Category Archives: Big Banks

Corporate Criminals 8/16/15

Corporate CriminalsI’m not sure how big the crime has to be for white collar criminals to get jail time. This mockery of the law known as deferred prosecutions has to reach the tipping point some time. When corporations budget huge funds in anticipation of future criminal liability, it pretty much guarantees they’ll do it again. And again. Oh, and get tax breaks for their bad behavior as well. Anyway… here are the latest headlines from Corporate Crime Reporter:

dollar signEdward Jones Neither Admits Nor Denies, to Pay $20 Million for Overcharging Customers

An SEC investigation found that instead of offering bonds to customers at the initial offering price, Edward Jones and Stina R. Wishman took new bonds into Edward Jones’ own inventory and improperly offered them to customers at higher prices.

In other instances, Edward Jones entirely refrained from offering the bonds to its customers until after trading commenced in the secondary market, and then offered the bonds at prices higher than the initial offering prices.

The firm’s customers paid at least $4.6 million more than they should have for new bonds.  In one instance, the misconduct resulted in an adverse federal tax determination for an issuer and put it at risk of losing valuable federal tax subsidies.

Edward Jones agreed to settle the case by paying more than $20 million, which includes nearly $5.2 million in disgorgement and prejudgment interest that will be distributed to current and former customers who were overcharged for the bonds.

Wishman agreed to pay $15,000 and will be barred from working in the securities industry for at least two years.

Can you say “Slap on the wrist?

dollar signCitizens Bank to Pay $18.5 Million for Failing to Credit Full Deposit Amounts

Citizens Bank will pay $18.5 million for failing to credit consumers the full amounts of their deposited funds.

The bank kept money from deposit discrepancies when receipts did not match actual money transferred.

The CFPB investigation found that from January 1, 2008 to November 30, 2013, Citizens Bank violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition on unfair and deceptive practices by failing to properly credit consumers’ checking and savings accounts. In cases where the bank’s scanner misread either the deposit slip or the checks, or if the total on the deposit slip did not equal the total of the actual checks, Citizens Bank did not take action to fix the mistake if it fell below a certain dollar amount.

Specifically, Citizens Bank failed to credit consumers the full amount of their deposits: Citizens Bank frequently did not give consumers full credit for their deposits when the amount scanned on the deposit slip was less than the amount of the checks and cash deposited. The bank credited the consumer’s account with what was read on the deposit slip, not the actual sum of money the consumer transferred into the bank.

The CFPB would be the Consumer Financial Protection Bureau, the brainchild of Senator Elizabeth Warren (D-Ma). Due to its being an agency that protects consumers against corporate malfeasance, Republicans naturally want to dismantle it.

dollar signFormer SAP Exec Pleads Guilty to FCPA Violations

A former regional director of SAP International Inc. pled guilty today to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) by participating in a scheme to bribe Panamanian officials to secure the award of government technology contracts for SAP.

Vicente Eduardo Garcia, 65, of Miami, pled guilty to a one-count information charging him with conspiracy to violate the anti-bribery provisions of the FCPA.

In late 2009, SAP sought a multi-million dollar contract to provide a Panamanian state agency with a technology upgrade package.

In connection with his guilty plea, Garcia admitted that, to secure the contract, he conspired with others, including advisors and consultants to SAP, to pay bribes to two Panamanian government officials, as well as to the agent of a third government official — with the understanding that at least a portion of the money would be transmitted to the third official.  The conspirators used sham contracts and false invoices to disguise the true nature of the bribes.

Garcia admitted that he believed paying such bribes was necessary to secure both the initial contract and additional Panamanian government contracts.

Can’t wait to see the “sentence” this guy gets.

martha stewart

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Corporate Criminals 5/21/2015

Corporate Criminals


This edition of Corporate Criminals begins with some players who’ve already been in trouble plenty of times, which leads to the question: Why aren’t Boards and shareholders throwing them out on their asses? Headlines via Corporate Crime Reporter. Here we go again:

Five Major Banks to Plead Guilty

Five major banks – Citicorp, JPMorgan Chase & Co., Barclays PLC, The Royal Bank of Scotland plc and UBS AG – will plead guilty to felony charges.

Citicorp, JPMorgan Chase & Co., Barclays PLC, and The Royal Bank of Scotland plc will plead guilty to conspiring to manipulate the price of U.S. dollars and euros exchanged in the foreign currency exchange (FX) spot market and the banks have agreed to pay criminal fines totaling more than $2.5 billion.

UBS AG will plead guilty to manipulating the London Interbank Offered Rate (LIBOR) and other benchmark interest rates and pay a $203 million criminal penalty, after breaching its December 2012 non-prosecution agreement resolving the LIBOR investigation.

In conjunction with previously announced settlements with regulatory agencies in the United States and abroad, including the Office of the Comptroller of the Currency (OCC) and the Swiss Financial Market Supervisory Authority (FINMA), today’s resolutions bring the total fines and penalties paid by these five banks for their conduct in the FX spot market to nearly $9 billion.

