Equifax Lobbied To Kill Rule Protecting Victims Of Data Breaches

As Equifax acknowledges a massive security breach making the names, addresses, social security numbers and more available for fraud and disruption and it appears executives, including the CFO, sold stock before making this information public, it also comes out that Equifax lobbied to make it more difficult for consumers to get damages for exactly this kind of abuse.

Equifax’s lobbying group argued against the prohibition even as it acknowledged that a 2015 government study found “that credit reporting constituted one of the four largest product areas for class action relief” for consumers. Consumer groups countered the claims of CDIA and other rule opponents by saying the ability to file suit is necessary to protect Americans’ legal rights.

Source: Equifax Lobbied To Kill Rule Protecting Victims Of Data Breaches

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Wells Fargo’s Testimony Left Some Feeling Shortchanged – The New York Times

VEA Vice Chair Nell Minow is quoted in the Gretchen Morgenson New York Times story about the latest revelations of 1.4 million fraudulent accounts at Wells Fargo and the very unusual decision to pay separate lobbyists to represent the outside directors.

“What exactly are the shareholders getting out of this arrangement?” asked Nell Minow, a governance expert and vice chairwoman at ValueEdge Advisors, a firm that guides institutional shareholders on how to reduce risk in their portfolios. “And what disclosures about this are being made to shareholders?”I asked Wells Fargo those questions and whether the lobbying expenditures were covered by directors’ and officers’ insurance or by shareholders. Ms. Dunn, the spokeswoman, declined to comment.Ms. Minow said the practices were particularly notable because of Wells Fargo’s record.“It might be different if this was a different company,” she said. “But this board, even somewhat reconstituted, has lost so much credibility with investors that this expenditure for lobbyists looks like another in a series of very bad decisions.”

How Wells Fargo’s Cutthroat Corporate Culture Allegedly Drove Bankers to Fraud| Vanity Fair

An important analysis of the corrupt corporate culture that led to widespread fraud.

Hambek began to see things that shouldn’t have been happening: bankers persuading customers to take out large loans and then immediately repay part of them so that the banker could get credit for the bigger loan, for instance.

Source: How Wells Fargo’s Cutthroat Corporate Culture Allegedly Drove Bankers | Vanity Fair

Wells Fargo Accounts Probe Lets Board Off Easily But Proxy Advisory Firms Disagree – TheStreet

Ron Orol writes in The Street:

A report on Wells Fargo’s (WFC) fake-accounts scandal commissioned by the bank’s independent directors is far less critical of the company’s board than two studies issued last week by influential shareholder advisory firms. Instead, the 113-page analysis released Monday of how employees working to meet the San Francisco-based bank’s ambitious sales targets created more than 2 million unauthorized credit card and savings accounts over a five-year period lays much of the blame with former CEO John Stumpf and former community banking chief Carrie Tolstedt.

According to the report board “members believe they were misinformed” (note use of the passive voice, a telling indicator of a failure to accept responsibility). ISS sees it differently:

A report days earlier from Institutional Shareholder Services, the most influential shareholder advisory firm in the U.S., was less forgiving of the board. The firm recommended that investors vote against 12 of Wells Fargo’s 15 directors, including the four members who oversaw the investigation.

Members of two board subcommittees “failed over a number of years” to provide sufficient risk oversight at the scandal-plagued lender, the ISS report said, and the board overall failed to implement an “effective risk management oversight process in a timely way” that could have spared the bank’s reputation.

In our view, the compensation plan alone, rewarding the number of transactions instead of the quality of transactions, is sufficient reason to replace the entire board.

Source: Wells Fargo Accounts Probe Lets Board Off Much Easier Than Proxy Firms – TheStreet

Deutsche Bank Fined in Plan to Help Russians Launder $10 Billion – The New York Times

Deutsche Bank agreed on Monday to pay a $425 million fine to New York State’s main financial regulator to settle charges that it helped Russian investors launder as much as $10 billion through its branches in Moscow, London and New York.The punishment represents the latest regulatory black eye for Deutsche Bank, Germany’s largest. In the last decade, it has been implicated in several financial scandals, including pushing toxic mortgages on investors and manipulating London’s main lending rate for its own financial gain.

Deutsche Bank also agreed to pay 163 million pounds, or about $204 million, in civil penalties in a separate settlement with the Financial Conduct Authority of Britain in the matter, the bank and the regulator said on Tuesday.

In its investigation, the New York State Department of Financial Services found that between 2011 and 2015, a group of Deutsche Bank executives based mainly in Moscow and London helped wealthy Russians send money overseas by arranging stock trades that had no economic purpose other than disguising what the client was doing.

Citigroup to Pay $18 Million to Settle Charges It Overbilled Clients – WSJ

Citigroup Inc. will pay $18 million to settle Securities and Exchange Commission allegations that it overbilled investment advisory clients and lost client contracts…The SEC alleges that at least 60,000 clients were overcharged about $18 million in fees because Citigroup charged clients higher rates than the ones that were negotiated. The bank allegedly didn’t confirm that proper billing rates were entered into its computer systems over a 15-year period from 2000 to 2015.The regulator also says that Citigroup allegedly lost contracts for 83,000 advisory accounts opened between 1990 and 2012, and therefore couldn’t check whether clients were being billed at the negotiated rates.

Source: Citigroup to Pay $18 Million to Settle Charges It Overbilled Clients – WSJ

JPMorgan Chase to Pay $264 Million to Settle Foreign Bribery Case – The New York Times

Vying for lucrative deals in China, JPMorgan Chase deployed all the usual wining-and-dining tactics that big banks use to woo clients. JPMorgan, federal authorities now say, also had ways of sweetening the deal that crossed a legal line.

Federal prosecutors and regulators announced on Thursday a settlement of roughly $264 million with the bank and its Hong Kong subsidiary, accusing them of a vast foreign bribery scheme that may have spread to a number of Wall Street banks.

The case centered on JPMorgan’s hiring practices in China, where it hired the children of Chinese leaders to win business in the fast-growing nation. Some of the well-connected candidates were unqualified, the authorities said, and often “performed ancillary work” — telltale signs of hidden bribery.The case could lay the groundwork for the authorities to pursue penalties against other big banks as well. Banks including HSBC, Goldman Sachs and Deutsche Bank have hinted that they face investigations into their hiring practices in China as part of a larger sweep by the agency that began in 2013.

Source: JPMorgan Chase to Pay $264 Million to Settle Foreign Bribery Case – The New York Times