Receiving Wide Coverage ...
Crackdown: A top banker was arrested on criminal charges Wednesday, but those looking for prosecutions resulting from the financial crisis are still going to be disappointed. Mark Johnson, a top foreign-exchange executive at HSBC is accused of "front running" a currency trade for a client in 2011, which was worth about $3.5 billion. The deal won the bank about $8 million at the time, albeit to the detriment of the company involved. Another HSBC banker, Stuart Scott, has also been charged. What did Johnson say when the deal went through? "Ohhhh, f—ing Christmas," reports the Wall Street Journal, based on a transcript of the recorded call. Too bad this holiday season may be spent in front of a jury of his peers.
According to the Financial Times, HSBC cleared the bankers involved during an internal investigation years ago, but apparently the Justice Department isn't satisfied.
"The charges are a boon to the Justice Department, which until now has not mounted any cases against individuals in its wide-ranging investigations into currency manipulation by the major banks," says the New York Times.
Going minimalist: On Wednesday, Morgan Stanley reported that its second-quarter profit and revenue had dropped from a year before. Like many companies these days, the bank is trying to do "more with less" after selling off an oil merchant and cutting staff. Wall Street Journal, Financial Times
Wall Street Journal
Two roads diverged in a yellow wood: Backers behind the digital currency Ethereum have opted to undo a set of transactions that led to a $60 million theft last month – taking what's known in the community as the "hard fork." The decision is a controversial one, as critics have argued that the ledger that underpins the currency should not be altered.
M&A: F.N.B. Corp. plans to buy Yadkin Financial in an all-stock deal that could be announced as early as Thursday, as regional banks continue to consolidate. "Midsize lenders are among the most active deal makers in the financial industry these days, as larger banks sit on the sidelines amid heightened regulatory scrutiny since the financial crisis," the paper says. "Smaller banks face pressure to grow or try to sell themselves, as low interest rates sap profits and regulatory costs mount."
Changing roles: Money-market funds are taking fate into their own hands and settling direct "repo" deals with institutional investors and insurers, as banks bow out. That's according to data from the Office of Financial Research, which is housed inside the Treasury Department.
Borrowing blitz: The markets may be in turmoil, but regular folks continue to buy houses and take on loans, boosting banks' bottom line in the process. "Business done with, and for, ordinary people buoyed the US banking industry's profits in an otherwise lacklustre results season, with loan default rates running near historic lows," the paper says.
New York Times
'Sorry State': The heads of a number of top public companies, led by JPMorgan Chase's CEO Jamie Dimon and supported by executives including Warren Buffet, are preparing to release a report Thursday outlining principles for improving how public companies operate. The group began a series of meetings and calls last summer to discuss market problems: "too little trust and connection between shareholders and management, too many rules imposed by so-called governance experts and too many idiosyncratic accounting guidelines," the paper says.