Jeanine Skowronski

Receiving Wide Coverage ...SEC Sues Auditing Firms: The Securities and Exchange Commission is suing Chinese affiliates of the Big Four accounting firms Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers as well as BDO for failing to produce documents related to fraud investigations at nine China-based companies. Charges were filed against the auditors as part of a larger investigation into the Chinese companies themselves, following a string of "so-called reverse mergers" that led to billions of dollars in investor losses. Depending on how this plays out, the case could wind up having broad implications. The Journal reports the affiliates could wind up being barred from auditing U.S.-traded firms, which "could complicate the audits of multinational companies doing business in China." Meanwhile the FT says the move "could lead to the wholesale delisting of Chinese companies from the U.S. stock market" since it could leave Chinese companies in the U.S. without auditors. (The Journal actually echoes these concerns in a separate article.) Not surprisingly, the Big Four auditors say they plan on working with regulators to find a "diplomatic solution."

Receiving Wide Coverage ...UBS Nears Libor Deal: UBS is expected to reach a settlement with U.K. and U.S. authorities over its involvement in the London interbank offered rate-rigging scandal by the end of this year, several news outlets are reporting this morning. Even more notable is the fact that this settlement is expected to supersede the $450 million Barclays agreed to pay over similar charges. (A unnamed FT source "close to the talks" estimates the fine is likely to be higher than $500 million.) UBS acknowledged that talks are underway, but declined to comment on the specifics. Should it pan out, a large settlement "would increase the likelihood that other financial institutions would face stiff penalties," the New York Times' Dealbook reports. The Royal Bank of Scotland is also apparently in "advanced talks" with regulators, though a resolution is less imminent. Financial Times, New York Times, Wall Street Journal

Receiving Wide Coverage ...Schneiderman Strikes Again: More details have emerged regarding New York Attorney General Eric Schneiderman's mortgage-backed securities case against Credit Suisse, now that it has formally been filed, and while there are definite nuances and different key players, the general gist of the allegations may sound a bit familiar. To summarize, prosecutors allege the investment bank misled investors about the quality of the home loans that made up its mortgage securities back in 2006 and 2007. In another bout of déjà vu, there are also apparently incriminating staff emails to back these claims up. (See American Banker's candid crisis catchphrases slideshow for a good refresher on earlier examples of internal correspondence gone awry.) Credit Suisse is rejecting the complaint, saying (and this might also ring a bell) that it "recycles baseless claims from private lawsuits" and uses an "inaccurate and exaggerated" number. (Schneiderman is seeking damages related to $11.2 billion in losses.) But perhaps the most important thing to note, post-filing, is that the attorney general reinforced his pledge to pursue legal action against "other institutions" for mortgage-related wrongdoing. And a New York state law with a 10-year statute of limitations provides him with plenty of time to do so. Financial Times, Wall Street Journal, Washington Post, American Banker

Receiving Wide Coverage ...JPMorgan Shuffles in New CFO: JPMorgan Chase has named Marianne Lake as its new chief financial officer. As this American Banker article points out, the appointment of a new CFO was to be expected, given Doug Braunstein's apparent demotion back in July following the more than $6 billion in trading losses caused by the London Whale. (It should be noted that, on the record, the bank's CEO Jamie Dimon is telling news outlets the move has "nothing" to do with the trading losses and that Braunstein is transitioning to a role as vice chairman at the company in order to return "to his true love of investment banking.") The selection of Lake, on the other hand, was a bit less predictable, given the current financial chief of JPM's retail banking unit is, as Reuters notes, "a little-known executive" within the financial institution. (Other internal candidates up for the job included commodities chief Blythe Masters and Lou Rauchenberger, a top aide within the corporate and investment bank.) It also bucks the trend "of large banks often looking outside their finance departments for their CFOs lately," the Journal says. Dimon listed Lake's talent with numbers, high IQ and experience "on the consumer side and wholesale side" among her strengths while discussing the appointment. And, while he also maintained appointing a woman to the finance-chief job "wasn't a consideration at all," many news outlets were apt to give a nod to JPM for promoting gender equity in the C-suit, with the Journal and the Times quick to anoint Lake one of the most powerful women on Wall Street. As American Banker magazine Editor in Chief Heather Landy tweeted "Marianne Lake may not be the 1st female CFO of a giant U.S. bank - see @SallieKrawcheck - but this still feels like a big leap for womankind."

