Tag: US Bank

Citi Allegedly Helped Mexico Launder Money in New Scandal

October 2, 2024 / Frank Nez / 3 Comments

Citi allegedly helped Mexico launder money after the Fed dropped an enforcement action after the bank cut ties from the country.

The Federal Reserve revealed on Tuesday that it had terminated a 2013 enforcement action it filed against Citigroup, over “shortcomings in its capacity to police money laundering.”

The enforcement action, which did not carry a fine, was filed against the bank and its Banamex subsidiary over deficiencies in the firms’ anti-money laundering programs, and ordered the firm to strengthen its efforts and update regulators on its progress.

Banamex is the second-largest bank in Mexico.

The Banamex Financial Group was purchased by Citigroup in August 2001 for $12.5 billion USD.

However, Citi announced in late 2023 that it planned to split Banamex from the rest of the bank in the second half of 2024.

Reuters reports that a Citi spokesperson declined to comment on the Fed action.

This has led investors to believe that the Fed bailed Citi in an agreement to cut its ties to Mexico.

What do you think is happening here?

Leave your thoughts below.

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Also Read: Illegal Short Sellers Will Now Face Life Sentence In Prison

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Market News Today - Citi Allegedly Helped Mexico Launder Money in New Scandal. — Market News Today – Citi Allegedly Helped Mexico Launder Money in New Scandal.

TD Bank now gets caught with illegal market manipulation and has agreed to pay over $20 million under a deal with the SEC.

Investors are calling it ‘pay to play’.

The U.S. broker-dealer unit of Toronto Dominion Bank (TD Securities USA) has agreed to pay more than $20 million to resolve allegations of manipulating the U.S. Treasuries market.

This settlement comes as part of an agreement with U.S. authorities, concluding a lengthy investigation, per Reuters.

In a court filing on Monday, TD Securities admitted to engaging in spoofing practices within the U.S. Treasuries market as part of a deal with the U.S. Justice Department.

The firm also settled related civil charges with the Securities and Exchange Commission (SEC).

Additionally, the bank faced charges for not properly supervising its former head of the U.S. Treasuries trading desk.

From April 2018 to May 2019, a former employee manipulated the U.S. Treasury cash securities market by placing orders he had no intention of executing, a tactic known as “spoofing.”

This practice aims to create a misleading impression of market demand.

U.S. regulators have taken a strong stance against spoofing, which is designed to distort market activity.

However, the criminal bank has now been let go off what investors deem as ‘easily’.

Under the terms of TD’s agreement, the Justice Department will refrain from prosecuting the firm as long as it adheres to the three-year agreement and implements significant compliance improvements.

The DOJ decided not to appoint a third-party monitor for compliance, based on the company’s efforts to address the issues.

As part of the settlement, TD Securities will pay a $12.5 million criminal penalty related to civil investigations by the SEC and the Financial Industry Regulatory Authority (FINRA).

This amount is in addition to an approximately $9.5 million criminal penalty outlined in the agreement.

The bank will also compensate victims with $4.7 million and forfeit $1.4 million.

This settlement comes at a time when the Canadian bank is reportedly on the verge of pleading guilty to separate charges concerning its U.S. retail bank’s alleged failure to prevent money laundering linked to Chinese crime groups and illegal fentanyl sales, as reported by the Wall Street Journal last week.

Also Read: TD Bank Customers Now Say They Cannot Access Their Money

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Visa Is Now Draining A Whopping $7 Billion From Customers

September 29, 2024 / Frank Nez / 2 Comments

Visa is now draining a whopping $7 billion from customers in transactions fee, which has led to an investigation from the Justice Dept.

The U.S. Department of Justice (DOJ) has initiated a lawsuit against Visa, claiming the company has unlawfully maintained a monopoly that suppresses smaller competitors in the payments market.

In a press release, the DOJ announced its civil antitrust action, accusing Visa of unfairly dominating the debit network sector.

Antitrust laws are designed to protect consumers by curbing anti-competitive practices of dominant firms.