Gosh, who couldn’t have anticipated this happening? In their post, JPMorgan Chase: Corporate Rap Sheet, the Corporate Research Project calls the company: “… a prime symbol of financial sector misconduct and reckless behavior…”; personally, I doubt there’s anything reckless about their dealings. I think JPMorgan Chase has decided they will keep doing business as usual as long as they’re only punished with measly fines. And they are measly, all things considered. Two things have to start happening with big bank crime:

  1. People Have To Start Going To Jail
  2. No Part of Any Fines Paid Should Ever Be Tax Deductible

Duke Energy Apologizes for Environmental Crimes, Will Pay $102 Million

Three subsidiaries of North Carolina-based Duke Energy Corporation, the largest utility in the United States, pled guilty to nine criminal violations of the Clean Water Act at several of its North Carolina facilities.

The company and will pay a $68 million criminal fine and spend $34 million on environmental projects and land conservation to benefit rivers and wetlands in North Carolina and Virginia.

But hey, they apologized, right?

The Consumer Financial Protection Bureau (CFPB) filed a complaint and proposed consent order in federal court against PayPal, Inc. for illegally signing up consumers for its online credit product, PayPal Credit, formerly known as Bill Me Later.

The CFPB alleges that PayPal deceptively advertised promotional benefits that it failed to honor, signed consumers up for credit without their permission, made them use PayPal Credit instead of their preferred payment method, and then mishandled billing disputes.


martha stewart


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Corporate Crime Report For 2/4/15

Corporate Criminals

Corporate Crime Headlines From Corporate Crime Reporter:

FCC to Fine AT&T $640,000: The Federal Communications Commission intends to fine AT&T Inc. $640,000 for allegedly operating numerous wireless stations throughout the United States without authorization over a multi-year period and failing to provide required license modification notices to the FCC.

FinCEN Fines Oppenheimer $20 Million: The Financial Crimes Enforcement Network (FinCEN) assessed a $20 million civil money penalty against Oppenheimer & Co., Inc., for willfully violating the Bank Secrecy Act (BSA).

Oppenheimer, a securities broker-dealer in New York, admitted that it failed to establish and implement an adequate anti-money laundering program, failed to conduct adequate due diligence on a foreign correspondent account, and failed to comply with requirements under Section 311 of the USA PATRIOT Act.

FinCEN and the New York Stock Exchange assessed a civil money penalty of $2.8 million against Oppenheimer in 2005 for similar violations.
In 2013, the Financial Industry Regulatory Authority fined the firm $1.4 million for violations of securities laws and anti-money laundering failures.

Community Health Systems Hospitals to Pay $75 Million to Settle False Claims Act Charge: Community Health Systems Professional Services Corporation (CHSPSC) and three affiliated New Mexico hospitals (CHS) will pay the United States $75 million to settle allegations that they violated the False Claims Act by making illegal donations to county governments which were used to fund the state share of Medicaid payments to the hospitals.

CHSPSC is based in Franklin, Tennessee, and manages more than 200 affiliated hospitals in 29 states.

“Congress expressly intended that states and counties use their own money when seeking federal matching funds in order to encourage them to join the federal government in ensuring that Medicaid funds are spent on the needs of beneficiaries,” said Justice Department Civil Division chief Joyce R. Branda. “When private hospitals violate the rules against hospital donations funding the state share, that important protection of the Medicaid program is destroyed.”

Standard & Poor’s Financial Services and its parent McGraw Hill Financial Inc. will pay $1.375 billion: to settle charges S&P engaged in a scheme to defraud investors in structured financial products known as Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDOs).

The agreement resolves the department’s 2013 lawsuit against S&P, along with the suits of 19 states and the District of Columbia.



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Corporate Criminals Update: January 21, 2015

Corporate Criminals

Corporate Criminals

Today’s corporate criminals and malfeasance courtesy of Corporate Crime Reporter:


dollar signThe Financial Industry Regulatory Authority (FINRA) has fined Fidelity Investments $350,000 for overcharging more than 20,000 customers a total of $2.4 million.

FINRA charged that “Fidelity did not have reasonable supervisory systems or procedures to ensure that customers were charged accurate fees for accounts managed by third-party investment advisors, which resulted in erroneous and duplicate fees charged in certain customer accounts utilizing asset-based pricing, duplicate fees in certain customer accounts managed by third-party wrap providers, and erroneous markups on certain fixed income investments.”

According to the settlement with FINRA, in one program, Fidelity “did not accurately reflect the fees charged to customers.”


dollar signGeorge Landegger, the chairman of an international pulp mill company, Parsons & Whittemore, pled guilty to willfully failing to file reports of foreign bank and financial accounts (FBARs) with the IRS regarding secret Swiss bank accounts that he maintained and controlled at a Swiss private bank headquartered in Zurich, Switzerland.

Landegger maintained his undeclared accounts at the Swiss Bank from at least the early 2000s up until 2010.

During that time, Landegger’s undeclared assets reached a high value of over $8.4 million.


dollar signMore than 1,000 cities, counties, school districts and other government entities in California – including Los Angeles and Santa Clara County – will share in a $68.5 million settlement paid by Office Depot for allegedly overcharging them for office supplies.

The California entities participated in the US Communities purchasing program, which was set up to allow state and local governments across the country to leverage their combined purchasing power by appointing a single public entity to negotiate a contract with a vendor on behalf of all US Communities members.

Participants in the contract are guaranteed to receive Office Depot’s best available prices for government purchasers, according to Sherwin’s complaint.
But Office Depot allegedly gave Los Angeles, Santa Clara and the other California entities that are part of the settlement a lower discount rate than other government entities were given.


martha stewart


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