Singapore Orders Falcon Bank Unit Shut Over 1MDB Breaches

Published / by You Suck / Leave a Comment
Share Button

Falcon Bank

Singaporean monetary regulator has ordered that the local branch of the Swiss bank Falcon Bank should cease operations as a result of its connection to the money-laundering activities of the under-attack Malaysian sovereign fund 1Malaysia Development Bhd.

In a statement released on Tuesday, the Monetary Authority of Singapore said it has ordered the closure of the Falcon Private Bank branch in the city-state for considerable breaches of its anti-money laundering regulations, accusing the bank’s senior management of misconduct.

The Singaporean central bank also disclosed that local branch manager of Falcon Private Bank, Jens Sturzenegger, has been arrested. He was arrested on Oct. 5 by the city’s Commercial Affairs Department.

“Falcon Bank has demonstrated a persistent and severe lack of understanding of MAS’ AML requirements and expectations,” the MAS said. “Taking into account the totality of Falcon Bank’s conduct, MAS’ assessment is that the merchant bank will be unable to comply with these requirements and expectations going forward.”

The Swiss bank has been fined S$4.3 million ($3.1 million) for breaching 14 provisions of the anti-money laundering laws of Singapore. It has been accused of failing to duly assess customers’ accounts for irregularities and to report suspicious transactions, among other charges.

The Singaporean regulator revealed that it wasn’t the first time the private bank, which commenced operations in the city in 2008, had been found wanting. It said it uncovered “an even larger number” of breaches and “serious failings” by senior management after an inspection in 2013. A fine of S$300,000 was imposed on Falcon for those lapses.

Falcon is the second Swiss bank to be shut in Singapore in recent months for connection with money-laundering activities of 1MDB. The branch of BSI Bank in the city was ordered to be shut for similar reason in May, making it the first bank to receive such punishment in over 30 years.

Back home, Financial Market Supervisory Authority (FINMA) has ordered Falcon Bank to surrender to it 2.5 million Swiss francs ($2.56 million) which it considered as illegal profits. The Swiss regulator said in a statement released on Tuesday that the bank handled $3.8 billion in 1MDB fund flows from 2012 to the summer of 2015. It noted that the funds were “generally moved on quickly” and that the bank failed to investigate the unusual, high-risk transactions it brought to its notice.

FINMA has also commenced enforcement proceedings against two former Falcon executives, whose names have not been given. It has also threatened to withdraw the bank’s operating license it further money-laundering rule breaches were discovered.

The Swiss and Singaporean financial regulators will work together to ensure orderly closure of the Falcon Bank branch in Singapore, according to MAS.

Singapore’s financial regulator, which promised earlier in the year to take stronger action against money laundering also fined the banks UBS and DBS the amount of S$1.3 million and S$1 million respectively. The fines were for money-laundering control lapses seen in the banks.

Originally known as Ueberseebank, Falcon was founded in 1965. The Zurich-based bank had its name changed in 2009 after it was acquired by Abu Dhabi government-controlled investment firm Aabar.

Francois Hollande Urges Uncompromising Stance in Brexit Negotiations

Published / by You Suck / Leave a Comment
Share Button

Francois Hollande

French President Francois Hollande has called on the European Union not to take things easy with Britain in its bid to leave the bloc so as not to set a bad precedence.

Hollande said on Thursday that EU leaders need to ensure that the UK is made to pay a heavy price for the decision to leave the regional body. He emphasized the importance of a tough stance by the EU in the Brexit negotiations in protecting the integrity of the single market.

“The UK has decided to do a Brexit, I believe even a hard Brexit,” he said. “Well, we must go all the way through the UK’s willingness to leave the EU. We have to have this firmness.”

Hollande said Britain needs to be made to pay a high economic price for leaving the bloc. The French leader, who made reference to how former Prime Minister Margaret Thatcher had desired to stay in Europe in exchange for a check, added that it was impossible to now allow the U.K. to “leave and pay nothing.”

France’s president was speaking at a dinner organized to mark the 20th anniversary of Notre Europe, a pro-EU group founded by former EU commission head Jacques Delors. Those in attendance at the 150-guest event included Jean-Claude Juncker, current EU commission president, and Michel Barnier, chief EU negotiator in the Brexit discussions.

Hollande appeared to be especially concerned about the negative impact a ‘soft’ Brexit would have on the future of the EU. He feared other countries in the bloc would want to follow similar path as Britain to leave and continue to benefit without obligations.

Speaking at a party conference last weekend, British Prime Minister Theresa May revealed she would seek for full control over immigration. But she did not intend submitting to the European Court of Justice rulings which would significantly hinder the UK’s access to the single market.

May’s speech had contributed to the sterling dropping to a 31-year-low against the U.S. dollar this week. The Independent reported that the British currency dived further following Hollande’s remarks, dropping as low as $1.1841 on Asian markets.

The UK’s home secretary Amber Rudd also recently caused an outcry across the region after revealing a plan requiring companies in the country to list out the names of foreign workers on their payroll.

Hollande was echoing similar sentiments expressed by Angela Merkel hours earlier. The German chancellor, while addressing local business executives on Thursday, promised that she would oppose special concessions for the UK, if such constitute a threat to the single market.

France’s president, who said Europe “has always lived with crises,” recalled when his mentor Delors had to deal with another crisis that was also caused by the UK.

He is currently facing a strong challenge from a resurgent far-right National Front led by Marine Le Pen on the home front. The opposition party has plans for an EU referendum if it gets into power in France.

