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Glaxo Admits China Execs May Have Broken the Law: Ahead of the Ticker

Tickers in this article: GSK HAS UBS

NEW YORK (TheStreet) -- GlaxoSmithKline revealed that some of its senior executives in China may have broken the law.

The acknowledgment comes after China accused the British drugmaker of bribing hospital workers, doctors and government officials.

GSK executive Abbas Hussain, who went to China to investigate the accusation, said in a statement, "Certain senior executives of GSK China who know our systems well, appear to have acted outside of our processes and controls which breaches Chinese law."

Hussain added that the company has a zero tolerance policy regarding this type of behavior.

According to allegations, as much as 3 billion yuan ($490 million) was channeled through travel agencies and consulting firms to hide the bribery. Four GSK China employees are said to have been detained while the investigation proceeds.


UBS reached an "agreement in principle" with the U.S. government to settle its lawsuit over its sale of mortgage-backed securities.

UBS said it reached the agreement with the U.S. Federal Housing Finance Agency over claims related to residential mortgage-backed securities it sold from 2004 to 2007. It said it will book 865 million francs in charges and writedowns related to the settlement as a result.

The FHFA sued 18 banks in 2011 in attempt to recoup losses on $196 billion in mortgage-backed securities sold to Fannie Mae and Freddie Mac. The agency accused UBS of doling out misleading statements and failing to conduct due diligence in selling $4.5 billion worth of these securities.

UBS reported net income of about 690 million Swiss francs ($734 million) for the second quarter, compared to 425 million francs in the same period last year. Some analysts expected the company to report net income of about 560 million francs, according to Thomson Reuters.


Toymaker Hasbro reported disappointing second-quarter earnings on weak demand for toys and merchandise for boys.

Hasbro said it earned $36.5 million, or 28 cents a share, for the quarter, down for $43.4 million, or 33 cents a share, a year ago. Analysts had expected earnings of 34 cents.