Daily Archives: April 13, 2016

SEC Does Little To Protect Investors From Climate Risk

Investors and the global environment are at risk because the nation’s primary securities regulator has done “almost nothing” in recent years to ensure that publicly traded companies properly warn their investors about the threat of climate change, according to a top environmental adviser to U.S. money managers.

The lack of action by the Securities and Exchange Commission under Chair Mary Jo White represents a reversal from the agency’s aggressive approach under its previous leader Mary Schapiro, who in 2010 instructed companies to publicly describe the risksthey face from climate change, according to Mindy Lubber, president of nonprofit group Ceres.

Since then, Lubber said, the SEC has done little to enforce Schapiro’s directive. The agency has sent thousands of letters to companies ordering them to improve their disclosures to investors about a variety of topics, but since White’s term began in April 2013 just eight of those letters contain the term “climate change,” Lubber said. Of those, none have gone to the largest companies facing the biggest risks from climate change, she added.

Read on.

They are back! Occupy Wall Street rises up for Sanders

(CNN)The forces of Occupy Wall Street, splintered and faded in the aftermath of their 2011 demonstrations, are getting the band back together to boost Bernie Sanders ahead of next week’s critical New York primary.

Nearly five years since Occupy was evicted from Zuccotti Park, blocks from the New York Stock Exchange in lower Manhattan, a coalition of organizers, labor leaders and progressive activists who lined up under the banner of “the 99 percent” are renewing their efforts in pursuit of a more traditional cause: Getting voters to the polls on April 19.
That begins with traditional canvassing, but will extend to what is expected to be a large pro-Sanders, Occupy-inspired march on Saturday in Manhattan.

Federal regulators announced that 5 out of 8 big banks do not have credible plans for winding down operations during a crisis without the help of public money

Press Releases

Joint Release

  • Board of Governors of the Federal Reserve System
  • Federal Deposit Insurance Corporation
For Immediate Release
April 13, 2016

Agencies Announce Determinations and Provide Feedback on Resolution Plans of Eight Systemically Important, Domestic Banking Institutions

The Federal Deposit Insurance Corporation and the Federal Reserve Board on Wednesday jointly announced determinations and provided firm-specific feedback on the 2015 resolution plans of eight systemically important, domestic banking institutions.

The agencies have jointly determined that each of the 2015 resolution plans of Bank of America, Bank of New York Mellon, JP Morgan Chase, State Street, and Wells Fargo was not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code, the statutory standard established in the Dodd-Frank Wall Street Reform and Consumer Protection Act. The agencies have issued joint notices of deficiencies to these five firms detailing the deficiencies in their plans and the actions the firms must take to address them. Each firm must remediate its deficiencies by October 1, 2016. If a firm has not done so, it may be subject to more stringent prudential requirements.

The agencies jointly identified weaknesses in the 2015 resolution plans of Goldman Sachs and Morgan Stanley that the firms must address, but did not make joint determinations regarding the plans and their deficiencies. The FDIC determined that the plan submitted by Goldman Sachs was not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code, and identified deficiencies. The Federal Reserve Board identified a deficiency in Morgan Stanley’s plan and found that the plan was not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code.

Neither agency found that Citigroup’s 2015 resolution plan was not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code, although the agencies did identify shortcomings that the firm must address.

The deadline for the next full plan submission for all eight domestic, systemically important financial institutions is July 1, 2017. The agencies will evaluate all eight of the full plans submitted in 2017 under the statutory standard.

The agencies are issuing Resolution Plan Assessment Framework and Firm Determinations (2016), which explains the resolution planning requirement, and provides further information on the determinations and the agencies’ processes for reviewing the plans. Further, the Federal Reserve Board is releasing the feedback letters issued to each firm. Each letter details the deficiencies and shortcomings of each firm’s plan, as well as the specific remediation required of each firm. Additionally, the agencies are releasing new guidance for the July 2017 submission of all firms.

Read on.

JPMorgan Loses Foreclosure Appeal for Lack of Proof

No note? No problem — at least for JPMorgan Chase N.A. in a foreclosure trial.

But the Third District Court of Appeal reversed the final judgment granted without “any document or other evidence to establish its foreclosure action.”

The bank triumphed in a bench trial after filing to foreclose on a condominium at 7910 Harbor Island Drive in North Bay Village in 2013.

The borrower, Angel Enrique Abreu, received $263,250 in July 2008 on a note that set an interest rate of 7.625 percent and monthly payments at about $1,863.