France was one of the first countries to call for tough Brexit negotiations. It believes that a soft stance would serve to encourage anti-EU parties across the bloc.

Judge Rules Scott Tucker, Others Owe FTC $1.2 Billion Over Payday Loan Scam

Published / by You Suck / Leave a Comment
Share Button

Scott Tucker

Scott Tucker, a professional race car driver, and others owe the Federal Trade Commission (FTC) approximately $1.2 billion after deceiving thousands of payday loan customers, says a Nevada federal judge in an issued judgment on Friday.

According to U.S. District Court of Nevada Judge Gloria Navarro, Tucker’s payday loan company harmed many of its customers because of various misleading loan terms. Because of this deception, clients that borrowed a $300 payday loan were required to pay $975 back to the business.

He will be prohibited from participating in the consumer lending business moving forward.

“Scott Tucker did not participate in an isolated, discrete incident of deceptive lending, but engaged in sustained and continuous conduct that perpetuated the deceptive lending since at least 2008,” the judge said in her ruling, reports the Associated Press.

Reportedly, Tucker claimed ignorance to federal law and argued that his businesses maintained short-term, high-interest credit standards under industry norms. He added that he was unaware of any wrongdoing and highlighted that he had no intentions of deceiving consumers.

Navarro was not having any of it as she alluded to evidence confirming her ruling.

One of the pieces of evidence included an email from one of his employees, which showed clients offering complaints regarding confusion about the payday loans. Another email from a manager of one of the payday loan stores suggested a new loan repayment model due to the fact that “90 percent of the issues we have with customers stem from them not understanding our process of renewals and paydowns.”

The judge’s $1.266 billion ruling will impact Tucker, the estate of his deceased brother and several corporate entities within the confines of the Tucker business, like Black Creek Capital Partners, Broadmoor Capital Partners and AMG Capital Management. His will wife will also be required to pay $19 million to the FTC.

In 1998, Tucker and his brother, Blaine, launched a payday loan company called National Money Service. After expanding into various business entities, the private firm started to get into trouble.

In 2012, the FTC filed charges against both men and their businesses, alleging that the payday loan establishment maintained usurious interest rates. Recently, Tucker faced criminal charges in New York, where it’s charged that he ran a $2 billion payday loan business that took advantage of nearly five million consumers, even though the state has banned payday loans or has implemented usury limits.

Bradley Weidenhammer, an attorney for two payday lending companies connected to Tucker, did not issue a public statement in regards to the judge’s ruling.

Blaine Tucker committed suicide in 2014 and Scott Tucker says he has not done anything wrong.

The latest penalties against Tucker will be the biggest in the war on payday lending giants. Across North America and Europe, authorities are trying their hardest to rein in the industry and to make the payday loan moguls accountable for their actions, policies and alternative financial products.

Bass Pro, Goldman Sachs Consortium to Acquire Cabela’s for $5.5B

Published / by You Suck / Leave a Comment
Share Button

Bass Pro

A consortium led by Bass Pro Shops has reportedly reached a deal to acquire rival American outdoor sports gear retailer Cabela’s in a transaction that could potentially interest antitrust regulators.

The consortium, which includes the private equity division of Goldman Sachs Group and Capital One Financial Corp, had earlier been reported to have offered an undisclosed amount over $4 billion for the leading outdoor sporting goods chain.

The bid had put the consortium in the lead to take over the running of Cabela’s, having surpassed another bid received from Sycamore Partners, which was bidding in collaboration with American credit card company Synchrony Financial. A deal was thought likely to be reached as early as this week.

Business Insiders has now revealed that a deal has been announced, valuing Cabela’s at $65.50 per share in cash. That put the value of the total deal at about $5.5 billion. The transaction is expected to be finalized in the first half of 2017.

The deal brings together two of America’s biggest outdoor gear retailers. This raises the possibility of an antitrust investigation being carried out.

JPMorgan served as Bass Pro’s sole financial adviser, while Guggenheim Securities was the exclusive financial adviser to Cabela’s. Preferred equity financing of for the deal was provided by the Merchant Division of Goldman Sachs Group and private equity firm Pamplona. Goldman Sachs provided $1.8 million while the New York-based Pamplona committed $600 million for a combined total of $2.4 billion in preferred financing.

Cabela’s and Bass Pro have been major go-to for outdoor enthusiasts in need of gear and equipment hunting and fishing for several decades. They have been able to maintain their relevance in recent years as all-in-one locations for shopping, entertainment and expert advice amid stiff competition from major online retailers, such as Amazon. They have also been driven at times by their hunting-gun businesses.

As a result of pressure from activist hedge fund Elliot Management Corp., Cabela’s had revealed last December that it would explore a variety of strategic options, including a potential sale.

Uncertainty over gun law changes has caused swings in Cabela’s gun sales, negatively affecting its revenue and profit. The retailer had a disappointing third quarter last year which it attributed to weak fall apparel and footwear sales.

A successful deal would enable Bass Pro Shops, which is headquartered in Springfield, Missouri, to improve its presence outside the U.S. Northeast. Most of its stores numbering around 100 are located in the region. On the other hand, the Nebraska-based Cabela’s has around 85 retail stores, most of which are in the Northwest. Both retailers maintain presence across the U.S., overlapping in states such as Missouri, Texas and Kansas.

Capital One Financial Corp reportedly has interest in acquiring Cabela’s credit card business known as World’s Foremost Bank. Reuters reports the business had almost two million accounts and around $5 billion and $502 million in loans and revenue respectively last year.

Cabela’s shares have gained 18 percent in 2016, following 30 percent drop in the two-year period through 2015.