The Wall Street Journal reports BNP Near Settlement With U.S. for Up to $9 Billion.
The article says the bank and U.S. prosecutors have agreed on the broad terms of the settlement, which would include:
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Saw this article in the Wall Street Journal a week ago, June 12– BNP Paribas Executive Chodron de Courcel to Quit Post.
Article says the chief operating officer will be leaving the bank at the end of June. He previously had been planning to retire on September 30. The announcement from the bank did not contain any reference to the investigations in the US, according to the article.
However, his name is on the list of heads demanded by New York state regulators as a part of the settlement talks. When I read the article I sensed his early departure, without acknowledging the investigation, was actually a part of the settlement talks.
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Heads starting to roll in BNP Paribas settlement talksRead More »
Previously mentioned another perspective on possible penalties on BNP Paribas for violation U.S. sanctions on trade in some countries – could it be U.S. harassment of banks who don’t bow to U.S. foreign policy?
At The Feed, Walter Russell Mead provides perspective on why there has been such a strong reaction from the French government – Hollande’s Top Priority: Save BNP. His discussion is quite helpful for me.
The article explains that the government, big companies, and the banking system in France are tightly linked. There are overlapping ownership interests, centralized control, close coordination, and wide revolving doors between the government and private sector.
The article explains: …
Another perspective on BNP Paribas – centralized control of French economyRead More »
Here’s a different point of view: US efforts to impose draconian penalties on foreign banks for providing financial services in countries that the US doesn’t like it is really just a case of imposing our political preferences on the world.
Since access to dollar-based accounts essentially requires settling transactions in New York-based systems at some point in the transaction, the U.S. is leveraging the location of dollar settlements to force everyone to comply with our foreign policy.
For an explanation of this perspective, check out this article in Financial Times: America prosecutes its interests and persecutes BNP. (Snappy title, by the way – wish I could write that well.)
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Now for a completely different perspective – US harassment of French banks.Read More »
The extensive efforts by French government officials to intervene on behalf of BNP Paribas in order to reduce any penalties against the bank fell flat when President Obama announced that it is the Department of Justice that determines settlements and he will not intervene.
That according to a Wall Street Journal report, Obama Says He Has No Role in BNP Paribas Penalties.
Efforts to change the mind of US regulators include: …
Maneuvering in settlement talks for BNP Paribas and BofARead More »
A few more details on settlement talks mentioned earlier.
The N.Y state Department of Financial Services wants to see a dozen or more staff fired, including an unspecified number of executives.
The government position is fine of $10B or more.
So here’s the combined government position: …
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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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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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 »
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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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.
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: …
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: …
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 …
A few links and comments of interest to auditors – double counting JPM settlement amounts, payroll fraud, PCAOB proposals.
11-7 – Bloomberg – Holder’s Credit Grab at JPMorgan – …