopter Flying Over Afghanistan.  Credit:  U.S. Air Force. 

FROM:  AMERICAN FORCES PRESS SERVICE

Combined Force Detains Taliban Weapons Facilitator

Compiled from International Security Assistance Force Joint Command News Releases

WASHINGTON, June 27, 2012 - An Afghan and coalition security force detained a Taliban weapons facilitator in the Zharay district of Kandahar province today, military officials reported.

Officials said the facilitator coordinated the transportation and storage of equipment and supplies used in insurgent attacks across the region.

The security force also detained several suspected insurgents, officials said.

In other Afghanistan operations today:

-- In the Tsamkani district of Paktiya province, a combined force searching for a Haqqani leader called in an airstrike that killed several insurgents. The leader is responsible for coordinating, financing and leading attacks against Afghan and coalition forces. No civilians had been harmed and no property had been damaged.

-- A combined force detained a Haqqani leader and several suspected insurgents in the Sharan district of Paktika province. The detained Haqqani leader was responsible for building improvised explosive devices used throughout the region. He also provided IED instruction to other Haqqani insurgents.

In June 26 operations:

-- A combined force killed multiple insurgents, detained several others and seized a weapons cache containing six rocket-propelled grenades, six IEDs, some homemade explosives, eight AK-47 rifles, one machine gun, three grenades, and communications equipment in the Shahid-e Hasas district of Uruzgan province.

-- A combined force killed one insurgent during a firefight in Ghazni province's Gelan district.

-- Coalition forces killed two insurgents in the Qarah Bagh district of Ghazni province.

-- A combined force detained two insurgents in Khowst province's Sperah district.

-- A combined force discovered a cache containing some RPGs in Khowst province's Nadir Shah Kot district.

-- A combined force killed six insurgents and detained three others in Logar province's Pul-E Alam district.

-- A combined force detained 12 insurgents in Nangarhar province's Khugyani district.

-- Afghan police and coalition forces discovered a cache containing several mortar rounds in the Deh Bala district of Nangarhar province.

-- Afghan police and coalition forces detained three insurgents in Parwan province's Bagram district.

-- Afghan soldiers and coalition forces killed one insurgent in the Siaghird district of Parwan province.

And on June 24, a combined force captured an insurgent leader in the Tarin Kot district of Uruzgan province. The detained insurgent had planned, directed and executed attacks against Afghan and coalition forces.

BARCLAYS BANK PLC AGREES TO PAY $160 MILLION PENALTY AND AVOIDS PROSECUTION FOR GLOBAL INTEREST RATE MANIPULATION

 FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, June 27, 2012
Barclays Bank PLC Admits Misconduct Related to Submissions for the London Interbank Offered Rate and the Euro Interbank Offered Rate and Agrees to Pay $160 Million Penalty

WASHINGTON – Barclays Bank PLC, a financial institution headquartered in London, has entered into an agreement with the Department of Justice to pay a $160 million penalty to resolve violations arising from Barclays’s submissions for the London InterBank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR), which are benchmark interest rates used in financial markets around the world, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office.

As part of the agreement with the Department of Justice, Barclays has admitted and accepted responsibility for its misconduct set forth in a statement of facts that is incorporated into the agreement.  According to the agreement, Barclays provided LIBOR and EURIBOR submissions that, at various times, were false because they improperly took into account the trading positions of its derivative traders, or reputational concerns about negative media attention relating to its LIBOR submissions.  The Justice Department’s criminal investigation into the manipulation of LIBOR and EURIBOR by other financial institutions and individuals is ongoing.  The agreement requires Barclays to continue cooperating with the department in its ongoing investigation.

“LIBOR and EURIBOR are critically important benchmark interest rates,” said Assistant Attorney General Breuer. “Because mortgages, student loans, financial derivatives, and other financial products rely on LIBOR and EURIBOR as reference rates, the manipulation of submissions used to calculate those rates can have significant negative effects on consumers and financial markets worldwide.  For years, traders at Barclays encouraged the manipulation of LIBOR and EURIBOR submissions in order to benefit their financial positions; and, in the midst of the financial crisis, Barclays management directed that U.S. Dollar LIBOR submissions be artificially lowered.  For this illegal conduct, Barclays is paying a significant price.  To the bank’s credit, Barclays also took a significant step toward accepting responsibility for its conduct by being the first institution to provide extensive and meaningful cooperation to the government.  Its efforts have substantially assisted the Criminal Division in our ongoing investigation of individuals and other financial institutions in this matter.”

