Receiving Wide Coverage ...
Sued Over Libor: Fannie Mae is suing nine banks for an estimated $800 million in losses it incurred as a result of alleged manipulation of benchmark interest rates, including Libor. Defendants include Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, JPMorgan Chase, Rabobank, Royal Bank of Scotland and UBS. Fannie is also suing the British Bankers' Association. Fannie's counterpart, Freddie Mac, filed a similar lawsuit against more than a dozen banks in March. The Journal dubs Fannie's suit "the latest legal salvo by the mortgage-finance giants." Earlier this week, Rabobank CEO Piet Moerland stepped down following a $1.07 billion settlement over Libor rate-rigging allegations. UBS, Barclays and Royal Bank of Scotland have also reached settlements with global regulators. But Times columnist Floyd Norris argues the hefty fines associated with these settlements have done little to fix the system. "Unfortunately, nothing fundamental is being changed," he writes. "Libor lives on. Regulators who wanted to change that
have been outmaneuvered by those who did not want to risk damaging one of the biggest and most lucrative markets around." Washington Post, New York Times
Settled: Anonymice tell their favorite papers that Wells Fargo has "quietly settled" with the Federal Housing Finance Agency "for allegedly misleading disclosures on mortgage securities" it sold to Fannie Mae and Freddie Mac. We're saying "quietly settled" because, as the FT explains, "unlike deals with UBS and JPMorgan, Wells' settlement, which is believed to be worth less than $1 billion, is governed by a confidentiality agreement." The settlement could be disclosed in the bank's next quarterly filing, though the exact amount is likely to remain a mystery. Both Wells and the FHFA are declining to formally comment on the agreement. Bank of America, which "faces potentially the largest tab," Royal Bank of Scotland, Deutsche Bank and Credit Suisse are the holdout banks that have yet to settle with FHFA over mortgage-related allegations. Financial Times, Wall Street Journal
RBS' Game Plan: U.K. regulators have decided against breaking up the largely government-owned Royal Bank of Scotland and, instead, will attempt to expedite reprivatization by restructuring the bank into a good half and a bad half. "The bank is separating about 38 billion pounds, or $61 billion, of toxic assets, including some property loans in Ireland," Dealbook reports. "RBS plans to sell up to 70% of the portfolio over the next two years and the rest a year later." (The FT's got a pretty good explainer with more specifics about how this will work.) The bank also plans to accelerate the sale of its U.S. unit RBS Citizens to offset losses. Per the Journal, "A partial listing of the lender will take place by the second half of 2014, and RBS intends to fully exit the business by 2016."
Wall Street Journal
The latest on JPM's first $9 billion, then $11 billion, eventually $13 billion, and now possibly defunct mortgage-related settlement, includes a look back at the legal wrangling over Washington Mutual's purchase agreement. "In one exchange, a JPMorgan lawyer made it clear he didn't like any language that saddled the bank with liability for breaches of contract that happened before the closing," the paper notes.
Credit Suisse has dismissed London trader Rohit Jha over $6 million in "unusual trading losses" that hadn't previously been disclosed to the public. His boss, Matthew Tagliani, was suspended in January. "While the losses aren't considered financially material, Credit Suisse is continuing to investigate how the positions went undetected by its safeguarding systems and weren't reported to supervisors for 16 business days last December," anonymice tell the paper.
Goldman Sachs has earned an "outstanding" rating for adherence to the Community Reinvestment Act due, in part, to its funding of Citigroup's Citi Bike program.
Funding issues have caused the Commodity Futures Trading Commission "to delay cases, shelve certain probes and [decide] not to file charges against two former traders over [JPM's] 'London whale' trading mess."
New York Times
ING plans to unwind a portfolio of U.S. mortgage securities moved off its books by the Dutch government during the financial crisis. The portfolio "will be unwound at an expected 400 million profit for the Dutch government," Dealbook reports.
Citi is warning in a report to global clients it advises about the once primarily "American phenomenon" of shareholder activism. "The number of activist campaigns overseas has jumped to 30 last year from 22 in 2010," Dealbook notes. "What's more, many activist situations remain out of the public eye, suggesting the actual numbers are likely to be much higher."
