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US fines 16 Wall St firms $1.8 bln for talking deals, trades on personal apps

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Wall St

US regulators on Tuesday fined 16 financial firms, including Barclays (BARC.L), Bank of America, Citigroup, Credit Suisse (CSGN.S), Goldman Sachs, Morgan Stanley and UBS (UBSG.S), a combined $1.8 billion after staff discussed deals and trades on their personal devices and apps.

The sweeping industry probe, first reported last year and subsequently disclosed by multiple lenders, is a landmark case for the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), marking one of their largest collective resolutions.

From January 2018 through September 2021, the banks’ staff routinely communicated about business matters such as debt and equity deals with colleagues, clients and other third-party advisers using applications on their personal devices such as text messages and WhatsApp, the agencies said.

The institutions did not preserve the majority of those personal chats, violating federal rules which require broker-dealers and other financial institutions to preserve business communications. That impeded the agencies’ ability to oversee financial markets, ensure compliance with key rules, and gather evidence in other, unrelated investigations, the agencies said.

Spokespeople for UBS, Morgan Stanley and Citi said the banks were pleased to have resolved the matter. Bank of America, Barclays, Goldman Sachs, Nomura and Credit Suisse declined to comment.

“Today’s actions – both in terms of the firms involved and the size of the penalties ordered – underscore the importance of recordkeeping requirements: they’re sacrosanct. If there are allegations of wrongdoing or misconduct, we must be able to examine a firm’s books and records,” said Gurbir Grewal, director of the SEC’s Division of Enforcement.

The failings occurred across all 16 firms and involved employees at multiple levels, including senior and junior investment bankers and traders, the SEC said.

In a major victory for the agencies, the institutions admitted the facts and acknowledged that they violated federal laws, although Bank of America and Nomura neither admitted nor denied aspects of the CFTC’s investigative findings, it said.

The institutions, which cooperated with the investigation, have begun implementing improvements to their compliance policies and procedures, the SEC said.

 

‘WE DELETE CONVOS’

Wall St banks have for years struggled to stamp out the use of personal devices at work – often banning them altogether from trading floors – but the problem became acute as bankers and traders worked from home during the pandemic.

According to CFTC Commissioner Christy Goldsmith Romero, staff used personal apps to evade oversight, sometimes at the direction of senior executives who knew they were violating bank policies but wanted to obfuscate trading communications.

In one example cited by her office, Bank of America staff used WhatsApp, with one trader writing: “We use WhatsApp all the time but we delete convos regularly.” The head of a trading desk routinely directed traders to delete messages on personal devices and to use Signal, including during the CFTC’s probe.

In another example, a Nomura trader deleted messages, which included incriminating statements about trading, after the CFTC sent a request to preserve documents, her office said.

“Those choosing to participate in US financial markets are on notice: the era of evasive communications practices is over,” Goldsmith Romero said in a statement.

 

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World Biz

Fire in Mangaf Workers’ Accommodation Claims 41 Lives

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mangaf kuwait fire

A devastating fire broke out early Wednesday in a building housing workers in Mangaf, southern Kuwait, resulting in the deaths of at least 41 people, according to Deputy Prime Minister Sheikh Fahad Yusuf Saud Al-Sabah.

During his visit to the site, Sheikh Fahad, who also oversees the interior and defense ministries, criticized real estate owners for their violations and greed, attributing these factors to the tragic incident.

“Unfortunately, the greed of real estate owners is what leads to these matters,” Sheikh Fahad stated.

The blaze was reported to authorities at 6:00 a.m. local time (0300 GMT), according to Major General Eid Rashed Hamad.

“The building was used to house a large number of workers. Dozens were rescued, but sadly, many succumbed to smoke inhalation,” a senior police commander informed state television.

He further emphasized the longstanding warnings against overcrowding in worker accommodations, though he did not specify the workers’ occupations or nationalities.

The fire has been contained, and authorities are currently investigating its cause, officials said.

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Baltimore shipping lane fully reopens after bridge collapse

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Baltimore

The Baltimore shipping lane blocked for more than two months after a cargo ship collided with a major bridge in
March, sending it crashing into the water, fully reopened on Monday, authorities said.

The US Army Corps of Engineers, along with Navy salvage divers, restored the channel to its original dimensions by removing about 50,000 tons of debris from the Patapsco River, a statement from the Key Bridge Response Unified Command said.

The riverbed was certified as safe for transit on Monday.

“We are proud of the unified efforts that fully reopened the Federal Channel to port operations,” said Lieutenant General Scott Spellmon, commanding general of the Army Corps of Engineers.

“The partnerships that endured through this response made this pivotal mission successful.”

On March 26, the Singapore-flagged M/V Dali lost power and plowed into a support column of the Francis Scott Key Bridge, causing it to collapse and killing six road workers who had been filling potholes overnight.

The 106,000-ton ship had been headed for Sri Lanka at the time of the accident.

The US National Transportation Safety Board (NTSB), which is investigating the incident along with the FBI, has said the ship had two electricity blackouts in the moments before the disaster.

The Dali was refloated last month and towed back into port.

The port of Baltimore is one of America’s busiest ports and a key hub for the auto industry, handling almost 850,000 autos and light trucks last year — more than any other US port, according to state figures.

The full reopening of the shipping channel will allow for two-way traffic, Monday’s statement said.

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PM Sheikh Hasina and Modi Exchange Pleasantries at Swearing-In

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Sheikh Hasina

Prime Minister Sheikh Hasina of Bangladesh and her Indian counterpart, Narendra Modi, exchanged pleasantries following Modi’s swearing-in ceremony this evening.

Foreign leaders, including the Bangladeshi Prime Minister, took turns approaching the podium to congratulate Modi on taking his oath as the Indian Premier for a third consecutive term.

Clad in light purple, Prime Minister Sheikh Hasina stepped forward to greet Modi, who extended his hand to her. They exchanged a warm handshake and brief pleasantries, inquiring about each other’s well-being.

Modi then escorted Prime Minister Hasina to the banquet hall, guiding her to the dinner hosted by President Smt. Droupadi Murmu at Rashtrapati Bhavan.

Prime Minister Hasina, accompanied by her daughter Saima Wazed, entered the Rashtrapati Bhavan as the third foreign leader to attend the oath-taking ceremony.

Top leaders from Sri Lanka, the Maldives, Bhutan, Nepal, Mauritius, and Seychelles were also present at the swearing-in event, which saw a record attendance of over 8,000 dignitaries.

Prime Minister Hasina arrived in New Delhi on Saturday to participate in the ceremony. She is scheduled to depart for Dhaka tomorrow afternoon.

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