15 June 2012
In November 2011 we reported on the £6.3 million fine imposed on Coutts by the Financial Services Authority for mis-selling an AIG bond to a large number of wealthy clients.
These clients suffered a loss in their investment as a result of the collapse of AIG in 2008. The FSA held that Coutts breached Principle 9 of the FSA Handbook, which requires that a “firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely up on its judgement”.
Sky News is today reporting that Coutts has begun offering customers compensation for this mis-selling:
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15 June 2012
Rajat Gupta, former head of McKinsey and a past Goldman Sachs and Proctor & Gamble director, has this afternoon been found guilty of insider trading by a New York court.
This is the highest profile insider trading conviction for many years. As we observed in this post in October 2011, Mr Gupta is, or was, a high priest of the elite of finance capitalism.
Mr Gupta was found guilty on three counts of securities fraud and one conspiracy charge relating to the passing of tips to Raj Rajaratnam, former head of the Galleon hedge fund and who in October 2011 received an 11 year jail sentence for insider trading.
Mr Gupta will be sentenced in October 2012.
15 June 2012
With the Chancellor of the Exchequer and the Governor of the Bank of England setting out their policy responses (last night’s Mansion House speeches here and here) to the continuing tightness of credit in the UK and anticipated liquidity problems following the Greek elections, and the ECB also hinting that it will make additional liquidity available to Eurozone banks, the retail forex trading OANDA is suspending its service on Sunday:
“The decision to halt trading is very much tied to the uncertainty in Europe and in particular, the Greek election. Given these events, there is the potential for extreme exchange rate volatility at a time when global currency markets are closed. OANDA’s concern is that exchange rates could undergo significant fluctuations as the exit polls are made public. If these fluctuations are wide enough, accounts that under normal conditions would be considered well-capitalized, could become subject to a margin call.
By halting trading and holding the closing prices steady during this period, we aim to shelter traders from the potential for price spikes.”
See also: Brokerage exits Greek stock market, credit insurer reviews [now pulls] cover for exports to Greece
A Eurozone exit: forex traders and retailers prepare
A Eurozone exit: Legal implications for companies and businesses