Wells Fargo poses increasing threat to global financial system

Wells Fargo & Co (>> Wells Fargo & Co) poses an increasingly serious threat to the global financial system, while risks posed by other large U.S. banks have changed relatively little, according to an annual report released Wednesday by a U.S. government research group charged with monitoring such threats.

The Office of Financial Research (OFR), a financial stability watchdog, studied the systemic importance of the world’s largest banks using 2014 data from the Basel Committee on Banking Supervision.

It then assigned a score to each bank based on factors including size, complexity, interconnectedness and cross-jurisdictional activity, as well as how easily the products they offer can be provided by competitors.

Read on.

Panama papers: Tax queries go out to all the names revealed

Indian Express front page (first Panama Papers story

Sources said that depending on the number of offshore entities incorporated by the addressee and the complexity of the investments involved, people have been given up to 20 days to respond to the questionnaire.

With the Prime Minister seeking the first status report on the probe into ThePanama Papers within 15 days, units of the Income Tax (Investigation) across the country have dispatched detailed questionnaires to all Indian clients of Panamanian law firm Mossack Fonseca who were named by The Indian Expressas part of an ongoing investigation.


Officials said that the communications have already been dispatched to around 50 people in different cities and that these are in two parts. The first is a clarification on whether they are the persons named in The Indian Express report and whether they gave comments attributed to them on the offshore entities listed against their names. The clients have been given three days to respond.

Read on.

Goldman and Wells Fargo FINALLY Admit They Committed Fraud. So Why Should We Care?


Why should we care?

Because Wells Fargo received a $25 billion dollar bailout and Goldman received $10 billion in one bailout and $13 billion in another.

Moreover, fraud was one of the main causes of the Great Depression and the Great Recession … which cost tens of trillions of dollars in losses. But nothing has been done to rein in fraud today. And governments have virtually made it official policy not to prosecute fraud criminally. (Background.)

Fraud is an economy-killer, and trying to prevent deflation while allowing a breakdown in the rule of law is like pumping blood into a patient without suturing his gaping wounds.

Panama raids offices of Mossack Fonseca law firm

Panama’s attorney general late on Tuesday raided the offices of the Mossack Fonseca law firm to search for any evidence of illegal activities, authorities said in a statement.

The Panama-based law firm is at the center of the “Panama Papers” leaks scandal that has embarrassed several world leaders and shone a spotlight on the shadowy world of offshore companies.

The national police, in an earlier statement, said they were searching for documentation that “would establish the possible use of the firm for illicit activities.” The firm has been accused of tax evasion and fraud.

Police offers and patrol cars began gathering around the company’s building in the afternoon under the command of prosecutor Javier Caravallo, who specializes in organized crime and money laundering.

Mossack Fonseca, which specializes in setting up offshore companies, did not respond to requests for comment on Tuesday.

Read on.

In 2013, assets at the six largest U.S. banks are up 37% from five years ago. What happened?



As we’ve pointed out in numerous BuzzFlash commentaries in the past, the Department of Justice settlements with “banks too big to fail” have amounted to little more than the cost of doing business for the financial entities. As financial columnist Stephen Gendel wrote in Fortune back in 2013, “Assets at the six largest U.S. banks are up 37% from five years ago”:

At least one of the widely recognized causes of the financial crisis is not only still around, it has perhaps gotten worse. By every measure I can think of, and I have tried a bunch, the big banks are bigger than they were five years ago, at the dawn of the financial crisis.

This trend is continuing, as CNBC detailed in 2015: “Too big to fail banks just keep getting bigger.”

Public Citizen, a nonprofit organization that advocates on behalf of the public interest, issued a news release highly critical of the Department of Justice agreement with Goldman Sachs (which is primarily an investment banking business):

This is a $5 billion settlement to resolve wrongdoing that cost the national economy $20 trillion. Goldman Sachs has admitted it was a key link in the chain of wrongdoing that led to the 2008 crash and the Great Recession. But eight years after the crash, there are still no criminal prosecutions of either the Big Banks themselves or their executives….

This settlement, like others involving Goldman Sachs and the rest of the Wall Street perpetrators of the wrongdoing that led to the Great Recession, does virtually nothing to advance the objectives of deterrence, punishment or compensation for victims. The real message is, whether due to size, complexity or privileged access to politicians, Goldman Sachs and Wall Street remain above the law.