Receiving Wide Coverage ...
Let's Make a Deal: Promontory Financial Group won't be locking horns with New York's financial watchdog in court after all. Promontory on Tuesday agreed to a $15 million settlement with the New York Department of Financial Services and a six-month ban from taking on some new consulting engagements in New York state. The deal resolves allegations that Promontory whitewashed a report on Standard Chartered's sanctions violations and puts a concrete end to the indefinite ban on certain consulting work that the NYDFS had issued earlier this month. Promontory had been gearing up to challenge that ban in court. But while the two sides may have struck a deal, it looks like they're still clashing over the wording of the settlement. The consulting behemoth conceded as part of the settlement that "in certain instances" its actions with regard to Standard Chartered "did not meet the department's current requirements for consultants." Promontory's lawyer tells the Wall Street Journal this language constitutes a win for the firm, which made no admission of wrongdoing and refused to "admit it lacked independence, integrity and autonomythe words in prior agreements." But a DFS representative tells the paper Promontory's concession effectively acknowledges that it acted with a lack of independent judgment and the lawyer's statement is "misleading and disingenuous, and is representative of the conduct that Promontory has exhibited throughout this investigation." (The exchange is repeated nearly verbatim in the Financial Times.) Meanwhile, the New York Times ponders "whether Promontory ever actually intended to sue, or if the threat was meant more as a negotiating tactic" and offers a few details about the two-hour meeting that led to the settlement.
Intern Trouble: Meanwhile, Bank of New York Mellon agreed to a $14.8 million settlement with the Securities and Exchange Commission over charges it had violated foreign bribery rules by offering internships to relatives of a Middle Eastern sovereign wealth fund in order to curry favor with the client. The SEC sounds pretty furious about this, stating the young interns "did not meet the rigorous criteria, yet were hired with the knowledge and approval of senior BNY Mellon employees to corruptly influence foreign officials and win or retain contracts to manage and service the assets of the sovereign wealth fund," as the Financial Times reports. The Wall Street Journal notes coveted internships are a common form of currency on Wall Street. Now banks have "one less avenue by which to promote their business and gain access to other markets," according to the paper's paraphrasing of a legal expert's opinion. The New York Times details the interns' subpar performance, which includes one incident in which a human resources executive scolded two for repeatedly playing hooky.
Acquisition Fever: BB&T Corp. is one hungry bank. The regional lender announced plans to pay $1.8 billion for National Penn Bancshares Monday night, its third deal in less than a year. Breakingviews' Daniel Indiviglio says the deal "makes financial sense and is more proof the Federal Reserve supports industry mergers," so he's curious why more of BB&T's peers aren't following the bank's example. The Journal suggests midsize regional lenders will soon jump on the deal-making bandwagon, pointing to CIT Group's $3.4 billion acquisition of OneWest Bank as further evidence. American Banker has more on why the North Carolina-based BB&T is betting big on Pennsylvania banks and why National Penn decided to sell as it hovered close to the $10 billion threshold.
Wall Street Journal
The paper takes a look at the nation's ballooning grad-school debt, which accounts for 40% of total student debt. Lots of graduates are counting on income-based repayment plans and eventual forgiveness to manage their debt load, but critics worry this system is contributing to skyrocketing tuition.
JPMorgan Chase is reportedly closing in on a $150 million deal with the SEC to settle allegations that it guided clients toward its own investment products without disclosing a potential conflict of interest.
Minneapolis Fed President Narayana Kocherlakota says the Fed should put off raising rates lest the markets conclude it has lowered its target inflation goal, which could in turn lead the economy to get stuck "in a permanent low-interest-rate trap."
When it comes to global assets under management, New York remains the center of the universe contrary to the predictions of those who foretold a shift eastward in the aftermath of the financial crisis. That's because Dodd-Frank prompted U.S. firms to grow even larger in order to churn out sizable profits that would outweigh regulatory costs.
New York Times
Mega-retailer Target has agreed to reimburse Visa card issuers up to $67 million for the costs associated with its 2013 data breach, according to an anonymouse.
Facebook should stop trying to get Americans to use its social network to send each other money and concentrate on more willing markets in Latin America, Asia and Africa, according to an op-ed by redesign mobile head Rakesh Agrawal.