BizFeed: Banks Plead Guilty to Currency Scam
1. Citigroup, JPMorgan Chase Among Banks Fined for Rigging Foreign Currency
The News: Four large global banks have pleaded guilty to manipulating international currency rates. Citigroup, JPMorgan Chase, Barclays and Royal Bank of Scotland had been accused of collusion and price fixing, according to the New York Times. UBS was also accused and stripped of an earlier non-prosecution agreement, forcing the bank to plead guilty to manipulating the London Interbank Offered Rate.
Why it Matters: Even after the Great Recession and increased scrutiny on banks, they were still able to break the law “every day for about five years,” the Times wrote.
That lack of oversight, coupled with the pressure to squeeze profits from a relatively middling business, set the stage for this scandal, one that unfolded nearly every day for five years. The crimes described on Wednesday also painted the portrait of something more systemic: a Wall Street culture that enabled many big banks to break the law even after years of regulatory black marks after the crisis.
“If you aint cheating, you aint trying,” one trader at Barclays wrote in an online chat room where prosecutors say the price-fixing scheme was hatched.
Still, the banks won’t be in too much trouble, as the penalties could be more symbolic than anything, and nobody has been indicted. Isn’t that nice.
Although they could be barred by American regulators from certain activities, the banks scrambled behind the scenes to persuade those regulators to grant exemptions. That process, which delayed the Justice Department’s announcement by a week, already led to the Securities and Exchange Commission providing a number of waivers that allow the banks to conduct business as usual.
And at least for now, the Justice Department did not indict any employees whose errant instant messages underpin the cases against the banks.
2. H&M is Recruiting Big in Philly
The News: Fast-fashion retailer H&M chose Philadelphia and Houston for a big recruitment push. The Philadelphia Inquirer reports that the ever-expanding company will start an ad blitz online, in print and on digital billboards. They will depict messages like: “Five weeks vacation IS POSSIBLE” and “Finding my place IS POSSIBLE.”
Why it Matters: The company isn’t choosing Philly out of the goodness of its heart. It’s a strategic move because of the vast number of millennials and recent college grads in the region. The Inquirer explains:
“In this particular area, there is a growing need to fill positions as people move on,” said Jennifer Ward, spokeswoman for H&M USA. She was referring to both college matriculation and employees being promoted from entry-level positions.
And with no other major city having had a larger increase of 20-to-34-year-olds since 2006, according to a Pew Charitable Trusts report last year, H&M wanted to tap millennials’ innate sense of entrepreneurship.
3. Supermarket Raises its Own Minimum Wage
The News: Weis Markets, which has five locations in the Greater Philadelphia area and is a power player in Central Pennsylvania, has voluntarily raised its own minimum wage to $9 per hour. That’s up from the state minimum wage of $7.25. The Bucks County Courier Times has the story.
Why it Matters: The minimum wage and pay equity fight in the United States is going to take time — especially if we have to rely on a gridlocked Congress to get anything done. So it’s refreshing to see businesses voluntarily raise their own wages. Giant Food Stores pledged in April to start associates at $9 per hour, and Aetna said in January that it plans to raise its minimum wage to $16 per hour for 5,700 workers. Companies that stay ahead of the wage curve are going to be much more competitive in the fight for talented workers.