Receiving Wide Coverage ...
JPMorgan's Wrist Slapped: JPMorgan Chase will pay $307 million to settle Securities and Exchange Commission and Commodity Futures Trading Commission probes into the bank's alleged failure to tell its wealth-management clients about conflicts of interest. One allegation is JPMorgan didn't tell clients it was putting their money in more-expensive funds that JPMorgan itself managed, the Wall Street Journal said. Also, JPMorgan put clients' money in third-party funds that paid fees to JPMorgan. JPMorgan said the moves were a mistake and were unintentional.
The SEC also ordered JPMorgan to hire an independent consultant to review its actions in the future, to make sure JPMorgan doesn't accidentally put its clients' money in funds that generate more fees for JPMorgan (without telling clients). JPMorgan won't have to stop giving its own funds and business partners preferential treatment, the New York Times noted. But it will have to at least disclose it from now on. Of the fines, $267 million will go to the SEC and $40 million will go to the CTFC, the Financial Times said.
Wall Street Journal
Banks are taking drastic steps to crack down on actions taken by their own employees — often unwittingly — that expose the banks to cyberattacks. Banks are banning employees from using USB drives, warning them about what they post on social media and discouraging the use of "out-of-office" emails. JPMorgan Chase bans its employees from using work email addresses for personal use.
Several banks are also monitoring whether employees are falling victim to "spear-phishing" attempts. JPMorgan recently ran a fake spear-phishing test and found that 20% of its employees fell for it. TD Bank has also sent spear-phishing attempts, to try to bait employees; if the employee falls for it, he or she gets an instant pop-up video telling them they made the mistake. Pinnacle Financial Partners in Nashville, Tenn., is also running spear-phishing attempts; its employees "all joke about it," said the bank's information security director.
In total, JPMorgan expects to spend about $500 million on cybersecurity next year, twice the amount it spent in 2014. Bank of America Chairman Brian Moynihan has said the bank's cybersecurity budget is unlimited. John Stumpf, chairman of Wells Fargo, said the bank spends "an ocean of money" on cybersecurity. "It is the only expense where I ask if it's enough." Employee error accounts for about 30% of data breaches, according to a survey by the Association of Corporate Counsel.
Financial Times
HSBC has hired two firms to consult it on restructuring and downsizing moves, amid its 2012 deferred-prosecution agreement with U.S. authorities over sanctions and money-laundering violations, in which it agreed to pay $1.9 billion. Rothschild will advise HSBC on the sale of its private banking clients' riskiest portfolios and on selling off assets of the private bank. KPMG will advise on the sale of private bank assets to reduce the geographic scope of the business; HSBC has already agreed to sell its private banking and trust operations in Bermuda and it sold $12.5 billion of Swiss private banking assets to LGT Group of Liechtenstein.
Elsewhere ...
Los Angeles Times: The paper looks at the difficulties faced by banks and credit unions that want to conduct business with marijuana businesses in states where it's legal. Good Meds in Denver has had 25 bank accounts closed. The Federal Reserve Bank of Kansas City refuses to give a charter to Fourth Corner Credit Union in Denver, which wants to become "the first financial institution in the nation catering exclusively to the marijuana business."
