The theft of $1.5 billion from three banks in Moldova remains a mystery, but what has become clear is that the scheme, originally seen as a vast conspiracy of hundreds of shadowy companies, was substantially carried out by a single well-financed person who had detailed knowledge of banking regulation and ties to Russia, Ukraine, and Britain. The money was taken away over a two-year period through loans to nonexistent businesses, then in one weekend, most of the documents and records were destroyed. Today the central bank ordered the three banks involved, Savings Bank, Social Bank and Unibank, to close. They are immediately prohibited from opening new accounts, and they will be wound down and deposits transferred to other banks in October. The three banks hold 30 percent of the deposits in Moldova, and the scale of the losses has resulted in unpaid government salaries and the closing of public services including hospitals.
The largest U.S. banks are reducing their office space. JPMorgan Chase is vacating a building in New York, moving some jobs to New Jersey. Bank of America will not be renewing its lease on four floors of an office tower in Charlotte.
Promontory Financial Group LLC is effectively banned from advising banks in New York State after regulators looked over the group’s advisory documents, particularly those on money laundering transactions done by Standard Chartered Bank for businesses based in Iran. Regulators found that reports were routinely revised to cover up signs of misconduct at banks. Promontory says regulators don’t have any authority over its work and is preparing a legal challenge to the order.
Standard Chartered Bank reduced its dividend by half and said it would seek additional capital if needed.
U.S. banks had asked the Federal Communications Commission (FCC) to relax rules on telemarketing so that they could place robocalls to cell phones of customers and prospective customers without the customers’ permission. However, the FCC let the existing rules stand and adopted an interpretation that specifically prohibits such calls. Nothing in the telemarketing rules prevents banks from contacting customers by phone, but calls to cell phones cannot be placed by machine.
Guilty: Tom Hayes, a trader at UBS and Citigroup, was sentenced to 9 1/2 years in prison after being convicted of leading an international syndicate that rigged Libor rates. Hayes continued his rate-rigging scheme even after learning that he was facing a criminal investigation. Hayes had little to offer in his own defense, admitting that he routinely requested false rate reports, but claiming that this was a standard practice at both banks and that he never gave any thought to the consequences of his actions. Hayes was found guilty on all eight charges he faced in the first Libor case to go to trial.
The NCUA liquidated New Bethel Federal Credit Union in Virginia. It had been in conservatorship since April 30. It had 172 members.