Daily Archives: April 25, 2014

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Citigroup : U.S. Plan Settlement Talks — Update

Citigroup : U.S. Plan Settlement Talks — Update

WASHINGTON–The Justice Department and Citigroup Inc. plan to meet next month in the opening salvo of multibillion-dollar settlement talks aimed at ending probes into how the bank handled shoddy mortgage-backed securities, according to people familiar with the matter.

The scheduled meeting will be the first chance for each side to put a number on a potential settlement, but in the past such numbers have been far apart, representing little more than starting negotiating positions.

The Justice Department hasn’t yet floated a number with the bank–which has already settled several other mortgage-related lawsuits–but an agreement could tally in the billions of dollars.

The discussions, which center on the bank’s sale of residential mortgage-backed securities, are part of a continuing push by the Justice Department to bring big banks to heel for activities that regulators and law enforcement believe contributed to the 2008 financial crisis.

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Treasury blocks big bonuses at RBS

Treasury blocks big bonuses at RBS

Royal Bank of Scotland has been told by the government it will not be able to grant bonuses worth more than the salaries of its employees after the Treasury said it had blocked an application by the taxpayer-backed lender to hand out awards of up to 200pc of base pay.

The Treasury, which controls an 81pc holding in the bank, said RBS would be a “back-marker” for banking industry pay and average remuneration at the lender would continue to fall this year.

In a statement, RBS said it had been informed by the UKFI, the body in charge of the taxpayer’s holding in the bank, that any application at its upcoming annual shareholder meeting to award bonuses worth twice an employees fixed pay would be blocked, effectively ending any hope of getting the measure through.

RBS warned the decision to block larger bonuses could lead to a “commercial and prudential risk” largely as a result of senior staff deciding to quit the business to work at banks with the ability to hand out bigger pay packages.

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Morgan Stanley Again Targets Suit Over $104M In Bad MBS

Morgan Stanley Again Targets Suit Over $104M In Bad MBS

Law360, New York (April 24, 2014, 7:37 PM ET) — Morgan Stanley on Thursday sought to undo a lower court’s ruling that found Allstate Insurance Co.’s suit over $104 million in allegedly overrated mortgage-backed securities to be timely, telling a New York appeals court the claims are barred by Illinois’ statute of limitations.

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Wells Fargo Plans to Start Webcasting Annual Meetings in 2015 — Update

Wells Fargo Plans to Start Webcasting Annual Meetings in 2015 — Update

Wells Fargo & Co. is the latest big bank to announce that it will begin webcasting its annual shareholder meeting.

Starting next year, Wells Fargo expects to provide an audio webcast of its annual meeting “given the recent interest,” a bank spokesman said Friday. He added that the bank is committed to holding “an annual meeting that is open, informative and serves the interests of the shareholders.” Wells Fargo isn’t planning to webcast its annual meeting Tuesday, however.

The topic of webcasting the meetings has gained attention of late as big banks pay billions of dollars in regulatory fines, generating more questions about their business practices. Many big banks also are holding their annual meetings far from the cities where they have headquarters.

As of earlier this week, New-York based Citigroup Inc. and San Francisco-based Wells Fargo were the only U.S. banks of the six largest that didn’t webcast their annual meetings. That rankled some individual investors and analysts who said the banks should do more to build broader lines of communication with investors.

Citigroup said at its annual meeting in St. Louis on Tuesday that it will start webcasting next year. Wells Fargo said Friday that it would follow suit.

Other banks such as Bank of America Corp., Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley already provide audio webcasts of their annual meetings. Most companies still don’t webcast their annual meetings, though more big companies from a variety of industries have adopted the practice, including Alcoa Inc., Google Inc. and Walt Disney Co.

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Barclays Must Face Investor Lawsuit Over Libor Manipulation, Says Appeals Court

Barclays Must Face Investor Lawsuit Over Libor Manipulation, Says Appeals Court

A federal appeals court ruled Friday that Barclays BARC.LN -1.25% PLC must face a shareholder lawsuit accusing the British bank of misleading investors about its manipulation of the Libor benchmark rate as well as its borrowing costs.

The Second U.S. Circuit Court of Appeals in New York revived the investors’ lawsuit after a federal judge in Manhattan tossed the case last year. The appeals court said shareholders of Barclays’ American depositary receipts had presented a “plausible” claim.

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Bank of America : BofA ex-CFO agrees to settle N.Y. lawsuit over Merrill

Bank of America : BofA ex-CFO agrees to settle N.Y. lawsuit over Merrill

(Reuters) – Bank of America Corp’s former finance chief, Joe Price, has agreed to pay $7.5 million to settle a New York lawsuit that accused the bank and its former executives of misleading investors during the lender’s acquisition of Merrill Lynch.

