Barclays to pay $2 billion over toxic pre-crisis mortgages

Barclays agreed Thursday to pay the United States $2 billion for allegedly deceiving investors about the quality of mortgage deals that fueled the 2008 financial crisis.

The Justice Department said the British bank "caused billions in losses" to investors by engaging in a "fraudulent scheme" involving three dozen mortgage-backed securities deals sold between 2005 and 2007.

Of the $31 billion of mortgages packaged together in these investments, more than half eventually defaulted. Prosecutors said Barclays "systematically and intentionally misrepresented" the quality of these loans to investors. read more »

China Says Anbang’s Founder Defrauded Investors of $10 Billion

China accused the deal maker who bought the Waldorf Astoria hotel in New York of bilking investors of more than $10 billion, prompting him to issue a rare denial of guilt on Wednesday in a country where the courts almost always convict.

Both the surprise plea from the deal maker, Wu Xiaohui, and the vast amount of money that officials said he had obtained illegally could raise the stakes in a prosecution meant to show Beijing’s resolve to crack down on the titanic borrowing binge of recent years. The Chinese government last month seized Mr. Wu’s company, Anbang Insurance Group, in a move seen as making an example of a firm that piled on too much debt too fast and added risks to the country’s already creaky financial system. read more »

Are you ready? This is all the data Facebook and Google have on you

The harvesting of our personal details goes far beyond what many of us could imagine. So I braced myself and had a look

Want to freak yourself out? I’m going to show just how much of your information the likes of Facebook and Google store about you without you even realizing it. read more »

Getting a handle on a scandal

Corporate crises drive the media and politicians wild. But do they damage shareholder value?

A popular riff doing the rounds in tech circles is that, if data are the new oil, then Facebook’s Cambridge Analytica fiasco is the equivalent of Deepwater Horizon. That was the name of an oil platform that exploded in April 2010, coating the Gulf of Mexico and the reputation of BP, the firm responsible, in a toxic slick.

Yet just how damaging are “Deepwater” incidents for firms and their owners over time? Perhaps they cease to matter after the initial burst of media purgatory, groveling by executives, celebratory cant from competitors and politicians’ grandstanding.

To answer this, The Economist has looked at eight of the most notable corporate crises since 2010, including those at Uber and Wells Fargo. The evidence shows that these episodes were deeply injurious to the companies’ financial health, with the median firm losing 30% of its value since its crisis, when compared with a basket of its peers. Facebook should beware. read more »

Former Math Teacher Pleads Guilty in Ticket-Resale Ponzi Scam

A former math teacher charged with scamming investors out of more than $60 million through a Ponzi scheme disguised as an effort to buy and sell tickets to concerts, musicals and sporting events pleaded guilty, as federal prosecutors in New York increasingly clamp down on fraud in the ticket-resale business.

National Event Co. Chief Executive Officer Jason Nissen was charged in May with raising funds from investors under the pretense that he was going to use the proceeds to purchase and resell tickets to popular events, such as the Super Bowl and the hit Broadway musical “Hamilton.” Instead, prosecutors said, he just used the money to repay earlier investors. read more »