Daily Archives: April 15, 2017

Big banks lying about their business model again. Also using buybacks to enrich the rich.

And don’t buy into Dimon’s Brooklyn Bridge…

The CEO of America’s largest bank made a startling announcement last week: His company has too much money, and he plans to throw away its profits on rich people.

He didn’t quite put it that way, of course. In his annual letter to shareholders, JPMorgan Chase CEO Jamie Dimon boasted about his company buying $25.7 billion of its own stock over the past five years, and hinted it could buy back another “big block of stock this year” to further boost share prices.

At their best, stock buybacks (also known as “share repurchases”) are essentially pointless. At their worst, buybacks drain resources from productive economic activity to provide a cheap high for Wall Street. Companies buy their own stock to raise the stock price: Removing shares from the market elevates the value of those that remain. Money is funneled from corporate coffers to shareholders.

Read on.

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Wells Fargo fights to retain Davenport city accounts

Wells Fargo is not prepared to end its 32-year relationship with the city of Davenport.

Patrice DeCorrevont, executive vice president of Wells Fargo’s Government and Institutional Banking Group, said the banking giant will attempt to retain the city as its client after Davenport announced its intentions to release a request for proposals for new banking services.

In March, Wells Fargo’s institutional Community Reinvestment Act rating, or CRA, was downgraded by the Office of the Comptroller of the Currency to “needs to improve,” making Wells Fargo ineligible for city funds.

“Our intention is to respond,” DeCorrevont said. “It might end up being thrown out, but we will let the city of Davenport make that decision. This is a 32-year relationship that we don’t wish to see go.”

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Hackers release files indicating NSA monitored global bank transfers

Hackers released documents and files on Friday that cybersecurity experts said indicated the U.S. National Security Agency had accessed the SWIFT interbank messaging system, allowing it to monitor money flows among some Middle Eastern and Latin American banks.

The release included computer code that could be adapted by criminals to break into SWIFT servers and monitor messaging activity, said Shane Shook, a cyber security consultant who has helped banks investigate breaches of their SWIFT systems.

The documents and files were released by a group calling themselves The Shadow Brokers. Some of the records bear NSA seals, but Reuters could not confirm their authenticity.

The NSA could not immediately be reached for comment.

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HSBC : to pay $2 million to resolve U.S. civil loan fraud lawsuit

HSBC Holdings Plc has agreed to pay about $2 million (1.60 million pounds) to settle a civil fraud lawsuit that alleged the bank improperly attempted to get reimbursement from the federally backed U.S. Small Business Administration (SBA) on bad loans it knew were based on fraudulent or potentially fraudulent information.

Under the SBAExpress loan program, designed to help startups and small businesses, the SBA guarantees up to half the value of loans made to companies by lenders such as HSBC.

According to a complaint made by the U.S. government in federal court in Manhattan, HSBC sought reimbursement for 42 defaulted loans without revealing that borrowers may have submitted false information to the bank to obtain many of the loans, or that the bank had included them on an internal list of fraudulent or potentially fraudulent loans.

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