Ex-JPM exec banned; banks fear being left behind
Receiving Wide Coverage ...
Gotta do better
The Office of the Comptroller of the Currency ordered the New York, Chicago and Los Angeles branches of MUFG Bank to strengthen their anti-money laundering controls. “The OCC said the branches failed to file reports on suspicious customer activity in a timely manner and that there were ‘systemic deficiencies’ in how the branches monitored high-risk transactions and correspondent accounts for foreign financial institutions,” the Wall Street Journal says. The bank, a unit of Mitsubishi UFJ Financial Group, Japan’s largest bank, wasn’t fined but was required “to develop a remediation plan and ensure that it has qualified compliance officers on staff at its branches to conduct regular audits and risk assessments.” Wall Street Journal, Financial Times, American Banker
Wall Street Journal
The Federal Reserve has permanently barred Timothy Fletcher, a former JPMorgan Chase managing director, from the banking industry for his involvement in a referral hiring program the Fed says violated U.S. antibribery law. Fletcher ran the so-called Sons and Daughters program in which JPM offered internships and other job opportunities to the children of foreign government officials and existing or potential clients in order to win business. Fletcher left the bank in April 2015. The bank has separately agreed to pay about $264 million in fines and penalties to the Fed, the Justice Department and the Securities and Exchange Commission.
A cobranded credit card, which was announced last week, “is part of a broader partnership between Apple and Goldman to offer financial advice and products to millions of iPhone users. The collaboration will be closely watched by rivals in both Silicon Valley and Wall Street that are puzzling through the messy collision of finance and technology. Apple’s path to creating the joint card with Goldman shows how the biggest banks, though wary of powerful tech companies, are also eager to not be left behind by them.”
Another win for ex-employee
David Fotheringhame, a former top foreign exchange trader at Barclays who “was one of the most high-profile casualties” of a New York Department of Financial Services investigation into an illicit trading practice at the bank, has won nearly £1 million in compensation for being unfairly dismissed from his job in 2016. The bank had reached a $150 million settlement with the agency, which ordered the bank to “take all steps necessary” to terminate Fotheringhame, who was named a key player in the scheme. The former trader initially won about £80,000 from the bank for unfair dismissal but then sued Barclays to get his job back, which he also won, but the bank refused. Barclays was then ordered to pay him a little under £1 million.
Difference of opinion
There is a “growing divide” among big British banks about how much money they should set aside to cover any increase in defaults stemming from a disorderly Brexit. While “HSBC, Barclays and Royal Bank of Scotland have all set aside extra cash in the belief that standard economic models would not fully cover the risks of a disorderly Brexit, rivals such as Lloyds and Santander have dismissed the need for extra provisions.”
Claims from fraud investigators that “they’ve uncovered a sophisticated new breed of credit card skimmers being installed at gas pumps that is capable of relaying stolen card data via mobile text message … simply don’t hold water,” the KrebsOnSecurity blog says. The U.S. Secret Service sent out an alert claiming that “a circular device found on the side of a gas pump was a skimmer that was believed to be responsible for communicating with other Bluetooth-based skimmers found embedded in the pumps, and that its purpose was to gather stolen card data and send it off wirelessly to the skimmer thieves via text message.” However, Krebs found “the mysterious circular device was not a Bluetooth anything. Rather, it is little more than a GPS-based tracker that can be bought at Amazon and other online stores for about $100-$150.”
You’re in my seat
“Bankers who covet the status and privacy of personal offices are in for big changes” at JPMorgan Chase, which “is tearing down walls and moving its San Francisco investment bankers onto ‘hot desks,’ a space-saving layout that has long been a fixture at tech companies. When JPMorgan renovated two floors at its Mission Street office in San Francisco last month, it replaced many offices with diner-style booths, designated quiet zones and communal tables for the roughly 250 investment bankers and other employees there. Shared workspaces have been relatively slow to catch on at banks, but JPMorgan is following recent renovations by some rivals, which designers tout as cost cutting and productivity boosting.”
John Havens, Citigroup's former president and chief operating officer, was snared in the same prostitution bust in Florida that trapped New England Patriots owner Bob Kraft. The two names were on a list of 25 men charged with soliciting prostitution in massage parlors in the Jupiter, Fla., area. Havens became Citigroup president in 2011 after leading the bank's investment banking and trading units.
“MUFG Bank is taking immediate corrective action to ensure that there is a complete remediation of all deficiencies that the OCC outlined in its Consent Order. We have made substantial investments over the last several years to bring us into full compliance.” — An MUFG spokesman.