Other stuff

Previous post discussed Barclays drawing a £72M (US$109M) fine for breaking British anti-money laundering laws.  The bold scheme involved not putting clients’ names into the computer system amongst other creative plans. They bankers involved also gave their clients a money back guarantee if their names ever became public.

I did a bit of research to find out how the fine compares to their financial statements. Was wondering how big a hit $109M really is for them.

You can find the 2014 financial statements for Barclays at this link. The financials are here. Income statement is on page 224.

Here are some key numbers to help put the £72M fine in perspective:

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Barclays’ money laundering fine in relation to their 2014 financial statements.Read More »

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. …

Minor updates on bank fiascoes and settlementsRead More »

Another bank, Credit Agricole, settles up for money laundering, with tab under a billion. Standard Chartered under a new investigation. Toshiba identifies 30 more senior staff who participated in the accounting schemes.

10/1 – Accounting Today – Toshiba Says 30 More Executives Names in Accounting Scandal – In addition to three former presidents resigning, an additional 30 executives have been identified in as players in the Toshiba book cooking scandal.  None of the 30 will be fired.

Current over statement of income is estimated at US$1.3B in the article with a US$6B loss in market value.

10/20 – Wall Street Journal – Credit Agricole to Pay $787 Million in U.S. Sanctions Case  and IRS – Credit Agricole Corporate and Investment Bank Admits to Sanction Violations, Agrees to Forfeit $312 Million.

Another bank had institutional policies to willfully circumvent US rules on money laundering for banks and individuals in sanctioned countries. NY DFS says total laundered amount was $32B. The bank admitted to one felony charge in a deferred prosecution agreement.

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More articles on banking and accounting fiascosRead More »

For all of you who think there should be hundreds of bankers in jail, keep in mind one of several hurdles to clear is getting a jury to go along with you. Major lesson in the result from the Dewey & LeBoeuf trial is that complicated financial stuff is really, really difficult to explain to a jury.

10/21 – Wall Street Journal – Jury in Dewey Law-Firm Case Felt Inundated by Details –

There were 150 counts against the three senior executives of the law firm. If I get the case correctly, the core issue is manipulating the financial statements through the means of inappropriate journal entries. Alleged goal was to cook the books in order to keep the lenders happy and thus keep the law firm alive.

The jury acquitted on a couple of dozen charges and was deadlocked on all the others. They did not return a guilty verdict on any charge.

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Explaining complex financial details to jurors is an obstacle to putting senior executives in jailRead More »

Knowing a former employer held open a three-million-a-year job awaiting his return had no impact on the objectivity of at least one departed government worker.

10/16 – BoingBoing – Eric Holder:  I didn’t prosecute bankers unrelated to my $3M/year law firm salary – Article points to the discussion in the next article.

Mr. Holder left a law firm where he was reportedly earning $3M a year to become the attorney general. After completing his government service, he returned to the law firm. Presumably his salary will resume or even increase since he now has humongous amounts of inside information on government strategy, capabilities, and intentions for enforcement of criminal law. That will be tremendously valuable knowledge for banks that find themselves talking to various US Attorneys in the near future.

One pertinent comment: …

Would anticipating a return to a job paying salary of $3,000,000 a year affect your objectivity while working at another job?Read More »

A bit of news about companies in the financial world that have long been called too-big-to-fail, or too-big-to-jail.

The New York Times reports a new position paper from the Department of Justice encourages federal prosecutors to go after individual employees as well as companies when there is criminal wrongdoing.

Reporting is at Justice Department Sets Sites on Wall Street Executives. The technical shift is to focus on individuals who engage in the suspected behavior as well as the company under investigation instead of focusing first on the company, settling with the corporate entity, and then considering whether any individuals were involved.

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The Feds will go after those horrible terrible bankers on Wall Street now that the statute of limitations has expired.Read More »

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 »