Tag Archives: Cost Of Doing Business

GlaxoSmithKline fined $3bn for bribing doctors to increase drugs sales [2012]

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“The company encouraged sales reps in the US to mis-sell three drugs to doctors and lavished hospitality and kickbacks on those who agreed to write extra prescriptions, including trips to resorts in Bermuda, Jamaica and California.  Psychiatrists and their partners were flown to five-star hotels, on all-expenses-paid trips where speakers, paid up to $2,500 to attend, gave presentations on the drugs. They could enjoy diving, golf, fishing and other extra activities arranged by the company.  GSK also paid for articles on its drugs to appear in medical journals and ‘independent’ doctors were hired by the company to promote the treatments, according to court documents.”

http://www.theguardian.com/business/2012/jul/03/glaxosmithkline-fined-bribing-doctors-pharmaceuticals

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Bank of America to Pay $17 Billion in Justice Department Settlement

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“Bank of America Corp. is set to pay a record settlement of nearly $17 billion over its mortgage lending as early as Thursday, capping a legal odyssey that has dogged it since the depths of the financial crisis.  More than $1 billion of the payout from the Charlotte, N.C., bank could go to a handful of states, according to a person familiar with the deal.  The settlement amount is the largest ever reached between the U.S. and a single company, and is approximately equal to the bank’s total profit for the past three years. Bank of America has spent more than $60 billion on legal woes stemming from the financial crisis, and the latest settlement would push the tab to close to $80 billion.”

http://online.wsj.com/articles/bank-of-america-reaches-17-billion-settlement-1408560100

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HSBC paying $2 billion to avoid charges in drug cartel laundering case

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“The deferred prosecution agreement was reached in December 2012 and was approved Monday. The settlement was seen as a record amount to resolve charges that the bank failed to stop billions of dollars in drug money from flowing through the bank from Mexico.  Under the terms of the deal, the Justice Department agreed to suspend criminal charges against HSBC and its US subsidiary for five years if the bank agreed to pay the penalty. When announcing the settlement, HSBC Chief Executive Stuart Gulliver said: ‘The HSBC of today is a fundamentally different organization from the one that made those mistakes.'”

http://www.globalpost.com/dispatch/news/regions/americas/united-states/140121/hsbc-paying-2-billion-drug-money-laundering-cartel

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HSBC Judge Approves $1.9B Drug-Money Laundering Accord [2013]

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“HSBC Holdings Plc (HSBA)’s $1.9 billion agreement with the U.S. to resolve charges it enabled Latin American drug cartels to launder billions of dollars was approved by a federal judge.  HSBC was accused of failing to monitor more than $670 billion in wire transfers and more than $9.4 billion in purchases of U.S. currency from HSBC Mexico, allowing for money laundering, prosecutors said. The bank also violated U.S. economic sanctions against Iran, Libya, Sudan, Burma and Cuba, according to a criminal information filed in the case.”

http://www.bloomberg.com/news/2013-07-02/hsbc-judge-approves-1-9b-drug-money-laundering-accord.html

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Royal Bank of Scotland Japan Unit Sentenced in Libor Probe

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“Royal Bank of Scotland Group Plc was ordered to pay $50 million by a federal judge in Connecticut over claims that it rigged the London interbank offered rate.  RBS was among six companies fined a record 1.7 billion euros ($2.3 billion) by the European Union last month for rigging interest rates linked to Libor. The combined fines for manipulating yen Libor and Euribor, the benchmark money-market rate for the euro, are the largest-ever EU cartel penalties.  Global fines for rate-rigging have reached $6 billion since June 2012 as authorities around the world probe whether traders worked together to fix Libor, meant to reflect the interest rate at which banks lend to each other, to benefit trading positions.”

http://www.bloomberg.com/news/2014-01-06/royal-bank-of-scotland-japan-unit-sentenced-in-libor-probe-1-.html

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Despite Legal Costs, Big Six U.S. Banks’ 2013 Profit 2nd Highest Ever

