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Byline: Justin Baer Last month, the IRS released a study (https://www.irs.gov/pub/irs-pdf/p5788.pdf) examining the feasibility of Direct File, an IRS-run electronic filing system for taxpayers. If implemented, Direct File would be [...]

JPMorgan Chase and Wells Fargo will be the first banks to report their earnings for the quarter, providing insight into how rate cuts may impact banks' performance. Lower interest rates could have mixed effects on banks, affecting their lending activities and the interest they earn on loans. Banks are also expected to see improvements in investment-banking fees and trading revenue due to a stronger economy and volatile markets. However, concerns have been raised about credit-card delinquencies among lower-income consumers. [Extracted from the article]

Vanguard Group, a major asset manager, has appointed Salim Ramji, a former executive at BlackRock, as its new CEO. This marks the first time an outsider has been chosen to lead Vanguard in its 50-year history. Ramji, who previously led BlackRock's exchange-traded funds and index investing, will assume the role in July. Vanguard is known for its low-cost index funds and is seeking to expand into the financial advice business. Ramji's appointment comes after the departure of CEO Mortimer J. "Tim" Buckley. [Extracted from the article]

TD Bank is facing a Justice Department investigation into its internal controls, specifically regarding how Chinese crime groups and drug traffickers used the bank to launder money from U.S. fentanyl sales. The investigation was launched after an operation in New York and New Jersey uncovered the laundering of hundreds of millions of dollars through TD and other banks. Prosecutors allege that the criminals also bribed TD employees. TD Bank has been under scrutiny for its anti-money-laundering practices for years and is currently the subject of three other investigations. The bank has set aside $450 million to resolve one of the inquiries and expects additional penalties. The issues have already affected TD's expansion plans, as regulators' concerns over suspicious customer transactions scuttled a $13.4 billion deal last year. TD Bank is cooperating with law enforcement officials and regulators and is working to strengthen its anti-money-laundering program. The investigation into TD's practices is led by the U.S. Attorney's Office in New Jersey and is part of a broader effort to counter the threat posed by fentanyl and the networks of Chinese money-brokers used to launder proceeds from Mexican cartels. The U.S. government relies on banks to help detect and prevent money laundering, and the Bank Secrecy Act requires financial-services companies to report suspicious activity. [Extracted from the article]

Fidelity Investments, a major investment firm, has recently cut approximately 700 jobs, marking its first round of layoffs since 2017. The cuts affected less than 1% of the company's workforce, and those affected were notified on Thursday. Fidelity had been hiring aggressively in recent years due to increased interest in investing, but the decision to downsize was made to better align with the evolving needs of customers and ensure long-term competitiveness. Fidelity International, a separate entity based in London, is also planning to cut around 1,000 jobs this year. [Extracted from the article]

Fidelity Investments CEO Abigail Johnson has made significant changes to the company's executive team, appointing new leaders to senior roles, including finance chief. These moves reflect Johnson's commitment to rotating members of her leadership team and bringing new perspectives to different parts of the company. Fidelity posted record revenue in 2023, with operating income totaling $8.5 billion, a 6% increase from the previous year. The company's assets under management and assets under administration also saw significant growth. Fidelity remains a privately held company controlled by the Johnson family and does not disclose the same level of financial detail as its publicly traded rivals. [Extracted from the article]

New York Attorney General Letitia James has filed a lawsuit against Citigroup, alleging that the bank failed to protect its customers from online scams and then denied reimbursements to those affected. The lawsuit claims that Citibank lacked sufficient security measures and did not respond to red flags, allowing scammers to infiltrate customers' accounts and conduct fraudulent wire transfers. When customers visited branches to report the scams, Citi employees coerced them into filling out affidavits and then used that information against them to reject claims for reimbursement. The attorney general is seeking restitution for defrauded customers, fines, and improved antifraud defenses from the bank. [Extracted from the article]

Bankers on Wall Street are experiencing another disappointing bonus season as lackluster deal activity has led to flat or decreased annual payouts. Investment-banking bonuses have fallen by as much as 25% compared to the previous year. The decline in bonuses is a result of weak bonuses for work done in 2022, which were already lower due to a drop in dealmaking. The industry's global fee pool has also fallen to its lowest level in over a decade. Despite hopes for a rebound, the stock market rally did not lead to enough deals, and investment-banking revenue dropped again. Many of the biggest private-equity firms also had a down year, resulting in job cuts. While banks have rewarded their best performers, others have received no bonuses. Bonuses play a significant role in financial firms' total employee compensation, and employees have come to expect them to exceed their annual salaries. The volatile nature of the industry contributes to the uncertainty surrounding bonuses each year. Bank executives argue that the current bonuses reflect a more normal environment compared to the lavish payouts of two years ago. Trading desks have not suffered as much as investment banking, and demand for their services remains stable. However, bonuses for traders and investment managers are still down compared to previous years. Some bankers have been passed over for promotions due to cost-cutting measures. Bank leaders are optimistic about the start of 2024, with improved capital-markets activity. [Extracted from the article]

