DealBook: How Far Does Corporate Liability Extend? | Swiss Investigate Apparent Suicide of Former Zurich Insurance Chie

BY AMIE TSANG HOW FAR DOES CORPORATE LIABILITY EXTEND? MetLife is being sued by people who lost their money through a Ponzi scheme and say that the insurer ignored or failed to notice signs that agents and brokers were peddling the financing program, Victoria Finkle reports in DealBook.The legal battle has raised questions about how far a company's liability should go. When Diversified Lending Group crashed in 2008, the Securities and Exchange Commission sued Bruce Friedman, the man who ran it, accusing him of misappropriating millions of dollars in investor funds. He had operated a Ponzi scheme and defrauded hundreds of investors of more than $200 million, according to court documents.  MetLife has settled some cases with its own customers who were duped by the D.L.G. offer, but the current batch of lawsuits involves people who did not buy MetLife insurance. These people put their money in a D.L.G. investment pitched to them by sales representatives, some of whom were affiliated with MetLife and some of whom were independent contractors approved to sell its products.  MetLife has argued in court documents that it "had no relationship with D.L.G." and "did not sell, or materially assist in the sale" of the D.L.G. program. In the case of Christine Ramirez, who invested $279,769 in the fund, MetLife also said it was not legally obligated to supervise the broker who made the sale to Ms. Ramirez because he was a contractor, licensed through an unaffiliated broker-dealer. The company added that it did not "take or receive anything from" Ms. Ramirez and is not liable for damages. Its spokesman said the company did not comment on continuing litigation.  "This case is about aiding and abetting," said Richard E. Donahoo, founder of Donahoo & Associates, one of the lawyers representing Ms. Ramirez. "Mr. Friedman, who was a felon, likely could never have obtained the millions from the hundreds of people that he cheated without the legitimacy that a company like MetLife provided." The court battle comes just as policy makers in Washington are considering whether large financial institutions are "too big to manage." MetLife successfully fought off the government's labeling of it as a systemically important financial institution, but there are still concerns about whether big financial institutions are have sufficient control over their assets and employees.  "'Too big to manage' is really the next frontier of regulatory challenges in the financial industry," said Robert J. Jackson Jr., a professor of law at Columbia University. "Even the best senior managers will tell you that running an organization of this size and scope well, and keeping an eye on all of his employees, is an enormous challenge that we're not yet prepared for." SWISS INVESTIGATE APPARENT SUICIDE OF FORMER ZURICH INSURANCE CHIEF Martin Senn, the former chief executive of Zurich Insurance Group, has killed himself, David Jolly reports in The New York Times. Details of the death were not made public by the company, beyond the confirmation that his family had said he killed himself on Friday. Swiss news outlets reported that Mr. Senn had died at his vacation home in Klosters, near Davos.  Roman Rüegg, a spokesman for the police of Graubünden canton, which includes Klosters, said on Monday that police officers had confirmed Mr. Senn's death Friday evening. He refused to confirm or deny reports that Mr. Senn had shot himself as the investigation was continuing. He added that if there had been a suicide note, the police had not obtained it.  Mr. Senn, 59, joined Zurich Insurance in 2006, becoming chief executive in 2010. He was credited with helping the company to navigate the financial crisis without major losses, but stepped down in December, citing "setbacks" that included failing to buy RSA Insurance Group of Britain and losses from insurance claims related to the chemical explosions in Tianjin, China, in August.  