Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

More good stuff on banking fiascos

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No massive publicity on the banking front, but there are ongoing issues in getting money laundering under control and the ongoing investigations of manipulating foreign exchange rates.

1/14 – Wall Street Journal – Forex Probe Finds New Signs of Potential Wrongdoing – Scope of the Forex fiasco and related U.S. Federal investigation is growing. Investigators have found new issues and that the manipulation of exchange rates may go beyond trading desks.

There is also a wider investigation running that I’ve seen mentioned:

The moves come as the Justice Department conducts sprawling antitrust and fraud investigations into potential improprieties in the foreign-exchange market.

JP Morgan and Citigroup have fired another round of traders involved in the mess, according ot the article. Morgan announced Wednesday they have reserved another $990M for cost of the investigation.

Also, a comment that hints there may be some individual accountability this time:

Justice Department officials have told lawyers representing banks and traders that they intend to file criminal charges against individuals and perhaps some of the institutions this year, according to people familiar with the discussions.

1/10 – Wall Street Journal – J.P. Morgan to Pay $500 Million to Settle Lawsuit – This settlement on a class action lawsuit is for mortgages sold by Bear Stearns before Stearns was purchased by Morgan in 2008 during the pit of the financial crisis.

Article says Morgan has paid over $20B in the last two years, a large portion of which is a result of the acquisition of Stearns and Washington  Mutual. That should cure any future potential buyer of a crashing bank to take over the collapsing company.

Also, $0.5B is essentially a rounding error in the list of bank settlements. Don’t know if I’ll even put this in the category of bank fiascos.

Civil settlements for manipulating Forex are getting started….

1/5 – Wall Street Journal – JPMorgan settles currency manipulation lawsuit in U.S. – Morgan settled a civil lawsuit from a group of investors for $100M. Morgan is one of a dozen banks sued by the group. The $0.1B settlement (which actually is less than a rounding error in the Morgan settlements) is for damages from Morgan manipulating the foreign exchange rates. This is presumably just the first of a string of settlements by major banks.

1/12 – Wall Street Journal – HSBC Struggles in Battle Against Money Laundering – The external monitor is preparing a report critical of the interim progress to improve the anti-money laundering program at HSBC.

Getting all the world-wide staff on board is an issue. Integrity standards vary by country and culture. From the report:

Today, HSBC is trying to accomplish a challenging task: getting its businesses in places like Malaysia and Oman to conform to American anti-money-laundering standards.

Article points at the challenge of bringing together all the systems and programs accumulated with all the mergers and acquisitions over the years.

It isn’t that there aren’t people available. HSBC says that about 10% of their 258,000 employees are involved with risk and compliance.

Written by Jim Ulvog

January 23, 2015, 9:12 am at 9:12 am

Posted in Other stuff

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