Daily Archives: October 2, 2016

‘Control Fraud’ – Corrupt Bankers Do It, Congress Ignores It

New Economic Perspectives:

The bipartisan shellacking Senators gave John Stumpf, the Wells Fargo CEO, last week made for great television, but did nothing about the real scandal: Our government continues to look the other way as many top bankers thumb their noses at fraud laws.

There is a term for the criminality that infects our biggest banks and damages the economy, and there is a solution to this problem. But there is also an obstacle.

Read more of David Cray Johnston’s post: ‘Control Fraud’ – Corrupt Bankers Do It, Congress Ignores It | Investopedia

Wells Fargo ignored petition from thousands of employees protesting unethical culture, lawsuit says

Thousands of Wells Fargo employees signed a petition asking management to change its cutthroat quotas — but the leadership ignored the complaints, according to the latest lawsuit against the beleaguered bank.

A former teller in New Jersey filed a suit in state court Friday that also accuses the bank of age discrimination, wrongful termination and gender discrimination. The suit says the bank fired the long-serving teller, Lenore Kuter, after she refused to cheat customers to meet sales goals.

Read on.

New York Times Reporter Hints She Has More Trump Tax Documents

 

Stay tuned!

Tax bombshell: Trump’s personal returns not business tax returns

Tax returns in the state of New York, Connecticut, and New Jersey.

Chicago’s Troubled Schools Made Wall Street $110 Million

The Chicago Board of Education was desperate for cash. Two Wall Street players were willing to lend it — at a price.

J.P. Morgan Chase & Co. and Chicago-based Nuveen Asset Management have made realized and paper profits exceeding $110 million on purchases this year of $763 million in Chicago Public Schools bonds. The school system needed the money to replenish its dwindling coffers before the new school year and to build and repair facilities.

J.P. Morgan, the country’s largest bank by assets, made a 9.5% profit on $150 million in bonds it bought in July and sold in September, or 82% annualized. Nuveen, an investment firm managing $160 billion, has bought $613 million in bonds since February for a total return, including price gains and interest payments, of about 25%. That’s almost 50% on an annualized basis, an especially large gain at a time of near zero interest rates.

The school system’s bonds are a favorite for John Miller, Nuveen’s co-head of fixed income, who said the firm bought when the market feared a default, a concern he called overblown. “At the end of day, this school system is critically important to Chicago — to the whole country really,” he said.

“We took a period of market risk on behalf of our client when they needed it most and the market has recognized their improved financial position,” a J.P. Morgan spokeswoman said.

Read on.

Wells Fargo Beatdown over endorsements that are not “genuine”

Here at LRM, I have written a lot about the importance of endorsements on promissory notes, specifically what has come to be known as a “ta-da” endorsement, which is roughly defined thusly: “…endor…

Source: Wells Fargo Beatdown over endorsements that are not “genuine”

Rep. Scott Garrett used much of his time at the House hearing with Wells Fargo CEO criticizing CFPB that brought the bank to justice

Rep. Scott Garrett (NJ-5th) had the Wells Fargo CEO in his crosshairs Thursday, but instead of going after the guy whose bank bilked $2 billion from hundreds of thousands of customers, he used much of his time criticizing the agency that brought Wells Fargo to justice.

That’s the complicated world Garrett has created, and he’s having a hard time living in it.

The Consumer Financial Protection Board was established under the Dodd-Frank financial reform act of 2010 to be a watchdog for consumer financial products and services. It does its job exceedingly well. It has returned over $11 billion to 25 million consumers in five years. In the case of Wells Fargo, it owned the stage – leading the investigation, exposing the fraud, and imposing $185 million in penalties to the bank for creating millions of sham accounts on unknowing customers over five years.

But Garrett, who consistently pushes legislation to neuter the CFPB, remarked the “CFPB was asleep at the wheel – they have one job and they blew it.”

That’s rich.

If CFPB was not efficient enough to suit the congressman, he should answer these questions: Why did he vote for a bill that would have allowed banks to ban CFPB attorneys from participating in bank examinations? Why did he vote for another bill that allows banks to litigate unfavorable findings from CFPB examiners?

Even after the Wells Fargo fines were assessed, Garrett voted for the Financial Choice Act, which would cut salaries of CFPB employees (including bank examiners and enforcement attorneys) and pay them less than other financial regulators; end the CFPB’s use of enforcement actions against banks; and make it easier for banks to block CFPB requests for documents.

As one blogger put it, Garrett’s objection is like “telling the sheriff to move faster while trying to take away his horse.”

Garrett’s spokesman explained that “three years went by where customers were being abused (as) the CFPB was examining Wells Fargo, and the agency did nothing.”

Except for that part about imposing a record fine, and building a case that has shaken the industry.

Read on.