Receiving Wide Coverage ...
'Whale' Settlement: Anonymice are telling their favorite news outlets that JPMorgan Chase is nearing an about $750 million to $800 million settlement with U.S. and U.K. regulators related to last year's pesky $6 billion "London Whale" trading loss. In a big win for the Securities and Exchange Commission, the civil settlement, which could be announced as early as this week, is expected to include an admission of wrongdoing. This admission, part of the SEC's harder stance on enforcement actions, "could open the bank to additional legal liability from shareholder suits, although securities lawyers said the bar is high to prove the bank intentionally misled investors," the Journal notes. Spokespersons for the bank and regulators, which also include the Office of the Comptroller of the Currency, the Federal Reserve and the U.K. Financial Conduct Authority, have yet to formally comment on the forthcoming settlement. Anonymice are billing the move as part of JPM's efforts to repair its frayed relationships with regulators, calm upheaval at the bank and finally put the trading loss behind it, but the new settlement may not be the last time the bank has to deal with the undead "Whale." "The Commodity Futures Trading Commission, the regulator overseeing the market in which the losses occurred, has balked at joining the broader settlement and plans to fine the bank later this year," unnamed sources tell Dealbook. The settlement also won't mark the end of the megabank's regulatory woes, given all the probes that are still pending. "As a result of these cases, [JPM] said it anticipates $6.8 billion in future legal costs in excess of the money it has already set aside to handle litigation," the Washington Post notes.
Contested: Barclays is contesting a £50 million legal fine regulators are looking to impose after concluding that the bank acted "recklessly" when raising emergency cash from Qatari investors during the financial crisis. Financial Times, New York Times
Summers Out, But Is Yellen In? The Journal seems to be most optimistic about vice chairman Janet Yellen's chances at securing the top spot at the Federal Reserve, but Dealbook thinks the President may still choose Donald Kohn, especially since former Treasury Secretary Timothy Geithner is pushing for him. The Post appears to feel this way, too, given its article looking athow Kohn thinks about financial regulation. Other dark horses could also walk away with the position. Per American Banker, "One critical factor is whether the White House blames Yellen for the unprecedented support she received over the summer as it became clear that Obama was considering nominating Summers to the post."
Sold: The U.K. government Tuesday sold for $5.1 billion some of its shares in Lloyd Banking Group five years after the bank's bailout. The FT calls the sale "a potent symbol of the U.K.'s return to health after a catastrophic failure in financial markets brought the banking industry to the brink of collapse in October 2008."
Interrupted: U.S. options trading came to a halt for about ten minutes on Monday after the systems that feeds pricing data to the market went down. The outage follows a longer one in August that occurred after a similar market-data feed supplying prices for securities malfunctioned. The SEC told the Post it is "monitoring the developments on the options market and discussing them with market participants as appropriate."
Wall Street Journal
"Midyear stress tests" reveal that many of the nation's largest banks, including JPM, Bank of America, Goldman Sachs and Citigroup, "would be able to weather a severe economic crisis with higher capital levels than previously estimated."
Goldman Sachs has named co-chief operating officer of equities R. Martin Chavez as its new chief information officer. He will succeed Steven Scopellite, who is retiring at the end of the year.
HSBC's deferred prosecution agreement with the U.S. over money-laundering allegations has led chief executive Stuart Gulliver to take an "ultra-conservative approach" in pursuit of compliance, says banking editor Patrick Jenkins. This approach includes withdrawing from "business that could be reputationally or ethically problematic" and refusing to enter emerging, but potentially high risk-countries like Myanmar. "The question is whether Mr. Gulliver's caution today will prove a better bet in the long term than banks that continue to be far more gung-ho for now, but may yet regret it," Jenkins writes.
New York Times
Foreign banks are finding the Foreign Account Tax Compliance Act to be cumbersome. "Critics acknowledge that they cannot stop the law, which aims to become a model for global finance rules, from going into effect," Dealbook notes. "The question is whether all the global financial institutions will comply equally."