Search Results for: tbtf

I’m a bit slow on the uptake sometime. There is an entirely new, huge banking mess that I hadn’t heard about before the billion dollar settlement was announced. Another small fiasco is rumored.

Another day, another couple billion out of the stockholders’ pocket.

First the nearly $2B private settlement.

Twelve banks agreed to settle a private antitrust lawsuit. The now-admitted scheme was to manipulate credit default swap rates. Those are deals to cover the loss if a bond defaults.

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Another massive bank fiasco involving the full cast of TBTF banks, this time for Credit Default Swaps. Where is the boundary of fiascos?Read More »

A few articles of note on the humongous settlements from five banks for manipulating foreign exchange rates. Oh, and a trivial $0.1B settlement from Barclays for manipulating yet another swap rate.

5/20 – Wall Street Journal – Barclays Fined $115 Million by CFTC for Alleged Manipulation of ISDAfix – Barclays tried to manipulate another index which is used to calculate pension payouts. This is an interest rate swap index. Game playing ran from 2007 until 2012.

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Follow up articles on the $5.8B settlement from TBTF banksRead More »

Three days ago I mentioned Barclays was accused of manipulating energy prices and the feds, specifically the Federal Energy Regulatory Commission, claim a $487.9M fine is due from them.  The case is heading to court – Barclays to Dispute Electricity-Manipulation Charges.

The Wall Street Journal reports J.P. Morgan is now negotiating a settlement for allegedly playing games with electricity prices.

Time to start paying attention to another banking fiasco.

The article Big Bank Staring at Record Fine Over Energy says the bank began negotiations with FERC with a possible billion dollar fine on the table.

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Another TBTF bank accused of manipulating electricity prices – time to start paying attention to another fiascoRead More »

When the leading article from the Wall Street Journal mentioned earlier was placed on the front page of the print edition, the headline of

 Wells Fargo Fined for Sales Scam

was in type 0.4 inches tall. Yes, I measured it.

That is the largest font I recall seeing on the front page in a long time. Maybe I don’t pay enough attention to font size, but still, that is the largest headline I recall lately. Isn’t quite the way you want to get your name on the front page of the Journal.

Here’s another article from the WSJ and a discussion from Rumbi Bwerinofa. Also, a study that quantifies the damage caused to senior executives earnings from the stigma gained by having a scandal-tainted company on their resumes.

9/9 – Emily Glazer at Wall Street Journal – Next Test for Wells Fargo: Its Reputation – The fiasco of opening accounts in customers’ names without their permission is a story that could cause reputational damage. Article says analysts are concerned and bank execs are worried how much this will damage earnings.

Difference with this mess from other banking fiascos is that this one is easy to explain and easy to understand.

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Followup on Wells Fargo opening accounts without customer permissionRead More »

Here are a few updates I’ve noticed about the banking fiascos:

8/17 – CFO Journal at Wall Street Journal – Biggest Banks’ Crisis-Era Settlements Petering Out: Report – Study by SNL Financial says payouts related to the financial crisis by the six largest US bank accumulate to $132B. More settlements are expected, but the number and dollar amount of settlements is slowing down.

Reserves for additional settlements are $5.9B at Goldman Sachs and $1.4B at Wells. The other four didn’t respond to the reporter about the dollars they have in reserves.

8/30 – Wall Street Journal – Meet the Private Watchdogs Who Police Financial Institutions – Article gives background on private sector monitors put in place to check on changes made to comply with deferred prosecution agreements.

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Updates on banking fiascos – 8/31Read More »

Not much news on the bank fiasco front in the last week or so. Here are two articles pondering what settlements are on the horizon.

5/26 – Alison Frankel at Reuters – Forex class action deals may hint banks braced to lose Libor appeal – Citigroup settled up for $394M with private parties over manipulation of forex.

Article points to one settlement I missed:

1/5 – Reuters – JPMorgan settles currency manipulation lawsuit in U.S. – Morgan will settle up with about $100M.

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Speculation on upcoming bank settlementsRead More »

The banks that settled up for a massive coordinated effort to manipulate foreign exchange rates each agreed to plead guilty to one criminal count of violating anti-trust rules. That makes each of them a felon.

Will describe why that is no longer a big deal and then offer an analogy of what this approach might look like in the life of an individual. …

Criminal guilty pleas for big banks are no longer a death sentence; more like a messy traffic incident that hit the papers. What that approach might look like in your life.Read More »

Big settlement announced today to resolve the Forex manipulation cases. Big surprise for me is the NYDFS only came in at $485M, with all of that going against Barclays. I was guessing a higher amount with DFS wanting a settlement from all the banks.

Here are two articles with the details, then I’ll list the individual settlements:  …

$5.6B for 5 banks to settle up on manipulating forex for customer’s accountsRead More »

Multiple reports indicate UBS will join previously expected  Barclays, JP Morgan,  RBS, and Citigroup  in settling up on their forex manipulation behavior next week.

A guilty plea to a felony criminal count is expected for all 5 TBTFs.

Biggest rumor is that DoJ may tear up the deferred prosecution agreement with UBS.

My wild guess of the dollar amount of the settlement? Four and a quarter billion. Reports i have seen over the past few weeks leave me wondering if that is just the DoJ settlements and doesn’t include NYDFS. If not, add another billion or three.

A few articles for more details:

http://fraudinfoblog.squarespace.com//fraud-info/2015/5/14/scarlet-letters-and-large-fines?hootPostID=6cd1af78b96858067766436572dd639b

http://mobile.nytimes.com/2015/05/14/business/dealbook/5-big-banks-expected-to-plead-guilty-to-felony-charges-but-punishments-may-be-tempered.html?_r=1&referrer

http://www.wsj.com/articles/justice-department-to-tear-up-past-ubs-settlement-1431645723

After reading the data for the 100 largest accounting firms, I realized the CPA industry can provide a frame of reference for the magnitude of fiascos we are seeing in the banking industry. Discussion of that article is here.

My wild guess is here for the total fines for manipulating forex rates: a range of $11B to $16B with point estimate of $13B.

Sixteen billion is just a number with lots of zeros. Let’s look at that number in relation to revenue in the CPA profession.

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A new metric for measuring the size of bank finesRead More »