Receiving Wide Coverage ...
JPM Madoff Settlement: New year; same story for JPMorgan Chase. Anonymice are telling their favorite news outlets the big bank is close to nearing another settlement with federal regulators. This one involves allegations that JPM ignored signs about Bernie Madoff's massive Ponzi scheme. The settlement is expected to include just over $2 billion in fines, paid out to victims of the Madoff fraud, the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network. It will also include a deferred prosecution agreement with Manhattan U.S. Attorney Preet Bharara. "The agreement, nearly unheard-of for a giant American bank and typically employed only when misconduct is extreme, underscores the magnitude of the case against JPMorgan," notes Dealbook. The Journal says JPM is trying to get the settlement finalized before it reports earnings on January 14.
Personnel Changes: George Canellos, co-head of the Securities and Exchange Commission's enforcement arm, announced his departure from the agency on Friday. No word yet on where exactly Canellos is going, but the Times notes "he is all but certain to spin through the revolving door." The paper also reports SEC chairman Mary Jo White is not expected to replace Canellos, leaving co-chief Andrew Ceresney "to put his own stamp on the enforcement division." Meanwhile, Dealbook profiles Gary Gensler's tenure as chairman of the Commodity Futures Trading Commission amid his exit from the agency. "Even as Mr. Gensler's aggressive streak thrust the once-backwater agency into the front lines of reform, it also maddened colleagues and complicated his legacy," writes reporter Ben Protess. "And now that his tenure is ending the agency has reached an inflection point, prompting Wall Street to hope for a friendlier regulator." Gensler is succeeded by Timothy Massad, the assistant Treasury secretary who oversaw the Troubled Asset Relief Program.
Wall Street Journal
Here's something to look forward to in 2014: U.S. banks stocks are expected to "regain their allure" this year as the economy improves. "Many analysts expect to see U.S. economic growth pick up in 2014, a trend that over time is likely to add to demand for loans and ease pressure on bank profit margins by lifting long-term interest rates," the paper notes.
A few high-speed trading firms have formed a group called the Modern Markets Initiative in order to revamp their image and lobby regulators and lawmakers. Scan readers will recall that high-speed trading has come under fire over the last few years following a few costly computer mishaps. Per the paper, "an initial goal for the group is to create a new name for the industry. They prefer 'automated professional traders' to high-frequency traders."
China has drafted new rules to curb risk in its shadow banking sector. Per the paper, the rules "mark an attempt by the government to better co-ordinate regulation of the country's shadow banks, but also indicate a more permissive official stance than many observers had anticipated."
New York Times
Gretchen Morgenson takes a looks at what is stalling regulators' final vote on the tougher leverage ratio recommended back in July. One possibility is that the Fed is waiting on overseas regulators to agree on changes to an international leverage ratio established back in 2010. "The definitional changes should not cause a decline in required capital at the largest banking firms compared with a U.S. leverage ratio proposal the agencies issued in the summer," a spokeswoman for the Federal Reserve tells her.