Credit Suisse Blasts UBS for Recruiting Brokers; SEC's In-House Court Blamed for Delays

Wall Street Journal

Wells Fargo forged a deal with Credit Suisse to recruit the Swiss bank's U.S. brokers in its private banking business, as Credit Suisse moves to wind down that part of its wealth management group. But UBS has been unfairly raiding Credit Suisse's broker ranks, according to an arbitration claim Credit Suisse filed with the Financial Industry Regulatory Authority, the Journal reported.

About 70 of Credit Suisse's 300 brokers in its U.S. private bank bolted for UBS in recent months. That's made it more difficult for Wells Fargo to recruit Credit Suisse's brokers, per their agreement. Credit Suisse has had a law firm send letters to its former brokers who joined UBS, warning they will be punished if client information finds its way to UBS.

An unnamed source said UBS hired the Credit Suisse brokers without providing compensation to Credit Suisse; that violates the "exclusive recruiting arrangement" that Wells Fargo forged with Credit Suisse. Wells Fargo and Credit Suisse have declined to say if any payment is involved in that arrangement.

When is a fast-track court not so speedy? When it involves the Securities and Exchange Commission's in-house tribunal for hearing appeals, apparently. Ever since the SEC set up its own court system (it was given the power to do so through Dodd-Frank), the time it's taken to hear appeals has involved longer and longer delays.

Just ask two former State Street executives whose legal fight with the SEC lasted five years spanning four judges, three rulings and two appeals. The executives were eventually cleared of allegations they misled investors. The article said it's not clear what is causing the delays, which have lengthened under Chair Mary Jo White.

Before it lowers the boom on colleges with high default rates on student loans, the Education Department is giving a helping hand. The offer of assistance in identifying and correcting problems is made in order to avoid withdrawing a school's access to federal aid.

Some real estate industry players are blaming new rules for the increase in how long it takes to close residential mortgage loans. The new TILA-RESPA integrated disclosures requirement has caused confusion among lenders, which has lengthened the average time it takes to close loans to 49 days, according to Ellie Mae.

New York Times

Debt collection companies like Encore Capital Group are using the courts to against consumers, and then blocking consumers from using the courts to challenge their tactics, by forcing the disputes into the arbitration process. Inserting arbitration language into the fine print of consumer contracts has allowed Encore and other companies that buy consumer debt to block class-action consumer lawsuits. Banks, car dealers, online retailers, mobile phone providers have also made use of arbitration clauses to snuff out attempts by consumers to file class-action lawsuits.

Washington Post

Apple Pay is Apple's trojan horse, according to Vivek Wadhwa, an academic associated with Stanford University and Duke University. Apple plans to use Apple Pay to establish a payments platform, then ditch its bank and credit card partners, Wadhwa writes in an op-ed column. Apple will use blockchain technology to sidestep banks and credit cards. This will all mean lower fees, better service and faster transactions for consumers, he writes.

Elsewhere ...

Quartz: The U.S. Patent Office published 10 blockchain-related patents that Bank of America filed in July 2014. The patents cover technologies that B of A developed for "cryptocurrency transaction payment system," risk detection and using blockchain to measure fraudulent activity. It's another sign of the increased interest in patents from the banking industry. Quartz suggested B of A's blockchain-related patents could mean it's working on a complete network based on blockchain.

Charlotte Observer: The North Carolina Bankers Association has begun an effort to persuade more young people to make a career out of banking. As part of the initiative, bankers under the age of 45 will go to schools to teach financial literacy to students. While they're at it, the presence of younger bankers may show students that banking isn't just a job for old people.