Friday, August 14, 2015

This Week in Bank Failures

The next step in the Greek bailout is agreed to, with Germany admitting late tonight that it had run out of excuses for foot-dragging. The loan includes enough money to keep the banking system operating.

Citizens Bank was pocketing customer deposits when there were errors on handwritten deposit tickets or when its scanners read them incorrectly, cheating its customers out of at least $14 million. The bank recorded the pilfered money as rounding error in its books. Now the bank has agreed to return the money to its owners and pay $20 million in penalties. It is the first time regulators have faulted a bank for deposit processing.

Nine banks have agreed to pay $2 billion to settle investor claims of rigging currency exchange rates.

GE is selling its online bank to Goldman Sachs. Terms of the deal were not disclosed.

Deutsche Bank employees were charged with criminal tax fraud in connection with carbon emissions trading in Germany. The seven employees were suspended by the bank after the charges were filed. One former employee was also charged and faces extradition from the United States. The carbon trade in Europe has been subject to a wide range of fraud, and this case may involve traders collecting VAT from buyers, then recording the trades as occurring in a jurisdiction without VAT and pocketing the collected taxes. More than a dozen people have already been convicted in similar schemes.