Barclays faces criminal charges; Warren seeks to toss Wells directors

Receiving Wide Coverage ...
Charged: British officials have brought criminal charges against Barclays and four past executives, including former CEO John Varley, over allegedly fraudulent deals it made with Qatar to avoid a government bailout during the 2008 financial crisis. “The case marks the first time that top executives at a U.K. bank face criminal charges for their actions during the financial crisis,” the Wall Street Journal noted. The bank would face a fine if found guilty.
“Unlike its peers Royal Bank of Scotland and Lloyds Banking Group, the Middle Eastern equity injections meant Barclays was able to avoid a bailout by British taxpayers,” the Journal added. Wall Street Journal, Financial Times here and here, New York Times

Wall Street Journal
Kick them out: Sen. Elizabeth Warren wants the Federal Reserve to remove 12 members of Wells Fargo’s board who served during the bank’s phony accounts scandal. In a letter to Fed Chair Janet Yellen, the Massachusetts Democrat said the Fed should invoke its authority “to remove the responsible Board members and protect the continued safety and soundness of one of the country’s largest banks.” Warren said the scandal “revealed severe problems with the bank’s risk management practices — problems that justify the Federal Reserve’s removal of all responsible Board members.”

Show me the money: Pressure is growing on Citigroup CEO Michael Corbat to pick up his game. Since taking the top spot in October 2012, Corbat has mostly played defense, the Journal notes, mostly by getting out of or scaling back certain businesses. Not surprisingly, the bank’s stock has underperformed, trading at “just 85% of book value, the lowest valuation of the big U.S. banks.”

Simon Dawson/Bloomberg

“Now, investors, analysts and even top executives within the bank say it is time for Mr. Corbat, a former Harvard football star, to shift to offense. That means boosting growth and profitability in areas such as credit cards, Wall Street stock trading and retail banking.”

On deck?: Since Ted Pick was named to oversee both stock and debt trading in late 2015, Morgan Stanley has produced $1 billion or more in fixed-income revenue in four quarters, and its market share among the top five Wall Street firms has doubled. As a result, Pick — who previously ran the bank’s stock trading unit for seven years — “has emerged as a leading contender to succeed [CEO James] Gorman.”

Financial Times
Boosting women, minorities: Morgan Stanley is launching an “innovation lab” next month to encourage technology startups headed by women and minorities. The company will provide seed money to approved companies with a “multicultural” or female founder, chief technology officer or other senior executive. Chosen companies will receive a $200,000 investment, office space in the firm’s headquarters in Times Square, and other benefits.

“If companies are scalable, bankable and investable, and if the only thing they lack is access to capital and networks, we’ll provide that, with early-stage growth capital,” said Alice Vilma, executive director of Morgan Stanley’s multicultural client strategy committee.

Going robotic: BlackRock is buying a stake in Scalable Capital, a European online investment adviser. The deal “is aimed at helping Scalable Capital to extend its business beyond retail investors to companies and other financial institutions, such as banks,” the paper said.

New York Times
Better than bitcoin?: Despite more than doubling in price this year, “bitcoin is on the verge of losing its position as the dominant virtual currency,” the paper reports. That’s because Ether, a rival digital currency that runs on the Ethereum network, has jumped 4,500%. The total outstanding units of Ether are now worth $34 billion, or 82% as much as all bitcoin; at the beginning of the year, Ether’s total value was only about 5% as much.

Why the shift to Ether? “The bitcoin community has struggled with technical issues and bitter internal divisions among its biggest supporters. It has also been tainted by its association with online drug sales and hackers demanding ransom,” the paper says. Ether, meanwhile, “has picked up backing from both tech geeks and big corporate names like JPMorgan Chase and Microsoft.”

Elsewhere
All things tech: Cathy Bessant, Bank of America’s chief operations and technology officer, talks to Forbes magazine about fintech, finding tech talent in a competitive environment, and artificial intelligence, which she calls “responsible automated intelligence.”

Quotable
“The momentum has shifted to Ethereum — there is no doubt about that. There is almost nothing you can do with Bitcoin that you can’t do with Ethereum.” — William Mougayar, the founder of Virtual Capital Ventures.