Receiving Wide Coverage ...
More JPM Woes: California Attorney General Kamala Harris is suing JPMorgan Chase over alleged credit card debt collection abuses. Per the lawsuit, JPM "engaged in widespread, illegal robo-signing, among other unlawful practices, to commit debt-collection abuses against approximately 100,000 California credit card borrowers over at least a three-year period." The bank, thus far, is declining to comment on the lawsuit. Various news outlets report other enforcement actions from regulators concerning the collection issues may follow. These developments shouldn't surprise American Banker readers. Risk management editor Jeff Horowitz broke the news of a pending OCC probe when he profiled the bank's aggressive credit card collection practices back in March 2012. New York Times, Financial Times, Washington Post, Wall Street Journal, American Banker
Debate on Dimon Continues: Meanwhile, the debate over whether Jamie Dimon should lose his dual title as CEO and chairman at JPM continues. This FT column concludes ousting Dimon as chairman would be tricky since "the only person who would be truly capable of supervising Mr. Dimon at JPMorgan these days is Mr. Dimon himself." An op-ed in the Journal argues that taking away Dimon's chairman title isn't actually in the best interest of shareholders. A New York Times op-ed by Jeffrey Sonnenfeld of the Yale School of Management similarly argues nothing would be gained by separating the roles. Additionally, Sonnenfeld notes "despite last year's notorious 'London Whale' trading disaster, JPMorgan's balance sheet was never in danger and Mr. Dimon generated a historic $21 billion in net income all this with unparalleled transparency and candid self-criticism." Readers don't have to look too hard for a counterpoint. In another Times op-ed, Simon Johnson economist and big bank breakup champion argues "shareholders still have cause to want change. When planes almost collide at an airport, we do not say, 'there was no actual accident, so that means the system works well.' Instead, our reaction is along the lines of, 'What went wrong?' and 'How can we prevent this from happening again?'"
Personnel Changes: The Royal Bank of Scotland has named its finance director Bruce Van Saun as the new chief executive of its U.S. unit Citizens Financial Group. Van Saun, set to take over for the retiring Ellen Alemany on Oct. 1, immediately played down the possibility of the U.S. unit being sold off, telling the Journal, he "would likely stick to a plan to float up to 25% of the business." In other news, Co-operative Bank chief Barry Tootell resigned after the British firm was downgraded to junk status by Moody's. He will be replaced immediately by Rod Bulmer, "who would act as temporary CEO of the company's banking arm," the Journal reports.
ATM Bank Heist: Federal prosecutors have filed charges against eight men who allegedly stole $45?million from automated teller machines by breaking into banks' computer systems, eliminating withdrawal limits on prepaid debit cards and manually withdrawing the money. The Post says the scheme "reinforced fears that new payment systems such as those being built into smartphones raise a variety of new risks for consumers," though banks, not individuals, were harmed in this instance. The FT calls the charges "part of a growing effort by U.S. law enforcement to punish cybercriminals who use networks with cells around the globe to break into financial institutions to steal billions of dollars." New York Times, American Banker
Wall Street Journal
The SEC is being urged to step up efforts to revamp rules "on government-sanctioned trading plans that allow corporate executives and directors to sell shares despite" potentially having insider knowledge about their firms.
New York Times
In case you were wondering what goes on at the SALT hedge fund conference "an ideas conference, a Wall Street bacchanal, a power-networking event" Dealbook has you covered.
Cyprus "seriously considered" leaving the Eurozone back in March when the country was in the midst of its financial crisis, but abandoned the idea "after it was estimated that reinstating the Cypriot pound would have caused an immediate 40% drop in the value of the new currency."