Royal Bank of Scotland Group Plc will pay $100 million to settle U.S. and New York regulators’ accusations that it violated sanctions programs targeting Iran, Sudan, Myanmar and Cuba.
RBS from 2002 to 2011 hid or failed to disclose information about the identities of sanctioned parties in 3,500 transactions valued at approximately $523 million, the New York Department of Financial Services said Dec. 11 in a statement. The U.S. Treasury Department’s Office of Foreign Assets Control and the Federal Reserve also were part of the settlement.
RBS said in a statement that it “deeply regrets” its oversight failures and pledged to strengthen compliance controls.
The bank cooperated with the investigation and has fired several employees who were involved in the wrongdoing, said Benjamin Lawsky, New York’s top banking regulator.
Britain’s largest state-owned lender said it would claw back three-quarters of the money from bonuses and awards already paid to employees after it was fined $612 million for manipulating rates in a separate case over Libor in February.
RBS, based in Edinburgh, said the U.S. Justice Department and Manhattan’s district attorney have concluded parallel investigations and aren’t taking any action against the bank.
JPMorgan Said in Talks to Pay $2 Billion to End Madoff Probes
JPMorgan Chase & Co. (JPM:US), the target of multiple U.S. Justice Department investigations, tentatively agreed to pay about $2 billion to resolve probes into whether it ignored warning signs about Bernard Madoff’s crimes, according to a person briefed on the matter.
The bank also assented to a deferred prosecution agreement, said the person, who asked not to be identified because the negotiations are private. In such deals, the government agrees not to prosecute for a specified period and charges are dismissed if the entity improves its programs and complies with the law. The talks are in their final stages and the accord could be announced before year-end, the person said.
Chief Executive Officer Jamie Dimon, 57, is seeking to resolve government probes that have beset JPMorgan, while overhauling internal controls to improve relations with regulators. Wall Street firms including JPMorgan have spent years fighting off claims brought on behalf of Madoff’s victims.
Manhattan U.S. Attorney Preet Bharara has been investigating how New York-based JPMorgan, the biggest U.S. bank, handled funds controlled by Madoff, whose multibillion-dollar fraud was the biggest Ponzi scheme in the nation’s history. James Margolin, chief public information officer for Bharara’s office, and Peter Donald, a spokesman for the Federal Bureau of Investigation, declined to comment.
Joseph Evangelisti, a JPMorgan spokesman, declined to comment.
Ex-Banker Ordered to Pay Insider Trading Gains to Investors
Former Morgan Stanley managing director Du Jun was ordered to pay HK$23.9 million ($3.1 million) to investors who sold him shares in 2007, for which he was jailed for trading with inside information.
The order by Hong Kong’s High Court yesterday benefits about 300 investors in Citic Resources Holdings Ltd. (1205), the Securities and Futures Commission said in a statement. The payments represent the profit they could have made had the inside information been known.
The restoration orders are the first by a Hong Kong court in an insider dealing case. Du, part of a team of Morgan Stanley (MS:US) bankers advising the Chinese commodities trader on acquiring oil-field assets, was convicted in 2009.
Du’s lawyer from Chong & Partners wasn’t immediately available for comment on yesterday’s ruling.
Insider trading was criminalized in the former British colony in 2003 and carries a maximum sentence of 10 years.
The case is Securities and Futures Commission v. Du Jun, HCMP1407/2007 in the Hong Kong Court of First Instance.
GLG to Pay $9 Million Over SEC Claims of Overvaluing Assets
GLG Partners Inc., the hedge-fund firm owned by Man Group Plc (EMG), agreed to pay $9 million to settle allegations by U.S. regulators that it overvalued assets in an emerging-markets fund.
GLG overvalued its stake in a coal-mining company from 2008 through 2010 due to internal-control failures, the Securities and Exchange Commission said in a statement yesterday. That resulted in inflated fees and the overstatement of assets under management in filings with the SEC, the regulator said.
U.K. Loses Fight at Top EU Court on Company-Tax Refund Curbs
The U.K. unlawfully curtailed the deadline for companies to claim refunds for wrongly paid tax, the European Union’s top court in Luxembourg ruled yesterday.
The EU Court of Justice said the U.K. violated EU law by depriving companies “without notice and retroactively” of the right to recover taxes that they shouldn’t have had to pay under a system ruled illegal more than a decade ago.
It’s the third time the U.K. courts sought the EU tribunal’s guidance in a challenge by a group of 20 companies, including British American Tobacco Plc (BATS), against the country’s advance corporation tax system, which ran from 1973 to 1999. While London-based Aegis Group Plc, which has since been taken over by Dentsu Inc. (4324), is the only company in that group to be affected by yesterday’s case, many other pending claims depend on yesterday’s decision, said Chris Morgan, head of tax policy at KPMG U.K.
Warren Says ‘Glass-Steagall 2.0’ Still Needed for Banks
U.S. Senator Elizabeth Warren, a Massachusetts Democrat, talked about banking industry regulation and entitlement programs.
Warren spoke with Stephanie Ruhle and Erik Schatzker on Bloomberg Television’s “Market Makers.”
For the video, click here.
Levitt Says Volcker Rule Still Puzzles Wall Street
Arthur Levitt, former Securities and Exchange Commission chairman, said the Volcker Rule is leading to “puzzlement and bewilderment” on Wall Street. Levitt talked with Tom Keene and Michael McKee on Bloomberg Radio’s “Bloomberg Surveillance.”
For the audio, click here.
Swiss Bank Chairmen Object to Tougher Rules, Bilanz Says
Swiss banks are more stable than banks abroad, UBS AG (UBSN) Chairman Axel Weber and Credit Suisse Group AG (CSGN) Chairman Urs Rohner said in a preview of a joint interview to be published in Bilanz magazine today.
“I am confident that in 2015 no tightening of the rules will be necessary,” said Rohner. It doesn’t make sense to speculate before the agreed appraisal of Swiss banking rules in 2015, according to the interview of Weber and Rohner.
The so-called Swiss finish on liquidity and capital requirements will be “considerably higher” than elsewhere, Weber said.
Swiss Finance Minister Eveline Widmer-Schlumpf said Nov. 3 that lenders including UBS and Credit Suisse may have to pull out of investment banking as she called for their leverage ratios to be raised.
“Banks would have to consider whether to carry on with investment banking or focus even more on asset management,” Widmer-Schlumpf was quoted as saying in an interview with Schweiz am Sonntag at the time. Banks “must be organized in such a way that the state isn’t ultimately held liable.”
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