“Barclays Bank’s illegal activity involved manipulating its submissions for benchmark interest rates in order to benefit its trading positions and the media’s perception of the bank’s financial health,” said Assistant Director in Charge McJunkin.  “Today’s announcement is the result of the hard work of the FBI Special Agents, financial analysts and forensic accountants as well as the prosecutors who dedicated significant time and resources to investigating this case.”

Barclays was one of the financial institutions that contributed rates used in the calculation of LIBOR and EURIBOR.  The contributed rates are generally meant to reflect each bank’s assessment of the rates at which it could borrow unsecured interbank funds.  For LIBOR, the highest and lowest 25% of contributed rates are excluded from the calculation and the remaining rates are averaged to calculate the fixed rates.  For EURIBOR, the highest and lowest 15% are excluded and the remaining 70% are averaged to calculate the fixed rates.

Futures, options, swaps, and other derivative financial instruments traded in the over-the-counter market and on exchanges worldwide are settled based on LIBOR.  Further, mortgages, credit cards, student loans and other consumer lending products often use LIBOR as a reference rate.  According to the agreement, an individual bank’s LIBOR or EURIBOR submission cannot appropriately be influenced by the financial positions of its derivatives traders or the bank’s concerns about public perception of its financial health due to its LIBOR submissions.

According to the agreement, between 2005 and 2007, and then occasionally thereafter through 2009, certain Barclays traders requested that the Barclays LIBOR and EURIBOR submitters contribute rates that would benefit the financial positions held by those traders.  The requests were made by traders in New York and London, via electronic messages, telephone conversations and in-person conversations.  The employees responsible for the LIBOR and EURIBOR submissions accommodated those requests on numerous occasions in submitting the bank’s contributions.  On some occasions, Barclays’s submissions affected the fixed rates.

In addition, between August 2005 and May 2008, certain Barclays traders communicated with traders at other financial institutions, including other banks on the LIBOR and EURIBOR panels, to request LIBOR and EURIBOR submissions that would be favorable to their or their counterparts’ trading positions, according to the agreement.

When the requests of traders for favorable LIBOR and EURIBOR submissions were taken into account by the rate submitters, Barclays’s rate submissions were false and misleading.

Further, according to the agreement, between approximately August 2007 and January 2009, in response to initial and ongoing press speculation that Barclays’s high U.S. Dollar LIBOR submissions at the time might reflect liquidity problems at Barclays, members of Barclays management directed that Barclays’s Dollar LIBOR submissions be lowered.  This management instruction often resulted in Barclays’s submission of false rates that did not reflect its perceived cost of obtaining interbank funds.  While the purpose of this particular conduct was to influence Barclays’s rate submissions, as opposed to the resulting fixes, there were some occasions when Barclays’s submissions affected the fixed rates.

The agreement and monetary penalty recognize Barclays’s extraordinary cooperation.  Barclays made timely, voluntary and complete disclosure of its misconduct.  After government authorities began investigating allegations that banks had engaged in manipulation of benchmark interest rates, Barclays was the first bank to cooperate in a meaningful way in disclosing its conduct relating to LIBOR and EURIBOR.  Barclays’s disclosure included relevant facts that at the time were not known to the government.  Barclays’s cooperation has been extensive, in terms of the quality and type of information and assistance provided, and has been of substantial value in furthering the department’s ongoing criminal investigation.  Barclays has made a commitment to future cooperation with the department and other government authorities in the United States and the United Kingdom.

Assistant Attorney General Breuer further stated, “As today’s agreement reflects, we are committed to holding companies accountable for their misconduct while, at the same time, giving meaningful credit to companies that provide full and valuable cooperation in our investigations.”

In addition, Barclays has implemented a series of compliance measures and will implement additional internal controls regarding its submission of LIBOR and EURIBOR contributions, as required by the Commodity Futures Trading Commission (CFTC).  Barclays will also continue to be supervised and monitored by the FSA.

The agreement and monetary penalty further recognize certain mitigating factors to Barclays’s misconduct.  At times, Barclays employees raised concerns with the British Bankers’ Association, the United Kingdom Financial Services Authority (FSA), the Bank of England, and the Federal Reserve Bank of New York in late 2007 and in 2008 that the Dollar LIBOR rates submitted by contributing banks, including Barclays, were too low and did not accurately reflect the market.  Further, during this time, notwithstanding Barclays’s improperly low Dollar LIBOR submissions, those submissions were often higher than the contributions used in the calculation of the fixed rates.


