Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Minor updates on bank fiascoes and settlements

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Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

A few articles on various bank fiascos: first private settlement for manipulating LIBOR, two rumored criminal investigations for selling MBS’s, and a billion dollar settlement for money laundering.

11/13 – Reuters – Barclays in $120 mln settlement of Libor case – lawyers – Barclays is first out of the gate settling private lawsuits in US for manipulating Libor. Notes I’m keeping on a spreadsheet remind me they were first to settle with regulators back in 2012. They have already written checks to various regulators for $564M. Guess I’ll add some guesses for other private settlements.

My notes show nine banks have ponied up $9,049M. Yes, over nine billion bucks. I’ll make a wild guess of another billion for settlement of private lawsuits in the U.S.

11/17 – Wall Street Journal – U.S. Targets RBS, J.P. Morgan Executives in Criminal Probes – Story going around is that DoJ is focused on two bankers at JPM and a few at RBS for their involvement with mortgage-backed securities. The ten-year statute of limitation is getting close.

We will have to wait and see whether this is actual justice or only an effort to deflect waves of criticism that the Justice department has let individual bankers off scot-free. Will also have to wait and see if there is an actual crime beyond somebody somewhere must have lost money on a some bond or another. I hope the crime is more substantive than housing prices went down. If a case is ever filed, I’ll see what I can learn from the indictment.

Banking for terrorists

In a cause of action separate from what I typically am following, a bank in Jordan has reached a settlement with victims of terrorism in the amount of around $1 billion. A trial jury found the bank liable for handling the finances for Hamas. Bank lost out on their appeals.

8/14 – Wall Street Journal – Arab Bank: Settlement Reached in Civil Terrorism-Finance Case – After having been found liable for helping terrorists commit a variety of attacks, Arab Bank PLC, which is in Jordan, reached a negotiated settlement with 300 plaintiffs in advance of hearings for the amount of damages.

See also Arab Bank Reaches Settlement in Lawsuit Accusing It of Financing Terrorism from the New York Times on 8/14. A year ago the bank was found liable for helping Hamas commit 22 terrorist attacks in the Middle East.

9/10 – Jerusalem Post – Will the Arab Bank really have to pay out a $1 billion settlement? – The settlement by Arab Bank is confidential, so no documents will be visible publicly. Rumors floating are that the settlement will be a billion dollars. The bank denied that is the amount, saying the contingencies in the deal will make it much less.

This article claims to have talked to both sides. Authors conclude settlement will be in the range of 1 billion, likely more, possibly just a bit less. Reduction in the amount would only be due to the bank been able to prove individual plaintiffs did not suffer harm. Ten or 14 years after all the terrorist attacks that are addressed in the settlement would suggest all the plaintiffs would have long since surfaced. On the other hand a positive jury verdict and agreement to write checks could draw out more victims who have kept silent before. Article says contingencies in the settlement would push up the amounts.

Written by Jim Ulvog

November 19, 2015, 7:59 am at 7:59 am

Posted in Other stuff

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