On Monday, the company issued a statement, saying: "With the passing of Martin, we lose not only a highly valued former C.E.O. and colleague, but also a close friend. Our thoughts are with his bereaved family and friends, to whom we extend our deepest sympathies." The news of his death drew comparisons to the suicide less than three years ago of the company's chief financial officer, Pierre Wauthier. Mr. Wauthier killed himself, leaving a note in which he referred to tensions with Josef Ackermann, the company's demanding chairman. Mr. Ackermann stepped down soon after. Subsequent investigations by Zurich Insurance and Switzerland's financial watchdog found that Mr. Wauthier had not been under undue pressure, although Mr. Wauthier's survivors dispute this. ON THE AGENDA Data on personal income and spending during April will be published at 8:30 a.m. The Deutsche Bank 2016 Global Financial Services Conference starts today. NUNS WITH GUNS: THE STRUGGLES BETWEEN REGULATORS AND BANKERS Lenders have bolstered their forces with people to interpret and enforce a wave of new regulations, bringing striking change to banks' internal cultures, The Wall Street Journal reports. The 2010 Dodd-Frank law, intended to prevent another financial crisis, is one of the most complex pieces of legislation ever. It is the length of about 15 copies of "War and Peace" and covers matters like how much capital banks must set aside or how they can advertise.  Banks have hired tens of thousands of new employees and federal agencies have dispatched thousands of their own minders to watch over them. The new regulatory environment has changed the way banks work and forced them to push back their offerings. It has also been costly. Spending on regulatory compliance by the six largest banks in the United States rose to $70.2 billion in 2013, from $34.7 billion in 2007.  The change can be maddening, with regulators, internal compliance executives and employees all operating like rival tribes, people who worked on the issues told The Journal.  When bank compliance executives at Barclays shared images of how each group thinks of the others at a town hall, bankers were represented by cowboys on horses with guns. Compliance officials were depicted as nuns carrying guns. Barclays declined to comment.  Compliance employees told The Journal that they felt like hallway monitors, with people dropping what they were doing when they entered the room. One former Consumer Financial Protection Bureau deputy said he gave examiners pep talks, reminding them to "never let it be personal" and not to go in "with a chip on your shoulders." Contact amie.tsang@nytimes.com DEAL NOTES Charles M. Harper, Who Made ConAgra a Food Giant, Dies at 88 As chief executive he grew the company from a faltering $600 million operation to a $20 billion juggernaut, but he had less success at RJR Nabisco. NYT » MERGERS & ACQUISITIONS » Jazz Pharmaceuticals to Buy Celator for $1.5 Billion The deal would further bolster Jazz's portfolio by acquiring the maker of Vyxeos, a treatment for a form of leukemia. NYT » HNA Group's Spending Spree Moves to Australia HNA Group of China has agreed to buy a 13 percent stake in Virgin Australia Holdings and is in talks to acquire 49.99 percent of Air France's Servair, as it continues its aggressive expansion overseas. THE FINANCIAL TIMES Rothschild's Move Is Latest Twist for Alliance Trust RIT Capital Partners, the 55-year-old investment trust led by the financier Lord Rothschild, has approached Alliance Trust about a tie-up that would create a publicly listed company with a market value of more than 5 billion pounds, or about $7.3 billion. THE FINANCIAL TIMES Dalian Wanda Raises Buyout Offer for Property Arm Hong Kong regulators have taken a few weeks to approve the deal, because of the unusual funding structure of the transaction, The Wall Street Journal reports, citing people familiar with the matter. THE WALL STREET JOURNAL AirAsia Gets $1 Billion Offer to Acquire Leasing Company AirAsia, the region's biggest discount carrier, intended to sell Asia Aviation Capital, but needed to discuss the offer with the board, said Tony Fernandes, the chief executive. BLOOMBERG San Miguel Ends Telecom Push With 'Master Stroke' Philippine Long Distance Telephone and Globe Telecom acquired the telecommunications business of San Miguel Corp. for about $1.5 billion, including debt. BLOOMBERG Bayer and Monsanto Merger Raises Doubts Among RegulatorsAntitrust officials are likely to raise issues beyond competition in seed markets - if the big companies merge, the number of independent research and development laboratories will likewise fall. THE FINANCIAL TIMES INVESTMENT BANKING » U.S. Peer-to-Peer Lending Model Has Parallels with Subprime Crisis Marketplace lenders have no "skin in the game," there is limited data on loan quality, and there is scant information about loan collateral, Patrick Jenkins writes in the Inside Business column. THE FINANCIAL TIMES JPMorgan's Security Plan "Last year alone, we started conversations with about 300 start-ups," said Dana Deasy, the bank's chief information officer. "Of those, we brought 100 of them into the bank and piloted their ideas." THE WALL STREET JOURNAL

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