Deutsche Bank Flew and Fell. Some Paid a High Price

In 2005, Deutsche Bank, then a powerhouse in the selling of risky derivatives on a global scale, was minting money.

To mark the moment, the bank’s profit engine — its global markets division — commissioned a book about itself. The remembrance would celebrate how Deutsche Bank, once a sleepy lender to German car companies, had transformed itself in just 10 years into a force in financial engineering, selling interest-rate swaps, credit derivatives and opaque tax-slashing investment vehicles to the world’s wealthy elite.

In the view of one senior executive, it all came down to masterly salesmanship by a single man, Anshu Jain, the chief promoter of the bank’s hottest product: risk.

“The size just kept mounting and mounting,” this person marveled in a passage in the book, referring to the growing demand for some of Deutsche’s raciest fare. And it was Mr. Jain, the bank’s eventual leader, who “dramatically accelerated that delivery of complex structures to the broader client base.” read more »

Deutsche Bank to pay $95 mln to end U.S. tax fraud case

Deutsche Bank AG agreed to pay $95 million to resolve a U.S. government lawsuit accusing the German bank of tax fraud for using "insolvent" shell companies to hide significant tax liabilities from the Internal Revenue Service in 2000.

Under the accord described in papers filed on Wednesday with the federal court in Manhattan, Deutsche Bank also admitted to trying to stick the shell companies with the tax bill for its then-new stake in drugmaker Bristol-Myers Squibb Co. read more »

Foreign Currency Exchange Dealer Pleads Guilty to Antitrust Conspiracy

A foreign currency exchange (FX) dealer pleaded guilty to participating in a price-fixing conspiracy in the FX market, the Justice Department announced today. 

According to the one-count information filed in the U.S. District Court for the Southern District of New York, Jason Katz was a dealer of Central and Eastern European, Middle Eastern and African (CEEMEA) currencies on the New York FX desks of three successive financial institutions.  From approximately January 2007 until July 2013, Katz and FX dealers at competing institutions conspired to suppress and eliminate competition by fixing prices in CEEMEA currencies, in violation of the Sherman Act, 15 U.S.C. § 1.  As part of this conspiracy, Katz and his co-conspirators manipulated prices on an electronic FX trading platform through the creation of non-bona fide trades, coordinated the placement of bids and offers on that platform and agreed on currency prices they would quote specific customers, among other conduct.  Under his plea agreement, Katz has agreed to cooperate with the department’s ongoing investigation into the FX market. read more »

N.Y. pension fund manager pleads not guilty to pay-to-play scheme

A former portfolio manager at New York state's retirement fund pleaded not guilty on Wednesday to charges that he steered $2 billion in trades to two brokerages in exchange for bribes that included vacations, cocaine and prostitutes.

Navnoor Kang, former director of fixed income and head of portfolio strategy at the New York State Common Retirement Fund, entered his plea in Manhattan federal court to charges that included securities fraud and wire fraud. read more »

SEC Pick Jay Clayton Is a 180 From Chairman Mary Jo White

Clayton is a Wall street lawyer who has represented top firms

Donald Trump’s nomination of veteran Wall Street lawyer Jay Clayton to lead the Securities and Exchange Commission is expected to end the streak of aggressive regulators and litigators overseeing the country’s top markets cop.

Mr. Clayton, whose clients have included Goldman Sachs Group Inc. and Barclays PLC, adds another figure with deep financial-industry ties to President-elect Donald Trump’s incoming administration. Mr. Clayton’s experience as a partner at Sullivan & Cromwell LLP on big stock and bond deals—including the 2014 initial public offering of Alibaba Group Holding Ltd.—signals Republicans prefer an SEC chairman who is attuned to the needs of Wall Street firms that prepare the markets when companies go to raise capital.

In one of his few public statements on policy, Mr. Clayton oversaw a 2011 New York State Bar Association report attacking the Obama-era SEC and Justice Department for “zealous” enforcement of laws aimed at American corporate bribery of foreign officials. The paper concluded their actions were “causing lasting harm to the competitiveness of U.S. regulated companies and the U.S. capital markets.”

Mr. Clayton’s background contrasts with that of current Chairman Mary Jo White, a former prosecutor who presided over the SEC in a period when the agency collected record amounts of penalties and disgorged profits from wrongdoers. read more »

CFTC Chair resigns

Chairman Timothy G. Massad today said he has tendered to President Obama his resignation as Chairman of the U.S. Commodity Futures Trading Commission, effective on January 20, 2017. Mr. Massad issued the following statement: read more »

U.S. prosecutors name FBI agent accused of leaking insider trading probe

U.S. prosecutors on Wednesday identified the FBI agent who they say admitted to leaking information to reporters about an insider trading probe involving a Las Vegas sports gambler and golfer Phil Mickelson.

David Chaves, a Federal Bureau of Investigation coordinating supervisory special agent, was named in court papers filed in Manhattan federal court as the agent prosecutors say leaked details about the probe of gambler William "Billy" Walters.

Prosecutors have said the agent, who they previously had not identified, admitted on Dec. 6 to being a "significant source" of information about the investigation in 2013 and 2014 for reporters at The Wall Street Journal and The New York Times. read more »

Alexion Says Senior Management Improperly Pressured Staff to Boost Sales

Company says investigation by board found staff was pressured to get customers to order its flagship drug earlier than needed to meet financial targets.

Alexion Pharmaceuticals Inc. said Wednesday that senior management pressured staff to get customers to order its flagship drug earlier than needed to meet financial targets.

The finding, reported in a securities filing, followed an investigation by members of Alexion’s board of directors into allegations of improper sales practices made by a former employee that had delayed the submission of its most-recent financial report. read more »

Equifax and TransUnion fined $23 million for misrepresenting credit products

Two of the nation’s largest credit reporting bureaus, TransUnion and Equifax, will together pay more than $23 million in fines and refunds to settle charges from a federal consumer watchdog that they misled consumers about the pricing and value of credit products.

The Consumer Financial Protection Bureau said Tuesday that the companies deceived consumers by suggesting that the credit scores they provided were the same scores used by financial firms to make lending decisions when in fact, the scores “were not typically used by lenders.” The firms were also unclear about the price structure of some products, marketing them as free or costing $1, when consumers were actually being enrolled in subscriptions that cost $16 a month. read more »