Receiving Wide Coverage…
Citigroup was fined $425 million by the U.S. Commodity Futures Trading Commission Wednesday, for claims that it tried to manipulate several interest-rate benchmarks between 2007 and 2012. However, it appears the bank could avoid any criminal charges, as the Department of Justice said it had closed its investigation and already told Citi it would not prosecute over Libor. Wall Street Journal, Financial Times, New York Times.
Wall Street Journal
Financial crime may be rampant inside Wall Street banks, but it's rare that individual employees are charged, the Wall Street Journal found. It analyzed 156 criminal and civil cases brought by U.S. regulators against 10 large Wall Street banks — including JPMorgan Chase, Citi, Morgan Stanley, Goldman Sachs and Wells Fargo — since 2009. A total 47 bank employees were charged in relation to their cases (just one was a boardroom-level executive); 24 of them settled or pleaded guilty, 11 contested the charges, five were found liable. The Journal didn't look at cases against bankers in which the firm itself wasn't charged.
This week the Treasury proposed to include financial firms in "data localization" provisions under future trade pacts but not under the Trans-Pacific Partnership. Banks have been concerned about being excluded from TPP rules that allow most businesses and companies to send data freely with the trade bloc, which includes the U.S., Japan and 10 other countries. They say they rely heavily on data and to build or rent facilities in which to house it in 12 different countries would add to their costs and unfairly benefit local technology firms.
New York Times
Marketplace lenders operating in New York could be facing further regulatory oversight of their business practices and loan terms, depending on the outcomes of a forthcoming investigation by the New York State of Financial Services that will examine whether Lending Club and its peers should be licensed to run in New York. It hasn't determined which of the startups it will target, but the response it receives from a May 17 subpoena it sent Lending Club — including interest rates it charges, underwriting standards and details about how it verifies borrower information — could give the DFS some direction. The company, which has until June 21 to respond, has said it will cooperate with the investigation.
Bank of Montreal is preparing to cut about 1,850 jobs as a response to declining branch transactions. Chief financial officer Tom Flynn said the cuts would affect the retail arm more than the investment unit and that some branches are scheduled to close in the medium term. "We're adjusting how we do business and moving with our customers," he said. As the total number of BMO's in-branch customer transactions have fallen in the last two years, digital and mobile banking transactions rose 5 million in the same period, he added. BMO notified staff in an internal memo Wednesday, after posting lower quarterly earnings. (Meanwhile, some smaller U.S. banks are bucking convention, adding staff to their branches.)
The Mt. Gox fiasco continues. Most people who invested and lost money in the now defunct bitcoin exchange will be disappointed that just $91 million in assets has surfaced to distribute to claimants, when the total amount of claims exceeds $2.4 trillion. The trustee overseeing the case said $414 million of those claims appear legitimate and have been approved. These claimants will get a portion of the $91 million, but how much of it remains to be seen pending some lawsuits and investigations.
OakNorth Bank, a U.K. "challenger bank" focused on small and mid-sized business lending, has shifted its services to a cloud-based system using Amazon Web Services. The development allows the year-old company is the first in the U.K. to outsource its IT services over the internet instead of through the physical computer server of legacy core systems. "This development is proof of the regulator's willingness to do that and will open up the opportunity for other financial institutions to follow suit," said Rishi Khosla, co-founder and chief executive. OakNorth has been working with AWS and the Financial Conduct Authority for six months on policies relating to data access, data protection, security and business continuity. The FCA proposed guidelines at the end of last year that would give firms the green light to use the cloud with certain safeguards in place.