Receiving Wide Coverage ...For Sale: HSBC is in talks to sell its stake in China's Ping An Insurance, which is worth $9 billion to $9.5 billion, depending on which paper you believe. A deal could net the bank around $7.5 billion. The FT name drops "Thai billionaire Dhanin Chearavanont, who controls the Charoen Pokphand Group" as a potential buyer. While the move is apparently not in line with HSBC chief executive Stuart Gulliver's statement last year that he had no intention of selling its big stake in Chinese companies, it does fit in with his modus operandi of making "streamlining HSBC's sprawling global operations and increasing profitability" a priority. Papers also attribute the sale to stricter capital requirements set to go into effect next year that make holding a stake in financial institutions more "onerous." HSBC is, however, likely to retain its stake in other Chinese companies, including in the Bank of Communications. Financial Times, New York Times, Wall Street Journal

Breaking News This MorningHSBC Faces New Inquiry: British tax authorities say they are looking into a list of HSBC clients with bank accounts in Jersey, the largest island in the English Channel, after receiving a tip from a whistle-blower. The data allegedly shows that "drug dealers, gun runners and bankers facing major fraud investigations had accounts with the bank in Jersey," the FT reports. HSBC told the Times it was aware (and subsequently looking into) a client data breach, but that it has not been formally made aware of the external investigation yet. The bank added it plans to "cooperate fully" with the authorities.

Breaking News This MorningSettlement: As speculated, JPMorgan Chase has reached a settlement with the Securities and Exchange Commission related to Bear Stearns' mortgage backed securities sales practices, Bloomberg reports. Details on the terms of the settlement are scarce, but JPMorgan did say in the filing "the agreement in principle is subject to approval by the SEC, as well as court approval."

Receiving Wide Coverage ...Election Day Has Arrived: It seems remiss not to at least mention the story set to dominate today's news cycle. That is, of course, the presidential election, which appears virtually deadlocked as polls open today throughout the U.S. Some notable (and arguably left-leaning) pundits are predicting President Barack Obama will maintain the electoral edge exhibited in key swing state poll results and keep the presidency, while other (arguably right-leaning) pundits are arguing Mitt Romney's national momentum will peak at just the right time and ensure victory. (The Washington Post actually has a pretty good round-up of notable pundit predictions, in case you're interested in that type of thing.) Either way, we should know the results by this time tomorrow. Unless, of course, Ohio — or possibly another battleground state — needs to hold a recount. (We're a little inclined to echo New York Times blogger Ross Douthat's sentiments here: "But for the love all that's holy don't give us a recount in Ohio.") In either or, perhaps, any event, while you're waiting for the polls to close, you can catch up on how the election is likely to affect the economy (according to Dealbook, don't expect either outcome to solve all puzzles), how it may impact the markets (via the FT) or how it's likely to impact the jobs of top U.S. banking regulators (via American Banker).

Receiving Wide Coverage ...Back to Business: The East Coast continues along its long road to recovery post-Sandy with some subways and airports set to resume (albeit limited) service today in the tri-state area. Also back in business is the New York Stock Exchange, which reopened its doors yesterday amid much criticism that a two-day shutdown signaled insufficient disaster preparedness. Both the Journal and the Times have pretty detailed play-by-plays of how the exchange's first day back went and the news is good. Despite a few "visible glitches" (including some blank monitors related to unreliable data connections) and relatively low staffing levels, "things went very, very smoothly." So smoothly, in fact, that Dealbook deems the exchange as "a small sign of reassurance and resilience" in the storm's aftermath. Activity was "average" with the Dow "closing down 10.75 points at 13096.46," but traders are now readying themselves for several big influential events including Friday's October jobs report and Tuesday's presidential election.

Receiving Wide Coverage ...Libor Probe Widens: You can add nine more big banks to the already too-long list of financial institutions being investigated for alleged attempts to rig the London interbank offered rate. New York Attorney General Eric Schneiderman (we're sure that name sounds familiar) and Connecticut Attorney General George Jepsen have issued subpoenas to Societe Generale, Royal Bank of Canada, Bank of America, Credit Suisse, Bank of Tokyo Mitsubishi UFJ Ltd., Norinchukin Bank, Rabobank, Lloyd's Banking Group and West LB AG in recent months in order to determine whether the firms played a part in any Libor-manipulation schemes. It was already widely known that seven banks, including Barclays and JPMorgan Chase, have received subpoenas related to the attorneys general investigations, thanks, in part, to an unnamed source "familiar with the matter" and several disclosures in financial filings. The investigation is part of a larger, global probe into the Libor scandal. Wall Street Journal, Financial Times, Washington Post