The DOJ argues that Visa’s monopoly is stifling competition and hindering the development of new technologies in the payments space.

It claims that Visa’s ability to shield itself from rivals has led to the company processing over 60% of debit card transactions in the United States, allowing it to collect more than $7 billion in fees annually.

According to the complaint, the fees imposed by Visa are ultimately passed on to consumers through higher prices or reduced service quality.

This means that Visa’s alleged illegal practices impact not just specific products, but the overall cost of goods and services.

The Justice Department further contends that Visa’s anti-competitive behavior has resulted in significant financial burdens for consumers, merchants, and the economy at large.

The lawsuit aims to restore competition in this critical market for the benefit of the American public.

Visa’s general counsel, Julie Rottenberg, has stated that the lawsuit lacks merit and that the company will defend itself vigorously in court.

She emphasized that businesses and consumers choose Visa for its secure and reliable network, exceptional fraud protection, and the overall value it provides.

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Also Read: TD Bank CEO Is Now Retiring Following Money Laundering Investigation

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Market News Today - Visa Is Now Draining A Whopping $7 Billion From Customers. — Market News Today – Visa Is Now Draining A Whopping $7 Billion From Customers.

US banks now hold 7x more unrealized losses than during the 2008 financial crisis, according to fresh data from the FDIC.

The FDIC reported that unrealized losses on securities totaled a whopping $516.5 billion, which was an increase of $38.9 billion from the previous quarter.

This increase was largely due to higher losses on residential mortgage-backed securities, which were affected by rising mortgage rates, per the report.

FDIC-insured institutions reported a net loss of $32.1 billion in the fourth quarter of 2008 ($12.1 billion during the 1st) — demonstrating just how overleveraged institutions have gotten today.

The banking industry also reported total assets of $24.0 trillion in the first quarter 2024, an increase of $291.2 billion (1.2 percent) from fourth quarter 2023.

The quarterly increase was mainly due to higher balances in trading accounts (up $176.1 billion, or 23.2 percent), cash and balances due from depository institutions (up $79.0 billion, or 2.8 percent), and securities (up $39.9 billion, or 0.7 percent).

Alarmingly, the number of banks on the FDIC’s “Problem Bank List” increased from 52 to 63.

Total assets held by problem banks also rose $15.8 billion to $82.1 billion.

Problem banks represent 1.4 percent of total banks, which is within the normal range for non-crisis periods of 1 to 2 percent of all banks, per the FDIC.

However, the growing number of problem banks and unrealized losses points towards a shaky financial system.

In 2008, the economic consequences forced people to foreclose their homes, jobs were lost, and retirement savings were completely wiped out.

The social implications the collapse created put families on the street and triggered severe community strain.

The crisis affected economies worldwide, leading to global slowdowns and increased economic inequality in many regions.

Industry experts such as Robert Kiyosaki and Grant Cardone have warned that the people are going to experience a system crash unlike anything ever seen before.

But I’m curious to know what you think — leave your thoughts below.

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Also Read: Wells Fargo Is Now Accused of Overcharging Customers in Lawsuit

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The SEC Now Penalizes Two Massive Investment Banks

September 27, 2024 / Frank Nez / 2 Comments

The SEC now penalizes two massive investment banks recovering more than $6 million of excess fees tied to options trading.

The Securities and Exchange Commission (SEC) has announced charges against Harvest Volatility Management LLC and Merrill Lynch, Pierce, Fenner & Smith Inc. for exceeding clients’ specified investment limits over a two-year period starting in March 2016.

This breach led to clients incurring higher fees, increased market exposure, and resulting investment losses.

As part of their settlements, Harvest and Merrill have agreed to pay a whopping $9.3 million in penalties and ‘disgorgement’ to resolve the SEC’s allegations, per a press release.

According to the SEC’s orders, Harvest served as the primary investment adviser and portfolio manager for the Collateral Yield Enhancement Strategy (CYES), which involved trading options in a volatility index to generate additional returns.

The SEC found that beginning in 2016, Harvest permitted numerous accounts to exceed the designated exposure levels set by investors when enrolling in the CYES strategy.