As a result of Barclays’s admission of its misconduct, its extraordinary cooperation, its remediation efforts and certain mitigating and other factors, the department agreed not to prosecute Barclays for providing false LIBOR and EURIBOR contributions, provided that Barclays satisfies its ongoing obligations under the agreement for a period of two years.  The non-prosecution agreement applies only to Barclays and not to any employees or officers of Barclays or any other individuals.

In a related matter, the CFTC brought attempted manipulation and false reporting charges against Barclays, which the bank agreed to settle. The CFTC imposed a $200 million penalty and required Barclays to implement detailed measures designed to ensure the integrity and reliability of its benchmark interest rate submissions.

The FSA issued a Final Notice regarding its enforcement action against Barclays, and has imposed a penalty of £59.5 million against it.

The case is being handled by Deputy Chief Daniel Braun, Assistant Chiefs Rebecca Rohr and Robertson Park, Trial Attorney Alexander Berlin, and Special Trial Attorney Luke Marsh of the Criminal Division’s Fraud Section.  The investigation is being conducted by the FBI’s Washington Field Office, jointly with the Antitrust Division of the Department of Justice.

The Department acknowledges and expresses its appreciation for the significant assistance provided by the CFTC’s Division of Enforcement, which referred the conduct to the Department, as well as the FSA’s Enforcement and Financial Crime Division.

This agreement is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.

HOT SHOTS SENT TO BATTLE COLORADO WILDFIRES

FROM:  U.S. AIR FORCE
A Vandenberg Hot Shots vehicle backs into the belly of a C-17 Globemaster here from March Air Reserve Base June 27. Eighteen members of the Vandenberg Hot Shot crew, along with two hot shots crew carrier vehicles, one superintendant support vehicle and one all terrain vehicle deployed to Colorado to support the wildland fire fighting efforts. (U.S. Air Force photo/Andrew Satran)

Vandenberg sends Hot Shots to Colorado wildfire front lines
by Staff Sgt. Erica Picariello
30th Space Wing Public Affairs

6/27/2012 - VANDENBERG AIR FORCE BASE, Calif. -- Vandenberg deployed the only Department of Defense wildland fire fighting asset at 2 p.m. June 27 in support of the wildland fire fighting efforts in Colorado Springs.

The 18-member Vandenberg Hot Shot crew, along with two hot shots crew carrier vehicles, one superintendant support vehicle and one all terrain vehicle, loaded into the belly of a C-17 Globemaster from March Air Reserve Base at approximately 1 p.m. on June 27.

"This is national support at its finest," said Mark Farias, Vandenberg Fire Department chief. "Vandenberg Hot Shots, being the only DoD hot shots, bring a critical skill set to the fight. These guys will be on the front lines of this wildfire using their training regarding wildfires and urban interface to save lives and structures in the state of Colorado."

The hot shots will most likely be assigned to the Waldo Canyon Fire. As that fire rages in Colorado Springs, engulfing more than 15,517 acres, many military bases and residential areas are in danger and facing mandatory evacuation. This hot shots crew has been explicitly trained to save structures, not just to extinguish the flames.

"When a building or community faces a wild fire danger we use structure triage," said Jesse Hendricks, Vandenberg Hot Shots superintendent. "First we remove any fuel source, like trees or shrubbery, from around the home using hand tools. Once we've created an area clear of fuels, we actually burn a fire around the structure that will carry the initial fire away from the homes."

Vandenberg's Hot Shots are going into this inferno mentally and physically prepared.

"We all got into the mindset that this is going to be a nasty situation," Hendricks said. "We understand fatigue will be a factor, so we are all hydrating and are trying to get as much sleep as we can before getting to Colorado. When we go into any wildfire we try to relate it to our 'mental slides,' meaning that we recall similar wildfires and pull from those lessons learned so that we will be more effective."

Vandenberg's Fire Chief feels confident that this hot shot crew will prove to be a valuable asset to the containment of the Colorado wildfire.

"Thousands of people and homes are threatened, but the most skilled DoD wildland fire fighters are being deployed. Our hot shots are difference makers, having saved this base numerous times, our surrounding communities and now Colorado Springs," Farias said.