So HSBC gets only a small fine in comparison to Credit Suisse for skipping US registration rules. Taking aim at the covert nature of the Swiss banking world, the Securities and Exchange Commission accused HSBC’s Swiss unit of violating a cardinal rule of the financial industry. The unit failed to register with the S.E.C. before providing advice to American clients, an omission that allowed it to avoid scrutiny in Washington. The S.E.C., which requires banks and other firms that offer investment advice to comply with basic registration rules, extracted a $12.5 million penalty from the HSBC unit. The payout is a fraction of the penalty assessed in the S.E.C.’s case against Credit Suisse, which paid $196 million in February to settle similar accusations.
Taking aim at the covert nature of the Swiss banking world, the Securities and Exchange Commission accused HSBC’s Swiss unit of violating a cardinal rule of the financial industry. The unit failed to register with the S.E.C. before providing advice to American clients, an omission that allowed it to avoid scrutiny in Washington.
Read more at NYTIMES.com
This one goes down in the category of “its good to be a Receiver or Trustee if there is a lot of money left to go after once the fraud is found out and stopped.” The fees, paid by the industry-backed Securities Investor Protection Corp., or SIPC, which is managing the case, have financed a team of lawyers who this week surpassed $10 billion in recoveries for victims, or almost 60 percent of the principal that vanished after Madoff’s arrest in December 2008.
“No one would have anticipated this recovery six years ago, and not a nickel of the fees has come out of the customer fund,” Stephen Harbeck, SIPC’s president, said today in a phone interview. “It’s a remarkable achievement.”
It’s a great rationale for a $1 billion in fees!!
Six years after Bernard Madoff’s fraud collapsed, the cost of liquidating his defunct investment advisory firm to repay thousands of victims has topped $1 billion, though the con man’s former customers aren’t footing the bill.
Read more at Bloomberg.com
Seems like RBS just keeps having problems. I guess that is why the British government had to bail them out during the financial crisis. The bank, which is 81 percent owned by the British government after a bailout during the financial crisis, said that it did not properly recognize certain tax credits on theoretical losses as part of a stress test by the European Banking Authority. As a result, R.B.S., based in Edinburgh, said that its “fully loaded” common equity Tier 1 capital ratio in 2016 should have been 5.7 percent under an “adverse scenario,” essentially a future financial crisis, as part of the test, instead of the 6.7 percent that was reported. The capital ratio is an important measure of the bank’s ability to weather financial disturbances. The new number is still above the minimum threshold set by the authority.
“This revised result was above the post-stress minimum ratio requirement of 5.5 percent used in the 2014 E.B.A. stress test for the adverse scenario,” the bank said in a statement.
It’s a good thing we don’t have too many banks like this in the US… or wait we did…
The bank, which is 81 percent owned by the British government after a bailout during the financial crisis, said that it did not properly recognize certain tax credits on theoretical losses as part of a stress test by the European Banking Authority.
Read more at NYTIMES.com
Seems like Bank of Scotland that survived the financial crisis, has new crises that are costing it $88 million to settle. Luckily for them they are a big bank and close to the “too be to fail” in the UK so they get to pay a fine. I would only guess that a smaller US bank would be put out of business for this type of problem. Here is part of what the regulators had to say:
“The severe disruption experienced by R.B.S., NatWest and Ulster Bank in June and July 2012 revealed a very poor legacy of I.T. resilience and inadequate management of I.T. risks,” Andrew Bailey, the chief executive of the Prudential
Regulation Authority, said in a news release. “It is crucial that R.B.S., NatWest and Ulster Bank fix the underlying
problems that have been identified to avoid threatening the safety and soundness of the banks.”
The technology failure, resulting from a problem with an overnight software update, also caused R.B.S. to produce
inaccurate customer account statements and some businesses were unable to make their payrolls, the Financial Conduct Authority said.
LONDON – British regulators fined the Royal Bank of Scotland 56 million pounds, or about $88 million, on Thursday over a technology failure that left millions of customers unable to access their accounts for several weeks in 2012.
Read more at NYTIMES.com
Disclosure is the key issue and here is a case that they settled for just a small amount of money but it will taint then for the rest of their careers. Lucky for them the DOJ did not pursue criminal charges. The Securities and Exchange Commission filed civil fraud charges in U.S. District Court on Thursday against former Allen Park Mayor Gary J. Burtka for allegedly leading the bond issue campaign without disclosing the deal’s problems or the fact that his town faced a budget deficit.
When the city of Allen Park, Mich., sold $31 million in municipal bonds five years ago to fund a “blockbuster” movie studio center, the SEC says a key fact was withheld from investors: The studio deal was near collapse.
Read more at FA-MAG.com
Looks like Putin’s friends are under attack by the United States. Its hard to hide fraud and money laundering in this sophisticated world we live in and here is another example of the US using its expertise to uncover such illegalities.
U.S. prosecutors have launched a money-laundering investigation of a member of Vladimir Putin’s inner circle, several people familiar with the efforts said, in a politically sensitive escalation of pressure on the Russian president’s cadre of billionaire supporters.
Read more at ComliancEX.com
He obviously has a great legal team. Can you imagine the bill recognizing how much he already has paid out in settlements.
New York (HedgeCo.Net) – The billionaire hedge fund manager of SAC Capital won’t face any charges as the prosecution has decided that there isn’t enough evidence against him, WSJ reports.
It seems that Steven Cohen has beat the statute of limitations for prosecution from the allegedly massive insider-trading scheme run by one of his portfolio managers, Mathew Martoma. Last week Cohen pleaded the 5th, declining to testify before a grand jury in the recent slate of insider trading allegations against traders at his firm.
Read more at Hedgeco.net
Mayer Hoffman is a great firm and every once in a while either one partner makes a mistake or is incorrectly accused of wrongdoing or other charges. When you have 5,000 employees this is an expected part of doing business and other big firms like Ernst and Young and KMPG, etc. have been in the same situation accused of fraud, conspiracy and other wrong doing and they are still around.
The Securities and Exchange Commission has issued an order instituting proceedings against Mayer Hoffman McCann, an auditing firm associated with CBIZ, after it found that one of MHM’s audit and attest clients, Tradebot Systems, a high-frequency trading broker-dealer, had traded CBIZ stock.
Read more at AccountingToday.com