Bank fraud settlements


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From daily The Morning Star in Britain:

UBS agrees to $50 million payout over mis-sold bonds

Wednesday 07 August 2013

Switzerland’s biggest bank UBS has agreed to pay about $50 million (£32m) to settle US federal charges of misleading investors in its sale of risky mortgage bonds prior to the 2008 financial crisis.

The Securities and Exchange Commission (SEC) announced the settlement with UBS Securities, the Swiss bank’s investment arm, on Tuesday.

The bank was allowed to get away with neither admitting nor denying wrongdoing.

The settlement with UBS was the latest in a series regarding Wall Street firms’ dubious conduct over the years preceding the 2008 crisis.

Goldman Sachs agreed in July 2010 to pay $550m (£359m) to settle similar SEC charges of misleading buyers of a complex mortgage investment.

JPMorgan settled similar charges in June 2011 by agreeing to pay $153.6m (£100m) and reached an agreement over mortgage bonds for $296.9m (£194m) last November.

Credit Suisse, Switzerland’s second-largest bank, agreed to pay $120m (£78m).

JPMorgan: We’re Being Investigated By DOJ Over Mortgages: here.

7 Things About Prosecuting Wall Street You Wanted to Know (But Were Too Depressed to Ask): here.

Token fines for banks caught rigging foreign exchange markets: here.

6 thoughts on “Bank fraud settlements

  1. Pingback: JPMorgan banking scandal news | Dear Kitty. Some blog

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  3. Fri Jul 11, 2014 12:27 am (PDT) . Posted by:
    “James Hutchings” apeloverage

    A Senate inquiry has called for the Commonwealth Bank of Australia to face a royal commission to investigate fraud, forgery and allegations of a cover-up inside its financial planning arm, and described corporate regulator ASIC as ‘timid’.

    Thousands of Australians have lost their life savings as a result of allegedly shoddy financial advice given to them by planners at the country’s biggest bank.

    The inquiry said the bank’s existing compensation program for financial planning victims should be completely re-done, and the offers made to victims reviewed.

    Inquiry chairman, Labor Senator Mark Bishop, has indicated this could increase the CBA’s compensation bill from about $51 million to $250 million.

    The inquiry has also called for a wider investigation into the financial planning arms of other industry players including Macquarie Group.

    “There was forgery and dishonest concealment of material facts,” the inquiry said in its report.

    “Clients lost substantial amounts of their savings when the global financial crisis hit; the crisis was also used to explain away the poor performance of portfolios.”

    “Meanwhile, it is alleged that within CFPL [Commonwealth Financial Planning Ltd.] there was a management conspiracy that, perversely, resulted in one of the most serious offenders, Mr Don Nguyen, being promoted.”

    The report concluded that corporate regulator ASIC “has limited powers and resources but even so appears to miss or ignore clear and persistent early warning signs of corporate wrongdoing or troubling trends that pose a risk to consumers.”

    It said in one case ASIC was shown to be “a timid, hesitant regulator, too ready and willing to accept uncritically the assurances of a large institution that there were no grounds for ASIC’s concerns or intervention.”

    ASIC was alerted to misconduct in the CBA’s financial planning arm by whistleblowers six years ago, but took almost 16 months to mount an official investigation.

    The corporate regulator’s performance was heavily criticised during the inquiry, with victims and whistleblowers complaining that ASIC ignored complaints and was too close to the bank.

    ASIC chairman Greg Medcraft admitted to the Senate that the regulator’s trust in the CBA had been “misplaced".

    The Commonwealth Bank has so far paid $52 million in compensation, but has already been forced to re-open the files of more than 4000 customers as part of new license conditions announced by ASIC last month.

    (Source: Sydney Morning Herald)

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