While the Republican Party has made the return of Glass-Seagall part of its official platform, Donald Trump‘s national finance chairman, Steven Mnuchin, told CNBC on Wednesday the campaign hasn’t decided yet if it will support the plan.
The Depression-era legislation, which was designed to prevent big bank “supermarkets,” would essentially break up many of the large institutions. News of the GOP’s call to reinstate the law, which was repealed in 1999, has made many on Wall Street unhappy.
“We’re not taking a position on whether we support that or don’t support it. We’re saying a lot of things need to be looked at. We think Dodd-Frank needs to be looked at. Obviously there is an important concern of protecting depositors,” Mnuchin said in an interview with “Power Lunch.”
Running out of jobs to cut??? Start with some of the Wall Street execs that are repeated offenders of crimes need to have their pay cut.
Wall Street’s top bankers are getting their pay slashed, but at least they’re keeping their jobs.
Investment banks cut pay to begin the year, when a disastrous first quarter hampered earnings. But now, even as markets and bank performance rebound — Morgan Stanley on Wednesday morning became the latest major Wall Street firm to top analysts’ estimates — they’re still slashing compensation.
It’s a sign that the banking and trading businesses on which Wall Street’s leading banks rely for billions of dollars in revenue are hitting peak efficiency. Having already pared down headcount to get profitable last quarter, it looks like big banks are running out of jobs to cut.
A former Twin Cities investment adviser is facing charges that he bilked clients out of more than $5 million in a fraud that persisted even after his dismissal by Wells Fargo and an industry-imposed ban from practicing.
The Star Tribune reports on the case against Bradley Smegal, who is facing two counts of securities fraud charges. His attorney didn’t comment, but Smegal has apparently notified authorities that he plans to plead guilty.
According to prosecutors, Smegal, who also once worked for Minneapolis-based Piper Jaffray, spent years persuading clients to make what he called “conservative” investments — at least some of which went into his personal accounts. He was fired by Wells Fargo in 2011 and barred from the financial sector months later by the Financial Industry Regulatory Authority. But prosecutors said he kept up the fraud and “led certain clients to believe that he was still employed by Wells Fargo.”
HELSINKI (AP) — The Nordic region’s largest bank said Wednesday it will close 68 accounts at its Luxembourg branch as it adopts tougher rules on clients using offshore companies.
Nordea Bank has carried out an internal investigation after Swedish broadcaster SVT, one of hundreds of media with access to leaked documents detailing offshore accounts, reported that Nordea’s Luxembourg unit worked with Panamanian firm Mossack Fonseca to help customers set up shell companies.
OAKLAND, Calif. (CN) – Lawyers for a group of homeowners clashed with Citibank attorneys at a Tuesday hearing on whether the mortgage loan servicer committed fraud by charging delinquent borrowers unnecessary fees for property inspections.
In an order denying the homeowners class certification last year, U.S. District Judge Yvonne Gonzalez Rogers said the case hinges on a contract dispute, as the mortgage terms govern the validity of the charges, and inspection fees are authorized by the plaintiffs’ mortgage agreements under certain circumstances.
“Citi’s liability rises or falls on whether a fact-finder determines that a property inspection fee was authorized by the borrower’s mortgage agreement,” she wrote.
At the Tuesday hearing, Gonzalez-Rogers asked whether the plaintiffs, who live in Alabama, could choose to bring a fraud claim under Alabama law over a breach of contract claim.
In her 2012 lawsuit, lead plaintiff Gloria Stitt claimed Citi colluded with subsidiaries, affiliates and vendors on a profit-making scheme to charge unnecessary and marked-up fees to homeowners for property inspections once they defaulted on their mortgage payments. Stitt said vendors padded fees “often by 100% or more,” but never informed borrowers of the markups or profits. A borrower named Diana Ellis brought a similar lawsuit against J.P. Morgan Chase.
“It’s not a breach of contract to defraud someone of money by asking them for money they’re not obligated to pay: It’s fraud,” said Daniel Alberstone, attorney for the Citi plaintiffs.
On April 25, the Consumer Financial Protection Bureau (CFPB) entered an enforcement order against New Jersey law firm Pressler and Pressler and its debt-buyer client, New Century Financial Services, for pursuing hundreds of thousands of debt collection lawsuits without reviewing the underlying documentation supporting the existence of a debt. The law firm agreed to pay a $1 million fine, the debt-buyer client agreed to pay a $1.5 million fine, and both agreed to extensive recordkeeping and compliance measures going forward. These recordkeeping and compliance measures include an obligation to file account information in the court file of defaulted debt-collection cases before obtaining a final judgment, and to do no prejudgment discovery of a debtor’s assets.
The sanction stemmed from the manner in which the debt-buyer client communicated with its law firm. Rather than sending account files of the purchased debts, the client would electronically send spreadsheets showing debtor information and amounts of debts to the law firm. The law firm, which was staffed by over 300 employees, only 19 of which were attorneys, would then use proprietary software to turn the information in the spreadsheets into civil complaints. Neither the debt-buyer client, nor the non-legal staff, nor the attorneys signing the complaints, would review the original account-level documentation substantiating the debt. As a result of these practices, the CFPB found the law firm filed an untold number of lawsuits based on false or unreliable information.
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A federal appeals court on Wednesday revived a lawsuit accusing Freddie Mac and several former top officials of defrauding shareholders by concealing its subprime mortgage exposure and its inadequate risk management prior to the 2008 financial crisis.
The 6th U.S. Circuit Court of Appeals said a lower court judge erred in concluding that the Ohio Public Employees Retirement System did not sufficiently allege that its losses were caused by Freddie Mac’s disclosure shortfalls.