Daily Archives: July 26, 2013

Goldman And JPMorgan Probed Over Metals Warehouse Manipulations

s the WSJ reports, the Department of Justice has opened an initial probe into the metals warehousing industry and the Commodity Futures Trading Commission has also sent letters to some firms telling them to preserve documents, in what is likely the beginning stages of an investigation.

Via WSJ,



The probe comes amid growing concern in Washington over banks’ ownership of metals warehouses and other commodity assets.



Banks that trade physical commodities have come under attack by government officials, companies and consumer groups, who worry about the ability of the financial sector to exert influence over markets for raw materials.



Mr. Brown held a hearing on the subject this week at which some company officials alleged banks are deliberately creating shortages of aluminum and other raw materials for financial gain.


The Federal Reserve has said it is reconsidering the permission it granted to banks over the past decade to participate in physical commodity markets. The permission expires later this year.


Wells Fargo exits mortgage joint venture businesses

Wells Fargo exits mortgage joint venture businesses

Wells Fargo  ($43.65 -0.66%) announced plans to withdraw from eight joint ventures in the mortgage lending space.

The decision is effective immediately and is expected to gradually be completed over the next 12 to 18 months. 

The withdrawal is based on the current regulatory and market environment as changes in state and federal oversight have increased the complexity and difficulty of operating its joint mortgage ventures.

“This decision reflects our response to new operating realities and our commitment to continuously improving our business model,” said Franklin Codel, executive vice president and head of mortgage production.

He added, “As a leader in home lending, we want to ensure we’re always in the best position to help Americans achieve the dream of homeownership.”

As of the second quarter, the joint ventures contributed 3% of Wells Fargo’s mortgage production.

Appromixately 300 employees will be impacted, but the decision does not impact the mega bank’s retail and correspondent mortgage businesses.


FHFA reaches $885 million settlement with UBS

FHFA reaches $885 million settlement with UBS

UBS Americas will pay $885 million to settle ongoing litigation with the Federal Housing Finance Agency over the bank’s sale of toxic residential mortgage-backed securities to Fannie Mae and Freddie Mac.

The agreement ends one of many cases filed against banks by the FHFA. The conservator for Fannie and Freddie alleged that the various banks violated federal and state securities laws when selling private-label RMBS to the housing agencies. 

Under the terms of the settlement, UBS will pay approximately $415 to Fannie Mae and $470 to Freddie Mac to resolve certain claims related to securities sold to the entities between 2004 and 2007.