Price also agreed to not serve as an officer or director of a public company for 18 months, according to the settlement agreement.

The agreement ends the 2010 case against former Chief Executive Kenneth Lewis, Price and Bank of America linked to the 2008 global financial crisis. The bank and Lewis settled with New York Attorney General Eric Schneiderman last month.

New York accused the bank’s executives of concealing Merrill’s mounting losses from Bank of America shareholders prior to a December 5, 2008 vote on the merger, and misrepresenting the impact the merger would have on the bank’s future earnings.

“This settlement is one more step in our effort to hold top financial executives accountable for their actions,” Schneiderman said in a statement.

The bank paid the $7.5 million for Price, according to his attorney William Jeffress, who added that his client decided to settle to because of the toll it was taking on him and his family.

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What Regulators Must Consider Before Punishing Individual Bankers

What Regulators Must Consider Before Punishing Individual Bankers

“Why aren’t we holding the individuals responsible for the financial crisis accountable?” It is a question that has been repeated so many times over the last five years that no one seems to expect an answer. But the question was raised again recently by Benjamin Lawsky, head of the New York State Department of Financial Services, with a public promise to name names and hold individuals accountable in enforcement actions going forward.

In public remarks before the Exchequer Club in Washington, Lawsky stated that in order to deter misconduct and incentivize ethical behavior on Wall Street, regulators must not only hold corporations accountable, but also the individuals who engaged in the misconduct on behalf of the corporation.

First, he stated that regulators “should publicly expose—in great detail—the actual, specific misconduct that individual employees engage in.” Second, he stated that “where appropriate—individuals should face real, serious penalties and sanctions when they break the rules.” To this end, in addition to imprisonment for criminal violations, Lawsky proposed “suspensions, firings, bonus claw-backs, and other types of penalties in the regulatory context.”

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‘Geithner Chose Banks Fannies Over Homeowners’

‘Geithner Chose Banks Fannies Over Homeowners’

By Sen. Elizabeth Warren, The Boston Globe

25 April 14

 

y late 2009, the mortgage crisis had prompted plenty of finger-pointing — and a lot of it was directed at the families losing their homes. Earlier in the year, when talk of writing down mortgages surfaced, a televised rant about “losers” went viral and was generally credited with sparking the Tea Party. Now everybody seemed to have a favorite story about a bus driver who bought an $800,000 home or somebody’s brother-in-law who flipped houses, made a fortune, and then lost it all when the music stopped.

It all seemed backward. It was as if people were saying: “Oh, gosh, we can’t blame poor Mr. CEO Banker. He gets paid millions and millions of dollars because he’s really good at his job, so how was he supposed to know that his bank was about to collapse?” And then they turned around and said: “Hey, stupid homeowner! Why did you sign those confusing mortgage papers? Didn’t you know that your balloon payment would come due just the moment your job disappeared?”

The hypocrisy drove me nuts.

In fall 2009, Secretary Timothy Geithner invited people working on TARP oversight to a meeting. It was held in the Treasury Building in an incredibly fancy room that was loaded with historic furniture, rich draperies, and heavily framed paintings. It looked like a room for kings to negotiate over who was going to get what colony. The secretary and his aides sat on one side of a huge table. The rest of us lined up on the other side.

Secretary Geithner spoke quickly, often dropping his voice into a barely audible monotone, rushing ahead so fast that there was no room for interruptions. He was clearly smart and in command of the facts, but he didn’t offer many opportunities for questions. Maybe he was a little anxious. It probably wasn’t much fun to face more than half a dozen people whose job was to look over your shoulder and second-guess your decisions.

I tried not to fidget. But after we had listened to the secretary go on and on about his department’s cheery projections for recovery, I finally interrupted with a question about a new topic. Why, I asked, had Treasury’s response to the flood of foreclosures been so small? The Congressional Oversight Panel had been sharply critical of Treasury’s foreclosure plan. We thought that the program was poorly designed and poorly managed and provided little permanent help, and we worried that it would reach too few people to make any real difference. After the rush-rush-rush to bail out the big banks with giant buckets of money, this plan seemed designed to deliver foreclosure relief with all the urgency of putting out a forest fire with an eyedropper.

The secretary seemed annoyed by the interruption, but he quickly launched into a general discussion of his approach to dealing with foreclosures, rehashing the plan that the Congressional Oversight Panel had already reviewed. Next, he explained why Treasury’s efforts were perfectly adequate — no need to worry. Then he hit his key point: The banks could manage only so many foreclosures at a time, and Treasury wanted to slow down the pace so the banks wouldn’t be overwhelmed. And this was where the new foreclosure program came in: It was just big enough to “foam the runway” for them.

