Editor's note: Morning Scan will publish next on Jan. 3, 2017. Happy holidays from all of us at American Banker and SourceMedia.

Receiving Wide Coverage ...

Off to court: Having failed to reach a settlement following its long-running investigation into the British bank's alleged role in selling toxic mortgage-backed securities, the U.S. Justice Department is suing Barclays PLC. "It is highly unusual for the Justice Department to sue a bank, rather than reaching a settlement," the Wall Street Journal noted. The DOJ charges that between December 2005 and December 2007, before the global financial crisis, the bank "engaged in a fraudulent scheme to sell tens of billions of dollars of residential mortgage-backed securities in which it repeatedly deceived investors about the characteristics of the loans backing those trusts." Many of the securities sold by Barclays "proved to be catastrophic failures," the lawsuit claims, as "more than half of the underlying loans defaulted." Wall Street Journal, Financial Times, New York Times

In an accompanying article to its main story, the Journal says the DOJ "seeks to paint Barclays as a bank where executives knew the underlying mortgages behind their securities were bad, and repeatedly found ways to securitize them and misrepresent the quality of those loans to investors."

Settled: The U.S. government did, however, manage to reach multibillion-dollar settlements with Deutsche Bank and Credit Suisse for mortgage-backed securities misdeed allegations. Deutsche Bank settled for $7.2 billion on Thursday while on Friday Credit Suisse agreed to pay $5.3 billion. The figures include both penalties and restitution to customers. Financial Times, Washington Post

Wall Street Journal

More trouble: Rising interest rates are making it even harder for marketplace lenders to find buyers for their loans. Dealstruck, for example, stopped making new loans last month. "They don't want to buy anymore," Ethan Senturia, the company's CEO and co-founder, said about its hedge-fund backers. "We got caught. This is something that happens in specialty finance all the time. If you are not in a position to get lower cost of funds it can be challenging to continue indefinitely." The article also reports CAN Capital said it has laid off staff and put CEO Dan DeMeo and two other executives on leave, which American Banker reported last week.

Icahn's thinking: Based on his past and more recent comments, Carl Icahn, President-elect Trump's new regulatory adviser, isn't looking to totally dismantle Dodd-Frank, as many in the industry may hope. "In fact, I think you need Dodd-Frank, to some extent, more than even Donald does," Icahn told Fox News last month. On Thursday, he told CNBC, "I'm not against regulations at all. I sort of believe that you need a rule of law." But, he added, "There is too much regulation on the banks."

Picking his brain: Things are getting even creepier at Bridgewater Associates, the world's largest, most successful hedge fund. According to the Wall Street Journal, engineers are working on a secret project with a goal to create a software program that would automate most of the firm's management. "It would represent a culmination of [founder Ray] Dalio's life work to build Bridgewater into an altar to radical openness—and a place that can endure without him," the Journal reports. "The system remains under development, and the exact details of its operations are still being debated inside the firm," it says, but one employee described the project as "like trying to make Ray's brain into a computer."

Financial Times

Upping the ante: The fierce battle among U.S. credit card issuers to attract big-spending consumers with lucrative rewards "intensified sharply" this year "and it looks likely to escalate further, so much so that the rewards war has started to concern investors and analysts," the FT reports. The six largest card issuers paid out more than $100 billion in rewards between 2010 and 2015 but are on track to pay $22.6 billion this year alone, 18% more than last year and double what they paid out as recently as 2010. Amex was the most generous at $6.8 billion, followed closely by JPMorgan Chase at $6.6 billion.

Washington Post

Redemption: The paper profiles hedge fund manager Anthony Scaramucci, who it says "is widely expected to be the next Goldman Sachs alum to join the Trump administration." The Wall Street Week host "is suddenly in demand as an insider who can authentically preach the Trump economic gospel," the Post writes. "For Wall Street, Scaramucci's emergence, and the president-elect's willingness to rely on Goldman Sachs alums, is yet another sign that the anger the industry faced following the 2008 financial crisis may be subsiding."

Quotable ...

"It is an amazing time to be a consumer. Sign-up bonuses of 100,000 points on the Sapphire Reserve, up to 250,000 points on small-business cards from Amex, and more and more. It's certainly nice when the credit card companies are giving you $1,000, $1,500, $2,000 for getting a single credit card." – Brian Kelly, the "Points Guy"

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