Breaking News This Morning ... Fined: European Union regulators have fined eight financial institutions, including Deutsche Bank, Société Générale, Royal Bank of Scotland, Citigroup and JPMorgan Chase, for colluding in attempts to manipulate key global benchmark interest rates. Penalties total $2.32 billion. Future penalties are possible. Wall Street Journal, Financial Times, New York Times Receiving Wide Coverage ...
Receiving Wide Coverage ... Settled: Bank of America has agreed to pay $404 million to Freddie Mac to settle disputes over residential mortgage loans sold to Freddie between 2000 and 2009. Some good news for the bank? "The deal should largely shield Bank of America from any further 'put-backs' of crisis-era loans sold" to both government-sponsored enterprises, notes the Journal. B of A already agreed to a $1.28 billion repurchase settlement with Freddie back in 2011.
Receiving Wide Coverage ... UBS' Restructuring Efforts: An internal memo reviewed by the New York Times revealed UBS' plan to combine its currency, interest rates and credit trading businesses into a single unit. The move, confirmed by the bank, is part of UBS' ongoing efforts to "to shrink its investment bank and shift focus away from riskier trading activities to its wealth management and retail operations," Dealbook notes. The bank also plans to buy back bonds
Receiving Wide Coverage ... Questioned: The Securities and Exchange Commission has stepped up its probe into Wall Street's foreign hiring practices. Anonymice are telling their favorite news outlets that Citigroup and Morgan Stanley have both received letters requesting information to determine whether the banks violated the Foreign Corrupt Practices Act. Scan readers will recall that, back in August, JPMorgan Chase revealed the regulator was investigating whether the bank habitually hired the children of prominent Chinese officials
Receiving Wide Coverage ... A Battle over Board Member Bonuses: A small bank holding company has set the stage for a battle over whether activist hedge funds should be allowed to pay preferred board members bonuses. More specifically, Institutional Shareholder Services (of "dethrone Jamie Dimon" fame) is calling on shareholders to vote out three Provident Financial Holdings directors after they unilaterally approved a bylaw barring investor-paid incentives. The vote is indicative of larger tensions that have
Receiving Wide Coverage ... Co-op Bank Probe: The U.K. Treasury has launched a probe into Co-operative Bank that will examine how the bank was run (and regulated) in the years leading up to its current crisis. Scan readers will recall that the bank is in the middle of bailing itself out largely by ceding control to institutional investors. The Journal says the inquiry "may prove uncomfortable for Britain's politicians, particularly in the opposition Labour Party, some
Receiving Wide Coverage ... Yellen in Home Stretch: The Senate Banking Committee voted to confirm Janet Yellen's nomination for Federal Reserve chairman, and a change in Senate filibuster rules virtually guarantees she'll be confirmed by the full chamber. That change in parliamentary procedure the "nuclear option" Majority Leader Harry Reid's been brandishing will prevent filibusters for most presidential nominees. As such, it "represents a substantial power shift in a chamber that for more than
Receiving Wide Coverage ... Ring Fenced: Credit Suisse has begun to wall off its Swiss banking business from riskier investment banking operations in the U.S. and U.K. in order to address regulators' concerns over "too big to fail." The plan includes combining two London subsidiaries and transferring its U.S. derivatives business to its U.S. subsidiary. (The unit currently operates out of London.) UBS similarly announced plans to ring fence its banking operations last month. Wall Street
Receiving Wide Coverage ... How Justice Built Its Case Against JPM: The $13 billion civil settlement JPMorgan Chase reached with the Justice Department on Tuesday, the largest penalty a single company has ever paid to the government, started with the Justice Department's discovery of a 2006 meeting in which bank executives decided to continue selling shoddy mortgage securities despite major red flags, according to the Wall Street Journal. As part of the civil settlement, JPMorgan acknowledged
