Breaking News This Morning
Under investigation: The U.K.'s Financial Conduct Authority and the Bank of England's Prudential Regulation Authority are investigating Barclays CEO Jes Staley for attempting to identify a bank whistleblower last year. The bank issued a formal reprimand and said it would make a "very significant compensation adjustment" to Staley's bonus over the incident. The person in question is Tim Main, who Staley hired from Evercore Partners to chair Barclays's financial institutions group. Wall Street Journal, Finantial Times, New York Times
Receiving Wide Coverage ...
Throw them out: Institutional Shareholder Services became the second proxy advisory firm in a week to advise shareholders to vote against members of Wells Fargo's board of directors. Citing a "sustained breakdown of risk oversight" at the bank, ISS Friday called on shareholders to vote against 12 of Wells' 15 board members, including chairman Stephen Sanger. It said investors should support only CEO Tim Sloan and two new independent directors. Earlier last week, Glass Lewis, another advisory group, recommended voting against six Wells board members.
Wall Street Journal
What a deal: Goldman Sachs has already earned nearly $600 million on its purchase and eventual spinoff of TransUnion and is expected to make about five times its initial investment of $550 million, the Journal reports. Goldman bought the credit bureau in 2012 and spun if off three years later.
Top econ: President Trump said he would nominate Kevin Hassett, a tax policy expert and an economist at the American Enterprise Institute, to serve as the chairman of the Council of Economic Advisers.
Hacked: British payday lender Wonga said hackers broke into its computers and stole personal information on 270,000 of its current borrowers and former customers. The company, which initially believed that no customer data had been accessed, warned clients that some of their information had been compromised, including names, contact details and bank account numbers.
New York Times
Debt traps: The Consumer Financial Protection Bureau and the attorneys general of Illinois and Washington are suing Navient, the biggest servicer of student loans, for allegedly engaging in predatory lending and other violations. According to the Times, the lawsuits "shed light on how Sallie Mae" — which spun off Navient in 2014 — "used private subprime loans, some of which it expected to default at rates as high as 92%, as a tool to build its business relationships with colleges and universities across the country. From the outset, the lender knew that many borrowers would be unable to repay, government lawyers say, but it still made the loans, ensnaring students in debt traps that have dogged them for more than a decade."
He should know: Craig S. Phillips, special counselor to Treasury Secretary Steven Mnuchin, is the Trump Administration's point man on what to do about Fannie Mae and Freddie Mac. Phillips "certainly knows a thing or two" about the two federal mortgage agencies, the Times notes. He led Morgan Stanley's mortgage desk during the peak "mortgage-mania" years of 2004 and 2005, bundling loans and selling them to the two government-sponsored enterprises. And "when those loans blew up and the government sued Morgan Stanley, Mr. Phillips was a named defendant in the initial case — a case that resulted in the firm paying a $1.25 billion settlement."
"The longstanding sales practices and unchecked incentive program evidences a sustained breakdown of risk oversight on the part of the board." — Institutional Shareholder Services on Wells Fargo.