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Negotiations underway for multi-billion dollar settlement with BNP Paribas for violating trading sanctions

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Wall Street Journal reports Justice Dept. Seeks More Than $10 Billion Penalty Form BNP Paribas.

At issue is a large volume of transactions and dealings with countries for which the U.S. has banned any financial dealings. We’re talking loaning money and holding (likely hiding) deposits for countries like Iran, Sudan, and North Korea, along with businesses and individuals in those countries.

Negotiations are reportedly underway between the bank and the Justice Department, Manhattan U.S. Attorney, and Manhattan DA. From the article it sounds like the N.Y. Department of Financial Services is in the discussions. After reading about the Credit Suisse settlement, I’ll guess the SEC, FDIC, and OCC are in the conversation as well. Maybe the FRB.

What are the negotiating positions?

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Negotiations underway for multi-billion dollar settlement with BNP Paribas for violating trading sanctionsRead More »

Negotiations underway for multi-billion dollar settlement with BNP Paribas for violating trading sanctions Read More »

Just how harsh is that $2.5 billion fine for Credit Suisse? Not as bad as you might think.

1 Comment / Fraud, Other stuff /

Previous post described the guilty plea by Credit Suisse on charges they willfully aided U.S. citizens in evading income tax.

Fine is $2.5 billion. That is a lot of money. Or is it?

Follow me on a journey to see how big a deal that may be.

Penalty in terms of months or days of net income

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Just how harsh is that $2.5 billion fine for Credit Suisse? Not as bad as you might think.Read More »

Just how harsh is that $2.5 billion fine for Credit Suisse? Not as bad as you might think. Read More »

Credit Suisse admits to one felony for aiding tax evasion.

3 Comments / Fraud, Other stuff /

After unspecified decades of deliberately helping unnumbered thousands of customers evade income taxes, on Monday Credit Suisse Group plead guilty to one felony charge of aiding tax evasion. They will pay a fine of $2.5 billion.

I think this may be the end of “too big to jail.” Perhaps.

I’ll take a look at the modest size of the fine in relation to earnings in the next post.

Full service money laundering

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Credit Suisse admits to one felony for aiding tax evasion.Read More »

Credit Suisse admits to one felony for aiding tax evasion. Read More »

Minor updates on banks meeting justice

Leave a Comment / Fraud, Other stuff /

In the justice grinds slow department….

There has been much speculation of a settlement in the works for Credit Suisse for their efforts to help Americans avoid tax by secretly stashing funds in Swiss accounts. Reports are firming up that the bank will write checks of $2.5 billion to settle up. Will also take one guilty plea on a criminal charge.

The Wall Street is reporting Credit Suisse to Pay $2.5 Billion in Pact.

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Minor updates on banks meeting justiceRead More »

Minor updates on banks meeting justice Read More »

How do you keep one rogue employee from destroying your company?

Leave a Comment / Other stuff, Pondering /

That is the question asked on my other blog, Nonprofit Update: How do you keep one rogue employee from destroying your company? Or at least prevent a FCPA guilty plea and $108M fine?

That is a question I’ve pondered over the years. Have asked several of my clients the question and haven’t gotten any great answers.

I did get helpful answers from two of my clients, but the circumstances are so specific that I can’t share anything of the conversations.

Good internal controls will help. A great ‘tone at the top’ will go a long ways. Showing in everyday actions and words that ethical behavior is the expected norm will be a powerful message. Aggressively dealing with known behavior that is outside the boundaries will send a powerful message to the organization.

But how do you make sure that some completely out-of-control person doesn’t do something that can threaten the existence of your organization?

See the linked post to read of 4 examples that are in the back of my mind.

How do you keep one rogue employee from destroying your company? Read More »

FDIC sues 16 big banks claiming manipulation of LIBOR

Leave a Comment / Accounting, Other stuff /

The FDIC filed a suit against a host of big banks claiming they manipulated the LIBOR rates thus harming 38 banks that were taken over by the FDIC.

Included are lots of names you’ll recognize: Bank of America, Citigroup, Credit Suisse Group,  HSBC, Barclays, JPMorgan Chase, and RBS. They also included the British Bankers’ Association which owned and managed LIBOR.

Even a few hours after the news broke, the reports I’ve read are only a couple of paragraphs long. Not much background. Here’s a few articles to read, if you wish:

The case is 14-cv-01757, Southern District of New York, in case I want to look it up later.

FDIC sues 16 big banks claiming manipulation of LIBOR Read More »

Lincoln’s advice to fellow attorneys – Discourage litigation

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I previously used the publicly visible costs of a charity’s legal dispute to urge you to Please Try to Stay Out of Court.  The costs in dollars and time can be high. (Cross-posted from my other blog, Nonprofit Update, because it could help your clients.)

This advice is not anything new.

Turns out Abraham Lincoln gave that same advice to young attorneys.  He said …

Lincoln’s advice to fellow attorneys – Discourage litigationRead More »

Lincoln’s advice to fellow attorneys – Discourage litigation Read More »

KPMG global chairman speaks about insider trading fiasco

Leave a Comment / Audits, Other stuff /

John Veihmeyer, U.S. and global chairman of KPMG, addressed the Scott London insider trading mess during a speaking event with the University of Richmond’s Robins School of Business on Tuesday evening, March 4.

