Receiving Wide Coverage ...
UBS Pays Up: Immunity didn't quite work out for UBS. The Swiss lender has agreed to pay $545 million to settle investigations into the alleged manipulation of foreign-exchange and Libor rates. UBS had reached a nonprosecution agreement with the U.S. back in 2012 over its alleged role in the Libor scandal, but prosecutors scrapped the deal when the bank later became implicated in forex rigging. Now it will plead guilty to one count of wire fraud connected to Libor, although it faces no criminal charges related to forex. The Financial Times suggests UBS is getting off easy: the fine is "much lower than expected." All the papers note the Justice Department is expected to soon announce a wave of rate-rigging settlements with Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland. Wall Street Journal, Financial Times, New York Times
CFPB Takes on PayPal: PayPal has agreed to pay $25 million to settle a lawsuit alleging it funneled customers into its credit product without their permission. The Consumer Financial Protection Bureau alleges PayPal would then sign up customers for the credit product without their consent, then force "customers to pay for items using PayPal Credit by not making other payment options available," as American Banker reported Tuesday. The CFPB also rebuked PayPal for allegedly engaging in deceptive marketing practices and bungling disputes over bills. News of the settlement turned the comments sections on the Journal and the Post into informal complaint portals, as readers shared tales of their own unhappy encounters with PayPal. "The credit account and regular accounts are connected," one commenter writes. "You never knew which account was being charged." Wall Street Journal, Washington Post
The Murky Dynamics of JPM: Just how contentious is the relationship between JPMorgan Chase investors and the bank's leadership? It depends on which paper you read. American Banker's Robert Barba suggests a majority of shareholders are satisfied with top banana Jamie Dimon's performance, given that only 36% voted to prevent future leaders from holding the dual role of chairman and chief executive at the bank's annual meeting Tuesday. (If investors were really unhappy with Dimon, an analyst suggests, they would have approved the measure and thereby urged him toward retirement.) The FT focuses more on the 61% of shareholders who voted to approve the banks' executive pay package, "implying a sizable number of objections among major institutional investors." The Post also interprets the vote on executive pay as a sign of discontent with JPMorgan's management, particularly when compared to the 78% who gave the green light to Dimon's pay last year.
Ethics, Schmethics? The papers drill down further into a new report on ethics in the financial sector that suggests corruption is alive and well in the U.S and the U.K. The FT notes British workers come off worse than their American counterparts in the report: 32% of Brits say they would be up for insider trading if they knew they wouldn't get caught, compared to 24% in the U.S. However, it's unclear if U.K. financial professionals are more generally amenable to crime or just more forthcoming than Americans. (It's also worth noting this isn't exactly a Goofus-versus-Gallant scenario: 24% of Americans admitting they'd go in for consequence-free illegal activity is still pretty high.) The Journal takes a look at another much-scrutinized statistic from the report: 47% of 1,200 respondents say it's likely their competitors have engaged in unethical behavior. But the paper argues that while "it is quite common for people to think their rivals are cheating," they may be overestimating their competitors' penchant for wrongdoing.
New SEC Departure: The Securities and Exchange Commission is losing another high-profile staffer: chairman Mary Jo White's top aide Lona Nallengara. The Journal notes the SEC has lost a number of important players in recent months, and that two of the SEC's five commissioners are also expected to leave their posts soon. But their exits "largely reflect the normal churn at the SEC, where the jobs are demanding and top staffers typically spend four or five years before going to more lucrative jobs in the private sector." The Times offers a look at Nallengara's time at the SEC, during which he was often at the "center of the tension" during partisan conflicts.
What to Worry About: The Financial Stability Oversight Council's annual report on threats to the stability of the financial system flags high-speed trading and the changing role of clearinghouses as potential issues, the Journal reports. But the council "didn't recommend any specific action in response to its concerns about liquidity or market structure other than recommending regulators collect and share more data." The FT focuses on the council's concerns about cybersecurity, particularly about the possibility of a major attack that could hobble the financial sector's ability to operate. American Banker also identifies cybersecurity as the FSOC's top concern, noting the council calls for more information-sharing and coordinated responses to breaches within the financial sector.
Wall Street Journal
Hacks on debit cards used at ATMs have skyrocketed to their highest point in 20 years, according to credit-scoring firm FICO. Both bank ATMs and machines located at bodegas, grocery stores and other spaces are vulnerable: "Debit-card compromises at ATMs located on bank property jumped 174% from Jan. 1 to April 9, compared with the same period last year, while successful attacks at nonbank machines soared by 317%, according to FICO." The article implies that criminals may be focusing on ATM attacks since new chip-and-pin cards are making it harder to attack merchants' machines.
Democrats on the Senate Banking Committee will likely vote against Sen. Richard Shelby's proposed regulatory relief bill at a mark-up Thursday, but they have a bill of their own that could open the door to compromise.
Florida Bankers Association chief Alex Sanchez in an op-ed calls for an end to credit unions' tax exemption.
JPMorgan Chase is getting into the think-tank business. The JPMorgan Chase Institute will use transaction information gleaned from 30 million customers "to build a more granular snapshot of the U.S. economy," according to the FT. Its first report on income and spending habits reveals the highest-earning and lowest-earning households are equally likely to experience big fluctuations in earnings.
A derivatives contract "widely blamed for helping to inflate the credit bubble" is making a comeback on Wall Street.
New York Times
Hackers breached the website of the Federal Reserve Bank of St. Louis, redirecting readers to fake lookalike sites.
Here's Times reporter Nathaniel Popper talking up his new Bitcoin book, Digital Gold.