Commonwealth Bank Refunds More than A$100 Million for Charging Fees without Financial Advisory Services 

Commonwealth Bank Refunds More than A$100 Million for Charging Fees without Financial Advisory Services

One of Australia’s largest bank, Commonwealth Bank (CBA), has been charging clients for no financial advisory services.  The bank has since refunded more than A$100 million to its clients that who were charged fees for no services between 2007 to 2015.

” Commonwealth Bank Refunds More than A$100 Million for Charging Fees without Financial Advisory Services  “

Commonwealth Bank did not report the illegal behaviour under the Corporations Act to the industry regulator, the Australian Securities and Investments Commission (ASIC) only until 2014.  The bank

reported clients of its’ business subsidiaries, Commonwealth Financial Planning Limited (CFPL) and BW Financial Advice Limited (BWFA), did not receive annual reviews as part of the financial advice service package they paid for.  In one inquiry, one financial advisor in its subsidiary, Count Financial, knew the bank was charging A$1,000 in service fees in 2015, despite the client having died in 2004.

After the self-reporting, the bank worked with Deloitte and EY, to develop and implement a comprehensive Advice Fee Refund program covering the period 2007 to 2015, which involved reviewing approximately 62,000 customer files and making payments of approximately $88 million (plus interest) to affected customers. In November 2017, the Australian government had commenced inquiries into banking, pension and financial services industries, after a series of scandals.

Source: CBA, ABC, CTV News, The Guardian

 

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About Commonwealth Bank of Australia

Commonwealth Bank of Australia is Australia’s leading provider of integrated financial services, including retail, premium, business and institutional banking, funds management, superannuation, insurance, investment and share-broking products and services.

Visit: Commonwealth Bank

 

 


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Music Streaming Spotify Surged 13% at IPO on NYSE with $26 Billion Market Value

Music Streaming Spotify Surged 13% at IPO on NYSE with $26 Billion Market Value

Music streaming Spotify had surged 13% at IPO on the New York Stock Exchange (NYSE), at a reference IPO price of $132.  The stock closed at $149.01 on the 1st trading day, closing at  $147.92 at the end of the week, valuing the company at more than $26 billion.

“ Music Streaming Spotify Surged 13% at IPO on NYSE with $26 Billion Market Value “

Spotify opted for a direct listing on NYSE, bypassing investment banks or brokers to underwrite the offering, saving hundreds of millions of dollars in underwriting fees.  The reference price was set at $132, giving an early estimate of the level at which the the supply and demand could be balanced.  The opening public price was determined by the buy and sell orders collected by the NYSE from broker-dealers.

Spotify, founded by Daniel Ek and Martin Lorentzon, was launched in 2008 and is available in more than 60 countries.  It is the biggest music streaming company in the world with 71 million premium subscribers ($9.99 monthly) globally while Apple music streaming service has 36 million subscribers.

After the IPO, both founders Daniel Ek and Martin Lorentzon became billionaires with net worth of more than $2 billion & $1 billion respectively.

Sources: Reuters, CNBC, Bloomberg

 

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Anbang Insurance Group Receives $9.65 Billion Capital Injection from China Insurance Protection Fund

Anbang Insurance Group Receives $9.65 Billion Capital Injection from China Insurance Protection Fund

Anbang Insurance Group will receive capital injection of CNY 60.8 billion ($9.65 Billion) from China’s Insurance Protection Fund to ensure its solvency.  The group’s ex-chairman, Wu Xiaohui has admitted to fundraising fraud and embezzling more than US$10 billion.

” Anbang Insurance Group Receives $9.65 Billion Capital Injection from China Insurance Protection Fund “

In February 2018, the Chinese government had seized control of Anbang Insurance Group.  Anbang Insurance Group is being managed by a group of officials from the China Insurance Regulatory Commission (CIRC) for one year.  The regulatory intervention is one of China’s recent moves to stop Chinese conglomerates on aggressive overseas acquisition and to reduce financial risk.  The insurance conglomerate have significant stakes in banks and property developers including China Minsheng Banking Corp Ltd, China Merchants Bank Co Ltd, developers China Vanke Co Ltd and Gemdale Corp.

