Receiving Wide Coverage ...
No laughing matter: Add Morgan Stanley CEO James Gorman’s name to the growing list of high-profile Wall Street executives who have fallen for prank emails by an anonymous hoaxer. On Tuesday night Gorman replied to an email that appeared to come from Alistair Darling, a Morgan Stanley board member. Earlier this week, we reported the CEOs of Goldman Sachs, Citigroup and Barclays have fallen for the ruse, as has Bank of England Governor Mark Carney.
“So far the prankster appears to be after laughs,” the Wall Street Journal said. “But the exchanges expose a painfully low-tech vulnerability for banks, which have spent billions tightening their cyber-defenses.” Wall Street Journal, Financial Times
Wall Street Journal
SBA to the rescue: The Small Business Administration and New Orleans-based Liberty Bank are teaming up to guarantee loans for black business owners, “the first such partnership between the agency and a black-owned bank,” according to the Journal. The SBA and the U.S. Black Chambers will guarantee as much as 50% of some business loans provided by the bank “in an attempt to remedy one of the most widely voiced complaints from black business owners — that they can’t get adequate capital for their enterprises when they need it.”
Treasure seeking: Affluent home buyers are taking an increasing interest in buying foreclosed and real-estate owned luxury properties in fancy neighborhoods as the inventory of homes for sale tightens. “Having those three letters [REO] used to be a huge anchor on the property, but now it propels it,” said Danny Hertzberg, a real estate agent in Miami Beach.
Mirror, mirror: Gary Cohn is heading the White House’s search for the next Federal Reserve chair, but some market observers believe the former Goldman Sachs president could be a candidate himself.
Mixed signals: China’s banking regulator may be carrying out a high-profile campaign to reduce leverage in its financial markets, but at the same time it’s “encouraging more potentially reckless borrowing,” the Heard on the Street column reports. Big banks are being pressured to lend more to small companies and farmers while being told to live with higher bad-debt ratios.
“If the goal of lending to poorer customers sounds noble, the concern is that the execution will only worsen Chinese banks’ existing problems, namely high levels of bad loans and swaths of mispriced credit,” the column says.
Blockchain deal: AIG has sold what it says is the first blockchain-based multinational insurance policy to Standard Chartered, the U.K.-based bank. Carol Barton, head of multinational insurance at AIG, said using blockchain cuts the time in processing multinational policies, which are very complicated, from several months to a few days. “Ultimately, it makes it cheaper. The system makes the process faster and more cost-effective,” she said.
Soft landing: Colin Fan, Deutsche Bank’s former co-head of investment banking, is joining Japan’s SoftBank, which is recruiting executives to help manage its new $93 billion technology investment fund. Fan, a Canadian, is relocating to SoftBank’s office in San Carlos, Calif. He was recruited to the company by Rajeev Misra, a former DB colleague who is now CEO of SoftBank’s Vision Fund.
New York Times
A new Wells scandal?: Wells Fargo’s mortgage business is being sued for allegedly making unauthorized changes to home loans owed by customers in bankruptcy. The changes, which generally lowered monthly loan payments, “would seem to benefit borrowers, particularly those in bankruptcy,” the paper said. “But deep in the details was this fact: Wells Fargo’s changes would extend the terms of borrowers’ loans by decades, meaning they would have monthly payments for far longer and would ultimately owe the bank much more.” According to the lawsuits, Wells made those changes without the approval of the bankruptcy court. A bank spokesman strongly denied the claims, saying borrowers and the courts were notified.
Cutting: Bank of America has started laying off employees in its operations and technology division, part of the bank’s cost-cutting plans, Reuters reports. Many of the job losses were at the bank’s Charlotte, N.C., headquarters.
“Most lenders have a box, and the access to it is so high that many businesses are unable to reach it and are left out, specifically African-American businesses. This allows us to be flexible. We [can] mitigate that disadvantage.” —Ann Duplessis, vice president of Liberty Bank.