Illegal banking practices come home to roost
A year ago, the city of Los Angeles sued Wells Fargo for unethical customer conduct, alleging that the bank had covertly opened unauthorised accounts on behalf of customers. Twelve months on and the bank has been forced to reach settlements with city and federal officials totalling almost $200 million.
At a September hearing before the House Financial Services Committee, Wells Fargo CEO John G. Stumpf announced he was forfeiting at least $41 million in pay, at the same time vowing to immediately drop the banks sales incentive programme that was to blame for inciting bankers to set up the illegal accounts.
But it seems that few of his interrogators were impressed, with lawmakers from both sides of the house taking turns to tear into Stumpf over a period of four hours, labelling the bank’s actions as ‘theft’ and commenting that the fallout from the scandal had dealt a devastating blow to the entire banking industry.
Jail time for ex-bankers
After a three-month trial at Southwark Crown Court in London, England, four former Barclays bankers have been handed down lengthy jail sentences for conspiring to fraudulently rig global benchmark interest rates between 2005 and 2007.
The convictions represent a significant triumph for the British Serious Fraud Office (SFO), which has been pursuing investigations into the Libor scandal for several years but has enjoyed only one other successful prosecution to six acquittals. Two further Libor-fixing cases by other former Barclays bankers are currently under investigation.
The first to fall
The seven-year investigation of the rate-rigging scandal that caused global outrage has resulted in its inaugural conviction. A jail sentence of 14 years has been handed down to former City trader Tom Hayes after becoming the first to be found guilty by a jury of rigging the Libor interest rate.