The Insurance Protection Fund was set up to protect policyholders in the event of an insurer going bankrupt.  It is managed by China Insurance Regulatory Commission (CIRC).  The rescue fund is a non-government fund, and will only hold the equity stake temporarily.  The company will be inviting private companies in the area of pension insurance, healthcare, Internet and technology, and those that share synergic resources with its core insurance business to participate in future private placements.

Sources: Anbang

 

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About Anbang Insurance Group

Anbang Insurance Group is a global insurance company with total assets of nearly 1971 billion RMB. With over 30,000 employees and a customer base of 35 million worldwide, Anbang stands out as one of the most profitable insurance companies in China. Its business covers life insurance, P&C insurance, health insurance, pension insurance, banking, asset management, etc. With a “customer-centric” strategy in mind, Anbang Insurance is dedicated to creating value for its worldwide customers.

Visit: Anbang Insurance Group

 

 


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$8 Billion Lawsuit Against Billionaire Steven Cohen & Hedge Fund SAC Capital Advisor Dismissed

$8 Billion Lawsuit Against Billionaire Steven Cohen & Hedge Fund SAC Capital Advisor Dismissed

A $8 Billion lawsuit against Billionaire Steven A. Cohen and hedge fund SAC Capital Advisor had been dismissed by a United States court.  Steven Cohen & SAC Capital Advisor was sued for working with hedge funds to spread false rumours and to depress the share price of Fairfax Financial, a Canadian insurer & investment group.

“$8 Billion Lawsuit Against Billionaire Steven Cohen & Hedge Fund SAC Capital Advisor Dismissed”

Fairfax had claimed it was targeted by hedge funds, creating rumours by encouraging reporters to write negative stories and analysts producing biased research.  On 29th March 2018, the case against Steve A. Cohen and SAC Capital Advisor by Fairfax was dismissed.

SAC Capital Advisor was founded by Steven A. Cohen in 1992.  Since 2010, after a series of investigation by the United States Securities and Exchange Commission (SEC) for insider trading, the firm shrank and in 2016, the business entity closed down.  In 2014, Steven A. Cohen converted his investment operations of SAC Capital Advisor into his family office, Point72 Asset Management.  He is estimated to have more than $14 billion net worth.

The case is Fairfax Financial Holdings Ltd et al v. SAC Capital Management LLC et al, and filed at the Superior Court of New Jersey, Morris County, Nos. MRS-L-2032-06, MRS-L-5000-06.

Sources: Reuters, Institutional Investor

 

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About Fairfax Financial Holdings Limited

Fairfax Financial Holdings Limited is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management. Fairfax’s corporate objective is to achieve a high rate of return on invested capital and build long-term shareholder value. Fairfax seeks to differentiate itself by combining disciplined underwriting with the investment of its assets on a total return basis, which Fairfax believes provides above-average returns over the long-term.

Fairfax was founded in 1985 by the present Chairman and Chief Executive Officer, V. Prem Watsa. The company has been under present management since 1985 and is headquartered in Toronto, Canada. Its common shares are listed on the Toronto Stock Exchange under the symbol FFH and in U.S. dollars under the symbol FFH.U.

Visit: Fairfax Financial

 


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HSBC to Pay $100 Million for Libor-Rigging Settlement in United States

HSBC to Pay $100 Million for Libor-Rigging Settlement in United States

HSBC has agreed to pay $100 Million in settlements for Libor-Rigging with the United States District Court.  The $100 million settlement is to to end further private litigations on HSBC role in Libor fixing and manipulation.  Since 2008, many banks had been investigated and made settlements to prevent further litigation.