Receiving Wide Coverage ... JPMorgan Reaches Big Mortgage Accord: The New York bank agreed to a $13 billion settlement to resolve the government's longstanding issues with questionable mortgage practices. The Wall Street Journal said the "historic settlement," which ends multiple probes into mortgage bonds issued before the financial crisis, is the largest amount of fines and damages the government has secured from a company in a civil settlement. The New York Times notes that $4 billion
Receiving Wide Coverage ... Holiday Reading: The long-simmering battle between five federal agencies over the Volcker Rule appears to be in its final stage. The current draft is around 1,000 pages, and it's expected to be finalized before the end of the year. The basic dynamics here with the Fed and the SEC pushing for looser restrictions, while the CFTC seeks tighter rules are old news. But the New York Times has a detailed
Moody's Downgrades 4 Major Banks; GAO Study Finds Big Bank Benefits; CIA Collecting Data on Money Transfers
Receiving Wide Coverage ... Downgraded: Moody's downgraded four major U.S. banks JPMorgan Chase, Morgan Stanley, Goldman Sachs and Bank of New York Mellon Thursday, after the rating agency concluded that the government has become less likely to bail out big firms. "The lower credit ratings could raise the cost of capital for the banks, many of which were already downgraded by Moody's following another major review undertaken last year," the FT reports. Wall Street
Receiving Wide Coverage ... Oh, JPM: JPMorgan Chase has officially cancelled its terrible idea/Twitter takeover with vice chairman Jimmy Lee after the open invitation to #AskJPM questions on the social media site backfired. Profusely. ("Right when the engagement numbers were through the roof?!" tweeted Forbes' Alex Konrad in response to the cancellation.) "The original idea which had been kicked around the firm over the last few weeks was to come up with an out-of-the-box
Receiving Wide Coverage ... Unveiled: The Office of the Comptroller of the Currency issued detailed guidelines for bank consultants, or "Wall Street's shadow regulators" (hmmm, where have we heard that term before?) on Tuesday. The guidelines require, among other things, that banks "disclose all work a consultant performed for the institution over the past three years" and "document disciplinary actions taken against the consultant and the resources the firm has to complete an assignment" in an
Receiving Wide Coverage ... Former TARP Head Tapped for CFTC Post: President Obama Tuesday will nominate Timothy Massad, the assistant Treasury secretary who oversaw the Troubled Asset Relief Program, to serve as chairman of the Commodity Futures Trading Commission. If confirmed by the Senate, Massad will take over an agency in the midst of a massive post-financial crisis overhaul led by current chairman Gary Gensler, whose term ends at the end of the year. As head
Receiving Wide Coverage ... The Bird Is the Word: The Morning Scan is as sick of hearing about the Twitter IPO as you probably are, but it still dominates business news pages this morning. The social network's shares jumped nearly 75% on their first day of trading, in sharp contrast to the Facebook debacle last year. Hence the FT's take: "Tech industry enters new era with Twitter's IPO success. The shadow of Facebook's troubled IPO
Receiving Wide Coverage Atwitter About Twitter: The social-media network that's an unholy hybrid of news, opinions and procrastination priced its much-awaited initial public offering at $26 per share, above its underwriters' estimated range, for an initial valuation of $18 billion. (That's about $129 million per character that you're publishing for free in a typical 140-character Tweet.) Depending on how many shares are sold today in its first day of trading, the IPO is expected to
Receiving Wide Coverage ... You had to figure that with an election night, and lots of other distractions such as the continued buzz over the SAC Capital plea deal, commercial banks would get a break for at least one 24-hour news cycle. Wrong. Scan the major dailies, and there are threats coming from all directions, including regulatory probes, lawsuits and fines. Even Bitcoin is going to get scrutiny on Capitol Hill.
