The SEC is Seeking New Disclosures from Banks

Market News Daily - The SEC is Seeking New Disclosures from Banks.
Market News Daily – The SEC is Seeking New Disclosures from Banks.

The SEC is now seeking new disclosures from banks in the wake of the sectors recent failures this year.

The Securities and Exchange Commission has started questioning some regional and community banks about risks tied to recent bank failures, a move designed to ensure investors have details on any spillover effects, per WSJ.

A study showed that nearly 190 banks are currently on the verge of collapsing.

During the first week of June, at least $79 billion were withdrawn from the banking sector in just one week according to the Federal Reserve Economic Data.

The latest study shows that Americans have withdrawn $472 billion from big banks this year posing a big threat to the banking system and increasing the chances of new bank failures.

Companies have been wary of providing extensive disclosure on risks from the bank failures to avoid the perception of facing a greater impact than was the case, said Anna Pinedo, a partner at law firm Mayer Brown. 

“A lot of companies were concerned that if they made significant changes in their disclosure, it would be read by the market as if they’ve got a problem or had exposure to one of the top banks or something along those lines that would have been more alarming,” Pinedo said.  

But this is exactly what the banking sector needs, karmic retribution.

The SEC asked Southern California Bancorp to revise several sections of its registration statement to address banking-sector impacts.

The San Diego-based company said it expanded its disclosures to present a summary of market-risk information and to discuss its reasons for significant recent quantitative changes in market-risk exposures, in line with the SEC’s request. 

Southern California Bancorp also provided more clarity on the roles of the committees that oversee its risk-management framework and its oversight of interest-rate risk.

For example, it said that changes in interest rates could lead to interest-earning assets and interest-bearing liabilities maturing or repricing at different times, on a different basis or in unequal amounts, among other risks.

Read: Money Expert Warns Government May Freeze New Bank Withdrawals

Other SEC-Banking News Today

Market News Daily - The SEC is Seeking New Disclosures from Banks.
Market News Daily – The SEC is Seeking New Disclosures from Banks.

JPMorgan has been fined $4 million by the U.S. Securities and Exchange Commission (SEC) after about 47 million emails belonging to its retail banking group were mistakenly and permanently deleted.

JPMorgan’s latest scandal is taking retail investors back to when TD Ameritrade’s Bartlett Warehouse mysteriously burned down after the SEC announced 60 hedge funds were to undergo investigations for manipulative short selling.

The emails dated from Jan. 1 to April 23, 2018, and were deleted in June 2019 from about 8,700 mailboxes, including those belonging to as many as 7,500 employees who regularly worked with customers.

Many of the emails were business records that the largest U.S. bank was required under SEC rules to keep for three years.

The deletions occurred after JPMorgan’s corporate compliance technology department, which had been trying unsuccessfully to delete some communications from the 1970s and 1980s, sought help from an outside vendor managing the bank’s email storage.

According to a cease-and-desist order, the vendor failed to properly apply the three-year retention setting to “Chase” emails from early 2018.

“As a result, the troubleshooting exercise permanently deleted all of the emails in that domain from that period which were not subject to legal holds,” the order said.

JPMorgan, which is based in New York, did not admit or deny wrongdoing in agreeing to the civil settlement. It has adopted its own email coding procedures to avoid a recurrence.

“JPMorgan takes its record-keeping obligations seriously,” the bank said in a statement.

According to the SEC, JPMorgan has been unable in at least 12 civil securities-related regulatory probes to comply with subpoenas and document requests for communications that had been permanently deleted.

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Market News Today - The SEC is Seeking New Disclosures from Banks.
Market News Today – The SEC is Seeking New Disclosures from Banks.

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