” HSBC to Pay $100 Million for Libor-Rigging Settlement in United States “

In the settlement, HSBC denied any wrongdoing, but to avoid the risks, costs and distraction of litigation. The case is “Libor-Based Financial Instruments Antitrust Litigation, U.S. District Court, Southern District of New York, No. 11-md-02262.”  In 2017, the U.K. Financial Conduct Authority had announced plans to end the use of Libor by the end of 2021.

Sources: Reuters, Bloomberg

 

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About HSBC

HSBC is one of the world’s largest banking and financial services organisations. With around 6,000 offices in both established and emerging markets, we aim to be where the growth is, connecting customers to opportunities, enabling businesses to thrive and economies to prosper, and, ultimately, helping people to fulfil their hopes and realise their ambitions.

We serve more than 47 million customers through our four Global Businesses: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. Our network covers 71 countries and territories in Europe, Asia, the Middle East and Africa, North America and Latin America. Listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by about213,000 shareholders in 132 countries and territories.

Visit: HSBC

 

 


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Former Chairman of Anbang Insurance Begins Trial in Shanghai

Former Chairman of Anbang Insurance Begins Trial in Shanghai

Former Chairman of Anbang Insurance, Wu Xiaohui is facing his trial in Shanghai for suspected fundraising fraud and embezzlement.  In the trial, the prosecutor said the defendant, Wu Xiaohui had fraudulently raised money and “treated the firm’s capital as his own capital.”

” Former Chairman of Anbang Insurance, Wu Xiaohui Facing Trial in Shanghai “

In 2011, faked financial statements were submitted to China’s insurance regulator for approvals to sell insurance products to the public for investment, and selling more than the approved limit.  By 2017, Anbang had oversold CNY 724 billion ($115 billion) of insurance products.  He is alleged to illegally used CNY 65 billion ($10.3 million), with some of the funds being were routed to other firms for investments, debt repayment and personal spending.

In the trial, the former Chairman of Anbang Insurance, Wu Xiaohui raised objections and also believed he did not violate any regulations.  His sister testified against him, claiming he controlled more than 200 companies (with some in the names of relatives), and 38 were used to control Anbang Group.  According to China’s criminal code, the sentences are punishable by up to life sentence.

In February 2018, the Chinese government had seized control of Anbang Insurance Group.  Anbang Insurance Group is being managed by a group of officials from the China Insurance Regulatory Commission (CIRC) for one year.  The regulatory intervention is one of China’s recent moves to stop Chinese conglomerates on aggressive overseas acquisition and to reduce financial risk.  The insurance conglomerate have significant stakes in banks and property developers including China Minsheng Banking Corp Ltd, China Merchants Bank Co Ltd, developers China Vanke Co Ltd and Gemdale Corp.

Anbang Insurance Group is a global insurance company with total assets of nearly CNY 1,9 trillion ($304 billion).  The group employs over 30,000 employees and has a customer base of 35 million worldwide.  Anbang Insurance Group was established in 2004,

In 2004, Anbang Property & Casualty Insurance was established and opened its first branch in Beijing.  In 2011, CIRC approved the restructuring of Anbang Property & Casualty Insurance for the establishment of Anbang Insurance Group.  Chairman Wu Xiaohui had transformed the group over the 10 years into one of the world’s largest insurance company.  He is married to Zhuo Ran, the granddaughter of Deng Xiaoping, China’s leader between 1978 to 1989.

Sources: SCMP, Reuters

 

 

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About Anbang Insurance Group

Anbang Insurance Group is a global insurance company with total assets of nearly 1971 billion RMB. With over 30,000 employees and a customer base of 35 million worldwide, Anbang stands out as one of the most profitable insurance companies in China. Its business covers life insurance, P&C insurance, health insurance, pension insurance, banking, asset management, etc. With a “customer-centric” strategy in mind, Anbang Insurance is dedicated to creating value for its worldwide customers.