I found coverage of his discussion in two media outlets:

The Times-Dispatch article has the following comments:

Veihmeyer said he made the decision to fire London on the day — a Friday afternoon — he learned the partner was under federal investigation.

The following Monday, Veihmeyer told the firm’s leadership team not to circle the wagons, but to put out a public announcement about the investigation. KPMG also withdrew as the accounting firm for the two companies that had been compromised.

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KPMG global chairman speaks about insider trading fiascoRead More »

KPMG global chairman speaks about insider trading fiasco Read More »

Please try to stay out of court

Leave a Comment / Other stuff, Pondering /

This article is cross-posted from my other blog, Nonprofit Update.  It is posted here as well because it might also be helpful for your business clients. The article is focused on charities, but the same ideas apply to for-profit businesses:  please try to stay out of court.

In my journeys as a CPA serving the nonprofit community, I’ve been able to observe one (or more) charity/charities that have been in court because of their involvement in civil litigation. The time and costs involved can be substantial if you find yourself in civil court.

I can’t talk about those situation(s) because of confidentiality rules.

There are several things an auditor would routinely do in such situations.  The auditor would see the costs incurred from looking at the general ledger. Because of the possible financial impact, the auditor would have discussed the status of the case and possible outcomes with management, looked at legal invoices, and read the legal confirmation letter received from outside counsel. I can’t tell you what steps I took in any particular situation.

What I can say after seeing one/some specific situation(s) is that you should try really, really hard to stay out of court.

The costs can be high. The distraction for your leadership (and membership if you have members of some sort) can be significant.

One situation I can talk about

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Please try to stay out of courtRead More »

Please try to stay out of court Read More »

Admissions in Scott London’s plea agreement: felony insider trading 14 times

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Have you ever read a federal plea agreement for an individual? I’ve read court documents for criminal cases from the county where I live and civil cases at the federal level. This is the first individual criminal case from the federal level. Wow!

I just subscribed to the PACER system, which provide access to public documents in the federal court system. I’m still learning how to ride that bicycle. Looks like it will be quite useful.

One of the first things I looked at is the case of Mr. Scott London, most recently a senior level partner at KPMG, in charge of the southwest regional audit practice. As I’ve mentioned on this blog, he has pled guilty to insider trading.

The plea agreement is amazing. The phrasing is rather harsh and the admissions are exquisitely clear. I’ll share some of the things I noticed in this public document.

Admissions

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Admissions in Scott London’s plea agreement: felony insider trading 14 timesRead More »

Admissions in Scott London’s plea agreement: felony insider trading 14 times Read More »

Why I’m scratching my head over the JP Morgan settlement for not reporting the Madoff fraud

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I’m still trying to sort out the $2.7B settlement.

My initial hesitation when reading several pages of the deferred prosecution agreement and other news yesterday moved to full head scratching last night when I read the Wall Street Journal’s editorial, Another Madoff Swindle – The same government that ignored the fraud gets a cut of the recovery.  I’ve since read most of the DPA.

The editorial takes exception to the feds getting a $350M cut of the settlement, as if a reward is deserved. Put another way, that is a 17% commission { $350M / ( $1,700M + $350M ) } on the recovery.

Why does the editorial board use the words “extract”, “swindle” (twice!), and “money-grab”? Here’s a few reasons: …

Why I’m scratching my head over the JP Morgan settlement for not reporting the Madoff fraudRead More »

Why I’m scratching my head over the JP Morgan settlement for not reporting the Madoff fraud Read More »

Q: What’s $2.6B? A: Morgan’s current tab for settling up on failure to file suspicious activity reports on Madoff scheme

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Currently looks like J.P. Morgan will be wiring out $2.6B in the next few days to settle charges of having an insufficient anti-money laundering program and not filing suspicious activity reports on the Madoff fraud.

The Wall Street Journal’s tabulation as J.P. Morgan Settles Its Madoff Tab: …

Q: What’s $2.6B? A: Morgan’s current tab for settling up on failure to file suspicious activity reports on Madoff schemeRead More »

Q: What’s $2.6B? A: Morgan’s current tab for settling up on failure to file suspicious activity reports on Madoff scheme Read More »

Another multibillion settlement for JP Morgan – this time for not filing suspicious activity reports on Madoff accounts

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JP Morgan signed a deferred prosecution agreement with the Department of Justice for not reporting suspicions raised by Morgan’s own staff that the trading in Madoff’s accounts was suspicious.

The Wall Street Journal reports: J.P. Morgan to Pay $1.7 Billion to Victims of Madoff Fraud.

The DPA, which you can read here, says …

Another multibillion settlement for JP Morgan – this time for not filing suspicious activity reports on Madoff accountsRead More »

Another multibillion settlement for JP Morgan – this time for not filing suspicious activity reports on Madoff accounts Read More »