In January, U.S. Attorney General Preet Bharara fined J.P. Morgan $1.7 billion for allegedly turning a blind eye to Bernie Madoff’s Ponzi scheme, though his office declined to press criminal charges against the bank. Two weeks later, J.P. Morgan gave longtime Chief Executive Jamie Dimon a 74% raise.
To Bharara and other regulators, it was the clearest example of many that fining banks doesn’t do nearly enough to discourage such behaviors. Bharara took the unusual step of writing J.P. Morgan’s lawyers a letter detailing his exasperation. It appeared a turning point.
Prosecutors have changed their tone since. Over the last few months, Bharara and others have let banks know that criminal charges, which were rarely ever even considered years ago, are very much on the table. Their aggressiveness has created newfound leverage for banking authorities. They’re going after people now – not just brands – and banks are taking notice.
As part of a proposed settlement that would likely not include criminal charges – which could cripple a bank – regulators are demanding that BNP Paribas fire more than a dozen staffers that it feels were culpable in the bank’s alleged dealings with sanctioned countries, according to media reports. On Wednesday, BNP Chief Operating Officer Georges Chodron de Cource quit. Not surprisingly, he was on the “you better fire them or else” list.
Others people moves are likely to follow, one would assume, considering another option on the table would be for BNP to lose its New York banking license, which would cost way more than a dozen jobs, not to mention billions in revenue.
Other European banks have noticed the U.S. government’s new bulldog mentality and are worried, according to the Financial Times. Is using the threat of criminal charges to force banks to change their executive structure too heavy-handed? Some think so. Others feel it’s an effort to promote personal accountability, even if it’s by gunpoint.
The more interesting question is whether regulators would employ such a tactic against U.S. banks.
Worst Paid Jobs on Wall Street (eFinancialCareers)
Not everyone who works in banking is a “banker.” Some people spend years working on Wall Street and earn a fairly mediocre living. These are they.
Short Stint (WSJ)
Gary Antenberg is returning to Barclays as a managing director and chairman of insurance in its financial institutions group. He left Barclays after 13 years to join Deutsche Bank just last year.
M&A Team on the Move (Bloomberg)
Commerzbank is relocating its mergers and acquisitions team from the U.K. The group is headed to Germany, though at least two have taken alternate jobs in New York. Rosalind Hedley-Mille, the head of the bank’s M&A group, is retiring.
Private Equity Investors Have Some Needs (Financial News)
Investors are out to ruin some of the fun that goes along with working in private equity. Many are pushing for stronger clauses that would allow them to remove poor-performing fund managers as well as new rules that would disallow the firm to charge certain buyout expenses – like travel and entertainment – to the fund.
Big Loss of Morgan Stanley (Financial News)
Alvise Munari, global head of equity derivative sales at Morgan Stanley, is reportedly leaving the bank. No word yet on where he is headed.
Rents on the Rise (Bloomberg)
Bad news for soon-to-be-New Yorkers. The rental market has rebounded. The median rent in Manhattan rose more than 3% to $3,300 in May. The vacancy rate stands at just 1.58%.
Be Your Own Boss (Financial News)
If you’re a compliance pro, maybe that whole full-time thing is overrated. Experts are taking home north of $1,000-an-hour to work as consultants on short-term projects at banks.
Buzz Around the Office
Intern Burns (Business Insider)
“Goldman Sachs interns open bags of chips with scissors.” Just one of many anonymous jabs interns are sharing via social media app Yik Yak.
Quote of the Day: “When the phone rings too late at night or too early in the morning I’m going, ‘Oh my God, what happened?’ and if it stopped ringing I’d call everybody I knew at work to find out what I missed…I am a highly functional paranoid.” – Lloyd Blankfein