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Thursday, 11 June 2015

Thursday, June 11, 2015 Posted by Hari No comments Labels:
Posted by Hari on Thursday, June 11, 2015 with No comments | Labels:

Bank of England governor calls for longer prison sentences for bankers who break the law
In his Mansion House speech Bank of England governor Mark Carney said "Criminal sanctions should be updated, with market abuse rules similarly extended and maximum prison terms lengthened." He said that markets responsible for trillions of pounds of global trade were stained by excess, collusion and abuse and that "ethical drift" had taken hold. He said the Bank of England under his predecessor, Lord King, failed in the run-up to the financial crisis because of its arcane and ambiguous rules and its inability to identify risks in the banking system. It failed to effectively control markets where abuse was rife. Chancellor George Osborne, who was also speaking at the Mansion House, said: "The public rightly asks: 'Why is it after so many scandals so few individuals have faced punishment in the courts?.. Individuals who fraudulently manipulate markets and commit financial crime should be treated like the criminals they are - and they will be." BBC NEWS

HSBC Switzerland pays out £28m over money-laundering claims, but deal avoids prosecution and publication of findings
HSBC’s Swiss arm was caught banking the proceeds of political corruption and accepted deposits from arms dealers while helping wealthy people evade taxes. But the Swiss will not prosecute HSBC or publish the findings of their investigation into alleged aggravated money laundering. Announcing the biggest financial penalty ever imposed by the Geneva authorities, chief prosecutor Olivier Jornot launched a stinging attack on his own country’s financial laws, adding his voice to a growing a number of Swiss politicians and campaigners calling for reform of the country’s secretive banking system. HSBC’s Swiss arm is still facing investigations by US, French and Belgian authorities. Belgium said on Tuesday it was hoping to recover £390m in unpaid taxes from citizens who had hidden funds in undeclared Swiss accounts. Wrongdoing at HSBC was exposed after an IT worker at the bank, Hervé Falciani, leaked details about its Swiss accounts. The documents ended up in the hands of the French government in December 2008 and were distributed to the tax authorities of other nations, including the UK. But Switzerland is pursuing Falciani. It has issued an international arrest warrant, but the French authorities have refused to extradite him. GUARDIAN

Social Housing tenants earning £100k may get ‘right to buy’ discount
Government data show that there are 21,000 households in social properties, including council and housing association homes, who have incomes higher than £60,000. Some 8,000 earn over £80,000 and 5,000 are on more than £100,000. They could all qualify for six-figure discounts (£104,000 in London and £77,000 in the rest of England) funded by the taxpayer under David Cameron’s controversial new ‘right to buy’ plans. Critics said the disclosure made a mockery of Mr Cameron’s vow to help “working people” enjoy the dream of home ownership and one senior London Tory MP urged ministers to “iron out its obvious iniquities”. Researchers estimate that Right to Buy will force inner London boroughs to sell off 16,000 valuable properties. Social housing is built to help people on lower incomes but tenants can usually stay for life even if their earnings rise. Last year, former Communities Secretary Eric Pickles said it was “blatant unfairness” that the high-earning tenants were subsidised. EVENING STANDARD

WPP boss Martin Sorrell survives revolt over £43m pay package
77.8% voted for the pay package while 19.5% voted against and 2.7% abstained. Mr Sorrell, who took over WPP 30 years ago, received an annual salary of £1.15 million for 2014 but his total pay included £36 million as part of a long-term incentive plan and a £3.6 million short-term bonus. Adding pension contributions and a number of other benefits, he received total compensation of £42.98 million for 2014. Mr Sorrell’s pay has been a source of controversy for years. At the 2012 general meeting, nearly 60% of shareholders rejected his pay packet after which WPP lowered the executive’s base salary for 2013 and changed its long-term bonus plan, which has been the source of much of the controversy. PIRC, a U.K. consultancy advising a mix of asset managers and pension funds, said before the meeting that the annual controversy about Mr. Sorrell’s “enormous” pay packet showed executive remuneration systems were deeply flawed and in need of an overhaul. Luke Hildyard, deputy director at think tank High Pay Centre, said Mr. Sorrell’s pay for 2014 was more than double the amount paid to the chief executive of Royal Dutch Shell PLC, who was the second-best paid FTSE 100 boss for the period behind Mr. Sorrell. WALL STREET JOURNAL


