Tag Archives | Banking

Major U.S. Banks’ Checks Sent To Homeowners Bounce In $3.6 Billion Improper Foreclosure Settlement

By on April 28, 2013 in News 0

improper foreclosureHere’s fair warning that if Bank of America, Citibank, Goldman Sachs, HSBC, or Wells Fargo illegally foreclose on your home, the piddling compensation check sent to you a few years later may bounce when you attempt to cash it. Via ABC News:

A bunch of big banks agreed to a $3.6 billion legal settlement a few months ago to halt a review of improper foreclosures, in which banks’ law firms fabricated and robosigned documents.

Under the settlement, checks will be sent to more than 4 million homeowners who lost their homes to foreclosure in 2009 and 2010.

The first wave of checks was sent Friday. And, according to the Federal Reserve, at least some of them bounced. The Fed phrased it this way: “Some early recipients of checks informed the Federal Reserve’s consumer helpline on Tuesday that they were told their checks could not be cashed.” The Fed says the problem has been solved.

… Read the rest

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Goldman Sachs Rejects Proposal To Run For Political Office

By on March 29, 2013 in News 0

The investment banking giant needed intervention from the SEC to ensure that a shareholder’s satirical proposal—that the firm drop all pretense and simply run for political office as a candidate called “Goldman Sachs”—will not be put to a vote at its annual meeting, reports Bloomberg:

A shareholder proposal that the New York-based company run for office instead of funding political campaigns was discarded, according to a letter last month from the Securities and Exchange Commission, which agreed the firm can exclude the measure from its annual meeting.

Harrington Investments Inc. President John Harrington submitted the proposal last year, saying the $6.39 million in 2012 political contributions from the firm’s employees risks doing more harm to its reputation. He said the bank should explore running for office, using a U.S. Supreme Court ruling that corporations have similar political rights to individuals.

“It would be less damaging to the integrity of our political system and our company, for our corporation to directly run for office as a person under federal or state law, than to continue in the current form of political participation,” Harrington wrote in the proposal.

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How Your Social Media Score Will Shape Your Life Options

By on March 22, 2013 in News 0

On the intertwining of social capital and literal capital, the Economist reveals:

Facebook data already inform lending decisions at Kreditech, a start-up that makes loans in Germany, Poland and Spain. Applicants are asked to provide access for a limited time to their account on Facebook or another social network. Much is revealed by your friends, says Alexander Graubner-Müller, one of the firm’s founders. An applicant whose friends appear to have well-paid jobs and live in nice neighbourhoods is more likely to secure a loan. An applicant with a friend who has defaulted on a Kreditech loan is more likely to be rejected.

An online bank that opens in America this month will use Facebook data to adjust account holders’ credit-card interest rates. Based in New York, Movenbank will monitor messages on Facebook and cut interest rates for those who talk up the bank to friends. If any join, the referrer’s interest rate will drop further.

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U.S. Goverment Says Drug Cartel-Linked Banking Giant HSBC Is Too Big To Jail

By on December 14, 2012 in News 21

HSBC was fined of $1.9 billion this week for laundering billions of dollars for Colombian and Mexican drug cartels. It’s worth noting that for the world’s second largest bank, with trillions in assets, this is equivalent to a littering ticket. The New York Times writes:

It is a dark day for the rule of law. Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system. They also have not charged any top HSBC banker in the case, though it boggles the mind that a bank could launder money as HSBC did without anyone in a position of authority making culpable decisions.

When prosecutors choose not to prosecute to the full extent of the law in a case as egregious as this, the law itself is diminished.

… Read the rest

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The Psyche Of The Wall Street Quant

By on December 12, 2012 in News 38

Via Ghost Exchange, excerpts from a fascinating PBS interview with former hedge fund analyst Cathy O’Neil on the culture within Wall Street:

The basic cultural assumptions were not pleasant to me. The sort of most basic cultural assumption was that as a smart person, we have the right to take advantage of the system and of “dumb people.” And that is sort of — I mean, I guess I should have known, going into a hedge fund, that’s what people think.

I was thinking of it naively, more like, “Oh, there’s a system, and we should see what inefficiencies there are in the system and add information.” I mean, I just sort of drank that Kool-Aid. But once I was inside, I realized that’s not really how people think about it. They think, “Well, of course we’re going to take advantage, because we’re smart, and we can. We have better tools, and our tools are our brains.” Take advantage of absolutely everything and everyone that we can, in any way we can.