Visit: Anbang Insurance Group

 

 


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UBS to Pay $230 Million to Settle Mortgage-Backed Securities Probe

UBS to Pay $230 Million to Settle Mortgage-Backed Securities Probe

UBS will pay $230 Million to settle mortgage-backed securities probe in New York.  The settlement covers mortgage-backed securities issued between 2006 and 2007, with notional amount exceeding $10 billion.  Investors had lost billions of dollars in the certificates, backed by the loan pools (mortgage-backed securities).

” UBS Pays $230 Million to Settle Mortgage-Backed Securities Probe ”

UBS had ignored advisory issued during the due diligence process, and had breached its underwriting guidelines. The bank had admitted in the settlement prospectus supplements did not fully explain the bank’s due diligence process.  The $230 million settlement includes $189 million in consumer relief and $41 million in cash for the New York State.

Recent Settlements:

  • Royal Bank of Scotland – $500 million
  • JPMorgan Chase & Co. – $1 billion
  • Bank of America Corp. – $800 million

Source: Bloomberg, Reuters

 

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About UBS

Headquartered in Zurich and Basel, the UBS Group is a global firm providing financial services to private, corporate and institutional clients. The UBS Group is present in all major financial centers and has offices in over 50 countries. The UBS Group employs approximately 60,000 people around the world. The UBS Group’s historical roots stretch back more than a century.

Visit: UBS

 


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Crown Resorts Owner & Billionaire James Packer Resigns as He Battles Mental Health Issues

Crown Resorts Owner & Billionaire James Packer Resigns as He Battles Mental Health Issues

Crown Resorts Founder & Billionaire James Packer has resigned as a director of Crown Resorts as he battles mental health issues.  In 2017, he had returned to the Crown Resorts Board as part of leadership changes following the company’s decision to exit Macau and focus on its Australian assets.

“ Crown Resorts Owner & Billionaire James Packer Resigns as He Battles Mental Health Issues “

In recent times, James Packer, a billionaire with an estimated fortune of almost $4 billion and Australia’s top 10 wealthiest person, has been battling business and personal issues.  He was linked to a corruption scandal involving Israeli Prime Minister Benjamin Netanyahu, who is being investigated for receiving lavish gifts from businessmen including James Packer.  In Australia, he reportedly had $2.3 billion of debt at CPH & over $3 billion of debt at Crown, and exited his casino business in Macau after investigation & fines by Chinese authorities.  In 2015, after almost 10 years of negotiating, a settlement was reached with his elder sister, Gretel Packer over his late father’s $1.25 billion will.  In 2017, he ended his relationship & engagement with pop star Mariah Carey and made a settlement of more than a few million dollars to her.

James Packer is the son of the late media mogul Kerry Packer who founded Publishing and Broadcasting Limited, and inherited Consolidated Press Holdings.  Crown Resorts was founded in 2007 through a divestment from Publishing and Broadcasting Limited.

Sources: News, BBC, Crown Resorts

 

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About Crown Resorts

Crown Resorts is one of Australia’s largest entertainment groups.  The group’s core businesses and investments are in the integrated resorts sector.

In Australia, Crown Resorts wholly owns and operates two of Australia’s leading integrated resorts, Crown Melbourne Entertainment Complex and Crown Perth Entertainment Complex.  Overseas, Crown Resorts also fully owns and operates Crown Aspinalls in London, one of the high-end licensed casinos in the West End entertainment district.  Crown Resorts also has a strong portfolio of future projects and complementary investments, anchored by Crown Sydney, and including our digital businesses.

Visit: Crown Resorts

 

 


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Co-founder of Private Equity Firm Blackstone Peter Peterson Dies at 91

Co-founder of Private Equity Firm Blackstone Peter Peterson Dies at 91

Peter George Peterson, co-founder of one of the world’s largest private equity firm Blackstone Group, has died at the age of 91.  He and Stephen Schwarzman had left Lehman and founded Blackstone in 1985 with only 4 staffs, including themselves.  Today, Blackstone is one of the world’s largest investment manager, in private equity, real estate, hedge funds and credit with more than $434 billion AUM.  The investment manager employs almost 2,300 employees in 25 offices worldwide.  At founding, both contributed $200,000 for a total capital of $400,000, with Peter G. Peterson becoming the Chairman at age 59 and Stephen Schwarzman became the CEO at age 38.

