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Deutsche Bank ponies up $2.5B for cooking Libor; industry wide settlements approaching $9B.

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The dubious distinction of drawing the largest fine for manipulating Libor goes to Deutsche Bank. Their total tab is now $3.5B. That leaves UBS in a distant second place at $1.6B.

Check out two articles on April 22:

Deutsche Bank will pay slightly over $2.5 billion to settle up for manipulating Libor, Eurbor, and Tibor (Tokyo interbank). Several specific Directors and VPs will be fired.

A subsidiary company in Britain will plead guilty to violating American criminal laws.

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Deutsche Bank ponies up $2.5B for cooking Libor; industry wide settlements approaching $9B.Read More »

Deutsche Bank ponies up $2.5B for cooking Libor; industry wide settlements approaching $9B. Read More »

More good stuff for auditors – 4-20

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Big 4 firms moving into legal work, how state based regulation is slowing the profession’s responsiveness to change, and tax situations when you should refer a client to an attorney.

4/13 – Journal of Accountancy – 10 situations when a CPA should call “timeout” – When a client’s situation starts getting dicey, a CPA needs to call a timeout so the client can retain legal counsel. A list of 10 situations in the article doesn’t just apply to CPAs preparing individual tax returns. Some of them apply to auditors.

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More good stuff for auditors – 4-20Read More »

More good stuff for auditors – 4-20 Read More »

More good stuff on banking fiascos – 4-14

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Plan on how the banks will get out of the suits from soldiers. Also France tells HSBC to post a billion euro bond. Like they’re gonna’ grab a passport and book a flight to Argentina.

4/6 – Alison Frankel at Reuters – How Western banks hope to shake ex-U.S. soldiers’ Iran terror suit – Previously mentioned lawsuit by a number of US soldiers who were wounded by IEDs in Iraq. They allege the banks were providing the banking services used in turn to fund the terrorists who in turn wounded them.

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More good stuff on banking fiascos – 4-14Read More »

More good stuff on banking fiascos – 4-14 Read More »

Deutsche Bank in final negotiations for their Libor manipulation. If they settle at $1.5B, it would bring cumulative Libor fines to $7.6B.

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Leaks to Dealbook suggest Deutsche Bank could have a settlement in May with DoJ, NY DFS, CFTC and Financial Conduct Authority in London. Amount of settlement is looking to be over $1.5B and involve a guilty plea to a criminal charge by a British sub of the bank.

Report is Deutsche Bank Nears Plea Deal Over Libor Manipulation.

Several comments in the article refer to ‘discounts’ given to the first-to-settle, which was UBS. Also comments that the last to settle pays a premium.

I’ve started tracking the Libor and Forex settlements in a spreadsheet.  There are too many banks dealing with too many regulators on too many issues to keep everything straight in my little brain.  Good infographic on settlements from WSJ here.

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Deutsche Bank in final negotiations for their Libor manipulation. If they settle at $1.5B, it would bring cumulative Libor fines to $7.6B.Read More »

Deutsche Bank in final negotiations for their Libor manipulation. If they settle at $1.5B, it would bring cumulative Libor fines to $7.6B. Read More »

Bank fiascos – slow progress on changing cultures to prevent the next fiasco

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Change in massive organizations is slow. Here are a few articles on the speed of compliance to prevent future fiascos.

4/1 – Wall Street Journal – HSBC Monitor Says Bank’s Compliance Progress Too Slow and 4/1 – Deal Book at NY Times – HSBC Is Deemed Slow to Carry Out Changes – Quarterly report from the monitor on the 2012 DPA says he thinks the bank is not making enough progress on improving the anti-money laundering program. HSBC is now in year three of a five-year DPA.

On the other hand, progress takes time…

4/2 – This is Money at Daily Mail – Senior HSBC executive privately admits another major regulatory breach is ‘cast-iron certainty’, according to reports – This report got lots of coverage. I think it was reported elsewhere earlier than this article.

A senior compliance officer reportedly said that there is a high probability of another major regulatory violation at some point in the future. Several commenters and one headline I saw spun this as meaning the bank intends to break the law again.

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Bank fiascos – slow progress on changing cultures to prevent the next fiascoRead More »

Bank fiascos – slow progress on changing cultures to prevent the next fiasco Read More »

In other April 1st news…

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You can find my two posts for April 1 at my other blog, Outrun Change:

Pending outbreak of hostility between the Federation and Empire. New intel on prospects for Star Trek and Star Wars battle.

Democracy and innovation will trump totalitarianism and lack of freedom. Of course, it helps to have cloaked starships that fire photon torpedoes at warp speed hitting their targets hundreds of thousands of kilometers away go up against death stars that manually target lasers using visual observation.

News reports you may have missed on history books you may have read

Some books keep getting filed in the fiction section instead of the history section where they belong. Here are some news reports on a few of those books. Historian J.R.R. Tolkien gets good coverage.

Remember, it is April 1st.

In other April 1st news… Read More »

Another metric for measuring major settlements

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For future reference, I’m accumulating reference points for illustrating the magnitude of the huge bank settlements we are seeing.

Previously mentioned the annual billings of Big 4 accounting firms. Here are two more reference points –

Election cost in U.S. – $4B / $6B / $10B – According to this site (which was the first one I found that had the info I wanted so I stopped looking), the cost of congressional elections was $3.6B in 2010. The cost of congressional and presidential elections in 2012 was $6.3B. So the federal elections in 2010 and 2012 cost $9.9B.

