Three news to start your week: November 4
US SEC says JPMorgan Chase settles five enforcement cases paying $151 million
(Reuters)
JPMorgan Chase has agreed to pay $151 million to resolve five enforcement actions initiated by the US Securities and Exchange Commission. According to the regulator, these cases involve allegations that the nation's largest bank made deceptive disclosures to its brokerage clients. The settlement includes $61 million in civil penalties alongside $90 million in restitution for affected customers. Notably, JPMorgan neither admitted nor denied any wrongdoing in this agreement.
Sanjay Wadhwa, the acting director of the SEC enforcement division, highlighted that "JPMorgan's conduct across multiple business lines violated various laws designed to protect investors from the risks of self-dealing and conflicts of interest." Among the settlements, the most significant involves a $10 million civil fine and $90 million in reimbursements for customers who had invested in "conduit" products.
Trafigura Faces $1.1 Billion Hit in Mongolia After Fraud Probe
(Bloomberg)
Sources familiar with the situation report that Trafigura Group is bracing for a staggering $1.1 billion loss following suspicions of fraud involving its employees in the Mongolian oil sector. This substantial financial blow may also compel the commodity trading giant to revise its previous earnings figures, as it occurred less than two years after the company stirred the industry by revealing a more than $500 million loss due to alleged nickel fraud.
According to knowledgeable insiders who requested anonymity, the questionable activities within its Mongolian operations came to light in late 2023. Investigations revealed that certain employees in Mongolia had manipulated data and documents to artificially inflate payments while deliberately concealing overdue debts over approximately five years.
PwC profits fall in Asia after scandals in China and Australia
(Financial Times)
PwC's operations in Asia experienced a significant downturn over the past year, as scandals led to the loss of key clients in China and prompted the firm to divest its government consulting sector in Australia. Last Monday, the firm announced a 12.7 percent decline in profits across the Asia-Pacific region for the year ending June 30, reflecting a diminished market share that overshadowed growth in the Middle East and Europe.
On a global scale, PwC's profits increased by just 1 percent, a decrease from the 3.1 percent growth seen in the previous year. Although specific profit figures were not disclosed, the firm reported record revenues of $55.4 billion through June, marking a 3.7 percent rise when excluding currency fluctuations, starkly contrasting the revenue growth of 9.9 percent in 2023. The dual scandals in the Asia-Pacific region exacerbated an already sluggish consulting market, affecting PwC and dampening growth prospects for competitors like Deloitte and EY in their latest fiscal periods.