” Co-founder of Private Equity Firm Blackstone Peter Peterson Dies at 91 “

Peter G. Peterson had served as the U.S. Commerce secretary under President Richard Nixon in 1971 at the age of 37.  In 1973, he joined Lehman as Vice-Chairman and within 2 months, became the Chairman & CEO.  He quickly restructured losses from the bond-trading business and in 1977, merged Lehman with Kuhn, Loeb & Co., a New York investment bank.  In 1984, Lehman was sold to Shearson/American Express Inc. for about $375 million, where he received a sum due a contractual agreement in the event Lehman was sold.

In 2007, 22 years after the founding of Blackstone, Blackstone went public giving him almost $1.85 billion after listing.  He retired at the end of 2008, and invested his time and money on the Peter G. Peterson Foundation.

He was born in 1926, in Kearney, Nebraska in the United States.  His father was born in Greece, went to United States in 1923 at the age of 17.  He has 2 siblings, and one died at the age of 1.  In 1944, in his freshmen at Massachusetts Institute of Technology, he was expelled for plagiarism after consulting a term paper written by a friend of a friend.  Thereafter, he went to Northwestern University and graduated summa cum laude in 1947.  In 1951, he received his master’s degree at the University of Chicago’s Graduate School of Business.  He was also the Chairman of the Federal Reserve Bank of New York from 2000 to 2004.  Peter G. Peterson was divorced twice, and his third marriage was to Joan Ganz Cooney, the co-founder of Sesame Street and Children’s Television Workshop.

Sources: Bloomberg, NY Times

 

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About Blackstone

Blackstone is one of the world’s leading investment firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, and the communities in which we work. We do this by using extraordinary people and flexible capital to help companies solve problems. Our asset management businesses, with over $385 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis.

Visit: www.blackstone.com

 


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Law Firm Mossack Fonseca at Heart of Panama Papers to Shut Down

Law Firm Mossack Fonseca at Heart of Panama Papers to Shut Down

Mossack Fonseca, the law firm at the heart of the “Panama Papers” will be shutting down due to the economic and reputational damages on the firm.  Millions of documents and data was stolen and exposed from Mossack Fonseca, and leaked to the media in April 2016.  Names of powerful people including wealthy and politicians were leaked and exposed in the “Panama Papers” for using offshore corporations to evade or reduce taxes.

“ Law Firm Mossack Fonseca at Heart of Panama Papers to Shut Down “

In February 2017, Panama’s police arrested the law firm’s founders, Ramon Fonseca and Jurgen Mossack on money laundering charges.  They were released in April 2017.

Sources: Reuters, The Guardian, ICIJ

 

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About Mossack Fonseca

Established in 1977, we provide comprehensive international legal services. The firm provides services based on more than 35 years of experience. As part of its added value, the firm offers personal advice and a world-class online experience through a virtual Client Portal which is available 24 hours a day. Our web-based Client Information Portal application allows clients to request companies online, verify the status of companies, in addition to other transactions.

Visit: Mossack Fonseca

 

About Panama Papers

The Panama Papers are documents which were leaked from Mossack Fonseca, a Panama-based law firm which, according to its website, offers “comprehensive legal and trust services.” The website goes on to say that the firm offers “research, advice and services for the following jurisdictions: Belize, The Netherlands, Costa Rica, United Kingdom, Malta, Hong Kong, Cyprus, British Virgin Islands, Bahamas, Panama, British Anguilla, Seychelles, Samoa, Nevada, and Wyoming (USA).” Some of those jurisdictions have been labeled tax havens – including Panama.

Visit: Panama Papers by Forbes

 


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