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Banking Giant HSBC Settles For $1.9 Billion Over Laundering Billions For Mexican Drug Cartels, Saudi Terrorists, And Iran

By on December 11, 2012 in News 13

Is the second-largest bank on the planet also one of the most far-reaching criminal organizations? The New York Times reports:

Federal and state authorities plan to announce a record $1.9 billion settlement with HSBC on Tuesday, a major victory in the government’s broad crackdown on money laundering at banks.

The settlement with HSBC stems from accusations that the British banking giant transferred billions of dollars on behalf of sanctioned nations like Iran and enabled Mexican drug cartels to launder money through the American financial system, according to officials briefed on the matter. Prosecutors found that the bank had facilitated money laundering by cartels and had moved tainted money for Saudi Arabian banks tied to terrorist organizations.

Since January 2009, the Justice and Treasury Departments and Manhattan prosecutors have charged six foreign banks, including Credit Suisse and Barclays. In June, ING Bank reached a $619 million settlement to resolve claims that it had transferred billions of dollars in the United States for Cuba and Iran.

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Global Mega-Bank Co-Opts Occupy Movement In New Ad Campaign

By on November 28, 2012 in News 5

The Denmark-based multinational Danske Bank is one of the world’s largest, with assets worth about $600 billion. Its new marketing campaign, fascinating in much the same fashion as a train wreck, is based around the slogans “Occupy” and “A New Normal”:

The strategy is intended to restore trust in the Bank and ensure that we live up to our new vision of being “Recognised as the most trusted financial partner.” In order to reach that objective, we must set new standards for banking operations.

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Shadow Banking Industry Now Worth $76 Trillion

By on November 19, 2012 in News 1

Will unregulated, debt-based financial products destroy the world? Bloomberg reports that the funneling of capital into instruments of so-called “shadow banking” continues to balloon to unimaginably large proportions:

The shadow banking industry has grown to about $67 trillion, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight. The Financial Stability Board, a global financial policy group comprised of regulators and central bankers, found that shadow banking grew by $41 trillion between 2002 and 2011.

The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off-balance sheet investment vehicles, “can create systemic risks” and “amplify market reactions when market liquidity is scarce,” the FSB said.

Supervisors consider shadow banking activities to be those that allow banks to carry out business off balance sheets, as well as those which allow investors to bypass lenders and the functions they traditionally fulfill on the markets.

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Banks Forcing Legal Pot Growers to Run Cash-Only Businesses

By on November 16, 2012 in News 15

Picture: Joshua Sandoval (CC)

Even if you’re legally selling marijuana according to the laws of your state, the drug’s federal status may keep banks from doing business with you. Seems like the feds are shooting themselves in the foot when it comes to the potential of marijuana as a taxable revenue, but what else is new?

Via NPR:

Voters in Washington and Colorado just approved measures legalizing marijuana for recreational use. But businesses that want to sell marijuana in those states will face a problem: No bank wants to do business with them.

I called several banks in Washington. I called a local credit union, a tiny bank in the San Juan islands. Everybody said basically the same thing. Even if selling marijuana is legal under state law, it’s still illegal under federal law. And banks and credit unions worry that this could get them in trouble.

So people who want to go into the marijuana business — who want to legally grow, distribute, sell marijuana in the state — are going to have to operate, basically, like drug dealers.

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Crashing The Investment Banking Awards

By on October 11, 2012 in News 6

The previously mentioned U.K.-based activist squad The Intruders somehow got inside the Investment Banking Awards, where they realized that this year’s most noteworthy accomplishment had gone unmentioned:

The Investment Banking Awards are the Oscars of the financial world. Dished out for so-called ‘innovation’, some of the world’s richest bankers gather together to congratulate each other on devising ever more creative ways to make obscene sums of money.

One of 2012′s most profitable scams was the bankers’ ‘innovative’ approach to a key interest rate called LIBOR. Virtually every bank at the event was involved in illegally colluding to rig LIBOR, ensuring that they would always be the winners in the multi-million pound bets they were making on the markets.

When we noticed that this money-spinner had been overlooked in the ceremony, we decided to show up and make sure the LIBOR-riggers got the recognition they deserve.

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