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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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Economy

At least 20 Umrah Pilgrims died in Saudi Arabia Bus Crash

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At least 20 Umrah pilgrims were killed and 29 injured in a horrific bus crash southwest of Saudi Arabia, according to Gulf News reports.

The passenger bus crashed into a bridge on Monday, overturned, and caught fire, killing 20 and injuring 29.

According to Saudi media, the accident occurred around 4pm on the 14 km-long Aqabat Shaar road in the Asir province, as the bus was traveling from Khamis Mushayt to Abha.

The road, according to Saudi Press Agency, cuts through mountains, and has 11 tunnels and 32 bridges. When the bus was making its way down a bridge it underwent a brake failure, which caused it to crash into a barrier at the end of the bridge, overturn and catch fire. About 29 other people were also injured in the accident, according to reports.

The Saudi civil defense and Red Crescent Authority teams rushed to the site of the accident and cordoned off the area.

The deceased and the injured have reportedly been transferred to nearby hospitals.

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Economy

UN says: Extraordinary economic dev among BD’s many achievements

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Greeting Bangladesh, the United Nations on Sunday (26th March) said Bangladesh has many accomplishments — extraordinary economic development, a significant cultural legacy, leadership on a global stage for climate-vulnerable countries, and immense generosity in welcoming and hosting nearly a million Rohingya refugees.

“The hospitality of Bangladesh’s diverse people is just one of the many facets of a country that my colleagues and I have been fortunate to experience every day,” UN Resident Coordinator in Bangladesh Gwyn Lewis said in a press statement on the occasion of the country’s Independence Day.

“On behalf of the United Nations, I warmly congratulate the people of Bangladesh on the 52nd anniversary of independence,” she said.

Over the last 52 years, Bangladesh has made impressive and remarkable achievements: evolving from a war-torn country to one of the leading economic powers in South Asia, standing at the threshold of upcoming graduation from least developed countries (LDCs) in 2026, and planned achievement of the sustainable development goals (SDG) by 2030, she said.

The UN fully supports Bangladesh’s commitments to economic and sustainable development and appreciates the strong and long-lasting relationship with Bangladesh and our shared values.

The constitution of the country, which was adopted even before Bangladesh had formally become a member of the United Nations in 1974, guarantees fundamental human rights. The right to freedom of speech, religion, movement and assembly, the right to speak one’s own language and other rights that are in line with the UN charter, said the UNRC.

“Wishing you all a Happy Independence Day!” — she concluded.

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Stocks

South Asian Bourse Shrinks

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South Asian Bourse or Stock Markets dropped last week. Among them, the biggest fall was in the stock markets of India and Pakistan.

A review of South Asian markets shows that India’s Bombay Stock Exchange (BSE) index BSE Sensex has dropped 462 points during the week. At the end of the week, the index stood at 57,527 points. On the other hand, the Nifty-50 index of the country’s National Stock Exchange dropped by 467 points last week. At the end of the week, the index stood at 16,945 points.

Pakistan Stock Exchange Index ‘KSE 100’ lost 1,387 points last week. After a week of losing, the index settled at 39,942 points.

On the hand The Sri Lankan stock market hiked, the Colombo Stock Exchange index ‘ASPI’ lost 251 points in a week. After a week the index settled at 9,419 points.

Bhutan’s stock market index ‘BSI’ hiked by 23 point and the index stood at 1,127 points throughout the whole week. Nepal’s ‘NEPSE’ lost 18 points last week, as the index stands at 1,915 points.

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