B of A whistleblowers get $83 million; Activist buys Barclays stake

Receiving Wide Coverage ...

Just desserts: The Securities and Exchange Commission said it awarded $83 million to three whistleblowers who provided information about Merrill Lynch misconduct in handling funds, which led to a $415 million settlement with Bank of America two years ago. Two recipients received a combined $50 million while the other got about $33 million. The 2016 settlement with B of A, the agency’s second-biggest against a Wall Street bank, resolved allegations that the bank put billions of dollars of customer assets at risk to generate profits. the attorney for the three whistleblowers would not identify them, saying they were “senior” level employees and planned to donate a “substantial part” of the award to charity. Wall Street Journal, Financial Times

Foot in the door: Activist investor Sherborne Investors said it has taken a 5.2% stake in Barclays, putting further pressure on the bank to step up its turnaround plans. “The entry of the activist comes at a sticky time for Barclays, more than two years into a restructuring that has yet to pay off,” the Wall Street Journal comments. “Barclays was one of the worst-performing European bank stocks last year, and some shareholders have questioned whether Chief Executive Jes Staley has hit on the right strategy.” Wall Street Journal, Financial Times

Scott Eells/Bloomberg

Edward Bramson, “the publicity-shy activist investor” who founded Sherborne, “is likely to follow his tried and tested tactic of patience and time before attempting to shake up the British bank,” the FT says. However, Barclays is several times larger than his previous targets, and he will need to win the support of other big investors.

Wall Street Journal

Lose change?: Should the U.S. should get rid of the penny and the nickel? Henry Aaron, a senior fellow at the Brookings Institution, and Jay L. Zagorsky, an economist and research scientist at Ohio State University and a professor at Boston University’s Questrom School of Business, debate the idea.

Financial Times

Government Sachs, German edition: Jörg Kukies, the co-head of Goldman Sachs’ operations in Germany and Austria, will become Germany’s deputy finance minister, “the latest example of a Goldman veteran taking a senior position in a western government.” He was named to the position by Finance Minister Olaf Scholz.

But not everyone is happy about it. Bernd Riexinger, an MP for the Left Party, told the FT: “It clearly shows what the direction of travel will be under Olaf Scholz. By giving the top civil servant job to a bankers’ boss he clearly wants to keep in with investment bankers and speculators. But a federal ministry is not a service provider for financiers.”

Elsewhere

The question remains the same: The trial of a bitcoin trader who has been charged with money laundering and operating a money transfer business without a license raises the question: “Should bitcoin be subject to the same federal banking rules as traditional currency?” The trial, taking place in federal court in San Diego, “has reenergized the debate over how the virtual currency marketplace is regulated and whether such criminal prosecutions can stand up in court. Most cases have, but judges in a few prosecutions have taken provocative positions that bitcoin is not currency, suggesting that the debate is far from over.”

Quotable

“Without my clients, it’s unlikely the SEC would have even known about the wrongdoing.” — Jordan Thomas, a partner at Labaton Sucharow, who said he represented the three whistleblowers who helped the agency secure a $415 million settlement with Bank of America.