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]
Earlier today, it was reported that the Securities and Exchange Commission has been “investigating whether bond fund manager Pimco inflated the returns of its Total Return Exchange-Traded Fund run by founder Bill Gross.” The probe is said to have sped up in recent weeks but has been going on for “at least a year.” Which means that it was happening when Mohamed El-Erian announced he was leaving the firm. Which means that it’s possible not all but some of Bill Gross’s behavior surrounding El-Erian’s departure could be attributed to stress related to the look-see by the SEC, a theory we decided to explore further. Our findings:
* Enforcing total silence on the trading floor with the expectation that Pimco employees will neither speak to, look at, or breathe in his general direction: Gross has long been known to run the trading floor at Pimco with a “Before you even think to open your mouth, shut the fuck up” policy. This was not a new development. Survey says: can’t be blamed on the investigation. Read more »
1. Is it standard practice at Credit Suisse to tell traders at other banks, “Hey, we might buy this stock”? Because Zoe Henderson has worked in a lot of offices and people do that all the time.
Credit Suisse has accused the trader, Zoe Henderson, of improperly sharing client communications with her husband, a London-based trader at a rival bank, via electronic chat rooms, the people said…At Credit Suisse, the examination of chat-room records revealed that Ms. Henderson, who has been at the bank since 2004, on multiple occasions during the past several years shared Credit Suisse communications with her husband, Toby Henderson, a London-based equities trader at Royal Bank of Canada, according to the people familiar with the probe. Some of the communications described Credit Suisse clients’ interest in buying or selling stocks, price ranges of upcoming public offerings, or updates on corporate mergers or other deals, the people said…Ms. Henderson has told Credit Suisse lawyers that it was normal practice for traders other than her to send messages indicating interest in certain stocks to traders at rival banks, and that the practice didn’t hurt clients, according to a person familiar with the probe.
2. Why were Credit Suisse traders (allegedly!) making viewings of adult videos a group activity?
2a. …in the office? Read more »
…while the firm tries to figure out if the trio engaged in any currency rigging. Read more »
Bank Of America, BNP Paribas Give Forex Traders A Moment To Think About What They May Or May Not Have DoneBy Bess Levin
Joe Landes and Bobby de Groot know what we’re talking about. Read more »
Deutsche Bank has concluded co-Chief Executive Anshu Jain is clean after an internal investigation into the role of the bank into the manipulation of global interest rates, German newspaper Frankfurter Allgemeine Sonntagszeitung reported. Citing supervisory board sources, the paper reported that the internal probe had cleared Jain of involvement in the Libor scandal after scrutinizing bank documents and interviewing hundreds of Deutsche Bank employees. [Reuters]
In its latest corporate confession, the nation’s biggest bank disclosed that it’s facing more than a dozen civil and criminal investigations into its virtually every aspect of its business. Beyond the infamous “London Whale” debacle, the bank is also being investigated over mortgage-bond sales, improper foreclosure practices, interest-rate rigging and power market manipulation, according to JPMorgan’s latest quarterly filing with regulators. Although the bank didn’t reveal any new investigations, taken together they underscore the multitude of legal and regulatory challenges confronting JPMorgan boss Jamie Dimon. Indeed, earlier this month JPMorgan took the unusual step of disclosing that it had set aside a whopping $23 billion to tackle potential legal problems…Despite the wide-ranging issues, JPMorgan officials believe the bank is finally making headway on its raft of legal and regulatory woes after years of wrangling, according to sources. [NYP]