Some accounts exceeded these limits by 50% or more.

This situation resulted in Harvest and Merrill receiving increased management fees as clients’ exposure levels rose, thereby exposing investors to greater financial risks.

The SEC’s findings indicated that Merrill introduced its clients to Harvest and received a portion of Harvest’s management and incentive fees, along with trading commissions.

On top of that, the SEC determined that Merrill was aware that investors’ exposure to CYES exceeded the agreed-upon levels but failed to adequately inform affected clients, most of whom had existing advisory relationships with Merrill.

Both firms were criticized for not implementing reasonable policies and procedures to ensure transparency and compliance with client instructions.

Mark Cave, Associate Director of the SEC’s Enforcement Division, stated, “In this case, two investment advisers allegedly sold a complex options trading strategy to their clients but failed to adhere to basic client instructions or implement appropriate policies and procedures.

Today’s action holds Merrill and Harvest accountable for neglecting their fundamental duties to clients while their financial exposure exceeded predetermined limits.”

The SEC found that both firms violated Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7.

Without admitting or denying the findings, Harvest and Merrill agreed to be censured and comply with cease-and-desist orders, along with penalties of $2 million and $1 million, respectively.

Harvest will also pay $3.5 million in disgorgement and prejudgment interest, while Merrill will pay $2.8 million.

The SEC’s investigation was conducted by Bobby Gray, Matthew Finnegan, and Suzanne Romajas, under the supervision of Jeff Leasure and Mark Cave.

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Also Read: Roaring Kitty Owns Only These Two Stocks According To Filings

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RFK Jr. now shows his support on the MMTLP case after reposting a community post regarding investor questions for FINRA on X.

The MMTLP scandal is being recognized as one of the biggest Wall Street frauds of the decade.

Investors who held shares of MMTLP stock on the record date of December 12 would receive a preferred dividend of Next Bridge Hydrocarbon on Wednesday, December the 14th.

However, MMTLP stock stopped trading on Thursday, December 8 after FINRA delisted the security without notice or warning.

FINRA released a statement; however, failed to address a myriad of important questions to investors holding the security, which was no longer tradeable.

Since the events, the MMTLP community has sent over 40,000 letters to congress addressing their concerns, urging congressmembers to look into FINRA for potential fraud.

After ongoing publicity events, the Congressional Research Service has acknowledged the MMTLP community along with several reports published by FrankNez.

Republican figures such as JD Vance and now Robert F. Kennedy Jr., have shown their support in bringing light to the MMTLP fraud, which caused tens of thousands of investors to completely lose all their money as they were unable to close their positions.

On Monday, September 23, RFK Jr. reposted a post regarding the following 13 questions the MMTLP community feels FINRA should be answering:

Who was involved in the decision-making process to halt the stock using U3 Halt code?
Were any Broker Dealers, DTCC, AST, MMs or other Member firms consulted prior to the decision?
Was DTCC consulted specifically?
What was their determination based on their internal records including CNS and NSCC lending pools?
How did they arrive at that determination?
How many shares were moved by BDs into the “Obligation Warehouse”?
What was the “extraordinary event” that caused the U3 Halt designation to be triggered?
Have you had any communication with the OCC and why they allowed short shares to not be settled at the merger of TRCH and MMAT?
How do you hold the short positions not settled?
Why were the short positions not settled?
Do you have the accurate accounting from all 105 BDs who had shares on record with DTCC showing their long, short, and IOU positions (naked)?
Do you have all Broker-to-Broker clearing records (ex-clearing) from all member firms? Have you requested the information?
Do you have all the sell tickets from all 105 BDs dating back 5 years on all TRCH, MMAT, and MMTLP trades from all member firms? If not, how are you going to accurately investigate what happened? Isn’t your roll oversight in this matter?

