Business news briefs: DOJ subpoenas PNC

Share with others:

Print Email Read Later

DOJ subpoenas PNC

PNC Financial Services Group Inc. received a subpoena regarding the return rate for its payment-processor clients from the U.S. Department of Justice and Consumer Financial Protection Bureau. The authorities are "seeking information concerning the return rate for certain merchant and payment processor customers with whom PNC has a depository relationship," the Pittsburgh-based bank said Monday in a regulatory filing. "We believe that the subpoena is intended to determine whether, and to what extent, PNC may have facilitated fraud committed by third-parties against consumers." PNC said it's cooperating with the investigation. The lender agreed to pay $35 million in December to settle claims it charged minorities more for home loans than similarly qualified white borrowers. It concerned violations of fair-lending laws on loans to about 76,000 black and Hispanic borrowers from 2002 to 2008 by National City Bank, which PNC purchased at the end of 2008.

Gates: world's richest person

Microsoft founder-turned-philanthropist Bill Gates is the world's richest person with a net worth of $76 billion, according to Forbes' annual list of the world's billionaires. Warren Buffet, the Berkshire Hathaway chairman who helped buy Pittsburgh's H.J. Heinz Co. last year, ranked fourth, while Jorge Paulo Lemann, whose 3G Capital was Berkshire's partner on the deal, ranked 34th. Two other 3G Capital partners, Marcel Herrmann Telles and Carlos Alberto Sicupira, were ranked 119th and 146th, respectively. The ranking of 1,645 billionaires included several from Western Pennsylvania: Henry Hillman at 687; Susan Hirt Hagan at 988; Richard Scaife at 1,203; and Edward Stack at 1,284.

PPG closes deal with company

Pittsburgh coatings and glass maker PPG Industries has closed on the previously announced acquisition of most of the assets of Boxborough, Mass.-based Hi-Temp Coatings Technology Co., which makes high-temperature-resistant and insulative coatings. Financial terms were not disclosed.

Heinz joins shareholder event

Berkshire Hathaway's investment in the H.J. Heinz Co. last year means the Pittsburgh food company will be part of the Omaha carnival-style annual shareholders meeting that the Nebraska company hosts. This year's event, set for May 3, will sell ketchup from Heinz, alongside the usual offerings of See's candy, Wells Lamont gloves and Brooks running shoes, according to Chairman Warren Buffett's letter to shareholders issued Saturday. "This year, Charlie and I will have competing ketchup bottles for sale," wrote Mr. Buffett, referring to Charlie Munger, vice chairman. "This is important, so don't let me down."

Sauce slated for auction

Unilever is seeking bidders for its Ragu pasta sauce, people with knowledge of the matter said. Unilever last week contacted many of the companies that were approached when the company sold Wish-Bone dressings last year and expects to sell the brand for between $1.5 billion and $2 billion.

Pittsburgh ketchup maker H.J. Heinz Co., Kraft Foods Group Inc. and Pinnacle Foods Inc., which bought Wish-Bone last year for $580 million, are among the companies contacted, a source said. Representatives for Heinz, Kraft and Pinnacle declined to comment.

Citigroup subpoenaed

Citigroup and its Mexican subsidiary have received grand jury subpoenas from federal prosecutors over issues of compliance with anti-money-laundering and bank secrecy laws, the bank disclosed on Monday.

The disclosure, in the bank's annual securities filing, comes after Citigroup said its Mexican unit Banamex had been defrauded of as much as $400 million.

Banamex USA also received a subpoena from the Federal Deposit Insurance Corp. related to the Bank Secrecy Act and anti-money-laundering program, Citigroup said.

The purported fraud stems from a $585 million accounts receivable program Banamex had offered to an oil supply company, Oceanografia, in Mexico. Invoices for work Oceanografia was supposed to have completed were falsified, according to Citigroup. A person briefed on the matter said it was suspected that a Banamex employee was involved in the fraud.

Citigroup's chief executive, Michael L. Corbat, said in a memo to employees that it was unclear how many people were involved.

The investigations indicate that the purported fraud in Mexico could have larger legal ramifications for the bank, which has been trying to put many of its problems related to the financial crisis behind it.

The Securities and Exchange Commission and the FBI are also looking into the mater, people briefed on the matter said on Friday. Citigroup said it was cooperating fully with all the inquiries.

Manufacturing index rising

The Institute for Supply Management, a group of purchasing managers, said Monday that its manufacturing index rose to 53.2 in February from 51.3 in January. The increase only partly reversed a five-point drop in January from December. Still, any reading above 50 signals growth. Bradley Holcomb, chair of the ISM's survey committee, said many businesses blamed bad weather for a slowdown in their output.

Construction growth slows

Construction spending edged up 0.1 percent in January, significantly slower than an upwardly revised 1.5 percent gain in December, the Commerce Department reported Monday. Home building was up 1.1 percent in January with single-family construction rising 2.3 percent and apartment building up 1 percent. However, there was widespread weakness outside of housing. Non-residential construction fell 0.2 percent and office building was flat, with bad weather likely a factor in the weakness. Total government construction was down 0.8 percent in January compared with December.

Clothing stores talk merger

Men's Wearhouse and Jos. A. Bank Clothiers Inc. announced they are exchanging certain confidential information, with Men's Wearhouse adding Monday that it also has received a draft merger agreement from Jos. A. Bank. Shares of Jos. A. Bank rose 23 cents to $62.31 and Men's Wearhouse's stock rose 31 cents to $54.10.

Caesars sells off 4 properties

Caesars Entertainment is selling four properties to a separate unit that it controls for about $1.8 billion as it restructures its debt. The sale of Bally's Las Vegas and the other three properties is valued by the company at about $2.2 billion, when debt and renovations at the Quad Resort & Casino are included. Caesars Acquisition Co. expects the deal to close in the second quarter. Caesars Entertainment will manage the properties. The other assets include Harrah's New Orleans, and The Cromwell, which will open later this year and was formerly known as Bill's Gamblin' Hall & Saloon.

Also in business...

The ExOne Company named former Biomet executive Timothy R. Pierce U.S. chief operating officer.


Join the conversation:

Commenting policy | How to report abuse
To report inappropriate comments, abuse and/or repeat offenders, please send an email to and include a link to the article and a copy of the comment. Your report will be reviewed in a timely manner. Thank you.
Commenting policy | How to report abuse


Create a free PG account.
Already have an account?