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Citi to face cartel charges in Australia; 2 Pennsylvania banks ink $32.4M deal

Citigroup Inc. is expected to face charges over alleged cartel conduct in relation to its role as one of the underwriters in Australia & New Zealand Banking Group Ltd.'s 2015 share issuance. The New York-based bank has denied any wrongdoing.

Pennsylvania-based Orrstown Financial Services Inc. is buying in-state peer Mercersburg Financial Corp. in a $32.4 million stock-and-cash transaction.

Bank of Nova Scotia is buying Canadian asset management firm MD Financial Management for C$2.59 billion in cash. Scotiabank plans to fund a part of the deal via a C$1.50 billion common equity offering, selling 19.7 million common shares at C$76.15 per share on a bought-deal basis. It expects the deal to affect its common equity Tier 1 capital ratio by 30 basis points.

Private equity investment firm Thoma Bravo LLC is buying a majority stake in LogRhythm, Inc., a security intelligence and analytics company.

Funds managed by Corsair Capital LLC acquired Jackson Hewitt Tax Service Inc., the portfolio company of Bayside Capital Inc.

Investment bank Perella Weinberg Partners LP is considering a spinoff of its asset management unit before possibly going public, sources for Bloomberg News say. The unit has approximately $13.5 billion under management. They said the spinoff could help Perella Weinberg take its investment bank public and achieve higher valuation as an advisory company. The company is weighing various alternatives and has not yet made any final decisions.

Several financial companies disclosed guidance for second-quarter results.

Square Inc. expects to record a net loss per share of 6 cents to 8 cents for the quarter, higher than its previous estimate. The updated guidance was disclosed after the payment processor completed its purchase of e-commerce platform Weebly Inc.

Farmers and Merchants Trust Co. of Chambersburg in Pennsylvania expects to recognize a $10.0 million to $11.5 million impairment charge in the second quarter related to a $14.4 million loan participation interest.

Univest Corp. of Pennsylvania's second-quarter results could include a $13 million charge due to alleged fraudulent activities by one or more employees of a borrower and its related entities. The company will have its net income per share adversely affected by provision for loan and leases losses, and professional fees arising from this commercial lending relationship.

And Fulton Financial Corp. expects its second-quarter net income to be decreased by $32 million, or 18 cents per share, in light of credit losses arising from a single, large commercial lending relationship at one of its banking units. That loss stemmed from fraudulent activities believed to be perpetrated by one or more employees of the borrower and its related entities.

In other parts of the world

Asia Pacific: Hong Kong fines Hang Seng Bank unit; Nippon Life buys stake in MassMutual Japan

Europe: S&P downgrades Deutsche; Political worries shift to Spain from Italy

Middle East & Africa: UAE's Abraaj faces wind-up petition; Kenya to probe banks over stolen funds

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng increased 0.08% to 30,492.91, while the Nikkei 225 decreased 0.14% to 22,171.35.

In Europe, around midday, the FTSE 100 was up 0.71% to 7,732.26, and the Euronext 100 was up 1.14% to 1,060.98.

On the macro front

The motor vehicles sales report, the employment situation report, the PMI Manufacturing Index, the ISM Manufacturing Index, the construction spending report and the Baker-Hughes Rig Count report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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