@RobertKennedyJr 🇺🇸🫡
🤜🤛$MMTLP #MMTLPfiasco #WeAreNotGoingAway pic.twitter.com/RkQdltDZM4
— BusyBrands  (@busybrands) September 24, 2024

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Also Read: FINRA CEO Is Now Under Pressure On The MMTLP Case

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A Massive US Bank Now Plans To Open 165 Branches

September 24, 2024 / Frank Nez / 2 Comments

A massive US bank now plans to open 165 branches within the next two years after closing several locations in the past year.

Bank of America has announced an ambitious plan to open more than 165 new bank branches across 63 markets by the end of 2026, including 40 locations set to open this year.

The announcement was made on Monday, coinciding with the opening of the bank’s first financial center in Louisville, Kentucky, where it plans to establish five branches by the end of 2025.

This expansion is part of the bank’s ongoing strategy to consolidate its operations, as it aims to close two branches for every new one opened.

The Louisville branch marks a significant step in the expansion plans first revealed in June 2023, which include entering nine new markets and four additional states by 2026.

Aron Levine, president of preferred banking at Bank of America, stated, “We are reaching more clients through the expansion and modernization of our financial centers.”

He emphasized that while many customers utilize digital banking for routine transactions, they seek in-person support for more complex financial matters.

With the opening of its first branch in Lexington, Kentucky, in 2021, the bank’s focus on Louisville will bring its total branches in the state to ten by 2027, serving approximately 95,000 consumers and small-business owners.

Felicia Lewis, Bank of America’s southeast division executive, commented, “By expanding our capabilities in this market, we are able to better serve clients, and further drive local community growth and development.”

In addition to Louisville, Bank of America plans to open its first financial centers in Boise, Idaho, early next year.

The bank’s expansion efforts will also target other markets, including Omaha, Nebraska; Milwaukee and Madison, Wisconsin; New Orleans; Dayton, Ohio; and Birmingham and Huntsville, Alabama.

By the completion of its expansion plans, Bank of America will operate in over 200 markets across 39 states.

Since launching its current expansion project in 2014, the bank has invested more than $5 billion in its financial centers.

CEO Brian Moynihan highlighted the importance of these branch investments for enhancing customer relationships.

As of March, Bank of America ranks third among U.S. banks in terms of brick-and-mortar locations, with 3,975 branches.

JPMorgan Chase leads with 5,110 branches, followed by Wells Fargo with 4,349.

Earlier this year, JPMorgan Chase announced plans to add over 500 branches by 2027, focusing on underserved areas while also renovating existing locations and expanding its workforce.

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Also Read: JPMorgan CEO Says A $10K Tax Bonus Should Be Given To Americans

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A Massive US Bank Now Gets Hit With AML Investigation

September 14, 2024 / Frank Nez / 2 Comments

A massive US bank now gets hit with an AML investigation over flaws related to its internal controls and crimes risk management.

The Office of the Comptroller of the Currency (OCC) has taken enforcement action against Wells Fargo, raising concerns about the bank’s anti-money laundering (AML) controls and financial crimes risk management.

This development could impact the potential lifting of Wells Fargo’s asset cap and might signal increased scrutiny for other major banks.

On Thursday, the OCC announced it found several deficiencies in Wells Fargo’s AML practices, including issues with suspicious activity reporting, customer due diligence, and customer identification protocols.

The regulatory agreement mandates that Wells enhance its AML and sanctions risk management, secure OCC approval for new offerings, and notify the agency before expanding certain services.

Wells Fargo stated it is already addressing many of the requirements outlined in the agreement and is committed to resolving them with urgency.

Analyst Scott Siefers from Piper Sandler noted that while the formal action was anticipated, it still represents a setback in the bank’s progress to resolve regulatory issues.

Wells Fargo has been under the regulatory microscope since the fallout from its 2016 fake accounts scandal.

Currently, the bank operates under a $1.95 trillion asset cap imposed by the Federal Reserve, one of nine consent orders against it, though six have been lifted since Charlie Scharf became CEO.

The OCC’s 26-page agreement, which did not impose any fines, requires Wells to improve its internal controls and reporting mechanisms related to AML and sanctions practices.

The bank must also enhance its audit program and ensure data integrity for compliance systems.

