“The Justice Department plans to try and force four major banks to plead guilty to criminal antitrust charges for alleged collusion by traders in foreign-currency markets, people familiar with the discussions said.” [WSJ]
Posts Tagged ‘banks’
Banking and finance roundup
- Calvin’s refuge: how Swiss banking confidentiality undermined state despotism [Matt Welch, who also discusses how the gruesome FATCA law is proving to be the first component of an multilateral effort by OECD governments to curtail account privacy]
- Dodd-Frank compliance costs and the rapid decline of community banks [Marshall Lux and Robert Greene/Kennedy School, Carrie Sheffield, Jeff Sovern with a scoffing view; WSJ]
- “The IRS seized $242 million based on suspected structuring in more than 2,500 cases from 2005 to 2012.” [Jacob Sullum, new Institute for Justice report (PDF) by Dick Carpenter II and Larry Salzman and summary] More: new structuring case against Dubuque, Iowa widow raises question of whether feds have really followed through on promise not to press structuring charges where income is otherwise legal [AP/WHEC]
- “House Investigators: DOJ Forced Banks to Donate to Left-Wing Groups” [Joel Gehrke, NRO]
- “FDIC retreats on Operation Choke Point?” [Todd Zywicki] Rep. Luetkemeyer likely to keep up the pressure on regulators [Kevin Funnell]
- “Fed Officials Accused of Perjury in AIG Bailout Trial” [Lawrence Cunningham, Concurring Opinions]
- “Standard & Poor’s Settlement Shows Futility Of Fighting Government Policy” [Daniel Fisher, earlier]
Banking and finance roundup
- House Oversight Committee report finds evidence FDIC used Operation Choke Point to strangle access to banking for lawful but disliked businesses [St. Louis Post-Dispatch, Bloomberg, report, Kevin Funnell, HalfWheel (cigar shops), Pete Kasperowicz, The Blaze (guns), Joe Adler/American Banker (critical views)]
- “Fallout for the S.E.C. and the Justice Dept. From the Insider Trading Ruling” [Peter Henning, NYT DealBook, on challenges to previous cases; earlier]
- Congress finally trims Dodd-Frank, with a nose hair clipper. Imagine what Sen. Warren will say if it takes up a scalpel or axe [Michael Greve; but see A. Barton Hinkle defending Warren’s position; Matt Levine (“not worth caring about”)]
- Did tax policy set out to make life tough for American expatriates, or does it just seem that way? [Neil Gandal, WSJ on FATCA, FBAR, etc.]
- “Like other federal agencies, the SEC has long been good at publicizing its initial accusations of wrongdoing …not so good at letting the public know when those accusations turn out to be unfounded or an overreach” [Russell Ryan via Bainbridge, more on SEC press releases on enforcement actions]
- A market with next to no entry: “If Primary Bank, Mr. Greiner’s proposed firm, wins approval, it would be only the second new bank the FDIC has cleared in the U.S. since 2010.” [WSJ]
- “The only people who benefit from shareholder litigation over M&A deals are lawyers. Period. End of discussion.” [Stephen Bainbridge; related, Steve Bradford via Bainbridge (“Delaware’ entire fairness standard morphs into a tax on deals for the benefit of plaintiff lawyers”), earlier here, etc.]
“Operation Choke Point Hits Ammunition Company in Maryland”
“Fox Business Network’s John Stossel interviews US Consumer Coalition’s Brian Wise and Kat O’Connor, owner of TomKat Ammunition LLC, on the Justice Department’s Operation Choke Point.” The Gaithersburg-based ammo seller was cut off from credit card processing services and suspects that the federal Choke Point program was the reason. [cross-posted from Free State Notes; earlier on Operation Choke Point].
