Globetrotting with footnoted__»

This afternoon’s post takes a look at some noteworthy events unfolding around the globe:

MetLife, Inc. (MET): In the 8-K that MetLife filed August 2, Exhibit 99.2, page F-34 includes an update on the Italian branch of Alico Life International Ltd.’s (ALIL) fund suspensions in Italy, which relate to allegations that – among other things – employees made misrepresentations and improper disclosures about their policies. After noting that ALIL learned in March, 2010 that Milan’s public prosecutor is investigating actions taken by some of ALIL’s employees (as well as employees of one of its major distributors), the filing adds:

—ALIL is cooperating with the Italian and Irish regulatory authorities, which have jurisdiction… and is in discussions to address their concerns as well as those of the affected policyholders. The ultimate resolution of this matter could have a material adverse effect on the Company’s combined and consolidated results of operations or cash flows for an individual reporting period.

MasterCard, Inc. (MA): In the 10-Q that the credit card giant filed August 3, pages 25-26 offer status reports on pending matters around the globe. Among those is a new matter that popped up last month, described as follows:

—On July 2, 2010, MasterCard received a notice from the Swiss Competition Authority (WEKO—) that, based upon complaints, WEKO had opened an investigation of MasterCard’s domestic debit acquirer fees and ordered MasterCard to discontinue charging the fees. MasterCard responded to the notice on July 9, 2010. A negative decision could result in MasterCard being fined and ordered to stop collecting the fees. If WEKO were to issue a negative decision regarding the fees and order MasterCard to stop collecting them, and the decision was not reversed on appeal, such a decision could have a significant adverse impact on the revenues of MasterCard and its overall business in Switzerland.

The filing does not disclose the amount of revenues that it collects from doing business in Switzerland.

Molex, Inc. (MOLX): Molex filed its annual report on August 3 and provided an update on the unauthorized actions by a former employee (over a period of about 22 years!) that resulted in losses of more than $160 million.

A more complete summary of what happened is available on p. 28, but — briefly — an employee in Molex Japan’s finance group took unauthorized loans to cover losses resulting from unauthorized trading and margin trading. The person — who subsequently admitted to forging documents and concealing the transactions — also misappropriated funds to cover losses from the unauthorized trades.

Molex explains on p. 86 of the 10-K:

——we removed the individual who was responsible for these unauthorized activities. We have also taken the following actions during the fourth quarter of fiscal 2010: implemented a controller oversight function in Molex Japan with a member of corporate finance management; increased monitoring controls from corporate finance and executive management; expanded internal controls testing; and required all finance employees to review and recertify our Code of Business Conduct.

There are other important recent international activities, and we—ll report those soon in another post.

Image source: Norman B. Leventhal Map Center at the BPL via flickr


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