The European Union levied fines on multiple banks for manipulating Euribor and Yen Libor. Those are count parts to Libor. Penalties based on legal concept of operating an illegal cartel.
Money Beat provides a recap in The European Union’s Benchmark Fines: A Breakdown: …
EU issues fines for rate rigging of Euribor and Yen Libor, cousins of LiborRead More »
Jonathan Weil compares the $13B settlement by JP Morgan to greenmail in his article, The JPMorgan Settlement Isn’t Justice.
After having read the settlement, he realizes this is worse than the typical case of neither admit nor deny guilt wording we usually see in settlements. In spite of the press releases from the government saying JPM admitted misrepresentation, the settlement and statement of facts is worded so vaguely that there aren’t actually any details of what the government believes was done wrong.
Thus, there is nothing to deny: …
Is the $13B JPMorgan settlement actually greenmail?Read More »
JP Morgan and the Department of Justice announced a huge settlement that covers a host of legal claims against the bank.
Price tag is $13 billion, but keep in mind that claims credit for $4B the bank separately negotiated with Fannie and Freddie. The Wall Street Journal report is J.P. Morgan, U.S. Settle for $13 Billion.
A few of the key terms:
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For $13B, JP Morgan settles a slew of legal issuesRead More »
If J.P. Morgan pays out $13 billion to settle claims over residential securities as expected, is it reasonable justice or is it unjust?
There is a divergence of opinion on that question. This post will explore both schools of thought.
Two main issues
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Is that $13B settlement with JP Morgan justice or a travesty?Read More »
Rabobank, based in Holland, will pay a 774M Euro fine, or about $1.065 billion, to U.S. and European regulators. That according to a Reuters report today: Dutch Rabobank fined $1 billion of Libor scandal.
Regulators in Japan forced Rabobank to increase their compliance staff in Japan after the bank was caught trying to manipulate the Yen Libor.
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A few links and comments of interest to auditors:
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JP Morgan settled charges it manipulated energy prices by paying $410 million. That is a civil penalty of $285M plus $125M of profits from the trades.
I calculate that is about a week’s work of earnings per share or roughly equal to 2 traffic tickets in California for a median income family.
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Fine for manipulating energy market equal to 7 days net income or two traffic ticketsRead 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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The U.K.’s Serious Fraud Office charged two brokers yesterday for their role in allegedly rigging Libor rates.
A third trader was charged last month. All three were arrested in England last December. This third trader was charged in the U.S. in December.
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Deloitte Financial Advisory Services agreed to a $10M fine from the N.Y. Department of Financial Services and a one year ban on new work for state chartered banks.
The consent agreement between the state regulators and Deloitte Financial Advisory Services can be found here.
What’s the problem?
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Deloitte penalized for anti-money-laundering work done for Standard CharteredRead More »
The Wall Street Journal reports in Criminal Cases Loom in Rate Rigging that criminal charges may be brought against individuals who worked at Barclay. Charges could be filed this summer (2013) but the investigation is going slow so the timeline could slip.
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Possible criminal charges this summer against individuals in LIBOR rate fixing scandalRead More »
The president and EVP of the Dallas Federal Reserve Bank have three suggestions in the Wall Street Journal on How to Shrink the ‘Too-Big-To-Fail’ banks.
The problem
Only 0.2% of the US banks control 70% of the assets in the industry. Those few banks are two-big-to-fail, too-big-to-jail, and even too-big-to-prosecute. They get special treatment from the federal government, specifically an explicit guarantee they won’t be closed, which gives them lower borrowing costs which means they have a government-sponsored competitive advantage.
Why that matters
Here are a few consequences mentioned in the article: …
Suggestions from two Fed officials on reducing the dangers of Too-Big-To-Fail banksRead More »
George F. Will suggests the answer to the question is “yes”: When banks get too big to fail, they are too dangerous to leave intact
One of the U.S. senators on the left end of the political spectrum thinks it is time to break up the too-big-to-fail banks.
Look at the concentration of assets in the TBTF range and the long history of TBTF: …
Does too big to fail, too big to punish, and too big to manage mean you are too big?Read More »
Royal Bank of Scotland will pay $610M in fines. Their subsidiary in Japan will plead guilty to one criminal count of fraud in the U.S.
This parallels the settlement UBS reached, which I discussed earlier – UBS settles LIBOR manipulation claims for $1.5B and one guilty plea.
Summary findings from CFTC press release PR6510-13: …
RBS settles LIBOR manipulation case with $610M fine and one guilty pleaRead More »