There it was: The Treasury foreclosure program was intended to foam the runway to protect against a crash landing by the banks. Millions of people were getting tossed out on the street, but the secretary of the Treasury believed the government’s most important job was to provide a soft landing for the tender fannies of the banks.

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Royal Bank of Scotland : RBS Pay Plan Blocked by Government

Royal Bank of Scotland : RBS Pay Plan Blocked by Government

LONDON–Royal Bank of Scotland Group PLC said Friday it has withdrawn a planned pay resolution at its annual shareholder meeting after the U.K. government said it would vote against the move.

The 81% government-owned bank had wanted to set variable remuneration up to 200% of fixed pay, or two-for-one ratio, in line with some of its competitors.

However, the bank said it had been informed by UK Financial Investments Ltd.–which manages the government’s stake in the lender–that it would vote against any resolution that proposes a 2:1 pay ratio. Faced with the measure failing to pass, RBS said it had decided to withdraw the vote from its annual general meeting.

52 Year-Old French Banker Jumps To Her Death In Paris (After Questioning Her Superiors)

FranceTV and Le Parisien reports,

 

An employee of the Bred-Banque Populaire has committed suicide, Tuesday, April 22 in the morning at the headquarters of the bank. On her arrival at headquarters, quai de la Rapee, in the 12th arrondissement of Paris…

 

The incident occurred shortly before 10 am, 200 meters from the Ministry of Finance.

 

 

According to our sources, she questioned his superiors before jumping out the window, that formally denies the direction of the Bank.

 

“There is absolutely no evidence for designating his relationships with his hierarchy as responsible or letter or message ” insists the direction of the communication FranceTV info.

 

It also speaks of a “very painful moment for the company” .

 

 

In an email to all employees consulted by FranceTV info, the management of the bank confirms the “death by suicide” and said “severely affected.” It shows have established a psychological unit.

 

 

“For the moment, nothing puts the company in question, says the majority union SUNI-Bred/UNSA. The employee got along very well with her new team, her superior is very nice.

 

“According to a close,” Lydia lived alone, in a difficult environment.

 

The human resources department states that this inhabitant of Ivry was in therapy for several years. Each describes a “secretive” but “very well known and popular” woman, but “never spoke of it.

This is the 14th financial services exective death in recent months…

1 – William Broeksmit, 58-year-old former senior executive at Deutsche Bank AG, was found dead in his home after an apparent suicide in South Kensington in central London, on January 26th.

2 – Karl Slym, 51 year old Tata Motors managing director Karl Slym, was found dead on the fourth floor of the Shangri-La hotel in Bangkok on January 27th.

3 – Gabriel Magee, a 39-year-old JP Morgan employee, died after falling from the roof of the JP Morgan European headquarters in London on January 27th.

4 – Mike Dueker, 50-year-old chief economist of a US investment bank was found dead close to the Tacoma Narrows Bridge in Washington State.

5 – Richard Talley, the 57 year old founder of American Title Services in Centennial, Colorado, was found dead earlier this month after apparently shooting himself with a nail gun.

6 – Tim Dickenson, a U.K.-based communications director at Swiss Re AG, also died last month, however the circumstances surrounding his death are still unknown.

7 – Ryan Henry Crane, a 37 year old executive at JP Morgan died in an alleged suicide just a few weeks ago.  No details have been released about his death aside from this small obituary announcement at the Stamford Daily Voice.

8 – Li Junjie, 33-year-old banker in Hong Kong jumped from the JP Morgan HQ in Hong Kong this week.

9 – James Stuart Jr, Former National Bank of Commerce CEO, found dead in Scottsdale, Ariz., the morning of Feb. 19. A family spokesman did not say whatcaused the death

10 – Edmund (Eddie) Reilly, 47, a trader at Midtown’s Vertical Group, commited suicide by jumping in front of LIRR train

11 – Kenneth Bellando, 28, a trader at Levy Capital, formerly investment banking analyst at JPMorgan, jumped to his death from his 6th floor East Side apartment.

12 – Jan Peter Schmittmann, 57, the former CEO of Dutch bank ABN Amro found dead at home near Amsterdam with wife and daughter.

13 – Li Jianhua, 49, the director of China’s Banking Regulatory Commission died of a sudden heart attack

14 – Lydia _____, 52 – jumped to her suicide from the 14th floor of Bred-Banque Populaire in Paris