Breaking News This Morning ...
Advance warning: The Wall Street Journal is reporting Tuesday that Wells Fargo branch employees were given at least 24 hours' notice before the bank's internal risk managers were coming in for inspections, which helped them cover up the phony accounts scandal for so long.
"More than a dozen current and former employees of the bank across California, Arizona and New Jersey, for instance, said they forged or saw colleagues forge signatures on documents or shred papers that could have indicated accounts were opened without authorization," the paper reported. "Some branches that opened accounts for customers without the customer present would cut and paste a signature the bank had on file for the customer and add it to the required signature card," according to one former manager.
Wall Street Journal
Still cashing in: Executives at Goldman Sachs, Morgan Stanley and JPMorgan have now sold nearly $100 million in their companies' shares since Election Day, continuing to cash in on the big run-up in bank stocks following President Trump's victory. That's the most in that period in more than 10 years, according to the Journal. Morgan Stanley chairman and CEO James Gorman, for example, has sold more 585,000 shares in three separate transactions, netting a profit of at least $8.4 million. He hadn't sold any stock in the previous six years.
Still working: Two mortgage-servicing units of Citigroup agreed to pay $28.8 million to settle Consumer Financial Protection Bureau charges that they gave the "runaround" to struggling homeowners seeking to avoid foreclosure. The two units, CitiFinancial Servicing and CitiMortgage, agreed to refund a combined $21.4 million to borrowers and pay $7.4 million in civil penalties. "Monday's action is a sign the CFPB is continuing to pursue an aggressive enforcement agenda despite pressure from congressional Republicans and the Trump administration to rein in its activities," the Journal said, noting that the agency has filed more than a dozen enforcement actions in the past two months.
New name: TIAA-CREF never exactly rolled trippingly off the tongue, so the company shortened its name to just TIAA about a year ago. Now the retirement giant is doing something even more radical. It's renaming its asset-management unit – which manages nearly $900 billion in client assets – Nuveen, taking the name of the investment management company it bought in 2014. The "makeover is part of a larger effort by TIAA to diversify its holdings and sell to different markets," the Journal said. Last month it hired Vijay Advani, former co-president at Franklin Templeton Investments, to be president and COO of the reorganized business.
Flush: The Federal Home Loan Banks have been one of the "unexpected beneficiaries" of new money market fund regulations that have led to an influx of cash into funds that invest in government debt and away from corporate securities. The new rules "are fueling a rise in debt issuance by the FHLBs" which is "lending fresh support to a U.S. mortgage market in flux as interest rates creep higher," the Journal reported. "The increase is a boon to FHLB member banks like JPMorgan Chase and Wells Fargo," which have seen their access to corporate money funds curtailed.
Shrinking pay: Pay in the asset management industry fell for the second year in a row last year, with the median pay falling 2% to $99,000. Compensation in the industry has now fallen nearly 20% since 2014. "Rising pressure to cut fees, falling profits and volatile markets forced fund houses to slash bonuses and salaries," the FT said. "The decline in pay levels comes on the back of intense cost pressure for asset management companies, which are struggling to cope with the global shift by investors away from actively managed funds towards cheaper passive alternatives."
New York Times
Bye, bye fees: Citigroup, Lazard and Goldman Sachs stand to lose most of their expected $101 million in advisory fees if the proposed $37 billion merger of Aetna and Humana falls through. The three banks have each received about $13 million upfront but would earn another $88 million if the deal is completed. Citigroup and Lazard advised Aetna while Goldman worked for Humana. On Monday, a federal judge sided with the Justice Department, which says the deal violates antitrust rules.
"The sum of the parts is greater than the pieces. We have greater aspirations going forward." – Robert Leary, chief executive officer of the Nuveen unit of TIAA