The U.S. Justice Department is investigating whether Citigroup Inc. let customers move illicit cash through its Mexico unit, setting the bank’s biggest international operation in the path of an expanding money-laundering probe.
The Justice Department subpoenaed Banco Nacional de Mexico, known as Banamex, demanding information about its anti-money-laundering controls and seeking documents about its due diligence on operations involving hundreds of clients, according to documents reviewed by Bloomberg.
The subpoena, which was sent in January but hasn’t been reported or disclosed by the bank, expands a Justice Department investigation previously known to focus only on a small U.S. unit. It shows investigators are looking into a Mexico operation that accounts for about 10 percent of the New York-based company’s core revenue, and has about 1,500 branches — almost twice as many as Citigroup has in the U.S.
Law360, New York (July 24, 2015, 11:56 AM ET) — A U.S. appellate court on Friday revived a small Texas bank’s challenge to the constitutionality of the Consumer Financial Protection Bureau, saying that because the bank offers products over which the bureau has authority it has standing to bring such a case.
The bank has argued that President Barack Obama’s recess appointment of CFPB Director Richard Cordray, right, was unconstitutional and that all agency actions taken since should be deemed invalid. (Credit: AP) The D.C. Circuit said that a lower court judge improperly found in August…
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A year ago, Gary Hartland turned a trial about interest-rate swaps into a public examination of Barclays Plc executives’ misconduct in the Libor scandal. Now he wants to do the same to Lloyds Banking Group Plc.
From an office in an old Lloyds branch in Wednesfield, a working class town in England’s industrial Midlands, the 55-year-old entrepreneur plots an “aggressive strategy.”
“That’s the only language they understand,” Hartland said in an interview at the building, where he keeps his collection of bronze animals in the old bank vault. “Kindness is a weakness with them people.”
Wingate, Hartland’s real-estate investment firm, lost millions of pounds on an interest-rate swap sold by Lloyds. He sued the bank saying the deal wasn’t fair because it was pegged to a crooked benchmark: the London interbank offered rate.
Hartland was the first to seize upon the Libor scandal — which has resulted in a total of about $9 billion in global fines against financial institutions — to overturn an interest-rate swap. The derivatives, which were tied to Libor, were supposed to keep borrowing costs low, but turned out to be ruinously expensive for thousands of businesses following the 2008 financial crisis.
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Twenty-two financial companies that have served as primary dealers of U.S. Treasury securities were sued in federal court on Thursday, in what was described as the first nationwide class action alleging a conspiracy to manipulate Treasury auctions that harmed both investors and borrowers.
The State-Boston Retirement System, the pension fund for Boston public employees, accused Bank of America Corp’s (>> Bank of America Corp)Merrill Lynch unit, Citigroup Inc (>> Citigroup Inc), Credit Suisse Group AG <CGSN.VX>, Deutsche Bank (>> Deutsche Bank AG), Goldman Sachs Group Inc (>> Goldman Sachs Group Inc), HSBC Holdings Plc (>> HSBC Holdings plc), JPMorgan Chase & Co (>> JPMorgan Chase & Co.), UBS Group AG (>> UBS AG) and 14 other defendants of illegally trying to profit on the sale of Treasury bills, notes and bonds at investors’ expense.
According to the pension fund’s complaint, filed in U.S. District Court in New York, the banks used chat rooms, instant messages and other means to swap confidential customer information and coordinate trading strategies in the roughly $12.5 trillion Treasury market.
A win for Deutsche Bank in a mortgage lawsuit protects other lenders of questionable securities
Bank of America brought in $22.3 billion in revenue in the second quarter. Its profit — $5.3 billion — was almost double compared to this time last year, CEO Brian Moynihan said, because expenses were lower and the bank made more loans and originated more mortgages amid an improving U.S. economy.
But a small slice of BofA’s earnings boost, $204 million, came from a relatively obscure New York court case about an even more obscure pre-crisis mortgage deal.
The transaction in question is generally referred to simply as ACE. ACE was a 2006 residential mortgage-backed security whose full name is ACE Securities Corp., Home Equity Loan Trust, Series 2006–SL2, because that’s the sort of unwieldy jumble of a name banks gave mortgage securities in 2006. Also, because ACE was a mortgage security issued in 2006, it turned out to be filled with a lot of really bad mortgages. The mortgages in ACE were so bad — 2,375 of 5,000 loans were allegedly misrepresented — that the investors who bought the security sued the unit of Deutsche Bank that sold it. But it took them until 2012 to realize that and file a lawsuit against Deutsche — just over six years after the deal was done.
And that was the problem: the statute of limitations to sue the seller in this kind of security is six years. But when do those six years start? Deutsche argued they began when the deal was done in 2006. The investors argued that they began when Deutsche refused to buy back the bad loans as a way to solve the disagreement in 2012.
The question was finally settled last month when a New York judge ruled that the statute of limitations began in 2006. The investors who’d bought what was now plainly junk were out of luck. Had they realized the mortgages weren’t quite what Deutsche said they were just a year earlier, or — as you might expect of sophisticated institutional investors — when they were buying them in 2006, they’d have a case. But not now.