Lionel Messi to face trial in Spain over alleged €4.1m tax dodge fraud
In August, Lionel’s father and business partner Jorge Messi made a payment of €5m to the tax authorities – the €4.1m of the alleged unpaid tax plus interest.  But fraud, if proven, can result in a jail sentence for the Argentinian football superstar who has just clinched the treble with his club Barcelona. The court felt there was evidence that the Barcelona forward “benefited” from a network of companies that allowed him to defraud the Spanish Tax Agency of £3.4m in income tax. Messi’s net salary from Barcelona is said to be about €16m a year plus multi-million endorsements with commercial sponsors around the world. He has ended a successful club season in which Barcelona clinched the treble of La Liga, the Copa del Rey and the Champions League and has now joined up with Argentina for the Copa America. GUARDIAN

Record £117m fine for PPI mistakes costs Lloyds bosses £33m in bonuses
The payment protection insurance (PPI) scandal has plagued the banking sector in recent years and in particular Lloyds, which has had to set aside £12billion to pay for a compensation programme, out of a running total of around £24billion for all major banks. This fine relates to a period from March 2012 to May 2013 when the group assessed customer complaints relating to more than 2.3million PPI policies and rejected 37 per cent of those - many of them wrongly. Lloyds has now launched a programme to re-review or automatically uphold around 1.2million PPI complaints and set aside a total of £710million to cover any redress due to affected customers, who are being contacted directly. PPI was insurance against illness or job loss sold by lenders and credit card firms alongside loans to customers. Policies were often added on to loans without people's knowledge or sold to those who were not eligible for payouts, such as the self-employed. Lloyds was hit with penalties last July totalling £218million by the FCA and US regulators over benchmark rate-rigging practices. DAILY MAIL

Confused.com takes down savings service after accusation it directs customers only to accounts that pay it money
An investigation by Channel 4's Dispatches looked at the savings accounts listed by comparison websites Go Compare, MoneySupermarket, Confused.com and Compare the Market. In theory, if all of the websites were showing all of the savings accounts available on the market, they should have shown the same number of accounts and the same best-buy accounts should have appeared at the top of their tables. However the investigation unearthed 'a huge variation both in the number of accounts the comparison sites found – and in their best interest rates'. For example, while MoneySupermarket found 127 tax-free Isa accounts, Confused.com showed just seven. The best rates listed were 1.9 per cent versus 1.2 per cent. In fact, Confused.com listed just ten savings accounts from the eight companies 'it seems to have deals with', instead of the best available. Confused.com offered some rates that would have left buyers £500 a year worse off compared with 'best buys' from other sites. Confused.com claimed savers are shown accounts from companies it has ‘commercial relationships with’, but they can see the rest of the market by clicking ‘view more on the site’. But Dispatches claimed that this promise ‘was not true’ because there was no ‘view more’ button for savers to click on. A typical ‘commercial relationship’ is when the bank pays the comparison site a commission on every sale. DAILY MAIL

Estate agent Foxtons risks a legal bill as high as £42MILLION after charging a landlord £616 to change a light fitting
In what could be the most costly light replacement in history, solicitors believe the dispute could lead to Foxtons being sued by thousands of landlords regardless of whether they have had work carried out at their properties. Dr Chris Townley, a law lecturer at King’s College London, signed up with Foxtons to let and manage his London property in 2011. Foxtons used a subcontractor called Maintenance1st to do the work. Dr Townley was billed £550 plus £66 VAT, but he later found that the subcontractor had charged much less. Dr Townley also discovered that Maintenance1st had paid Foxtons an undisclosed commission for undertaking the work. Additionally, Foxtons had charged Dr Townley an ‘ad hoc management charge’ of 10 per cent plus VAT because the invoice was over £500 despite the fact that the only reason it exceeded this sum was because of Foxtons’ 33 per cent fee. Leigh Day solicitors has now served the estate agent with a letter of claim. It says thousands of other landlords will also be entitled to compensation from Foxtons and it believes claims could reach £42 million. DAILY MAIL

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