Morning Scan: Five Madoff Associates Found Guilty; SEC Probes Complex CLO Deals


Receiving Wide Coverage ...

Cue 'Law & Order' Theme: Five of Bernie Madoff's former employees were found guilty Monday night of aiding and covering up the largest investment fraud in U.S. history, putting to rest the myth that Madoff worked largely alone to swindle more than $17 billion from customers. Each potentially faces decades in prison, though the five defendants are likely to appeal. Madoff, who initially confessed to the scheme in 2008, is serving a 150-year prison sentence for the fraud, which is said to have begun as far back as the 1970s. New York Times, Wall Street Journal, Financial Times

Wall Street Journal

The Securities and Exchange Commission is looking into the resurgence of collateralized loan obligations to determine whether banks are using the complex securities to hide risky — and illegal — dealings.

Regulators proposed rules on Monday requiring appraisal management companies hired by banks to use state-licensed appraisers, part of a larger effort ensure property values are assessed independently and accurately. (Never mind that the majority of states already have similar standards in place, notes our colleague Brian Collins.)

Financial Times

Digging into the nitty-gritty of last week's Fed stress tests reveals insights into the agency's thinking about future legal costs for the industry, which could continue to loom large in years to come.

Academics Mark Roe and Michael Tröge argue that a bank tax done right could bring in much-needed revenue for the federal government and make financial institutions safer by taxing liabilities instead of assets.

The Fed is increasing its role in the repo market, the "behind-the-scenes bulwark of the so-called shadow banking system," potentially crowding out commercial banks and broker-dealers and reducing liquidity in the market.

New York Times

Law professor Peter Henning explores the whether companies should be able to deduct costs related to an enforcement action from their taxes — an issue that's been raised in the wake of some banking industry settlements of late, including JPMorgan's $13 billion deal with the Justice Department last November over sales of mortgage-backed securities.

Washington Post

More than 3,000 companies, including banks and retailers, were notified by the government last year that their computer systems had been hacked, according to reports from White House officials.

A new survey finds that millennials haven't forsaken brick-and-mortar banks altogether, though they still aren't banking in-person as often as often as their elders.



Big Winners and Losers for Banks on Election Night

Republicans won a sizable victory late Tuesday, retaking the Senate after losing it eight years ago. Banks, too, largely benefited, as an ally of the industry captured a Senate seat in West Virginia, two credit union allies fell and a key Democratic senator squeaked past. Here's how election night played out for banks.

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