Fraud

Deutsche capital joy fails to offset Russian shame

31 Jan 2017

The German lender will pay only $630 mln to U.S. and UK regulators for failing to stop suspect Russian trades. Being deemed merely negligent means Deutsche Bank's weak solvency gets a leg up. But its litany of catastrophic systems errors will only cement a tarnished reputation.

RBS takes baby step on road to U.S. redemption

26 Jan 2017

The UK bank's latest $3.8 billion charge almost doubles provisions relating to alleged mis-sellling of U.S. mortgage securities. The final cost could be far higher, since RBS is probably a year away from a settlement. Still, the extra bit of balance sheet clarity is welcome.

BT’s Italy scandal is more than a wrong number

24 Jan 2017

The UK telecom found alarming levels of collusion, incompetence and fraud at an Italian business that had been closely vetted by itself and external auditor PwC. The collapse in BT’s shares – far more than the actual losses – shows a pressing crisis of trust, not just accounting.

VW saved by its own failures in the U.S.

11 Jan 2017

The $4.3 bln settlement of criminal charges lifts the carmaker's Dieselgate costs to above $24 bln. VW can cope, but only thanks to its chronic underperformance in the U.S. Had the group met its U.S. targets up to 2015, it would be facing a crushing bill three times that size.

Markets well equipped for a post-truth world

23 Nov 2016

French builder Vinci's shares plunged after a hoax news release on Nov. 22, then mostly recovered. Markets have always been prey to the fake news and bogus rumours that now plague politics. The difference is that truth usually reasserts itself quickly in the world of money.

Wells Fargo ushers in next stage of banking shame

21 Nov 2016

The lender embroiled in a fake-accounts scandal now needs regulatory approval to hire and fire execs and directors. The OCC is playing catch-up with the SEC and others. But targeting Wells is the strongest signal yet that watchdogs have new ways to crack down on recidivist firms.

Trump voters may settle for less than his students

21 Nov 2016

The U.S. president-elect agreed to pay $25 mln to resolve accusations that his education venture was a scam. Averting trial lets Trump focus on picking his advisers and policies. Early choices suggest Americans who backed him will feel duped, too – and have almost no recourse.

Review: Hubris opens door to white-collar crime

11 Nov 2016

In "Why They Do It," Harvard professor Eugene Soltes seeks to find out what propels executives like Bernie Madoff to do wrong. Each culprit has their own particular story. The clubby and entitled atmosphere of executive culture, however, is a common catalyst for bad behavior.

Deutsche’s pain a sign bank regulation is working

4 Oct 2016

Jitters about the German lender have revived memories of the 2008 crisis. But eight years of reform have left Deutsche - and the rest of the banking system - better equipped to absorb a shock. The relative calm in financial markets suggests that regulators got some things right.

Malaysia fiasco undercuts Goldman’s standards push

21 Jul 2016

After the financial crisis, the Wall Street firm overhauled its business practices in an effort to avoid big reputational as well as financial risks. But its dealings with scandal-hit sovereign fund 1MDB, spelled out in new lawsuits, cast doubt on the depth of Goldman's changes.

FX market haunted by past bad behaviour

21 Jul 2016

A senior HSBC manager has been arrested for trading ahead of a big order in 2011. U.S. prosecutors’ case evokes the disregard for clients and flawed incentives that were the hallmark of past market-rigging cases. It compounds pressure on the FX market to show it has changed.