Big banks discovered they wrongfully foreclosed on more than 700 military members during the housing crisis and seized homes from about two dozen other borrowers who were current on their mortgage payments, Jessica Silver-Greenberg and Ben Protess report in The New York Times. The banks â€" Bank of America, Citigroup, JPMorgan Chase and Wells Fargo â€" found the foreclosures after regulators ordered them to examine mortgages as part of a multibillion-dollar federal settlement, according to people with direct knowledge of the findings.
“The analysis, which was turned over to regulators in recent days, provides the first detailed glimpse into the extent of wrongful foreclosures amid the collapse of the housing market,†Ms. Silver-Greenberg and Mr. Protess write. “While lenders previously acknowledged that they relied o faulty documents to push through foreclosures, the banks claimed borrowers were rarely evicted by mistake, including military personnel protected by federal law.†The new revelations “could provide fresh ammunition for Wall Street critics and prompt regulators to adopt a tougher stance.â€
Banks had previously resolved claims of improper foreclosures on military members, but the problems have turned out to be more extensive than those cases indicated, raising questions about a deal that was finalized last week. “When regulators forced them to take a close look at their loans, JPMorgan, Wells Fargo and Bank of America, the largest loan servicers, each discovered about 200 military members whose homes were wrongfully foreclosed on in 2009 and 2010, according to the people with direct knowledge of the findings. Citigroup had at least 100 such foreclosures. The forec! losures violate the Servicemembers Civil Relief Act, a federal law requiring banks to obtain court orders before foreclosing on active-duty members.â€
AT JPMORGAN, SELLING THE HOME BRAND  | Brokers in an elite group at JPMorgan Chase, who are central to the bank’s expansion into wealth management, work in a sales-driven culture that is unusually aggressive, Susanne Craig and Jessica Silver-Greenberg report in DealBook. “While financial advisers at other firms are typically free to offer a variety of investments, JPMorgan pressures brokers to sell the bank’s own products, according to the current and former employees. Several advisers who resisted said they were told to change their tactics or be pushed out.â€
JPMorgan disputes the characterization, saying it puts clients♠needs first. But current and former brokers in the program, known as Chase Private Client, “contend that the bank, at times, prioritized profit to the detriment of its clients. While such criticism is not uncommon in the financial industry or other sales-driven businesses, the brokers say JPMorgan took an extreme approach,†Ms. Craig and Ms. Silver-Greenberg write.
“You need to be presenting the private-bank, JPMorgan products and managed investment solutions,†Andrew Held, a manager at the group, told Johnny Burris, a former financial adviser, according to a recording Mr. Burris made of the conversation. “I’m not questioning your sales numbers,†Mr. Held said, according to the recording. “What I’m saying to you is you’re not embracing the JPMorgan private-bank platform.†Mr. Burris was later fired.
HSBC PROFIT FALLS  | The British bank HSBC said on Monday that profit fell 17 percent last year, in part because of a fine to settle money-laundering charges. The bank reported profit fell to $13.5 billion in 2012 from $16.2 billion in 2011, missing analysts’ expectations. HSBC’s shares fell in early trading in London, as the bank also missed its own target for return on equity.
Last year was “a difficult one for all at HSBC as we addressed the restructuring of the firm against a lower-growth economic backdrop and with legacy issues and regulatory challenges imposing a further set of imperatives,†Douglas J. Flint, HSBC’s chairman, said in a statement. In December, HSBC agreed to a record $1.92 billion fine to settle charges that it broke money laundering rules.
BUFFETT PLAYS UP NEWSPAPERS IN ANNUAL LETTER  | Warren E. Buffett’s annual letter to shareholders, which was published onFriday, underscored the investor’s contrarian instinct. “In a year when Mr. Buffett did not make any large acquisitions, he bought dozens of newspapers, a business others have shunned. His company, Berkshire Hathaway, has bought 28 dailies in the last 15 months,†DealBook writes. Mr. Buffett is expanding on those views on CNBC on Monday morning from 6 a.m. to 9 a.m.
ON THE AGENDA  | A group of regulators â€" including Thomas Curry, the comptroller of the currency; Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation; and Gary Gensler, chairman of the Commodity Futures Trading Commission â€" addresses the Institute of Internation! al Banker! s in Washington. Mike Mayo, an analyst with CLSA, is on CNBC at 11 a.m.