Receiving Wide Coverage ...A Countrywide Haunting: Bank of America found itself on the receiving end of a $1 billion mortgage lawsuit filed by the federal government on Wednesday. Federal prosecutors are accusing the bank of carrying out a scheme ("called the 'Hustle' and 'High Speed Swim Lane'") started by its Countrywide unit that defrauded government-backed mortgage agencies Fannie Mae and Freddie Mac "by churning out loans at a rapid pace without proper controls." B of A is denying wrongdoing. The case appears to be the latest move in the government's renewed crusade to punish mortgage lenders for their part in the 2008 financial crisis. JPMorgan Chase found itself on the receiving end of a civil lawsuit related to Bears Stearns' bad lending practices earlier this month with New York Attorney General Eric Schneiderman promising more cases were on the way. But many people — including former FDIC chairman Sheila Bair, who said in a meeting with American Banker recently she doubted the effectiveness of lawsuits and enforcement actions brought against institutions and not individuals — see the actions as a "too little, too late" scenario. "If Countrywide committed 'spectacularly brazen' fraud, why can't the [government] identify any individual perpetrators?" Times reporter Binyamin Appelbaum tweeted following the lawsuit's announcement. Federal prosecutors could apparently identify individuals involved (which, perhaps, can be seen as more of an issue). As a follow up tweet from Reuters blogger Alison Frankel noted: "The complaint actually identifies two Countrywide officials by name but they're not named as defendants." Washington Post, New York Times,Wall Street Journal, Financial Times

Receiving Wide Coverage ...Romney's Reserve: Various news outlets are following up on a Times article from Binyamin Applebaum that focuses on potential Federal Reserve chairman replacements for Ben Bernanke should Republican candidate Mitt Romney win the upcoming presidential election. (It should be noted some attention is also being given to potential Obama appointees, given Andrew Ross Sorkin's recent disclosure Bernanke isn't interested in another term once his current one expires in January 2014, but with much less fervor, perhaps, since another Obama appointee is generally considered less likely to dramatically overhaul monetary policy. Romney, on the other hand, has criticized recent Fed attempts to stimulate the economy.) Applebaum's article focuses on three likely Romney candidates — R. Glenn Hubbard, who served as chairman of the Council of Economic Advisers under President George W. Bush, his successor N. Gregory Mankiw and John B. Taylor, a Stanford University economics professor — with the general takeaway being that Taylor, "an outspoken critic of Fed policy" is most likely to implement a hawkish overhaul. (QE4 never, perhaps?) However, a subsequent analysis from FT blogger Robin Harding suggests it may be impossible for any new Fed chairman to turn a bunch of doves into hawks, given the term limits of its existing governors and the current body of regional presidents. "Even if a president Romney appointed a hawkish Fed chairman in 2014, around half the voting membership of the FOMC would probably be doves who had backed current policy," Harding writes. "Any change towards more hawkish policy initiated by a new chairman would have to be slow and gradual, which is just how the designers of the Federal Reserve System wanted it." This sentiment was echoed by Reuters blogger Felix Salmon, who also believes a major revamp would be difficult, even from a hawk like Taylor. "The Fed board isn't a bunch of muppets, rubber-stamping whatever the chairman wants," he writes. "It's pretty easy to build a consensus around low interest rates when inflation is low. Taylor, by contrast, would be trying to build a consensus around higher interest rates when inflation is low — and that's much more difficult."

Receiving Wide Coverage ...Big Bank CEOs vs. the Fiscal Cliff: Big bank CEOs are intensifying their efforts to get Congress to deal with the looming fiscal cliff, convening to discuss the issue over lunch at JPMorgan Chase CEO Jamie Dimon's house and releasing a letter intended to sway legislators toward a budget compromise. "We write today to urge you to work together to reach a bipartisan agreement to avoid the approaching 'fiscal cliff,' and take concrete steps to restore the United States' long-term fiscal footing," says the letter, which was signed by Dimon, Bank of America CEO Brian Moynihan, Citigroup CEO Michael Corbat and several others. But many news outlets have been quick to criticize the big bankers' oh-so-noble efforts. A Bloomberg article calls the letter "worthless" since Congress isn't wrangling over whether to address the deficit — like big bankers, legislators generally agree that's a good idea — but rather on how exactly to do so. "Instead of these wise men giving members of Congress permission to buck their own parties, the CEOs fail to explain what such a bipartisan agreement should look like," staff writer Brendan Greenley writes. Meanwhile, Slate blogger Matthew Yglesias quickly points out the letter itself presents a contradiction, since the fiscal cliff is a policy to reduce "the ratio of federal debt to GDP over the medium term," and suggests what big bankers really fear is not another recession, but rather an expiration of the Bush tax cuts that would come with going over the cliff. "It's easy to see why you'd care a lot about that if you happened to be a multi-millionaire bank CEO, but it has basically nothing to do with the 2013 growth outlook," Yglesias writes. "If you care about inequality, jumping off the cliff offers by far the best chance for addressing it."

