Daily Archives: October 6, 2014

U.S., UK regulators might settle Deutsche Bank Libor case this year: WSJ

(Reuters) – U.S. and British regulators are in a plan to settle the Deutsche Bank AG (>> Deutsche Bank AG) Libor case in the next few months as they hope to extract major penalties from the bank for alleged manipulation of the benchmark interest rate, The Wall Street Journal reported, citing sources.

However, the size and timing of the settlement is still unclear and is unlikely to conclude until early 2015, the newspaper said, citing a person briefed on the talks.

Regulators are hoping to convince the bank to pay well into the hundreds of millions of dollars, the newspaper said, citing a source.

Deutsche Bank said it is cooperating in the various regulatory investigations and conducting its own ongoing review into the matters, the newspaper said.

Read on.

Wingspan lays off employees at Monroe call center, workforce was once 400, now less than 100

When Wingspan Portfolio Advisors purchasedJPMorgan Chase’s (JPM) customer service operations in Monroe, Louisiana in September 2013, the company gave 400 JPMorgan employees the opportunity to continue their employment with Wingspan.

The company also promised to bring 900 jobs to the area in 10 years.

But now, the Monroe workforce is down to less than 100 people after a round of layoffs last week, according to a report from The News-Star in Monroe.

The laid off employees said that the company currently only occupies two floors of the building it leased from JPMorgan as part of the deal, instead of the seven it once occupied.

From the News-Star report:

Neither the Louisiana Department of Economic Development nor the city of Monroe’s economic development officer were given prior notice of the layoffs, although officials said they reached out to the company as early as Wednesday.

Louisiana Economic Development Secretary Stephen Moret told The News-Star Wednesday his department had “reached out to Wingspan several times (Wednesday) and have yet to receive a substantive response.”

The News-Star reports that it spoke to five people who were laid off last week by Wingspan. They told the News-Star that Wingspan told them they were “furloughed” and could potentially be rehired if the company secures more business.

Company executive Guy Davis said in an email Wingspan expects to rebuild its Monroe workforce if the company acquires new clients.

Read on.

Insurance Lawsuit Settled by Bank of America for $31M

Bank of America has agreed to pay $31 million to settle a class action lawsuit that claims mortgage borrowers were forced to maintain excessive flood insurance coverage.

U.S. District Court Judge Michael Simon approved the settlement in an opinion filed in late September. About 359,320 members of the national class action lawsuit will receive a portion of the $21.82 million set aside for them.

Read on.

‘Heavy drinking and girls’ on Libyan investors’ Goldman-funded trips

Goldman Sachs took employees at Libya’s sovereign wealth fund on “lavish” excursions to Morocco at which there was “heavy drinking and girls involved”, a lawyer who worked at the fund has claimed in court documents.

Catherine McDougall, formerly of City law firm Allen & Overy, said she had been “shocked” by the closeness between those at the Wall Street bank and employees at the Libyan Investment Authority (LIA) during the Colonel Gaddafi era, when the LIA lost around $1bn on a derivatives trade arranged by Goldman.

The LIA, which is suing Goldman in London, claims the bank cosied up to its employees and hoodwinked it into making $1.2bn-worth of trades it did not understand, and is seeking damages.

Goldman, meanwhile, argues that it had an arms-length relationship with the LIA officials, who understood completely what they were buying into.

In witness statements provided by the LIA on Monday, at the start of a court hearing to manage the case, Ms McDougall and others claimed the relationship was anything but normal.

Read on.

Ex-Treasury Secretary Paulson says AIG bailout was punitive

Former Treasury Secretary Henry “Hank” Paulson told a packed courtroom on Monday that AIG shareholders were singled out for punishment as part of the U.S. government’s attempt to contain the contagion of the 2008 financial crisis.

The testimony from Paulson appeared to bolster some claims contained in a lawsuit brought by former AIG Chief Executive Hank Greenberg, who contends the terms of a government loan to AIG cheated its shareholders.

“AIG, either fairly or unfairly, … became a symbol for all that is bad on Wall Street,” Paulson said as he testified about the U.S. government’s bailout of the insurance giant, which began with a $85 billion loan from the New York Federal Reserve in September 2008.

Paulson, testifying in federal court in Washington, also said he supported the loan and its terms as appropriate for the circumstances.

Read on.

State of Georgia bans two lenders for employing felons

The Georgia Department of Banking and Finance has banned two lenders from operating in the state after it found that the companies were employing convicted felons, which is a violation of Georgia state law.

Alabama-based Hometown Lenders and California-based Sun West Mortgage Company have both been ordered to surrender their Georgia mortgage lending licenses and were fined by the Georgia Department of Banking and Finance for the violations.

According to the Georgia Department of Banking and Finance, Sun West employed nine convicted felons, which is prohibited in Georgia.

Additionally, Georgia Department of Banking and Finance rule 80-11-4-4.08 requires “that no person employed by or directing the affairs of any licensee may be a convicted felon and that it is the licensee’s responsibility to ensure compliance.”

Read on.

J.P. Morgan doesn’t plan to inform victims of cyber attack

Simply because they don’t want their customers to pull their money out...

J.P. Morgan Chase won’t notify those customers who have been affected by its summer security breach — estimated to be two-thirds of U.S. households — that their personal information was exposed, a spokesperson for the bank told MarketWatch.

When asked why, the spokesperson said, “That’s just what we’re doing.” Read: Cybersecurity stocks are red-hot after security breach

Read on.

And here is Chase’s update of the cyber attack on the website:

Important Update on Cyber Security

We want to update you further on the cyber attack against our company.  After extensive review, here is what our forensic investigation has found to date.

Here’s what you should know now:

  • There is no evidence that your account numbers, passwords, user IDs, date of birth or Social Security number were compromised during this attack.
  • However, your contact information – name, address, phone number and email address – was compromised.        

Your money at JPMorgan Chase is safe:

  • Unlike recent attacks on retailers, we have seen no unusual fraud activity related to this incident.
  • Importantly, you are not liable for any unauthorized transaction on your account that you promptly alert us to.