BofA to pay $15.5 million fines for causing 'mini-flash crashes'

Bank of America Corp agreed to pay a total of $15.5 million in fines to settle charges by U.S. regulators and exchanges that lapses in its Merrill Lynch unit's risk controls disrupted trading in 15 stocks, leading to "mini-flash crashes."

The U.S. Securities and Exchange Commission on Monday imposed a record $12.5 million fine for violating its market access rule, which requires brokerages that give customers direct market access to have risk controls designed to stop erroneous or excessively large trades.

Several exchanges, including the New York Stock Exchange, Nasdaq and BATS, announced a related $3 million fine against Bank of America. read more » 

SEC press release read more » 

Investors Blast Barclays' 2nd Circ. Case Use In Libor Row

A class of bank investors in New York federal court has blasted Barclays PLC’s bid to toss claims of interbank benchmark rate manipulation based on a recent Second Circuit decision in a terrorism case, saying the decision doesn't apply because the instant claims involve domestic misconduct.

Barclays had argued that the circuit's Aug. 31 ruling in Sokolow v. Palestine Liberation Organization proves that several banks’ alleged activities in New York or elsewhere domestically are insufficient to establish jurisdiction. The investors on Thursday told U.S. District Judge George B. Daniel that the Sokolow case’s only connection to the U.S. was the citizenship of terrorism victims abroad, while the instant claims involve a scheme that hurt investors in the U.S. read more »

Court slashes damages owed by former SocGen trader Jérôme Kerviel

Ex-banker must pay €1m instead of €4.9bn for losses suffered by the bank in 2008 through his reckless financial trades

A French court has cut the damages owed by the former Société Générale trader Jérôme Kerviel from €4.9bn (£4.2bn) to €1m.

The appeal court in Versailles ruled on Friday that Kerviel’s reckless trades were “partly responsible” for the huge losses suffered by the bank in 2008.

It also ruled, however, that “deficiencies” in the bank’s management control and security systems contributed to the size of the losses, which Kerviel would have had no realistic way of repaying. read more »

Whistle-Blower Suit Accuses Visiting Nurse Service of Fraud

The Visiting Nurse Service of New York, one of the largest nonprofit home health care agencies in the United States, likes to highlight a lineage going back to its founder, Lillian Wald, who began nursing the poorest immigrant New Yorkers in their homes in 1893.

Whatever its outcome, a federal whistle-blower lawsuit served on the agency on Thursday showcases how far today’s billion-dollar entity has come from its early days, when Ms. Wald’s visiting nurses charged a dime, or nothing at all, for their services.

The lawsuit, brought under federal and state False Claims Acts by a senior manager who worked at the agency for 16 years, charges that the Visiting Nurse Service of New York has systematically extracted hundreds of millions of dollars from Medicare and Medicaid through falsified and improper billings, while shortchanging needy patients of the care their doctors ordered. read more »

State Water Board bans 100 Shell Oil storage tank sites from cleanup fund

California’s State Water Resources Control Board has permanently banned 100 of Shell Oil Company’s underground storage tank claims, held by subsidiary Equilon Enterprises LLC, from the cleanup fund for underground tanks after the company allegedly claimed reimbursement through false or misleading statements.

Disqualifying these 100 claims could save the fund up to $150 million, significantly reducing Shell’s future reimbursements from the fund. In addition, the settlement agreement requires Shell to pay $20 million to the parties to the settlement agreement, including more than $11 million to the State Water Board to settle its claims and alleged False Claims Act violations.

Shell has paid an additional $8 million in settlement moneys to the state’s Office of the Attorney General and a whistleblower related to the alleged violations of the False Claims Act. read more »

U.S. judge tells CFTC he won't 'rubber stamp' Deutsche Bank deal

A federal judge has ordered the U.S. Commodity Futures Trading Commission to justify why a settlement with Deutsche Bank AG in a case over the bank's handling of swap reporting is fair and in the public interest.

U.S. District Judge William Pauley in Manhattan said in an order on Thursday that while regulatory agencies like the CFTC should be afforded deference in settling cases, a judge has a duty to not simply "rubber stamp" agreements. read more »