Receiving Wide Coverage ...
So long, SIFI?: The Financial Stability Oversight Council is scheduled to meet Friday to discuss possibly removing American International Group from its list of systemically important financial institutions. "Removing stricter oversight of AIG would be a symbolic step," the Wall Street Journal noted. The company, which was bailed out by the government to the tune of $180 billion in 2008, became "a poster child for financial excesses, and was one of the reasons for the creation of the oversight council in the 2010 Dodd-Frank financial regulatory law." The insurance company is now about half the size it was during the rescue. Wall Street Journal, Financial Times
Facing the music: Equifax CEO Richard Smith is scheduled to testify before the Senate Committee on Banking, Housing and Urban Affairs on October 4 on the company's handling of its massive data breach. Wall Street Journal, American Banker
Ron Lieber, the New York Times' "Your Money" columnist, says in his column Thursday that "in my 12 years of writing personal finance columns for The Wall Street Journal and The New York Times, I can't recall any consumer transgression this widespread and potentially consequential that did not kill or injure. It's hard to think of a single thing that's gone right in the wake of this breach."
In the Times' White Collar Watch column, Peter J. Henning says he isn't optimistic that anyone at Equifax will be punished as a result of the massive hack. "The worst anyone connected with Equifax may end up facing is a tongue-lashing from Congress except for the outside chance that the aggrieved public gets its own day in court," he writes. "But that could be years from now."
Henning, a professor of law at Wayne State University, reminds us that "Equifax is a victim, not a perpetrator. Frustrating as it may be in this case, we usually don't blame the victim of a theft for allowing it to happen. And the usual tools that federal prosecutors use to go after companies for misconduct do not apply because Equifax did not actively mislead anyone about the hacking."
In the dark: Top officials of the Securities and Exchange Commission say they weren't told until recently, including as late as this week, about a 2016 cyberattack that penetrated Edgar, the agency's electronic system for public company filings. That "raises questions about how the breach was initially handled," the Journal reports.
The hack is raising fears that information stolen in the attack could be available to rogue traders before the agency makes it public.
The SEC's disclosure of the hack more than a year after it happened is "an awkward twist for a regulator that has been pushing public companies to both gird against attacks and to promptly disclose them," the Journal says in an adjoining story. "The response could undermine the agency's own efforts to push public companies to educate investors on cyberrisks and more swiftly disclose cyberbreaches to the public."
Wall Street Journal
Another charge: Social Finance is facing another charge of sexual harassment. A former employee of the online lender alleges in a lawsuit that a manager propositioned her for sex and retaliated against her when she refused. SoFi exhibited a "hostile work environment where sexually inappropriate behavior became widely accepted and laudable by upper management," she said in the complaint.
Ponzi meets bitcoin: The Commodity Futures Trading Commission has accused a New York company of operating a bitcoin-related Ponzi scheme, "the regulator's first fraud-related action involving the cryptocurrency," the Journal says. The agency says Nicholas Gelfman told investors that his company, Gelfman Blueprint, achieved dependable returns through high-frequency trading of bitcoin. In reality, the company used money from newer investors to pay back older ones. It also posted phony performance reports on its website, the CFTC charged.
Losing its edge: Goldman Sachs fell to its "worst ever position" in the ranking of the world's biggest investment banks, the FT reports. Goldman tied for third place with Bank of America Merrill Lynch in the first half of 2017, behind JPMorgan Chase and Citigroup. "It is the first time Goldman has been ranked lower than second since the rankings began in 2007," the FT noted.
"Edgar is the equivalent of Fort Knox for sensitive corporate filings before they are released publicly. It is a gold vault for insider traders." — Bradley J. Bondi, a partner at Cahill Gordon & Reindel and a former senior SEC official.