Daily Archives: July 21, 2016

U.S. sides with HSBC to block release of money laundering report

The U.S. government asked a federal appeals court on Thursday to block the release of a report detailing how HSBC Holdings Plc is working to improve its money laundering controls after the British bank was fined $1.92 billion.

In a brief filed with the 2nd U.S. Circuit Court of Appeals, the U.S. Department of Justice sought to overturn an order issued earlier this year by U.S. District Judge John Gleeson to make a report by the bank’s outside monitor public.

“Public disclosure of the monitor’s report, even in redacted form, would hinder the monitor’s ability to supervise HSBC,” the government’s court filing said, adding that bank employees would be less likely to cooperate with the monitor if they knew their interactions could be released.

A spokesman for the Justice Department declined to comment. HSBC did not immediately respond to a request for comment.

The filing comes a week after U.S. congressional investigators criticized senior officials at the Department of Justice for overruling internal recommendations to criminally prosecute HSBC for money-laundering violations.

Instead, the government in 2012 fined HSBC and entered into a five-year deferred prosecution agreement that stipulated all charges would be dropped if the bank agreed to install an independent monitor to help improve compliance.

Read on.

Former NY AG Cuomo aide caught up in mortgage scandal

ALBANY – A former aide to Gov. Cuomo received a home loan from the same businessman who gave a near-100 percent mortgage to Joseph Percoco, a second Cuomo aide who’s now the subject of a federal probe, according to a new report.

The Albany Times Union reported Thursday that Howard Glaser, a former Cuomo senior policy advisor and director of state operations, received a $200,000 mortgage on a $1.2 million home in Bedford, N.Y., from a company run by Abe Eisner, Cuomo’s unofficial liaison to the Jewish community.

Percoco was the governor’s closest aide before he left late last year to become an executive at Madison Square Garden. He was later named in a federal subpoena seeking records from Cuomo’s executive chamber about potential “improper lobbying” and “conflicts of interest” in the Buffalo Billion economic development program.

Cuomo has said that Percoco and his former pal, lobbyist Todd Howe, are the targets of the probe. Glaser has never been mentioned as a target.

Glaser, Howe and Percoco all received mortgages from Eisner, who ran Guardhill Financial Corp, GFI Mortgage Bankers and Marisa Capital.

The Post was the first to report that Eisner gave Percoco an $800,000 loan on his $815,000 home in South Salem, NY through GFI in 2012. The balloon mortgage was supposed to be paid off inn 2014. But The Post found Percoco, who earned between $70,000 and $120,000 that year was unable to pay it off and had to refinance and take out a second loan.

Howe also received a $140,000 loan through Eisner on his $1.8 million home in Washington D.C., despite years of financial and legal problems.

Read on.

Male escorts are making crazy money at the RNC

It’s been a great week for gay escorts in Cleveland.

Male prostitutes contacted by The Post said business is booming and Republican National Convention attendees — most of them married — are clamoring for their services.

“Business has been way better. I’ve seen 10 clients so far,” one male escort said.

“Most of them were first-timers. You could tell they were nervous, but once they became more comfortable, they seemed to be having a good time.”

Another escort said he had already earned $1,600 since Monday — over six times the amount he usually makes.

Read on.

Happy 5 year anniversary to CFPB!

JPMorgan Chase CEO op-ed: ‘Why we’re giving our employees a raise’

Jamie Dimon, chairman and CEO of the Wall Street behemoth JPMorgan Chase, wrote in a New York Times op-ed that the bank is raising its minimum wage to between $12 and $16.50 an hour for full-time, part-time and new employees, depending on geographic and market factors. Dimon writes:

WAGE stagnation. Income inequality. A lack of quality education. Insufficient training and skills development.

Issues like these have led approximately two-thirds of Americans to believe that the next generation will be worse off than the last. And it is true that too many people are not getting a fair opportunity to get ahead. We must find ways to help them move up the economic ladder, and everyone — business, government and nonprofits — needs to play a role.

At JPMorgan Chase, we’re starting by giving thousands of employees a raise. …

A pay increase is the right thing to do. Wages for many Americans have gone nowhere for too long. Many employees who will receive this increase work as bank tellers and customer service representatives. Above all, it enables more people to begin to share in the rewards of economic growth.

And it’s good for our company, helping us attract and retain talented people in a competitive environment. While businesses, including ours, are understandably cautious when it comes to expenses, there are good expenses (investments that will pay off in the long run) and bad expenses (waste and inefficiencies). We have never hesitated to invest aggressively if we thought it would improve our long-term prospects.

Read on.

Whistleblowers: Who They Are and Why You Should Care

The award-winning McCuistion Television Program, now in its 26th year on KERA, PBS TV, andThe National Center for Policy Analysis, a nonprofit, nonpartisan public policy research organization with a goal of developing and promoting private, free-market alternatives to government regulation and control, teamed up this spring for a six part series on the financial crisis.
Our Bank Whistleblowers United team, Michael Winston, Bill Black, Gary Aguirre and I were invited to be featured on the McCuistion segment on whistleblowers, to discuss why whistleblowers feel compelled to expose the wrongdoing we see in our organizations. Unfortunately, our fourth co-founder, Gary Aguirre, the SEC whistleblower, was not able to join us.
The host, Dennis McCuistion, gave each one of us the opportunity to tell of our personal experience. Unfortunately as each one of us can personally attest to, while the public value of whistle-blowing has been increasingly recognized, even encouraged by the Department of Justice, the reality is very different. Whistleblowers are often retaliated against – losing their job, incurring financial hardships and even being blackballed from working in their professions ever again.

Arrested HSBC FX Trader Had Been Cleared In Bank’s Own Internal Probe

The HSBC review, conducted in the wake of a sweeping foreign exchange rigging scandal that erupted in 2013, was led by an external lawyer and found no breach of its code of conduct. HSBC declined to comment. The bank was on Thursday reviewing its own investigation of the $3.5bn forex trade to decide whether to support Mark Johnson, its global head of forex cash trading, who was arrested on Tuesday evening at New York’s John F Kennedy airport.

As the FT adds, a solicitor for Mr Scott in London strongly denied the allegations on behalf of her client, who is UK-based. While a warrant for Mr Scott has been issued, US authorities are yet to apply formally for his extradition.

HSBC reviewed its $3.5bn purchase of sterling for Cairn Energy in 2011 along with many other forex trades as part of an internal remediation exercise that it carried out at the request of regulators when the wider forex rigging scandal erupted in 2013.


People briefed on the matter said the bank’s internal investigation found no breach of its code of conduct when it reviewed the trade carried out for Cairn by Mr Johnson and Mr Scott.

Read on.