P.S. There are signs that House Republicans may move to rein in Operation Check Point. Let’s hope so. [USA Today/Fond du Lac Reporter; HalfWheel (cigar news and reviews)]
Banking and finance roundup
- “How Operation Choke Point Hurts the Unbanked” [former FDIC chairman William Isaac, American Banker]
- A nation of snitches: “U.S. rules would expand white collar crime informers” [Reuters]
- Courts should stop giving deference to agency interpretations of criminal law: “Justice Scalia’s shot across the SEC’s bow re insider trading” [Bainbridge] Judge Rakoff criticizes SEC for bringing so many enforcement proceedings to in-house adjudicators [Reuters, earlier]
- Monitor envy: “The biggest U.S. banks have 100 or more on-site examiners from an array of regulators” and now New York’s financial regulator wants to get into the act [WSJ]
- Seventh Circuit finds Bank of America entitled to ask loan applicants about expected continuing entitlement to disability benefits, but in the mean time bank agrees in DoJ settlement to cease such inquiries [Easterbrook opinion in Wigginton v. Bank of America, see last page]
- Two SEC commissioners warn that campaigned-for “fair fund” to compensate investors in CR Intrinsic inside trading case “likely to benefit only class-action attorneys and the fund’s administrators” [Daniel Gallagher and Michael Piwowar, WSJ]
- “U.S. veterans sue [major European] banks, claim they should pay for Iraq attacks” [Alison Frankel, Reuters]
News from Operation Choke Point
Throwing its Chicago regional director under the bus, the Federal Deposit Insurance Corporation (FDIC) has disavowed a February 2013 letter in which the director had told an Ohio bank, “It is our view that payday loans are costly, and offer limited utility for consumers, as compared to traditional loan products … Consequently, we have generally found that activities related to payday lending are unacceptable for an insured depository institution.” Critics have charged that the federal government has not been forthright about the extent to which it discouraged banks from providing services to lawful but frowned-on businesses in such lines as payday lending and ammunition sales. [Kevin Funnell, earlier on Operation Choke Point]
“The Ill-Defined Crime of ‘Structuring’”
Cato’s Caleb Brown interviews Larry Salzman of the Institute for Justice in this podcast about the federal practice of seizing and keeping small businesses’ bank accounts when it claims to find a pattern of deposits below the $10,000 reporting threshold. Earlier here, etc.
“Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required”
“’How can this happen?’ [Arnolds Park, Iowa restaurant owner Carole] Hinders said in a recent interview. ‘Who takes your money before they prove that you’ve done anything wrong with it?’
The federal government does.”
For years I’ve been writing about the injustice of federal deposit-structuring law, from the South Mountain Creamery case in Maryland on up, and more recently the Institute for Justice has embraced the issue. Now that the New York Times has put a reporter on the case [Shaila Dewan, Oct. 25], the IRS says it will roll back its enforcement of the law to cases where there is other criminality — an excellent first step, although only a first step, since other federal agencies can also generate cases that result in seizures and prosecutions under structuring law.
As always, if you’re a small merchant fearful of this law, don’t go to your bank expecting helpful advice:
In May 2012, the bank branch Ms. Hinders used was acquired by Northwest Banker. JoLynn Van Steenwyk, the fraud and security manager for Northwest, said she could not discuss individual clients, but explained that the bank did not have access to past account histories after it acquired Ms. Hinders’s branch.
Banks are not permitted to advise customers that their deposit habits may be illegal or educate them about structuring unless they ask, in which case they are given a federal pamphlet, Ms. Van Steenwyk said. “We’re not allowed to tell them anything,” she said.
Banking and finance roundup
- Corporate charter revocation, a goofy cause, naturally enjoys support of RFK Jr. [Bainbridge, more]
- Jury finds Arab Bank liable in terror finance lawsuit [Daniel Fisher first, second, third posts; Kevin Funnell first, second posts]
- “And since most cases do settle, the scope of the law is actually being determined by the DOJ rather than the courts.” [Thomas Vartanian, American Banker] “Lloyds settlement latest example of the shadow regulatory state” [James Copland, City A.M.]
- Gideon Kanner is covering the AIG trial that just started;
- Do the benefits of mandatory investor disclosures outweigh the costs? [Elisabeth de Fontenay, Regulation (PDF) via Matthew Feeney]
- Albany lawprofs on board with scheme to expropriate underwater mortgages through eminent domain and compensate just 60 percent of face value [SSRN, earlier]
- Transparency in whistleblowing: we’ll see what the SEC wants us to see [Daniel Fisher]
Banking and finance roundup
- SEC regs suppress small business capital formation and that’s a shame [Commissioner Daniel Gallagher via Bainbridge]
- Federally sponsored gripe site for financial institutions not likely to end well [Hester Peirce and Vera Soliman, Mercatus via Kevin Funnell]
- Alleged terror payments “routed through” sued bank also went through major New York banks, which shouldn’t be surprising [Fisher]
- Did mid-level managers in securitized mortgage finance know they were in a housing bubble but cynically go ahead? Evidence against [Cheng et al., American Economic Review via MR]
- Shareholder litigation: “New ‘loser pays’ standard could curb abusive lawsuits” [Examiner editorial] Delaware take note: corporate by-law changes that cut off fee-seeking opportunism deserve acclaim [Keith Paul Bishop via Bainbridge]
- NYT was hot on “Goldman Sachs manipulated aluminum market” allegations but judge wasn’t [Reuters, July 2013 NYT]
- CFPB might shrug off discrimination and retaliation charges, but many of the firms it regulates could not afford to [Hans Bader]