Financial Risk & Regulation

Ant Group’s derailed IPO reflects fintech’s uneven, often controversial evolution globally

By Financial market reg / November 23, 2020 /

At the eleventh hour, Chinese regulators on November 2 halted what was to be Ant Group’s record-setting $37 billion IPO – two days before it was to list on the Shanghai Stock Exchange. The offering was hugely oversubscribed, reflecting the intense investor interest. The IPO is still expected to go forward, but with a significantly…

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Financial Risk & Regulation

Goldman’s 1MDB scandal reflects highly skewed priorities and norms in tone at the top

By Financial market reg / October 29, 2020 /

After lengthy negotiations in the 1MDB matter, the U.S. Justice Department on October 22 announced a settlement in which Goldman Sachs will pay the highest amount on record in a foreign bribery case. All in, Goldman will have paid over $5 billion to regulators globally, and $2.9 billion in the U.S. actions, including disgorgement of…

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Does the Fed’s relentless grip on Wells Fargo’s balance sheet herald a new compliance regime?

By Financial market reg / August 30, 2020 /

Remedy will likely remain a one-off action The Federal Reserve’s limit on Wells Fargo’s balance sheet growth – now two and a half years and counting – has caused the bank to reconstitute its corporate governance structure and control functions in an earnest effort to meet the Fed’s conditions for removal. This unusual remedy has…

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Fed Takes Pathbreaking Action Against Wells Fargo

By Financial market reg / February 27, 2018 /

Order Enhances Role of Compliance and Other Control Functions at Nation’s Largest Banks Earlier this month the Federal Reserve Board issued a cease-and-desist order finding that, in light of “pervasive compliance and conduct failures” involving violations of consumer protection laws, Wells Fargo was not meeting its regulatory expectations. The controversy began, as discussed last year in this…

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Wells Fargo’s Foreign Exchange Operations Under Investigation for Over-Charging: Sound Familiar?

By Financial market reg / December 4, 2017 /

Much has been written on Wells Fargo’s continuing compliance woes, including by this blog last year on its unauthorized retail account opening scandal. The most recent compliance issue involves the bank’s foreign exchange (forex) desk, where it is accused of overcharging mid-market corporate clients. To be sure, overcharging for forex transactions has resulted in multibillion dollar fines…

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Trump Administration Continues Moderate Deregulatory Approach to Financial Markets with OTC Derivatives Proposals

By Financial market reg / October 31, 2017 /

Early this month the Trump Administration published its second of a four-part series of recommendations on changing the regulation of the finance industry, weighing in on how to improve regulation of the capital markets. Last Thursday it published its third report, on the asset management and insurance industries. I found the first report on banking regulation, published…

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Government Removes AIG’s “Systemically Important” Label: Reading the Tea Leaves

By Financial market reg / October 3, 2017 /

On September 29, the Financial Stability Oversight Council (FSOC) removed AIG’s designation as a systemically important financial institution (SIFI), relieving it of significant regulatory burdens, such as stress testing by the Fed and high capital requirements. FSOC is the chief regulator of systemic risk put in place by the Dodd-Frank Act. In its own words,…

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Equifax Hack Points to Possible Corporate Governance and Business Model Factors Leading to Weak Protections for Borrowers’ Personal Data

By Financial market reg / September 22, 2017 /

Equifax, one of the “big three” credit reporting firms, recently disclosed that social security numbers and other personal information of some 143 million mostly U.S. consumers had been compromised through hacking. This was not a sudden discovery of a serious security issue. Equifax had been alerted in March 2017 by Cisco of an online security flaw affecting…

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Fines Imposed by Capital Markets Agencies Drop Precipitously in First Half of ‘17: What Does This Signify?

By Financial market reg / August 22, 2017 /

As reported by The WSJ, fines imposed by the SEC, CFTC, and FINRA, the primary self-regulatory securities organization, all dropped dramatically in the Trump Administration’s first half-year compared with the first half of 2016. Total fines levied by these three agencies totaled nearly two-thirds less. Is this a mere coincidence with the new Administration’s initiatives to deregulate…

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Trump Bank Plan and CHOICE Act Offer Starkly Different Approaches: What Are the Implications for the Finance Compliance Industry?

By Financial market reg / July 14, 2017 /

At first glance, the recently released Treasury report on banking regulation (Report) adds to a confusing array of proposals to reform U.S. financial regulation. But on closer look, the Report is a relatively balanced assessment of the drawbacks of the existing regulatory framework and a path forward to remedy some of the law’s deficiencies. This is especially…

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