GLENCORE UNDER SUBPOENA. Shares of Glencore fell more than 12% in early trading.

 By Todd Horwitz, Bubba Trading.

 

Glencore Shares Tumble after Subpoena

The Justice Department has demanded that Glencore PLC hand over records related to the Anglo-Swiss mining giant’s compliance with laws against foreign-corrupt practices and money laundering concerning its business in Congo, Nigeria, and Venezuela.

Glencore, which disclosed it had received a subpoena in a statement Tuesday, said it is reviewing the request and “will provide further information in due course.” The company said the subpoena was dated July 2 and relates to its operations in the three countries from 2007 to the present. Shares of Glencore fell more than 12% in early trading.

It’s been a tumultuous year for Glencore, mostly due to challenges linked to its business in the Congo, where it operates giant copper and cobalt mines. The Swiss trader and miner is already facing the possibility of a bribery investigation by U.K. prosecutors over its work with Dan Gertler, an Israeli billionaire and close friend of Congo President Joseph Kabila, people familiar with the situation said in May.

The DOJ usually issues subpoenas when it is investigating a company. In December, a Swiss court ordered companies controlled by Gertler to hand over bank documents to U.S. Federal prosecutors.

“Given the flow of negative news we’ve had through the course of this year, the knee-jerk reaction is worse than it otherwise might have been,” Hunter Hillcoat, an analyst at Investec Securities Ltd., said by phone. “The DOJ fines can be big, but to wipe out 10 percent of the market cap would be bigger than any fine I can recall.

”

The biggest U.S. penalty for foreign corruption was a $965 million payment imposed on Sweden’s telecoms company Telia Company AB after it accepted that it paid hundreds of millions of dollars in bribes to a government official in Uzbekistan.

Keep those stops tight
Todd “Bubba” Horwitz

IN ASSOCIATION WITH

Financial Markets & Political Commentary

 

Tags

, , , ,

Related Posts

About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.