SWISS VOTERS SUPPORT LIMITS ON EXECUTIVE PAY  | Swiss citizens voted on Sunday to impose severe curbs on executive compensation, “ignoring a warning from the business lobby that such curbs would undermine the country’s investor-friendly image,†Raphael Minder reports in The New York Times. “The vote gives shareholders of companies listed in Switzerland a binding say on the overall pay packages for executives and directors. Pension funds holding shares in a company would be obligated to take part in votes on compensation packages.â€
“In addition, companies would no longer be allowed to give bonuses to executives joining or leaving the business, or to executives when their company was taken ovr. Violations could result in fines equal to up to six years of salary and a prison sentence of up to three years.â€
WALL STREET DEFENDS WRESTLING  | The announcement by the International Olympic Committee that wrestling would probably be dropped from the Olympics after the 2016 games has prompted a pushback from the leaders of Russia and Iran. On Wall Street, too, a group of executives is rallying behind an effort to reverse the decision. The president of the Fortress Investment Group, Michael Novogratz, who wrestled at Princeton University, is leading a campaign to raise $3 million, The Financial Times reports. “Other financially prominent supporters include Josh Harris of Apollo Global Management, Todd Boehly of financial services group Guggenheim, Barry Bausano of Deutsche Bank and Rich! ard Tavos! o of RBC Capital Markets. All wrestled in their youth, a grounding Mr. Hovogratz said is ideal preparation for Wall Street’s rough and tumble.â€
News Corp. to Sell Stake in New Zealand TV Operator  | News Corporation is selling its 44 percent stake in Sky Network Television “to a broad range of institutional and retail investors,†The Wall Street Journal reports. WALL STREET JOURNAL
Disney and News Corp. Discuss Hulu’s Fate  | Walt Disney and News Corporation “hae begun discussions about resolving uncertainty over their jointly controlled online video site Hulu L.L.C., with one possible outcome being that one or the other company sells their stake,†The Wall Street Journal reports. WALL STREET JOURNAL
Bristol-Myers Squibb Contemplates Deals  | The drug maker “has weighed, albeit preliminarily, doing a large acquisition, according to people familiar with the company’s thinking,†The Wall Street Journal reports. WALL STREET JOURNAL
As Takeover Effort Fades, Best Buy Focuses on Turnaround  |Â
Nasdaq Executes Some Trades at a Loss  | Nasdaq OMX “is executing some U.S. stock trades at an operating loss in what analysts are calling an aggressive act to regain market share,†The Financial Times writes. FINANCIAL TIMES
Lenders Issue Less Debt at Start of Year  | The Financial Times reports: “Issuance so far this year of a mainstay of bank funding is at its most depressed since the financial crisis, as lenders fae additional regulations and weak economic growth.†FINANCIAL TIMES
Wegelin’s Fall From Grace  | On Monday, the once-prestigious Swiss bank Wegelin “is expected to become the first foreign bank to be criminally sentenced in the U.S. for tax violations, according to court documents,†The Wall Street Journal reports. WALL STREET JOURNAL
Goldman and Citigroup Warn Over Cyberattacks  |Â
BLOOM! BERG NEWS!
Rohatyn Writes to the Editor  | Felix Rohatyn, the veteran investment banker who is a special adviser to Lazard Frères & Company, says in a letter to the editor of The New York Times: “As chairman of New York City’s Municipal Assistance Corporation in the 1970s, I saw firsthand how the city avoided financial collapse and won a bright future, thanks to millions of New Yorkers who supported their banks and their unions working together to save each other and the city.†NEW YORK TIMES
Tip Bankers Like Waiters  | Forget about Europe’s proposed bonus rules. Instead, Antony Currie of Reuters Breakingviews writes, why not put a ceiling on banker salaries and let clients reward goodservice, just as they do in restaurants DealBook »
Deutsche Bank Shares Fall on Capital Concerns  | Shares of Deutsche Bank fell sharply in Frankfurt trading on Friday after Goldman Sachs cut its rating on the bank to a “sell,†Bloomberg News reports. DealBook »
Blackstone and Apollo Disclose Executive Compensation  | Stephen A. Schwarzman, chief executive of the Blackstone Group, made $213.3 million in pay and cash dividends in 2012; Leon ! Black, ch! ief executive of Apollo Global Management, received $125.5 million, Bloomberg News reports. BLOOMBERG NEWS
K.K.R. Reorganizes Team in Europe  | The European chief of K.K.R. “is clearing the path for a younger generation after his funds went through ups and down in the wake of the financial crash,†The Financial Times writes. FINANCIAL TIMES
Einhorn Ends Legal Challenge to Apple  | David Einhorn’s Greenlight Capial dropped its lawsuit against Apple after a judge ruled in the hedge fund’s favor, Reuters reports. “Apple removed the bundled proposal from the shareholder meeting, therefore resolving the issue,†Greenlight said in a statement. REUTERS
Taking on Apple, Greenlight Appears to Gain Little  |Â
REUTERS
JPMorgan Said to Be Tapped for Bausch & Lomb I.P.O. Â |Â Warburg Pincus, which bought Bausch & Lomb in 2007, chose JPMor! gan Chase! to lead an I.P.O. of the eye care products maker that could raise as much as $1.5 billion, Bloomberg News reports, citing unidentified people with knowledge of the matter. BLOOMBERG NEWS
Looking Back at Tech I.P.O. Troubles  | Since going public, Facebook, Groupon, MetroPCS, Zynga and Yandex, a Russian search company, have collectively lost about $60 billion of stock market value, The New Yorker writes. NEW YORKER
Wth Apps in the Workplace, Secret Data Is Vulnerable  | As employees use dozens of apps on various devices to store company information, protecting data becomes more difficult, The New York Times writes. NEW YORK TIMES
Former Dot-com Millionaire Pleads Guilty to Selling Drugs  |Â
NEW YORK TIMES
Casino Operator Admits Likely Violation of Antibriber! y Law
Obama to Tap Foundation President for Budget Chief  | “President Obama plans to nominate Sylvia Mathews Burwell, the president of the Walmart Foundation, as his budget chief, a White House official said on Sunday,†The New York Times reports. In the 1990s, Ms. Burwell “served in a variety of economic policy roles in the Clinton administration, including as a top aide to Robert E. Rubin, then the Treasury secretary, and s a staff member of the White House’s National Economic Council.†NEW YORK TIMES
The New York Fed’s Promise to Bank of America  | Gretchen Morgenson writes in The New York Times that in an agreement between the Federal Reserve Bank of New York and Bank of America that recently came to light, the New York Fed “agreed to testify on behalf of the bank in its legal battle against A.I.G. over fraud claims.†BLOOMBERG NEWS
Bernanke’s Late Night Speech  | In a speech on Friday evening, Ben S. Ber! nanke off! ered a fresh defense of the central bank’s effort to stimulate the economy. NEW YORK TIMES ECONOMIX
Ireland Wants Easing of Debt Terms  | After receiving a bailout of 85 billion euros ($110 billion) from international lenders in 2010, Ireland is now “pressing for the right to ease the payback terms of billions of euros of debt it incurred in that process,†The New York Times reports. NEW YORK TIMES
