Wall Street Journal
A few details have leaked out (all from unnamed sources) concerning the upcoming settlements between the Justice Department, state attorneys general and banks over the sale of mortgage-backed securities in the run-up to the financial crisis. The Journal said up to nine banks are about to finalize the details of their settlement agreements. Goldman Sachs and Morgan Stanley could settle their cases as early as late June. Others expected to reach settlements in the coming months are Barclays, Credit Suisse, Deutsche Bank, HSBC, Royal Bank of Scotland, UBS and Wells Fargo. The size of each bank's settlement will depend on how much trouble each bank caused, ranging from a few million dollars to $3 billion. The settlements will be released individually, rather than in a group package.
China has apparently stolen personal information from about four million Americans through its latest cyberattack, on the federal government's computer systems. But the stolen data does not seem to have shown up yet on the "digital black market, where criminals buy and sell credit card and Social Security numbers." An official with the Chinese Foreign Ministry on Friday said China opposes all forms of cyberattacks.
Out of the embrace of private equity, into the arms of a strategic owner. That appears to be the trajectory SunGard will take. The maker of financial software filed for an IPO this week, as its private equity owners, Bain, Blackstone and KKR, prepare to exit the company after years of ownership. But no sooner had the ink dried on the IPO paperwork, several firms announced their interest in acquiring the company. The two suitors named in the article are also makers of software for banks FIS (Fidelity National Information Services) and SS&C Technologies.
The British Bankers' Association, which previously controlled Libor, was warned by banks and others, going back to 2007, that the rate was unreliable and that some institutions were manipulating the rate to benefit their trading positions. The revelation came out in the trial of Tom Hayes, the accused mastermind of Libor rigging.
Although the article doesn't mention banks, a Journal story about alleged collusion among activist investors raises an issue that has been discussed for many years in the world of mutually owned thrifts. Executives at thrifts that have fully or partially converted into publicly owned companies have frequently complained that activist investors collude to seize control of their companies. Activist investors frequently communicate in secret, a tactic described by Locke Lord attorney Doug Faucette as a "wolf pack," to force the converted mutual thrifts to sell out. The Journal reports the Securities and Exchange Commission is investigating potential collusion among activist investor groups to win board seats at various companies.
The paper takes a turn looking at Delta National Bank & Trust, the small New York bank wrapped up in the FIFA scandal. Delta was the primary bank used by the Miami sports media company Traffic International, one of the companies at the heart of the FIFA investigation. At one point, deposits from Traffic International comprised almost a quarter of all Delta's deposits, according to financial reports filed with regulators. The Office of the Comptroller of the Currency is investigating Delta, the FT reports, although the OCC and the bank both declined to comment. The bank, which caters to wealthy Latin America residents, has offices in New York, Miami, Geneva, the Cayman Islands and Paraguay.
New York Times
As the Justice Department and House Financial Services Committee investigate the source of leaks at the Federal Reserve about its bond-buying plans, questions are raised about the Fed's reliance on internal investigations to suss out the source of the leaks. When news of earlier leaks came out, instead of referring the matter to law enforcement, an internal investigation was launched.
The Times looks at Abacus Federal Savings Bank, which was found not guilty of grand larceny and other charges on Thursday, along with two of its senior officers. Manhattan DA Cyrus Vance had tried to prove the bank lied for years to Fannie Mae about the qualifications of its mortgage applicants.
What's so wrong about making repeated withdrawals of $8,000 from your bank account? A somewhat-confusing discussion ensues about federal anti-money laundering laws, privacy concerns and the indictment of former House Speaker Dennis Hastert.
Bloomberg: Unnamed sources told Bloomberg the Consumer Financial Protection Bureau is likely to ban some overdraft-fee policies but it won't cap the size of charges or limit how often the fees can be assessed. The decision which a CFPB spokeswoman said the agency hasn't made yet would be a huge win for banks. The article cites the lobbying of community banks as a big reason for the CFPB's probable decision, as small banks have argued the fee income is vital to their survival. Even if the CFPB does decide against a total ban on overdraft fees, it will prohibit banks and credit unions from using high-to-low reordering of transactions and will also require clearer explanations of fees. These are steps that some banks have started to implement anyway, even if there remain some holdouts. And besides, consumers' improved knowledge of how to manage their bank accounts, thanks in part to mobile-banking apps, has taken a bite out of overdraft-fee revenue.