Stephen Volk, a prominent dealmaker and former vice chairman of Citigroup, has passed away at the age of 87. Volk had a successful career spanning six decades on Wall Street, advising corporate leaders such as Jack Welch, John Mack, and Sumner Redstone. He was known for his expertise in mergers and acquisitions and played a significant role in shaping the media industry. Volk was highly respected and admired for his mentorship and guidance to colleagues and will be deeply missed. He is survived by his wife, four children, nine grandchildren, and two great-grandchildren. [Extracted from the article]

Citigroup plans to cut 20,000 jobs by the end of 2026, which amounts to about 10% of the bank's workforce. The cuts are part of a restructuring plan led by CEO Jane Fraser, who aims to streamline and simplify the bank. Citigroup's focus will now be on corporate clients, and it has already shed some of its international consumer-banking businesses. The bank reported a net loss in the fourth quarter of $1.8 billion, with revenue falling 3% to $17.4 billion. Despite the job cuts, Citigroup expects its annual expenses to decrease over the next several years. [Extracted from the article]

Citigroup has announced that it will incur significant charges and expenses in the fourth quarter due to its exposure to Argentina's debt market, Russia's political instability, and the bank's own restructuring plan. The bank has set aside $1.3 billion in reserves to account for risks in Argentina and Russia, and the recent devaluation of the Argentine peso has resulted in a loss of approximately $880 million in revenue. Citigroup's exposures in Russia are also at risk due to the nation's prolonged political and economic instability. The bank has not provided specific details on its bottom line following these charges, but it remains on track to meet its expense guidance and medium-term targets. Additionally, Citigroup will pay $1.7 billion to the Federal Deposit Insurance Corp. as part of a special fee on banks. Finally, the bank has taken a $780 million charge for severance costs and other elements of its ongoing restructuring plan. These developments do not change Citigroup's overall strategy. [Extracted from the article]

general financial Morgan Stanley's chief operating officer has won approval from the US Senate to head to Washington for a senior State Department post, leaving a void the bank will [...]

Goldman Sachs adopted a provision in its executive compensation scheme that will reward top officers based on their ability to meet long-term performance goals without encouraging 'imprudent risk-taking'. Goldman's board [...]

Six US banks have now repaid funds the US Treasury supplied during the financial crisis, returning $2.7bn to taxpayers. More than two years have passed since the US government invested [...]

Sluggish trading to mark fourth quarter Pressure on bonuses expected to mount Wall Street's fourth-quarter results are set to be dogged by sluggish trading activity as Europe's economic woes and [...]

In the past decade the investment banking world was hit by a virus. Known as 'Goldman envy', it prompted the likes of Morgan Stanley, Merrill Lynch and UBS - and [...]

banks Pressure to raise capital or sell to rival US regional banks are preparing for consolidation as the hangover from the financial crisis and the sluggish economic recovery put pressure [...]

If the financial crisis and the fierce regulatory backlash that it sparked are sounding the death knell for Wall Street's old ways, it is not a sound being heard inside [...]

When he died last year, Jeffry Picower left behind a multibillion-dollar fortune - and a complicated legacy of a life and career that won praise and engendered -suspicion. Picower was [...]

banks Goldman Sachs has moved aggressively to shore up its defences against further litigation and protect a major source of its profits with the hiring of prominent regulatory and law-enforcement [...]

Azentus Capital to be based in Hong Kong Move is eagerly anticipated by industry Morgan Sze, the global head of Goldman Sachs' biggest proprietary trading desk and one of the [...]

Business levies Barack Obama, president, was pressed by top executives to slash taxes on foreign earnings of US companies - prompting the White House to agree to 'continue discussions' on [...]

Struggle to find US role for region's chairman Potential HK managers wary about taking post Goldman Sachs is seeking an executive to run its day-to-day operations in Asia even as [...]

BANKS Goldman Sachs has rebuffed accusations that its trading practices contributed to the collapse of two Bear Stearns hedge funds in the early days of the financial crisis in 2007. [...]

Credit Suisse's chief executive defended his decision to award one-off payments to about 400 senior employees whose bonuses had been slashed to avoid a hefty UK tax, arguing the bank [...]

Interview Brady Dougan Chief executive, Credit Suisse Francesco Guerrera and Justin Baer assessthe Swiss bank's business model Brady Dougan has a problem. Optimistic bankers would probably describe it as a [...]

Senator hits at bank over e-mails Goldman Sachs ' trading activities in the credit insurance market in 2007 have come under attack from a US senator after e-mails showed a [...]

Traders urged to 'kill' positions Goldman Sachs ' trading activities in the credit insurance market in 2007 have come under attack from a US senator after e-mails revealed a senior [...]

GENERAL INDUSTRIALS GE Capital set to earn $3bn this year General Electric executives offered investors a confident outlook for its finance arm, predicting on Tuesday that the business would earn [...]

banks Bank of America has agreed to pay $137m to US authorities to resolve allegations that it paid kickbacks to win municipal-bond investment contracts. The settlement on Tuesday marks the [...]

Bank of America has told US regulators that it has sold enough assets this year to meet the final condition that was put on its landmark repayment of $45bn ([pounds [...]

Latest financial group drawn into legal fight JPMorgan Chase is being sued for $6.4bn by the courtappointed trustee of Bernard Madoff's investment firm, becoming the latest financial institution to be [...]