It’s been a tough couple of years for consumers. They are increasingly relied upon to fuel the economy in the United States and around the world (stock prices tumble from Tokyo to London to Wall Street when American consumers even hint at lowered confidence and spending). But they are seeing their own legal rights being… Continue Reading
Following recent lawsuits, court decisions, and presidential debates, more Americans than ever are becoming familiar with the Dodd-Frank Act, which was passed in 2010 to increase the government’s ability to regulate big banks. Many politicians and lobbyists have argued for repealing the Dodd-Frank Act, but a recent New York Times editorial poses an interesting question:… Continue Reading
I’ve heard a lot of people describe the current state of our country’s largest financial institutions. I frequently hear things like “too complex,” “too big,” or “in desperate need of an overhaul.” But Sallie L. Krawcheck, former head of Bank of America’s wealth management division, gave a description yesterday that takes the cake: “It is… Continue Reading
It is fascinating to watch the banking and finance industry pointing fingers at each other for the botched Facebook IPO. Yesterday, attempts to shift blame and recover some losses led to some wonderful quotes from Citigroup. The New York Times’ Dealbook recently summed up Citigroup’s position: “Citigroup on Wednesday also criticized Nasdaq’s claim that its… Continue Reading
The decision by both the Justice Department and the SEC to close investigations into various questionable actions taken by Goldman Sachs reveals an interesting tension in our regulatory laws: between what we think is the “right” or “moral” code of conduct for the banking industry verses what is legal under existing laws and regulations. In… Continue Reading
The FDIC filed suit on Friday in U.S. District Court for the Southern District of New York against units of the five biggest banks in the United States. JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and Ally Financial have been accused of misrepresenting the value of mortgage-backed bonds sold to Colonial Bank between 2005… Continue Reading
I’m still trying to understand the SEC’s decision making process in deciding to charge Mr. Brian H. Stoker, former Citigroup banker, in connection with a subprime mortgage-related debacle at Citigroup. In this offering, Citigroup bet against one of its own securities, which subsequently lost most of its value and has since been described using bad… Continue Reading
I came across a quote from a speech F.D. Roosevelt gave in 1936 while reading an opinion piece by Jesse Eisinger in the New York Times and was struck by how timely it seemed. So I read FDR’s entire speech and now I think you should too. The phrase “history repeats itself” is a phrase… Continue Reading
Who would have expected to see Sandy Weill, Citigroup’s former CEO, say that big banks are bad? He who built the biggest bank in the US at the time, Citicorp. It’s like Henry Ford coming out against the Model T, Bill Gates telling us software is unhealthy and Thomas Jefferson proclaiming “Democracy” is over rated. … Continue Reading
“Hello, Ernesto. This is Vikram, you know that red Ferrari 458 I ordered a few months ago?” “Yes, Mr. Pandit, but of course. It will certainly be a great addition to the one you bought last year, and the vintage 1963 250 GTO we sold you with all those stock options you had been awarded.”… Continue Reading
These banks seem to be living in a parallel forgiving universe where losing money is rewarded and risk (failing the stress test) is not only tolerated but rewarded as well.
We commend you Sherry Hunt. Management at CitiMortgage and possibly CitiBank put profits before ethics and the law, but you did not. You saw a crime being committed and you blew the whistle. You risked your job, and possibly a career in banking to simply do the right thing. If more people had your courage and tenacity, financial institutions would play by the rules. They would not have to be hit over the head with a 2×4 wielded by the U.S. Attorney’s Office.
It will be okay, big guys. Investment banks will allow for the liquidity you supposedly so dearly fear losing. The market will adapt and the reduced risk in the U.S. financial system will restore confidence and integrity to the markets. The economy grew for decades under the Glass-Steagall Act. Would we really be upset to see that growth again–growth all can benefit from, not just traders?
The Wall Street Journal reported today that FINRA has fined Citigroup a whopping $725,000 for failures to disclose investment-banking relationships. Instead of the window dressing we are getting from FINRA, investors deserve strict and swift action. Substantial sanctions send a message that rules are important and that the public takes regulation seriously. A $725,000 fine hardly sends that message.
The CFPB is taking important first steps towards its mandate of helping consumers wade the murky waters of personal finance. Click Here Proof Positive. Sixty Percent of his evaluation was focused on selling risky subprime mortgages. Read this and more in Nicholas Kristoff’s captivating interview with a banker/salesman from Citigroup who seems to have realized… Continue Reading
As a former SEC attorney myself, I know how difficult it can be to work with limited staff, time, and money to reign in the fraud and deceit that seems to run rampant in Gotham… Excuse me, I meant Wall Street. But resources aside, some cases demand a full court press.
Some links that will get you ready for the coming weekend: Many of the biggest banks have begun to backtrack on their announced debit card fees. The banks had planned to charge between $3.00 and $5.00 to use debit cards for purchases. Wells Fargo continues to test the fee in five states, but JPMorgan and… Continue Reading
The SEC’s recent settlement with Citigroup wouldn’t even brush back Alex Rodriguez, so it’s certainly not scaring the world’s fourth-biggest bank into compliance. If the banks’ reaction to recent regulation is any indication, Citigroup will just levy more fees on its unsuspecting customers to pay off the $285 million legal tab in a few days…. Continue Reading
If S&P is looking for a new leader to run a profitable business, Doug Peterson formerly of Citigroup is surely up to the task. However, if Standard and Poor’s is looking to restore its tarnished reputation, Sisyphus is more likely the man for the job.
Wilmers is a good banker with even better morals. He’s old school, valuing bankers’ reputations, which has dropped to “third worst” among the professions, according to Wilmers. Unlike most executives, Wilmers recognizes the moral hazard of major bank bailouts and the incentive to maximize risk–to the benefit of the big shots, and at the cost of Main Street.
New York’s Attorney General is investigating large banks in connection with their role in the financial crisis. Can you say “déjà vu”? (Or since it’s New York, the Yogi Berra version: “déjà vu all over again.”)
Far from being penalized, even slapped on the writs, big banks–specifically Bank of America, JPMorgan, Citigroup, Wells Fargo, and Goldman Sachs–are enjoying the time of their lives. They are saving tremendously to the tune of billions by refusing to service distressed properties and loans. “Walk away fellas and don’t look back.” Instead, they are using some of that money wisely to lobby Congress and it’s working.
One thing’s for sure though, when Auditors are handsomely paid by the very companies they’re supposed to audit with independence and objectivity, there’s bound to be trouble afoot sooner or later.