Amex fires 10 in forex pricing case; Santander will fight Orcel
Receiving Wide Coverage ...
Wall Street connections
Deutsche Bank “played a key role in Jeffrey Epstein’s financial dealings in recent years, helping the accused sex-trafficker move millions of dollars in cash and securities through dozens of private-banking accounts with the German bank,” the Wall Street Journal reports. The wealthy American financier “used Deutsche Bank’s private-wealth division to hold and manage assets connected to him, clients or entities he was affiliated with for a number of years.” Wall Street Journal, Financial Times
“Deutsche Bank executives are still trying to understand the depth and scope of the bank’s relationship with Mr. Epstein, who has been a client of its private-banking division since at least 2013 — years after his conduct became public in a prostitution case involving a teenage girl,” the New York Times said.
In addition to Deutsche, Epstein “managed to affix himself to a handful of prominent Wall Street veterans,” including Jes Staley, who is now CEO of Barclays Bank. According to the Times, Staley, then “a top JPMorgan Chase executive and one of the highest-ranking figures on Wall Street,” visited Epstein “when he was serving time in Florida for soliciting prostitution from a minor.”
Separately, on Wednesday, the bank reported a reported a €3.15 billion ($3.51 billion) net loss for the second quarter, its largest quarterly loss in four years, including a €3.4 billion restructuring charge to cover its recent decision to largely exit investment banking and lay off 18,000 employees. Excluding the charge, which the bank originally pegged at a €3 billion, Deutsche earned €231 million, slightly higher than its preliminary estimate. Wall Street Journal, Financial Times, New York Times
Wall Street Journal
American Express said it refunded about $1.6 million to about 200 customers and fired 10 employees after it found they misrepresented foreign-exchange pricing to customers. The firm is also is retraining 28 employees in the unit.
“The moves are a result of a nearly yearlong internal investigation into the division’s pricing practices,” in which employees “routinely increased currency-conversion rates without notifying customers in an effort to increase revenue. A number of federal agencies, including the Justice Department, the Federal Reserve and the Consumer Financial Protection Bureau, have since been probing Amex’s foreign-exchange pricing practices.”
Visa credited its “push into the financial-technology sector, including its possible role in Facebook’s Libra project,” for strong financial results in the most recent quarter. “We’ve gotten our act together as it relates to fintechs,” CEO Al Kelly said. Regarding Libra, Kelly said “the company’s involvement in the project so far has been limited to the signing of a nonbinding letter of intent.”
“There’s just a tremendous amount to be finalized,” he said. “But obviously, given that we’ve expressed interest we actually believe we could be additive and helpful in the association.”
“Visa’s decision on how or if it will participate in Facebook’s Libra will be based on how the social network handles the mountain of criticism and requirements that global regulators and lawmakers are heaping upon it,” American Banker reports.
A 'Better' rate
Roboadvisor Betterment is offering some of the highest interest rates on savings accounts “in hopes of standing out in a field where banks have paid peanuts on client cash for years. Betterment said it is able to offer a lofty rate because of the deals it has struck with partner banks,” such as nbkc Bank. “The company — which itself isn’t a bank — will distribute customers’ deposits among several banks that will, taken together, offer up to $1 million in Federal Deposit Insurance Corp. protection. Those banks will pay Betterment interest higher than the Fed’s overnight rate, and Betterment will pass most of that to clients.”
The Financial Times hired an outside law firm to review its reporting on German payments company Wirecard, “one of Europe’s highest-profile fintech companies,” which is suing the paper, the Wall Street Journal reports. “The FT over the past few years published a series of articles raising questions about accounting practices and potential financial misconduct at Wirecard, which processes electronic payments for retailers and provides related services and loans. Wirecard has denied the FT’s reporting and accused its reporters of working with short sellers. The FT has rejected the allegations, calling them ‘a diversionary tactic aimed at stifling further reporting on Wirecard.’”
Justin Sun, the Chinese cryptocurrency investor who paid a record $4.6 million in a charity auction to have lunch with Warren Buffett, “abruptly postponed” the July 25 meeting. A foundation backed by Sun said he had “fallen ill with kidney stones.” Soon after, Sun was on social media defending himself against rumors on Chinese media that his firm, Tron, “engaged in money laundering and other illicit behavior,” the paper says.
“The sudden cancellation prompted broader questions on Twitter and cryptocurrency media outlets about Mr. Sun and his whereabouts.”
On Wednesday Sun said he was feeling better and expected to be back at work by Friday.
Standing their ground
Santander plans to “act with total force” against former UBS investment banking chief Andrea Orcel if he goes ahead with a €100 million lawsuit against the Spanish bank for allegedly reneging on a deal to name him CEO. “We are going to prove before the courts that the conditions were not met for [Orcel’s] contract to be effective,” said Jaime Pérez Renovales, a Santander board member and general secretary.
“Deutsche Bank is closely examining any business relationship with Jeffrey Epstein, and we are absolutely committed to cooperating with all relevant authorities.” — A bank spokesman, commenting on allegations that the bank helped the accused sex trafficker move millions of dollars