Receiving Wide Coverage ...Did Greg Smith Do Goldman a Favor?: More news outlets are echoing Dealbook's assessment of former trader Greg Smith's purported tell-all "Why I Left Goldman Sachs: A Wall Street Story" by stating that the book, due out today, isn't much of a tell-all at all. The FT says while Smith's account "paints an unflattering picture" of the investment firm, it doesn't "contain any blockbuster discoveries that could to lead to trouble for the bank's top executives" and, instead, focuses on "Mr. Smith's journey from summer intern to equity derivatives salesman in Goldman's London office." Meanwhile, a second Times review calls the not-so-tell-all "curiously short on facts" and says it actually might help bolster Goldman's reputation. "If Mr. Smith is the ultimate insider, and this is as bad as it gets — Mr. Smith in a hot tub at the Mandalay Bay Hotel in Las Vegas with a topless woman — then he hasn't made much of a case," the reviewer writes.

While accepting a lifetime achievement award at American Banker's Women in Banking gala, former Capital One Bank President Lynn Carter urged bankers to embrace perspectives contrary to their own.

Former Acting Comptroller of the Currency Julie Williams has learned one key lesson she hopes all bankers will heed: When faced with tough decisions, do the right thing.

Breaking News This Morning ...JPMorgan Earnings: JPMorgan Chase bested analyst expectations by reporting a 34% rise in earnings and net income of $5.7 billion for its third quarter. The boost in profit is related largely to a spike in mortgage loan originations that counterbalanced an additional $449 million in derivative losses courtesy of the London Whale and caused CEO Jamie Dimon to declare "we believe the housing market has turned the corner." Now if the nation could just fix its pesky fiscal cliff. Wall Street Journal, Financial Times

Receiving Wide Coverage ...The JPMorgan Shuffle Continues: JPMorgan cannot stop revamping its organization chart. One month after an overhaul of its corporate and investment banking division and a week after two upper-level departures, multiple news outlets are reporting the bank's chief financial officer Douglas Braunstein will step down by the end of the year. The move isn't all that surprising given Braunstein found his role significantly diminished during another major executive shake-up back in September due largely to the botched London Whale trades. Both Braunstein and JPMorgan have yet to comment on the news, broken initially by the Journal and credited to "people close to the company." Braunstein is not expected to leave JPMorgan completely, but, instead, will take on a different job at the bank. Sources say this new role could be at the firm's corporate and investment division. New York Times, Financial Times

Receiving Wide Coverage ...'Yet Another Bank': One week after New York Attorney General Eric Schneiderman filed a civil case against JPMorgan Chase alleging fraud in how Bear Stearns packaged and sold mortgage-backed securities, Wells Fargo finds itself being sued by the government for nearly a decade's worth of "reckless" mortgage lending. U.S. prosecutors (not affiliated with Schneiderman's mortgage task force, though he has promised more suits are on the way) are seeking "hundreds of millions of dollars" in civil damages from the bank on behalf of the Federal Housing Administration, alleging Wells "made false certifications" about the condition of their mortgage loans so that the government agency would insure them. FHA then had to foot the bill when the bank's alleged "mortgage factory" — Dealbook's interpretation of the complaint — output went belly up. "Yet another major bank has engaged in a longstanding and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance," United States attorney in Manhattan Preet Bharara said in a (perhaps obvious) statement.

Receiving Wide Coverage ...Battle over Money Market Funds Intensifies: A recent push by regulators to reform money market funds has become about much more than revamping a risky industry. According to the Journal, the showdown is "turning into a major test of a key change to the U.S. financial architecture after the most severe financial crisis in half a century" since the establishing new rules regarding the funds has now fallen to the Financial Stability Oversight Council, the "superregulator of sorts" created by the Dodd-Frank Act. Meanwhile, another Journal article points out money market funds are poised to receive an influx of cash between now and year-end since the Dodd-Frank Deposit Insurance Provision, which guarantees "an unlimited amount of non-interest-bearing deposits at banks" is set to expire.