bank fiascos

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 »

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 »

Settlements of private lawsuits are continuing. Also, settlements with CFTC underway for another rate manipulation scheme.

6/18 – Wall Street Journal – Banks’ Civil Forex Settlements Near $2 Billion/ Barclays, BNP Paribas, Goldman Sachs and HSBC recently signed agreements to settle case  – The settlements for private litigation over manipulation of foreign exchange rates are moving forward. Article says HSBC has settled up for $285M, Barclays for $375M, Goldman Sachs is in for $129.5M, and an unknown amount for BNP.

By my calculation that brings the total for seven banks to …

Minor updates on the banking fiascos: Forex settlements and a new fiascoRead 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 »

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 »

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 »

First in what is expected to be a string of settlements announced on Wednesday:

UBS Hit With $545 Million in Fines, from the Wall Street Journal.

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UBS will pay $545M for manipulating foreign-exchange rates. First of 5 expected settlements todayRead More »