Tag Archives: Cost Of Doing Business

FTC Begins Sanctions Against Insecure Internet-Connected Device Companies

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“The FTC is steadily hacking the law to make itself the country’s de facto privacy regulator. In this case, it’s using its right to punish a company for being ‘unfair’ to consumers. But its power is limited: it can’t fine TRENDnet; it can only require it to notify customers, establish ‘a comprehensive security program’ — that includes pen testing its products — and agree to 20 years of privacy audits (just like Facebook and Google). If TRENDnet messes up again after this, the FTC can then fine it up to $16,000 per violation (a power it used to fine Google $22.5 million).  There may well be more FTC orders to come.”

http://www.forbes.com/sites/kashmirhill/2013/09/04/camera-company-that-let-hackers-spy-on-naked-customers-ordered-by-ftc-to-get-its-security-act-together/

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Lawyers’ Heaven: Big Banks’ Legal Bills Total $100 Billion.

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“The six biggest U.S. banks, led by JPMorgan Chase & Co. (JPM) and Bank of America Corp., have piled up $103 billion in legal costs since the financial crisis, more than all dividends paid to shareholders in the past five years. Bank of America, led by Chief Executive Officer Brian T. Moynihan increased its legal costs by $3.3 billion in the first half to a total of $19.1 billion. That’s the amount allotted to lawyers and litigation, as well as for settling claims about shoddy mortgages and foreclosures, according to data compiled by Bloomberg. The sum, equivalent to spending $51 million a day, is enough to erase everything the banks earned for 2012.”

http://teapartyeconomist.com/2013/08/29/lawyers-heaven-big-banks-legal-bills-100-billion/

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U.S. seeking $6 billion from JPMorgan to settle mortgage claims

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“U.S. government housing finance authorities are pressing JPMorgan Chase & Co for at least $6 billion to settle lawsuits over bonds backed by subprime mortgages, according to a person familiar with the matter.  The FHFA litigation is among a raft of legal issues JPMorgan is trying to work through in addition to investigations over its $6.2 billion ‘London Whale’ derivatives loss of last year. The FHFA, which oversees Fannie Mae and Freddie Mac, sued JPMorgan over some $33 billion of securities two years ago and also sued at least 16 other financial institutions.  Fannie Mae and Freddie Mac were seized by the government in 2008 and received $187.5 billion to stay afloat.”

http://www.reuters.com/article/2013/08/27/us-jpmorgan-mbs-idUSBRE97Q0YE20130827

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JP Morgan fines may hit $600 million

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“JP Morgan’s penalties to resolve various probes of the ‘London whale’ trading fiasco are expected to total $500 million to $600 million, according to people close to the situation.  US and UK officials for months have been considering the possibility of a global settlement that would resolve all the probes at once, said another person familiar with the matter. Exact terms aren’t known and no final decisions have been reached.  Any settlement might include the filing of civil charges alleging that JP Morgan failed to supervise adequately former traders responsible for the bets and lacked sufficient controls to prevent an alleged cover-up of the losses, people close to the investigations said.”

http://blogs.wsj.com/moneybeat/2013/08/27/total-london-whale-fines-for-j-p-morgan-expected-to-be-500-million-to-600-million/

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Candy maker Hershey pays $4 million for price-fixing

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“US candy maker Hershey on Friday pleaded guilty to participating in a chocolate price-fixing scheme and paid a CAN$4 million (US$4.2 million) fine.  The company entered the plea at the Ontario Superior Court and, according to the Competition Bureau of Canada, received lenient treatment in exchange for its cooperation in an antitrust investigation.  Earlier this month, Canadian authorities also charged Nestle, Mars and a network of independent wholesale distributors in the case after a whistle-blower tipped authorities to the scheme. The alleged price-fixing involved popular brands such as Kit Kat, Coffee Crisp, Aero, Twix, Snickers, Bounty and M&Ms.”

http://www.rawstory.com/rs/2013/06/21/candy-maker-hershey-pays-4-million-for-price-fixing/

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German beer brewers in decades-long price fixing scandal

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“Bosses of large breweries in the country have admitted to investigators that a number of firms arranged to raise prices of their premium beer brands, according to reports in German magazine Focus.  Until now, it was believed the price-fixing arrangements spanned only a two-year period from 2006 to 2008.  Documents seen by Focus reveal that during an interrogation in January, Volker Kuhl, head of the Veltins brewery, said large breweries would pass the price-rising agreements along to smaller producers. The companies involved now face fines in the hundreds of millions of euros, Focus reported.”

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/10255074/German-brewers-in-decades-long-price-fixing-scandal.html

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Square Fined $507K In Florida For Operating Without A Money Transmitter License

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“A little more state-specific financial regulatory hot water for Square, the hot mobile commerce startup: it has been fined $507,000 by Florida’s Office of Financial Regulation for operating a payment service without a money transmission license. This looks like the second time that a U.S. state financial regulator has gone after the company, after Square was served with a cease and desist order in Illinois in March 2013, also for failing to obtain a license before opening up for operations. According to the Florida payment order (embedded below), the $507,000 fine covers over two years of operation, from February 2010 to November 2012.”

http://techcrunch.com/2013/08/16/square-fined-507k-in-florida-for-operating-a-mobile-payment-service-without-a-money-transmitter-license/

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HSBC to spend $700m vetting clients

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http://im.ft-static.com/content/images/f53ccd98-e6b7-4349-a5df-87a0e320c9cd.img

“HSBC will spend $700m on a global ‘know your customer’ programme, as part of a 26-point plan agreed with US regulatorsto settle money laundering and sanctions breaches.  The UK bank, which signed up to the A-Z programme of management changes covering both its US and global operations, reiterated apologies for its failure to prevent Mexican money launderers and countries subject to sanctions, including Iran, from using its network.”

http://webcache.googleusercontent.com/search?q=cache:0IwJRRZ65nQJ:www.ft.com/cms/s/0/4f6bd806-43b7-11e2-844c-00144feabdc0.html+&cd=3&hl=en&ct=clnk&gl=us#axzz2Fiz5GQLL

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