Banks

ubs1When Christie’s auctioned off Edgar Degas’s “Danseuses” for nearly $11 million in 2009, the catalog noted that the masterpiece was being sold as part of a restitution agreement with the “heirs of Ludwig and Margret Kainer,” German Jews whose vast art collection was seized by the Nazis in the years leading up to World War II. But now a dozen relatives of the Kainers are stepping forward to object. Not only did they fail to benefit from that sale, they say they were never even told about it, or any other auctions of works once owned by the couple, including pieces by Monet and Renoir. It turns out that the Kainer “heir” that has for years collected proceeds from these sales and other restitutions, including war reparations from the German government, is not a family member but a foundation created by Swiss bank officials. In lawsuits filed in New York and Switzerland, the Kainer relatives contend that officers of the bank — now part of the global banking giant UBS — never made a diligent effort to find them, and worse, used the family name to create a “sham” foundation ostensibly organized to support the health and education of Jewish youth but actually formed, they say, to cheat them out of their inheritance. [NYT via Matt]

Goldman Sachs Just Wants A Winner

Assessing the cost of the place.Lloyd Blankfein may have a direct line to the Big Guy Upstairs, but he seems to have been withholding some crucial information in recent years, based on certain bets made by GS. That Romney character is not President of the United States, Goldman’s best check-writing efforts notwithstanding, and Brazil is rather emphatically not sporting a sixth star on their soccer jerseys these days. But if the polls are right—and, really, when are they not?—Goldman won’t be backing the wrong horse this time around. Read more »

Bonus Watch ’14: Goldman Sachs

Thanks, guys.The Little Lloyds won’t be getting as much of that extra 25% in revenue the bank earned last quarter, but they’ll do alright. Read more »

Government auditors are investigating exclusive contracts held by Bank of America Corp. and JPMorgan Chase & Co. to provide financial services inside federal prisons…Bank of America has been paid at least $76.3 million by Treasury to manage inmates’ accounts, money transfers, email service and other technology inside the 121 facilities managed by the Federal Bureau of Prisons. The contract has been amended 22 times since it was awarded without competitive bidding in 2000. The accounts hold the money inmates earn from prison jobs paying as little as 12 cents an hour and supplemental funds sent by family and friends. Inmates use the money for clothing, phone calls, food and other expenses. Treasury says the payments to Bank of America were reimbursed by the Department of Justice, the Bureau of Prisons’ parent agency. JPMorgan issues debit cards to inmates when they are released that contain the balance remaining in their prison accounts. JPMorgan’s original contract was awarded in 1998 and amended at least 14 times. It was re-upped in 2008 and amended at least four times since then. [Center For Public Integrity]

A former UBS AG banker gave a primer on the workings of Swiss bank secrecy to a Florida jury hearing the tax-conspiracy trial of Raoul Weil, who once ran the bank’s global wealth-management business. Hansruedi Schumacher told Fort Lauderdale jurors today that he oversaw UBS accounts for about 15,000 U.S. clients in 1999, and most were structured to cheat the Internal Revenue Service. Clients shunned calls or account statements from their Swiss bankers, preferring personal visits, usually in hotels, he said. Bankers often changed hotels to avoid suspicion from the staff. [Bloomberg]

Some might say that a bank shouldn’t suggest that some of its regulators would be better out on the street than in a comfy office nit-picking what some other regulator has already nit-picked. Indeed, Citi Chairman Michael O’Neill said so himself. But he just can’t help it, so he’s going to come out and say it: When his bank inevitably does something wrong again, he’d really prefer to take only one irate phone call, rather than three. Read more »

Colin Fan, he of the “I have lost my patience” with you pricks video address, explains: Read more »

JP Morgan Chase’s third-quarter results were published more than three hours ahead of schedule because of a mistake by Shareholder.com, the investor-communications company owned by Nasdaq OMX Group Inc. “The root cause was a human error internally at Shareholder.com,” Ryan Wells, a Nasdaq spokesman, said in an e-mailed statement. Shareholder.com provides companies with Internet services including website maintenance for investor relations. JPMorgan’s earnings press release and supplement appeared online at about 3:30 a.m. in New York. The bank had set 7 a.m. for release of the market-sensitive data. [Bloomberg]