Receiving Wide Coverage ... SAC Brought Down: The papers reported late Monday that hedge-fund group SAC Capital Advisors will plead guilty to insider trading and pay $1.2 billion as part of a decade-long investigation, which included a previous $600 million payment, bringing the total fees to $1.8 billion. Though it was a record fine and high-profile win for U.S. prosecutors, the Journal and the Times focused on how the firm's founder, Steven Cohen, appeared off the
Receiving Wide Coverage ... HSBC Discloses Probe During Earnings: HBSC reported a 28% rise in third quarter net profit on Monday largely related to falling loan charges. The bank also became "the latest to admit that it was the subject of an investigation by several authorities into its conduct in the foreign exchange market," Dealbook notes. Per the Journal, "HSBC had not suspended anyone in connection with the probe and ... none of the traders named
Receiving Wide Coverage ... Sued Over Libor: Fannie Mae is suing nine banks for an estimated $800 million in losses it incurred as a result of alleged manipulation of benchmark interest rates, including Libor. Defendants include Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, JPMorgan Chase, Rabobank, Royal Bank of Scotland and UBS. Fannie is also suing the British Bankers' Association. Fannie's counterpart, Freddie Mac, filed a similar lawsuit against more than a dozen banks
Receiving Wide Coverage ... B of A Lawsuit Looming? And the financial crisis reckoning continues. Bank of America disclosed in a regulatory filing on Wednesday that a U.S. attorney's office (no word on which one yet) plans to recommend the Justice Department file a civil lawsuit against the bank over bad mortgage-backed securities. The bank also said it has raised its estimate of potential losses from litigation to $5.1 billion, from $2.8 billion. News of a
Receiving Wide Coverage ... Sins of Financial Crises Past: The year of crisis-era legal reckoning may indeed be upon us. According to the Wall Street Journal, regulators have brokered another settlement with a financial firm over allegations it sold bad mortgage-backed securities to Fannie Mae and Freddie Mac leading up to the financial crisis. No, we're not talking about JPMorgan Chase, but Ally Financial, which said on Tuesday it will take a $170 million charge in
Breaking News This Morning ... Rabobank CEO to Resign: Anonymice tell the Journal that Rabobank CEO Piet Moerland is poised to step down Tuesday as the bank reaches a $1 billion settlement with global regulators over rate-rigging allegations. The expected settlement would be the second largest Libor settlement to date, behind UBS's $1.5 billion agreement last December. Receiving Wide Coverage ...
Receiving Wide Coverage ... JPM Settlement(s) Update: In case you missed it, late on Friday, JPMorgan Chase agreed to pay $5.1 billion in a deal with the Federal Housing Finance Agency to settle allegations it sold bad mortgages to Fannie and Freddie in the years leading up to the financial crisis. The deal is part of the broader, reported $13 billion mortgage-related settlement the bank has been trying to broker with federal regulators and the Justice
Receiving Wide Coverage ... Unveiled: The Federal Reserve proposed stricter liquidity rules for the biggest U.S. banks on Thursday. (American Banker's Donna Borak breaks down the proposal's specifics here.) The Journal notes the proposed rules, which will be open for public comment for 90 days and would go into full effect in 2017, are "unlikely to cause major changes at U.S. banks, which have largely improved their funding positions since the 2008 financial crisis." But the
Receiving Wide Coverage ... Bank of America Found Liable: The verdict of a New York jury Wednesday holding Bank of America liable for alleged mortgage misdeeds at Countrywide may go down as an important turning point in the federal government's belated push for financial crisis accountability. The major papers list several reasons why this civil trial matters: it marks the first time a bank has been held liable for fraud in connection with the mortgage boom;
Receiving Wide Coverage ... ECB Inspections Start in November: The European Central Bank said Wednesday that it will begin a thorough review in November of the balance sheets of around 130 financial institutions from Latvia to Germany. Some news outlets are calling this a "bad loan" test. The goal is to remove doubts about the strength of European banks in the wake of the European recession. Along with stress tests, the central bank is also requiring
Receiving Wide Coverage ... Naming Names: British authorities have identified almost two dozen individuals at banks as possible co-conspirators in a probe into the manipulation of the London Interbank Offered Rate. The Serious Fraud Office notified the individuals last week that they had been included in court papers related to a case against Tom Hayes, a former trader at UBS and Citigroup. High Court justice Jeremy Cooke also lifted an order from last week that barred
Receiving Wide Coverage ... JPMorgan Chase's Deal: Over the weekend the country's largest financial institution reached a tentative $13 billion settlement with the Justice Department over the bank's questionable mortgage practices. But despite the record penalty, the bank's board is standing firmly behind its chief executive Jamie Dimon, whose role in negotiating the settlement only seemed to cement the board's support. A phone call by Dimon to a top deputy of Attorney General Eric Holder ahead
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