New York Times
Why is this not deemed to be money laundering? Pro-Russia rebel groups in eastern Ukraine have raised money through crowdfunding sites to fund their military campaigns. Much of their funding comes via Russian state-owned banks, including Sberbank, and through a private system of payment terminals owned by the company QIWI, which is affiliated with Visa. The rebel groups have also solicited funds from outside Russia using U.S. and European banks and through PayPal and Western Union. All this is happening, despite the fact that the Russian-backed rebels are the targets of international sanctions. QIWI has raised the specter of the "L" word in filings with the Securities and Exchange Commission. The company said its system "remains susceptible to potentially illegal or improper uses" such as money laundering by organized crime groups. Visa told the Times that it does not believe it has processed any donations to the sanctioned rebel groups.
It's not just big retailers like Target and Home Depot that hackers are targeting. In their quest to steal credit-card information, cyberthieves have also taken aim at small retailers like the Eataly food court in Manhattan. Smaller businesses usually have less-sophisticated security software. The National Small Business Association surveyed 675 businesses last year and half said they have been victimized by hackers.
Wall Street Journal
Ana Botín has shaken things up at Banco Santander since taking over the chairmanship after the death of her father, Emilio Botín. That's the main point of a long article profiling the Botín family and its management of the Santander financial empire. Many of the steps taken appear to address concerns about her father's management during his long tenure, such as neglecting the balance sheet. She's also said she'll take a step back from making large acquisitions like her father did, instead focusing on fixing issues within the bank. And she's made numerous changes to the executive ranks and to the board of directors, showing that nothing is deemed to be off-limits. The Journal points out that Botín has got her work cut out for her, as Santander faces more than its fair share of problems, including a number of issues with U.S. regulators.
Fintech disruptors like Lending Club, Yodlee and OnDeck Capital all enjoy lofty stock prices. For now. Regulators of many stripes almost certainly will start turning their attention to marketplace lenders and other disruptors, "Heard on the Street" said. When that happens, it should remove one of the reasons these companies are seeing so much froth in their stocks. (The column makes the interesting point that it won't just be the Consumer Financial Protection Bureau turning up the heat on marketplace lenders. Since banks purchase their loans, federal banking regulators likely will also get involved monitoring marketplace lenders.) Ocwen Financial is also used an example of what to expect for the trajectory of disruptors' stock prices. Ocwen was a high flyer two years ago. Since then, regulatory and litigation costs have pounded the mortgage servicer and its shares have fallen 83% since October 2013.
Financial Times
Banks with big trading desks indicated that the second quarter's trading revenue will be weak. A Citigroup executive said at a Wednesday conference that fixed-income, currencies and commodities trading were showing "probably a small decline" in the second quarter, from a year earlier. A Bank of America executive made similar comments.
The volume of trading in U.S. Treasuries has declined significantly, concerning traders. The yield on the 10-year Treasury has risen to almost 2.5%, but it's been driven by lower amounts of trading that would be expected. "It's definitely not functioning as normal," a New York bond trader said. The FT said there are several reasons for the decline in volume, including the Fed's quantitative easing program absorbing so much volume that there's less for everyone else to trade.
Elsewhere...
Charlotte Observer: Evangelist Franklin Graham explained why he moved his money to BB&T from Wells Fargo. The son of Billy Graham this week said he would remove his ministries' funds from Wells Fargo in protest of the bank's advertisement that showed a lesbian couple and their daughter. Graham later said he was moving the funds to BB&T, although BB&T previously hosted a Gay Pride event in Miami. Graham did not comment at the time about the BB&T sponsorship. In a column in USA Today, Graham said Wells Fargo "went beyond being gay-friendly to being a public advocate through a national TV advertising campaign for a lifestyle we, as a Christian organization, believe to be biblically wrong." As for BB&T's sponsorship of the Gay Pride event, the Winston-Salem, N.C., company "did not promote the program through a national advertising campaign (or we would still be looking for another bank).
there is a difference between being friendly and being a public advocate." Graham added that he didn't want his ministries' money to help pay for national advertising promoting same-sex relationships.
Los Angeles Times: California has appointed an auditor to review Ocwen Financial and whether its mortgage-servicing practices comply with federal and state laws. The auditor was required as part of an earlier consent order levied on Ocwen. If the auditor finds violations, California can recover funds from Ocwen and also assess penalties on the company. Ocwen already agreed last year to provide $268 million in relief to California homeowners last year for alleged abuses.