Cost to build a new aircraft carrier – $13B – Construction cost of the newest aircraft carrier, the U.S.S. Gerald Ford, is estimated at $12.8B per Wikipedia.

Another metric for measuring major settlements Read More »

Scoreboard for private settlements of Forex litigation

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Settlement talks are apparently progressing in a large class action suit against the big banks for manipulating foreign exchange rates.

Wall Street Journal reports on 3/17 that Citigroup, Barclays Close to Settling Forex Lawsuit With Private Investors.

Rumors are those two banks may settle with a group of investors for $800M between them.

According to the article, here’s the current status:

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Scoreboard for private settlements of Forex litigationRead More »

Scoreboard for private settlements of Forex litigation Read More »

A new metric for measuring the size of bank fines

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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 »

A new metric for measuring the size of bank fines Read More »

Primer on money laundering and tax havens

2 Comments / Audits, Fraud, Other stuff /

High level overview on the how-to of laundering money and using tax havens. Will leave you curious for more details, but it’s a good intro. Also, article on another couple of billion in another settlement from the Great Recession.

4/7/13 – ICIJ – Tax Havens 101: the high cost of going offshore – Good 4 minute primer on how to set up and run an offshore operation to hide assets, whether from the taxman, your spouse, or creditors.

[youtube=https://www.youtube.com/watch?feature=player_detailpage&v=gy2RgjIIZyA]

 

For under 4 minutes, it is a good explanation.

A few places to expand the ideas:

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Primer on money laundering and tax havensRead More »

Primer on money laundering and tax havens Read More »

Another Forex update

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Not a lot of new info in this report on the TBTF banks’ settlement discussions for manipulating foreign exchange rates, or forex. There are a few tidbits at the inside-baseball level that are interesting. If you’ve been reading my posts on banking fiascos, you will appreciate this info.

2/13 – Bloomberg Business – U.S. is Seeking Billions from Global Banks in Currency Manipulation Settlement –

DoJ is looking for a simultaneous settlement with all the banks so none of them are singled out.

Total dollar amount on the table is reportedly $4B with starting point for each bank about $1B, give or take.

Here’s what the really deep-inside-baseball lineup is looking like: …

Another Forex updateRead More »

Another Forex update Read More »

Commerzbank joins the billion-dollar-fine club

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The newest member of the elite club of banks that write billion dollar checks to settle up with the regulators is Commerzbank AG, the second largest bank in Germany.

After reading several reports on the billion and a half settlement, it seems to me that their corporate culture, at the core personality level, is to be not overly concerned about complying with US law.

The two primary issues are aiding and abetting the billion-dollar Olympus fraud and processing a quarter billion dollars of wire transfers for Iranian and Syrian customers banned from the US banking system.

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Commerzbank joins the billion-dollar-fine clubRead More »

Commerzbank joins the billion-dollar-fine club Read More »

About half past 9 tomorrow will be Pi day of the century

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March 14 is referred to as Pi day by people who enjoy math. Since pi equals 3.14159, that makes March 14 pi day.

3/14

3.14

Get it?

Well, it’s funny for some of us. Really.

Million Dollar Way points out that tomorrow, March 14, 2015, is the Pi day of the century.

I’ll let Mr. Oksol explain it: …

About half past 9 tomorrow will be Pi day of the centuryRead More »

About half past 9 tomorrow will be Pi day of the century Read More »

About that “invoice” to renew your fictitious business name for $150. It’s either a “misleading solicitation” or a scam. Take your pick.

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About a week ago I renewed the fictitious business name used for my publishing projects. Paid San Bernardino county $55. Only reason it took 20 minutes to prepare it is that the county revised the form since my last filing. Since I’m a cautious accountant, it was obviously necessary to read all the instructions just to make sure nothing changed.

Also received an invoice in the mail today that looks like it is from the Fictitious Business Name office reminding me the FBN is about to expire and the fee will be only $150.

Hmm. The form I just filed said the fee was $55.

If you look carefully, the outside envelope and “invoice” both contain one statement each saying this is not an official government request.

(This discussion is cross-posted from my other blog, Nonprofit Update, because I think it might be helpful for CPAs to help their clients.)

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About that “invoice” to renew your fictitious business name for $150. It’s either a “misleading solicitation” or a scam. Take your pick.Read More »

About that “invoice” to renew your fictitious business name for $150. It’s either a “misleading solicitation” or a scam. Take your pick. Read More »

A: 48% & 0%. Q: Percent of individual income taxes paid by top 1% of taxpayers and bottom half (projected for 2015)

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Table 4 of the Fairness and Tax Policy document from the Joint Committee on Taxation contains projections from the committee for 2015 tax returns. The table projects income and taxes paid by income level.

All of the following income numbers are based on a fairly broad definition of income, starting with AGI and adding items such as employer social security taxes, employer payments for health insurance, workers comp payments, and nontaxable social security benefits.

(cross-posted from my other blog, Outrun Change.)

Key items that jump out at me:

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A: 48% & 0%. Q: Percent of individual income taxes paid by top 1% of taxpayers and bottom half (projected for 2015)Read More »

A: 48% & 0%. Q: Percent of individual income taxes paid by top 1% of taxpayers and bottom half (projected for 2015) Read More »