Wells Fargo CEO Stumpf Quits in Fallout From Fake Accounts 

 

John Stumpf, who led Wells Fargo & Co. through the financial crisis and built it into the world’s most valuable bank, stepped down as chief executive officer and chairman, bowing to public outcry over legions of accounts opened by his employees for customers who didn’t request them.

Stumpf, 63, is retiring from both posts effective immediately, the bank said Wednesday in a statement. Tim Sloan, 56, the company’s president and chief operating officer, will succeed him as CEO. Lead director Stephen Sanger will serve as the board’s non-executive chairman. read more »

‘Flash-Crash’ Trader Faces End of Road in U.K. Extradition Fight

Navinder Singh Sarao hasn’t ventured outside London for more than a year due to bail restrictions imposed after his arrest for spoofing markets. That could all change should his final appeal fail Friday, forcing his extradition to stand trial in the U.S.

The 37-year-old will appear in a London court for his last chance to fight a ruling forcing him to be extradited. If the request is declined, Sarao could be on his way to the U.S. within 28 days.

Sarao has been fighting extradition since April 2015 when he was arrested at the behest of American prosecutors at his home in Hounslow, London. The trader is accused by the U.S. of spoofing CME Group Inc.’s stock futures market over four years, including on May 6, 2010, when a trading frenzy created a flash that briefly wiped almost $1 trillion from the value of American equities. He allegedly made as much as $40 million in profits overall and faces 22 counts of fraud and market manipulation. read more »

IN AN UNPRECEDENTED EFFORT, OUR FIRM'S CLIENT DISCOVERED THE MANIPULATIVE ACTIVITY THAT WAS BROUGHT TO THE ATTENTION OF THE CFTC AND DOJ WHO SUBSEQUENTLY CHARGED MR. SARAO AND NOW SEEK HIS EXTRADITION

CFTC's Massad on Pound Flash Crash, Cross-Border Swaps - video

Tim Massad, chairman of the Commodity Futures Trading Commission, addresses last week's flash crash for the British pound and discusses the commission's work to seek reasonable checks and controls on trading firms and new rules for cross-border swaps. He speaks on "Bloomberg Markets." read more »

Deutsche Bank to pay $9.5 million penalty over research info: SEC

Deutsche Bank will pay a $9.5 million penalty to settle civil charges that it failed to properly safeguard material non-public information generated by its research analysts and publishing an improper research report, U.S. regulators said Wednesday.

The Securities and Exchange Commission said Deutsche Bank's (DBKGn.DE) securities unit encouraged its equity research analysts to communicate with customers and its own traders, and failed to implement policies to prevent the analysts from disclosing non-public reports on trading recommendations and changes in estimates. read more »

Biodiesel executives to plead in $64 million biofuels fraud scheme

Two men are expected to plead guilty in a U.S. court on Wednesday to fraud charges related to the U.S. government's controversial policy designed to boost use of renewable fuels, according to court documents.

The case comes in the last four weeks of a contentious U.S. presidential election campaign as the petroleum industry presses for reform or repeal of a program that has drawn criticism from Big Oil and environmentalists alike. The U.S. government is due to finalize next year's biofuel mandates by end-November.

Fred Witmer and Gary Jury, co-owners of Indiana biodiesel plant Triton Energy LLC, were expected to appear in court on Wednesday for allegedly defrauding the U.S. government's renewable fuel support program and a tax credit program from 2012-2015, documents from a U.S. district court in Indiana dated Sept. 19 show.

Witmer and Jury together owe more than $64 million for wire fraud and conspiracy in a scheme to fraudulently produce biofuels credits used to comply with the U.S. Renewable Fuel Standard read more »

 

 

U.S. Tools to Bankrupt Kleptocracy: The Foreign Corrupt Practices Act (FCPA)

The Foreign Corrupt Practices Act (FCPA) was passed in 1977 and prohibits U.S. persons from bribing foreign officials. The law was developed after an investigation by the U.S. Securities and Exchange Commission found that in order to secure business opportunities overseas, over 400 U.S. companies had paid hundreds of millions of dollars in bribes to foreign officials. The same investigation found that these firms were using “secret slush funds” and falsifying corporate records to disguise illicit payments to foreign officials (as well as illegal campaign contributions to U.S. politicians). read more »

Navy Federal to pay $23 million to misled customers

The television commercials for Navy Federal Credit Union are so effective and sincere, you’d never know it’s an operation marked by mendacity, sham and deceit.

Before you get suckered in by the spot with the cute little Pomeranian kissing the big gruff Marine, find out why the Consumer Financial Protection Bureau (CFPB) ordered Navy Federal to pay its victims $23 million and a $5.5 million penalty for shady debt collection activities.

In a consent order issued Tuesday, CFPB presented a litany of offenses by Navy Federal, including violating the law by blocking debit cards, ATM machines and online accounts, and making empty threats to contact clients’ military superiors about overdue debts. The credit union also intimidated customers with false threats to garnish wages. read more »

At Wells Fargo, Complaints About Fraudulent Accounts Since 2005

In 2005, the year John G. Stumpf became president of Wells Fargo, Julie Tishkoff, then an administrative assistant at the bank, wrote to the company’s human resources department about what she had seen: employees opening sham accounts, forging customer signatures and sending out unsolicited credit cards.

She kept complaining for four years, and she was not alone. For years similar or identical complaints from Wells Fargo workers flowed in to the bank’s internal ethics hotline, its human resources department, and individual managers and supervisors. In at least two cases in 2011, employees wrote letters directly to Mr. Stumpf — who became the company’s chief executive in 2007, and its board chairman in 2010 — to describe the illegal activities they had witnessed. read more »

AIG Attacks $30M Office Depot Coverage Suit

AIG Specialty Insurance Co. asked for judgment on the pleadings Friday on two claims in a $30 million suit over coverage for an underlying whistleblower action accusing Office Depot of overbilling governments for office and school supplies under its insurance policy for “wrongful acts,” saying there’s no duty to defend.

Office Depot sued AIG — then known as American International Specialty Lines Insurance Co. — in April 2015, saying it is entitled to $30 million in coverage for a a term the retailer says is defined broadly. The underlying lawsuit resulted in a $77.5 million deal in 2014, filings said. read more »

Pfizer Wants Out Of Suit Over Pain Patch Marketing

Pfizer Inc. has asked a Maryland federal judge to kill a case accusing the drug company and three of its subsidiaries of misbranding the Flector painkiller patch and paying kickbacks to doctors for prescriptions, saying a whistleblower case can't be based on publicly disclosed material unless the relator is an original source.

The pharmaceutical company said Thursday that a public-disclosure bar applies to relator Jerome Palmieri’s second amended complaint because, in including new facts gleaned from the public disclosures in the time since he first filed his initial suit, Palmieri's allegations were partly derived from the public domain. read more »