Receiving Wide Coverage ...
Emails Stolen: You thought just your account information was stolen by the Home Depot hackers? Think again. The orange-clad home-improvement retailer said hackers that broke into its computer networks stole not only 56 million credit-card accounts, but also 53 million customer email addresses. While email addresses are already somewhat publicly available, the nefarious-minded can use the email address to trick people into signing up or agreeing to things they probably don't want. Home Depot's hackers broke into its network through one of the retailer's vendors, although the vendor was not identified. The Journal has an interesting narrative on how the attack occurred.
FX Settlement Talks: More leaks on the foreign currency exchange settlement front. As many as seven large banks are in advanced talks with U.S. and British regulators on a settlement, a Journal story citing anonymice says. The total settlement figure is currently estimated at $1.58 billion (which seems a pittance compared to other recent settlements and also considering that total will be shared by multiple banks). As of Friday, regulators hoped to get the settlement finalized by the middle of next week. Here are the banks involved: JPMorgan Chase, Citigroup, Bank of America, HSBC, Barclays, Royal Bank of Scotland and UBS. The settlement is likely to include the disclosure of electronic chat transcripts that demonstrate bank employees' bad behavior. Bank of America, meanwhile, reported a $400 million legal charge in anticipation of its likely settlement with regulators over foreign-exchange manipulation, retroactively lowering its third-quarter results to a loss of 4 cents per share, down from 1 cent per share earnings. B of A is expected to settle with the OCC and the Federal Reserve, the Times reported. Unlike some other banks, B of A only recently got caught up in the foreign-exchange manipulation settlement talks, the Journal reported.
Low Downpayments: Fannie Mae CEO Tim Mayopoulos discussed the new program for low downpayment mortgages. The good news: the mortgages are likely to cost the borrower less than similar loans from other government programs. The bad news: private mortgage insurance, the black hole of money that many unfortunate homeowners must shell out, boosting their monthly payment but providing them with zero equity in their homes. The new low downpayment mortgages will require PMI, which is likely to limit the size of the program, since many borrowers won't be able to afford the higher monthly payments that a PMI-loaded mortgage would require. In other GSE-related news, both Fannie Mae and Freddie Mac posted lower quarterly profits, largely because of slower home-price appreciation, but they were able to make a combined $6.8 billion payment to the U.S. Treasury.
New York Times
JPMorgan Chase's vendor fixed a security flaw in the bank's Corporate Challenge website, which was victimized in a cyberattack allegedly by Russian hackers. The same hackers that broke into Corporate Challenge (a series of road races that raise money for charity) also broke into JPMorgan's larger computer systems.
Of course MetLife should be deemed systemically important, Stephen Lubben writes in a "Dealbook" column. The failure of an insurance behemoth like MetLife would be "quite disruptive," he argues. And MetLife's argument that it held up well during the financial crisis misses the point, he says.
BankThink contributor Mayra Rodríguez Valladares explores the issue of living wills, including the challenges of making the documents credible and transparent.
Elsewhere ...
Rolling Stone: JPMorgan Chase whistleblower Alayne Fleischmann spills the beans to Rolling Stone on the sins committed during the mortgage-backed securities crisis. Fleischmann is the whistleblower upon whose testimony the Justice Department extracted a $13 billion (or $9 billion, depending on how you count it) settlement from JPMorgan. She discloses numerous instances of bad behavior, which Fleischmann, a lawyer, says amounted to "massive criminal securities fraud." One anecdote is about a JPMorgan manager who banned his employees from sending him email, which an outside lawyer says is proof the bank knew what it was doing was wrong. What JPMorgan was doing, of course, was taking the worst mortgages, pooling them into securities and selling those rated a level above subprime. Another nugget: When JPMorgan managing director Greg Boester, who had been involved in MBS sales, bolted for the hedge fund Citadel, JPMorgan CEO Jamie Dimon cut off all business with Citadel in retaliation. Fleischmann's whistleblowing doesn't implicate just Dimon and JPMorgan. In the article, she also blames the Justice Department, the SEC and plenty more government representatives, all of which she says conspired to help JPMorgan bury the evidence. A postscript: Matt Taibbi, the author of the Rolling Stone piece, posted on Twitter after the article was published, clarifying some issues. The concept that the Justice Department used Fleischmann's testimony as leverage in its civil case "was more my inference than hers" Taibbi wrote. He also said Fleischmann "does not explicitly say she violated" a confidentiality agreement, whatever that means.
