Receiving Wide Coverage ...
Good omen: Jefferies Group, which often serves as a bellwether for its larger investment banking peers, said its net profit more than doubled in the quarter ended August 31 to $83.8 million from $41.2 million a year earlier. Net revenue rose 22% to $801 million, led by a record $476 million from investment banking. On the downside, however, trading revenue fell 7% to $320 million, the lowest level in the past six quarters.
Bad grade: Harvard University’s endowment delivered a “disappointing” 8.1% return in its latest fiscal year. While that was better than the 2% loss it posted in fiscal 2016, it was still well short of the average 12.7% return among college and university endowments tracked by Cambridge Associates. “Our performance is disappointing and not where it needs to be,” said N.P. “Narv” Narvekar, Harvard Management Co.’s chief, noting subpar returns are a “symptom of deep structural problems” that are likely to continue. Wall Street Journal, Financial Times, New York Times
Wall Street Journal
It got off cheap: The Consumer Financial Protection Bureau was considering fining Wells Fargo $10 billion last year before settling on a penalty a fraction of that size for opening millions of accounts without customers’ permission, according to a July 2016 memo written by agency lawyers. But the lawyers eventually recommended a $100 million penalty to “help resolve this case,” stating that the smaller amount would “sufficiently deter similar violations” and get the bank to change its sales practices, the paper reports. The lawyers said Wells allegedly committed more than two million violations. The CFPB said Wells also fired or disciplined 10,000 employees involved in the phony accounts scandal.
Stating its case: In what is likely to be the first of many, Massachusetts Attorney General Maura Healey filed a lawsuit against Equifax for failing to protect consumers’ personal information, violating the state’s consumer protection and data privacy laws. The action “is just the first part of what is expected to be a legal wave that will eventually hit the company,” the paper comments. Hundreds of consumers have already filed lawsuits against Equifax.
Separately, Equifax’s Canadian division said the data breach affected about 100,000 consumers in that country. Consumers in the U.K. have also been affected.
IT professionals say the Equifax hack demonstrates the need to keep software up to date, but doing so isn’t easy, “easily confounded by the technical, financial and organizational realities.” Nevertheless, it is “crucial to overcome such hurdles given that it [is] core to their job, and that there [is] a certain price to be paid for failure.”
And with credit freezes growing, consumer loan volume may drop. But banks are being proactive.
Mind the gap: Credit card delinquencies are creeping up again, the result of consumer debt growing faster than incomes.
Quotable
“We allege that Equifax knew about the vulnerabilities in its system for months, but utterly failed to keep the personal information of nearly three million Massachusetts residents safe from hackers.” — Massachusetts Attorney General Maura Healey.
