New York Fines Barclays $15 Million Over C.E.O.’s Whistle-Blower Hunt

New York’s banking regulator ordered Barclays to pay $15 million in penalties after the British bank’s chief executive officer attempted to unmask a whistle-blower, the regulator said on Tuesday.

The New York Department of Financial Services said an investigation of Barclays’ chief, James E. Staley uncovered “shortcomings in governance, controls and corporate culture” at the bank. To resolve the matter, Barclays also agreed to strengthen its whistle-blower program, which allows employees to anonymously report problems they see to the bank’s senior leaders. read more »

BNY Mellon to Pay More Than $54 Million for Improper Handling of ADRs

The Securities and Exchange Commission today announced that Bank of New York Mellon will pay more than $54 million to settle charges of improper handling of “pre-released” American Depositary Receipts (ADRs).

ADRs – U.S. securities that represent foreign shares of a foreign company – require a corresponding number of foreign shares to be held in custody at a depositary bank.  The practice of “pre-release” allows ADRs to be issued without the deposit of foreign shares provided brokers receiving them have an agreement with a depositary bank and the broker or its customer owns the number of foreign shares that corresponds to the number of shares the ADR represents.

The SEC’s order found that BNY Mellon improperly provided ADRs to brokers in thousands of pre-release transactions when neither the broker nor its customers had the foreign shares needed to support those new ADRs.  Such practices resulted in inflating the total number of a foreign issuer’s tradeable securities, which resulted in abusive practices like inappropriate short selling and dividend arbitrage that should not have been occurring. read more »

Malaysia says Goldman Sachs failed to disclose key facts in 1MDB bond sales

Goldman Sachs Group Inc made untrue statements and omitted key facts in offering circulars for the bonds it sold for Malaysian state fund 1MDB, the Malaysian government said in criminal charges against the U.S. bank.

Malaysia on Monday filed the charges in Kuala Lumpur against three Goldman Sachs units in connection with the bank’s role as underwriter and arranger of three bond sales that raised $6.5 billion for 1MDB.

The charges were the first criminal action against the bank over its involvement in the scandal, which the U.S. Justice Department has estimated involved the misappropriation of $4.5 billion by high-level 1MDB fund officials and their associates between 2009 and 2014. read more »