Bill to kill SEC, DOL fiduciary rules heads for house vote

The bill that industry trade groups feared could stop the Securities and Exchange Commission and Department of Labor’s fiduciary rules in their tracks is coming up for a Tuesday vote on the House floor — and at least one industry official expects it to pass. The Retail Investor Protection Act, H.R. 2374, introduced by Rep. Ann Wagner, R-Mo., passed the House Financial Services Committee by a 44-13 vote in June and would require that the DOL wait to repropose its fiduciary rule until 60 days after the SEC issues its fiduciary proposal under Section 913 of Dodd-Frank. More on LifeHealthPro [...]

JPMorgan deal should be model for future settlements

The government’s legal pursuit of JPMorgan Chase & Co. has struck some on Wall Street as unfair. CEO Jamie Dimon recently reached a tentative deal with the Justice Department to put an end to some of the embattled financial firm’s legal troubles, a settlement worth $13 billion in fines and consumer relief; it’s the biggest settlement ever announced involving a single company. In fact, this was a just outcome, and it should be a new model for holding financial institutions accountable in probes related to bad mortgages and the 2008 financial crisis. JPMorgan Chase is accused of selling mortgage securities that it knew were faulty, although it inherited many of the alleged abuses in its 2008 acquisitions of Washington Mutual and Bear Stearns. JPMorgan Chase’s supporters argue that it only purchased the two banks under duress, when pressed by government officials to do so in an effort to prop up the banking system in the early days of the credit crisis. That’s not entirely true, however. JPMorgan Chase had sought to purchase Washington Mutual several months before the crisis struck. Plus, even after paying the government settlement, JPMorgan Chase will come out way ahead on the deal. Washington Mutual had a $40 billion market capitalization when JPMorgan Chase purchased it for $1.9 billion, and its mortgage business’s performance has outpaced expectations ever since. No one will pity Dimon and his shareholders the $750 million Washington Mutual earned the bank last quarter. More in the Boston Globe [...]

Washington Post report finds fraud, embezzlement at more than 1,000 non-profits

A startling report in today’s Washington Post, the newspaper says more than a thousand of the nation’s non-profits have each acknowledged losses of a quarter million dollars or more, because of theft, investment fraud, embezzlement or other unauthorized use of funds. The report is based on tax filings by the non-profits during the past five years. Each non-profit disclosed the problem by checking a box on the tax form indicating what’s called a significant diversion of funds. For more about all this, we’re joined from Washington by Joe Stevens, he’s an investigative reporter for the Post and the co-author of today’s piece. So your article says just the ten largest losses you’ve identified add up to more than five hundred million dollars, give us some examples. More on PBS NewsHour [...]

The Madoff Chickens Are Coming Home To Roost At JP Morgan Chase

It looks like JP Morgan Chase will finally have to pay up and maybe confess to its sloppy, maybe slippery relationship with the best known criminal of the 21st century so far, one Bernie Madoff. In 2011 I first wrote about highly questionable transactions in the apparent laundering of money between Madoff and another wealthy client of the bank, real estate developer Norman Levy. According to court documents filed at the time between $76 billion and $100 billion (that’s right, “billion” not “million”) were shifted, one might guess laundered from Madoff’s business account to Levy’s account, and then subsequently moved back into the Madoff account without a single inquiry from bank officials so far as we know. More in Forbes [...]

COMPLY-Choices for recouping unpaid FINRA awards seen as flawed

A range of solutions has emerged for dealing with a growing problem of brokerages that skip out on paying arbitration awards they owe to investors. Each, however, is far from perfect. The Financial Industry Regulatory Authority (FINRA), Wall Street’s self-funded regulator, is evaluating whether it needs to address an issue that some investor advocates say is getting out of hand: brokerages that lose securities arbitration cases against investors and then close up shop, leaving those investors unable to collect. More on Reuters [...]

Ex-Madoff Employee Tells Jury of ‘Cut And Paste’ Trades

An ex-employee of Bernard Madoff on trial for allegedly aiding his $17 billion fraud oversaw backdating of trades for account statements that sometimes featured “cut and paste” data, a former assistant told a jury. Annette Bongiorno, who worked for Madoff for 40 years, would request trade dates and prices as much as a year old be used on account statements to reach pre-determined profit goals for customers, and cut out trade data to be taped onto some statements, Winnie Jackson, the defendant’s former assistant, testified yesterday in federal court in Manhattan. More on Bloomberg [...]

U.S. SEC cracks down on advisers over repeated compliance failures

Three investment advisers and their owners agreed on Wednesday to settle civil charges that they had repeatedly failed to address compliance problems, in a case that stems from a broad crackdown by U.S. regulators into compliance failures by asset managers. The U.S. Securities and Exchange Commission said that Modern Portfolio Management Inc., Equitas Capital Advisers LLC, and Equitas Partners LLC would each pay financial penalties and hire compliance consultants to resolve the charges. More on Reuters [...]

JPMorgan Faces Possible Penalty in Madoff Case

Federal authorities are preparing to take action in a criminal investigation of JPMorgan Chase, suspecting that the bank turned a blind eye to Bernard L. Madoff’s Ponzi scheme. The Madoff case, coming on the heels of a tentative $13 billion settlement over JPMorgan’s mortgage practices, poses another major threat to the reputation of the nation’s largest bank. More in the New York Times [...]

SEC introduces, unanimously approves crowdfunding proposals

The Securities and Exchange Commission on Wednesday formally proposed new rules that would allow entrepreneurs to raise capital from anyone in the country through online investment portals. The new rules, which were approved unanimously by the five-member commission and now enter a three-month comment period, would give companies the green light to start widely selling securities through what are known as crowdfunding portals. Right now, entrepreneurs can offer equity deals only to accredited investors through those marketplaces. More in the Washington Post [...]

Delamaide: Time to hold JPMorgan to account

Which of these statements is true: Jamie Dimon’s company has agreed to pay the largest regulatory settlement ever by a single firm. Jamie Dimon is the best bank chief executive in the world. Jamie Dimon can walk on water. If your answer was all three, then you can join the ranks of Wall Street analysts and financial pundits who claim that Dimon is the best possible chief executive of the best bank in the country even after it has paid tens of billions of dollars in fines and legal expenses on investigations into more than a dozen of its businesses. More in USA Today [...]