Daily Archives: October 8, 2014

White House Monitored JPMorgan Breach With Alarm

WASHINGTON — President Obama and his top national security advisers began receiving periodic briefings on the huge cyberattack at JPMorgan Chase and nine other financial companies this summer, part of a new effort to keep top national security officials as updated on major cyberattacks as they are on Russian incursions into Ukraine or Islamic State attacks.

But in the JPMorgan case, according to officials familiar with the briefings, no one could tell the president what he most wanted to know: What was the motive of the attack? “The question kept coming back, ‘Is this plain old theft, or is Putin retaliating?’” one senior official said, referring to the American-led sanctions on Russia. “And the answer was: We don’t know for sure.’’

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Sold! Home offered for an iPhone 6 sees quick sale

After his offer to swap his two-story brick house on Detroit’s east side for a new iPhone 6 or a 32gb iPad went viral on Tuesday, the seller’s house sold and he’s received an offer to have an iPhone 6 donated to him.

The Zillow article explained that Andreas Gindelhuber originally bought the $41,000 foreclosed home on Detroit’s east side in 2010, hoping to make some money on it as a rental property. When Gindelhuber’s tenants left seven months ago, he owed $6,000 in county property taxes. He hired a local agent, Larry Else, to sell the house. Per Zillow:

“I’d be willing to trade it for an iPhone 6 or an iPad 32 GB,” Else remembers Gindelhuber telling him.

“If you’re serious about that, I think that’s a really good idea that would make this listing stand out,” Else said.

Else wouldn’t share the sale price, but said it was less than $1,000, to a buyer who lives a block down on the same street.

Source: Zillow

U.S. Prosecutor Geoffrey Graber, Not the DOJ, Masterminded $37 Billion Bank Penalty Win

Geoffrey Graber, the 41-year-old Justice Department attorney tasked with holding Wall Street accountable for the financial crisis, has a message for his prosecutors: Always be closing.

In the past year, Graber has won almost $37 billion in penalties from some of the world’s largest banks, a record haul for prosecutors. To colleagues, he compares his job to that of Blake, the notorious motivational speaker played by Alec Baldwin in David Mamet’s 1992 film Glengarry Glen Ross, who chastises real estate salesmen for failing to lock in deals.

“My role was to identify the most promising cases and accelerate those,” Graber said in an interview. “We’ve done our best to put a short fuse on this.”

………

The surge of settlements engineered by Graber in the past year has helped neutralize some of that criticism and rehabilitate a key piece of Holder’s legacy. Still, the settlements have been controversial. Critics such as Roy Smith, a professor at New York University’s Stern School of Business, say prosecutors were driven by “political fever” to extract massive penalties from Wall Street.

“They have to deliver something, so they come up with this,” said Smith, a formerGoldman Sachs Group Inc. (GS:US) partner. “The fact that it’s unfair never really gets considered. The banks have no choice but to hunker down and accept it.”

For Graber, a California native, it was personal.

“When I was living in San Francisco and coming home to L.A. I would see the devastating effects of the housing crisis,” Graber said in an interview. “I knew people who were losing their homes. They lived in the same neighborhood as my family. I had friends who lost homes.”

On a side note: Graber is now turning to prosecuting executives which include Mozilo. Read on.

Former Bank VP Pleads Guilty to Conspiracy

OAKLAND, Calif. (CN) – Former United Commercial Bank senior vice president Thomas Yu pleaded guilty to federal conspiracy charges Tuesday.
Yu, 51, faces up to 5 years in prison after pleading guilty to one of six counts: conspiracy to commit false bank entries, reports, and transactions, the U.S. Attorney’s Office said.
Yu admitted he prepared “false and misleading quarterly loan loss allowance reports in which the bank calculated the loss reserves it was required to recognize as part of its quarterly financial reporting in the third and fourth quarters of 2008,” prosecutors said in a statement.
“By failing to properly downgrade poor performing loans, Yu admitted that he helped the bank avoid required loan loss reserves that enabled the bank to artificially inflate its reported earnings to the public.”
The now defunct UCB was a Chinese bank based in San Francisco.

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Geithner: AIG losses were exceptional compared with other firms

Former U.S. Treasury Secretary Timothy Geithner defended the 2008 bailout of American International Group Inc for a second day on Wednesday, struggling at times to respond to increasingly contentious questions about the government’s efforts to rescue the insurance company as it stood minutes from bankruptcy.

The questions came in the second week of trial in a lawsuit brought by Hank Greenberg, a major AIG shareholder until the bailout and the company’s chief executive until 2005. He contends the terms of the government $85 billion loan to AIG, which was extended in exchange for a nearly 80 percent stake in the company, cheated its shareholders.

A lawyer for Greenberg, David Boies, pressed Geithner Wednesday morning with questions about the extent of the government’s control of the company and whether his team at the New York Fed had assessed whether AIG had taken imprudent risks.

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Exclusive – Bank of America seals oil financing deal with Philly refinery

Bank of America Corp (>> Bank of America Corp) has clinched a deal to provide inventory and working capital financing to the biggest oil refinery on the East Coast, replacing JPMorgan Chase & Co (>> JPMorgan Chase & Co.) with a revamped arrangement that excludes physical supplies, according to a source familiar with the deal.

The agreement with Philadelphia Energy Solutions (PES), sealed on Tuesday, will give Bank of America’s commodities business one of the biggest such financing arrangements in the country, but excludes the physical oil trading and logistics operations that were part of the JPMorgan pact, the source said.

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Barclays to pay $20 million to settle U.S. class action over Libor

Barclays Plc (>> Barclays PLC) has agreed to pay nearly $20 million (12.43 million pounds) to resolve a U.S. class action lawsuit accusing the British bank of manipulating the Libor benchmark interest rate, according to court papers filed Wednesday.

The proposed deal, disclosed in court papers filed in federal court in New York, is the first such settlement of private litigation in the United States against various banks accused of manipulating the London interbank offered rate.

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