Jefferies analyst Ken Usdin noted that the broad requirements could impact Wells Fargo’s future growth strategy, but the practical implications remain unclear.

Despite the seriousness of AML issues, Royal Bank of Canada analyst Gerard Cassidy believes this enforcement action will not hinder efforts to lift the asset cap, as it primarily addresses past consumer banking problems.

Wells Fargo has invested significantly in its risk and control operations, hiring around 10,000 employees and increasing spending by $2.5 billion annually since 2018.

This suggests the new regulatory action may not drastically alter overall costs.

Other major banks have also faced scrutiny regarding their AML and sanctions programs.

Bank of America and Citi have highlighted related risks in their recent filings, while JPMorgan Chase continues to disclose ongoing investigations from a 2019 money-laundering incident in India.

Additionally, Canadian lender TD is under investigation for its U.S. AML program related to drug trafficking allegations.

As the financial landscape evolves, the potential for similar enforcement actions against other banks remains uncertain, leaving the industry on alert.

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Also Read: The US Treasury Direct is Now Freezing Customer Accounts

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Market News Today - A Massive US Bank Now Gets Hit With AML Investigation. — Market News Today – A Massive US Bank Now Gets Hit With AML Investigation.

Citibank now fires a whistleblower for ‘underperformance’, after the former employee provided records requested by the OCC.

Citi has filed a countersuit against its former employee, Kathleen Martin, alleging that she was terminated not for refusing to falsify records for the Office of the Comptroller of the Currency (OCC), as she claimed in her lawsuit from May, but rather for being unable to properly fulfill the duties of her role.

Martin, who was let go from her position as Citi’s interim data transformation chair in September 2023 after nearly two years with the bank, had alleged in her lawsuit that she was fired for not agreeing to Chief Operating Officer Anand Selva’s request to conceal information from the OCC that would make the lender “look bad.”

In a revised lawsuit, Kathleen Martin has accused Citi’s Chief Operating Officer Anand Selva of intentionally deceiving the bank by wanting to misrepresent Citi’s compliance metrics to the Office of the Comptroller of the Currency (OCC).

Martin claims Selva sought to conceal information from the OCC that would have made the bank “look bad.”

However, Citi maintains that Martin’s termination in September 2023 was not due to her refusal to falsify records, but rather because she lacked the necessary “leadership and engagement skills” to effectively execute the role of interim Data Transformation Chair, which she had been appointed to after the previous chair, Rob Casper, departed the company.

Citi asserts that during Martin’s interviews and assessment for the interim role, it was identified that she needed to improve in areas like her “dogmatic nature, lack of innovation and lack of experience driving the execution of complex change across Citi.”

Once Casper left, Citi’s senior leadership, including COO Selva, determined that Martin could not successfully fulfill the demands of the interim chair position.

According to Citi, COO Anand Selva tried to help the plaintiff, Kathleen Martin, improve her performance in the interim Data Transformation Chair role.

Selva allegedly set up one-on-one meetings and working groups to facilitate better collaboration and working relationships with stakeholders.

Selva’s HR team also provided Martin with a senior mentor to support her development.

In May 2023, Citi leadership discussed a plan to improve Martin’s performance.

In July, Selva conveyed Martin’s mid-year review before she raised any concerns about his behavior.

Soon after, Martin contacted HR and expressed fears about her job security.

Citi claims that Martin “felt her position was at risk,” but the bank asserts that internal documents showed she “exceeded expectations” and that CEO Jane Fraser had commended her for her “gravitas” and ability to build “strong relationships” at the bank.

However, Citi says Martin failed to heed the feedback provided, and she was ultimately removed from the Data Transformation Chair role because she lacked the “executive level relationships” and leadership needed to successfully execute the data transformation efforts.

Citi says the data transformation work was too critical for the bank to tolerate Martin’s underperformance.

Citi denies Martin’s claims that she protested the reporting of a key metric accurately or that Selva objected to it.

The bank says Selva and Martin met in September 2023 to discuss reporting certain metrics using red, amber, and green scales.

Also Read: A Massive US Bank is Now Closing Credit Cards

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