Receiving Wide Coverage
Disrupters: Acting on an idea from Jamie Dimon, JPMorgan Chase, Amazon and Berkshire Hathaway announced they are forming a company to try to reduce health-care costs for their employees. The effort will be led by Todd Combs, a Berkshire investment officer who joined JPM’s board of directors last year, JPM Managing Director Marvelle Sullivan Berchtold, and Amazon SVP Beth Galetti.
“The ballooning costs of health care act as a hungry tapeworm on the American economy,” Berkshire CEO Warren Buffett said in a statement. “Our group does not come to this problem with answers. But we also do not accept it as inevitable.” Wall Street Journal, Financial Times, New York Times, Washington Post, American Banker here and here
Crypto crackdown: The Securities and Exchange Commission obtained a court order to stop a $600 million initial coin offering by Dallas-based AriseBank. The Wall Street Journal called the move “one of the biggest U.S. interventions yet into the world of raising money by issuing digital tokens.” The SEC called the deal a “scam” and alleges the company and its executives deceived investors about buying a federally insured bank that was going to offer a Visa credit card backed by “any of 700-plus cryptocurrencies.”
Separately, Facebook said it is banning all advertisements for bitcoin and other cryptocurrencies that are “frequently associated with misleading or deceptive promotional practices.” It specifically called out initial coin offerings in the ban. Financial Times, New York Times, Washington Post
Bitcoin has dropped about 30% so far this month and is on a pace for its worst monthly drop in three years, falling below $10,000.
Speaking of cryptocurrencies, Jeff Clarke, CEO of Kodak, which recently minted its own “photo-centric cryptocurrency to empower photographers and agencies to take greater control in image rights management,” told the New York Times that creating KodakCoin was not a gimmick or a “desperate money grab.”
“This is not a dog food company that’s creating a currency,” Clarke said. “This is a real solution around digital rights management that Kodak has been involved in for many years.”
Wall Street Journal
Hired: Sarah Dahlgren, the former head of financial institution supervision at the Federal Reserve Bank of New York, is joining Wells Fargo to oversee regulatory relations for its corporate risk group, “a division of the company that has faced challenges and heightened regulatory scrutiny.” Dahlgren, currently a partner at McKinsey, spent 25 years at the New York Fed, where she managed the rescue of American International Group during the financial crisis.
Moving in: The U.S. homeownership rate rose to 64.2% in the fourth quarter from 63.7% a year earlier, the first year-on-year increase in 13 years. “The annual increase marks a crucial turning point because it comes after the federal government reined in bubble-era policies that encouraged banks to ease lending standards to boost homeownership,” the paper says.
Staying put: JPMorgan Chase’s announcement Monday that Jamie Dimon plans to remain as CEO for a while “firmly doused rumors that Mr. Dimon was considering a run for political office,” the paper reports. It also creates a tricky situation for the bank, which “has seen significant churn among the executives beneath him, a problem that could grow worse now that he has signed on for five more years.”
It’s official: HSBC named Charlie Nunn as permanent head of its retail banking and wealth management division. He had been running the unit since John Flint, who previously ran it, was promoted to CEO last year.
New York Times
New gig: Former American Express CEO Kenneth I. Chenault, who recently joined the boards of Facebook and Airbnb, is moving deeper into Silicon Valley. He will be chairman and managing director of General Catalyst Partners, which the paper describes as “one of the most successful venture firms of the past two decades.”
“Mr. Chenault ‘s choice to jump into the world of start-ups is more than just a business decision; to him, it is an opportunity to have a larger impact on Silicon Valley and its business culture,” the paper said.
“Wells Fargo is focused on transforming our risk management practices and we are committed to being very engaged and completely transparent with our regulators so they have a full understanding of the progress we are making in building a stronger organization.” — Wells Fargo CEO Tim Sloan announcing the hiring of Sarah Dahlgren as a top risk executive.