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“Combined profit at the six largest U.S. banks jumped last year to the highest level since 2006, even as the firms allocated more than $18 billion to deal with claims they broke laws or cheated investors.  A stock-market rally, cost cuts and a decline in bad loans boosted the group’s net income 21 percent to $74.1 billion, according to analysts’ estimates compiled by Bloomberg. That’s second only to 2006, when the firms reaped $84.6 billion at the peak of the U.S. housing bubble. The record would have been topped were it not for litigation and other legal expenses.”

http://www.bloomberg.com/news/2014-01-09/big-six-u-s-banks-2013-profit-thwarted-by-legal-costs.html

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Wall Street Predicts $50 Billion Bill to Settle U.S. Mortgage Suits

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“Wall Street could pay nearly $50 billion to buy peace from federal authorities who are taking aim at the banks over their role in the mortgage crisis, according to interviews and a confidential analysis of the industry’s potential legal exposure.  Bracing for a potential reckoning, the banks and their outside lawyers are quietly using JPMorgan Chase’s record $13 billion mortgage settlement in November to do the math and determine just how much each bank might have to pay to move beyond the torrent of government mortgage litigation that has dogged them since the financial crisis.”

http://dealbook.nytimes.com/2014/01/09/wall-street-predicts-50-billion-bill-to-settle-u-s-mortgage-suits/?hp&_r=0

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It might cost you $39K to crowdfund $100K under the SEC’s new rules

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“If you are looking to raise money via crowdfunding, the moral of the story is, try to raise as close to the next threshold as possible. The thresholds are at $100,000, $500,000, and $1M. So if you need to raise $60,000 for your business, aim for $99,000. Not only will you pay less for that money but you will have more of it. Of course, this assumes you will be able to secure $99,000 from backers. Same holds true for the $100,000 to $500,000 levels and over $500,000 level. While this was not the intent of the legislation (to force companies to seek more capital than they need), it may make sense when trying to decrease the cost of raising that money.”

http://venturebeat.com/2014/01/02/it-might-cost-you-39k-to-crowdfund-100k-under-the-secs-new-rules/

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JPMorgan Chase Nears a $2 Billion Deal in a Case Tied to Madoff

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“JPMorgan Chase is starting the new year with another steep payout to the government.  The bank plans to reach as soon as this week roughly $2 billion in criminal and civil settlements with federal authorities who suspect that it ignored signs of Bernard L. Madoff’s Ponzi scheme. All told, the bank will have paid some $20 billion to resolve government investigations over the last 12 months.  JPMorgan’s Madoff settlements would also involve a so-called deferred prosecution agreement, a criminal action that would essentially suspend an indictment as long as JPMorgan acknowledged the facts of the government’s case and changed its behavior.”

http://dealbook.nytimes.com/2014/01/05/jpmorgan-chase-nears-a-2-billion-deal-in-a-case-tied-to-madoff/?emc=eta1&_r=1&

JPMorgan Chase is starting the new year with another steep payout to the government.

The bank plans to reach as soon as this week roughly $2 billion in criminal and civil settlements with federal authorities who suspect that it ignored signs ofBernard L. Madoff’s Ponzi scheme, according to people briefed on the case.

All told, after reaching the Madoff settlements with federal prosecutors in Manhattan and regulators in Washington, the bank will have paid some $20 billion to resolve government investigations over the last 12 months.

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JPMorgan chief Jamie Dimon negotiates fine amount with U.S.

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“JPMorgan Chase chief Jamie Dimon held talks with the Department of Justice Thursday on a possible $11 billion deal to settle alleged violations, a source close to the matter said.  Dimon and US Attorney General Eric Holder met in Washington amid intense negotiations to wrap up a slew of misbehavior allegations against JPMorgan, the biggest US bank by assets.  Earlier this week reports said JPMorgan had offered $3 billion to the Justice Department to settle some or all of the charges it faces, against reported demands for $20 billion from the department.  The talks focused on a number in the range of $11 billion, but the Justice Department has also reportedly insisted on the company admitting guilt.”

http://www.rawstory.com/rs/2013/09/26/jpmorgan-chief-jamie-dimon-holds-talks-with-justice-department/

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