The corporate crime wave continues. Here are a few excerpts from some of the latest news.
Yesterday’s CFPB/OCC settlement with Capital One (previous blog) for deceiving credit card customers into purchasing junky ripoff add-ons comes hard on the heels of revelations that other big U.S. banks have been caught or are being investigated for LIBOR bid rigging or mortgage discrimination or aiding money launderers. Danielle Douglas in the Washington Post mentions 3 of these 4 ways to make money without earning it in this story. The fourth, Wells Fargo’s recent mortgage discrimination settlement with enforcers, is discussed here in the Corporate Crime Reporter.
And then there’s Gretchen Morgenson’s New York Times story highlighting how big hedge funds get what may be non-public information before ordinary investors do, which enables them to front-run the markets. And remember, you don’t front-run if you actually want to invest in companies on a longterm basis that may actually create jobs or boost the economy, because high-speed trading allows you to earn your frontrunner premium in just seconds. There is another down-side, of course; high-speed trading may cause future flash-crashes (not a desirable outcome).
Do any big banks earn money by offering innovative, fair and sustainable products anymore? Do any big banks make money the old-fashioned way, by earning it? Just wondering. It seems as if we need more financial regulation, not less, despite what some industry apologists in Congress continue to assert.
Senior Director, Federal Consumer Program, PIRG
Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.