Royal Bank of Scotland pays $4.9 billion for financial crisis-era misconduct: U.S. Justice Department

Royal Bank of Scotland will pay $4.9 billion to settle U.S. claims that it misled investors on residential mortgage-backed securities between 2005 and 2008, the U.S.

The Justice Department said the penalty is the largest-ever imposed on a bank for misconduct leading up to the financial crisis. The bank announced in May that it had reached the settlement in principle.

The government alleges RBS misled investors in underwriting and issuing residential mortgage-backed securities, understating the risks behind many of the loans and providing inaccurate data.

“Despite assurances by RBS to its investors, RBS’s deals were backed by mortgage loans with a high risk of default,” Andrew E. Lelling, U.S. Attorney for the District of Massachusetts, said in a statement.

The Justice Department said that RBS disputes the allegations and does not admit wrongdoing, although the bank said in a statement it was happy to move on.

“There is no place for the sort of unacceptable behavior alleged by the DoJ at the bank we are building today,” RBS Chief Executive Ross McEwan said. read more »

RBS bankers joked about destroying the US housing market

Transcripts of pre-financial crisis conversations show senior bankers’ disregard for customer

RBS bankers joked about destroying the US housing market after making millions by trading loans that staff described as “total f***ing garbage”, according to transcripts released as part of a $4.9bn (£3.8bn) settlement with US prosecutors.

Details of internal conversations at the bank emerged just weeks before the 10-year anniversary of the financial crisis, which saw RBS rescued with a £45bn bailout from the UK government. read more »

Corruption? What corruption? FIFA deletes any mention from new Code of Ethics

Despite years of impropriety, FIFA — soccer’s international governing body — has eliminated the term “corruption” from its Code of Ethics.

World soccer officials have long been accused of taking bribes, diverting funds and match-fixing. The most prominent pair — former FIFA President Sepp Blatter and former vice president Jack Warner — were investigated by the Ethics Committee before being removed from the organization. Warner was subsequently banned for life and faces extradition to the United States on a variety of criminal charges.

After persistent claims of corruption and mismanagement, the Ethics Committee removed Blatter from his post in 2015. Warner was suspended by the committee in 2011; about a month later, FIFA announced his resignation from all his posts within the organization.

That same committee has now watered down punishments for malfeasance. read more »

SEC subpoenas Tesla over Musk's tweets

The U.S. Securities and Exchange Commission has sent subpoenas to Tesla Inc regarding Chief Executive Elon Musk's plans to take the company private and his statement that funding was "secured," Fox Business Network reported on Wednesday, citing sources.

Subpoenas typically indicate the SEC has opened a formal investigation into a matter. Tesla and the SEC declined to comment.

The electric carmaker's shares, which fell as much as 4 percent on the news of subpoenas, were last down 1.9 percent at $341.00 on Wednesday.

Tesla shares cut their losses after Goldman Sachs Group Inc said it was dropping equity coverage of Tesla because it is acting as a financial adviser on a matter related to the automaker. Investors viewed the news as confirming a tweet from Elon Musk on Tuesday about hiring Goldman.

Musk stunned investors and sent Tesla's shares soaring 11 percent when he tweeted early last week that he was considering taking Tesla private at $420 per share and that he had secured funding for the potential deal.

Musk provided no details of his funding until Monday, when he said in a blog on Tesla's website that he was in discussions with Saudi Arabia's sovereign wealth fund and other potential backers but that financing was not yet nailed down. read more »