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Wells allegedly mishandled fraud probes; BofA fires 2 in sexual misconduct probe

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Wells allegedly mishandled fraud probes; BofA fires 2 in sexual misconduct probe

Wells Fargo & Co. is facing yet another possible legal mess, this time for allegedly mishandling "hundreds" of fraud investigations, The New York Times reports. Matthew Valles — who was a fraud investigator for the company in Portland, Ore. — told the publication that when a customer's account shows signs of fraud, Wells Fargo simply closes the account and drops the customer instead of investigating for potential crime as required by law. Valles was terminated in January and is suing the bank and his former manager, claiming that firing him violated whistleblower laws, according to the report.

In other banking news, Bank of America Corp. terminated at least two employees from its prime brokerage unit for allegedly interfering in the bank's investigation of former executive Omeed Malik's alleged inappropriate behavior, The Wall Street Journal reports, citing "people familiar with the matter." Malik was fired after being accused of making unwanted sexual advances.

Also, BofA created the "brand safety officer" role to ensure that the company's advertisements do not appear alongside questionable content online, The Drum reports. Lou Paskalis, BofA's senior vice president and enterprise media executive, declined to name the new hire for the role, according to the report.

The New York Department of Financial Services asked New York Community Bank, Signature Bank and Deutsche Bank AG for details on their lending relationships with Jared Kushner the son-in-law of U.S. President Donald Trump — as well as Kushner's family and his companies, Bloomberg News reports, citing "people familiar with the matter."

Bank of New York Mellon Corp. intends to open an office in Riyadh, Saudi Arabia, as early as the second quarter, and apply for an asset services license from the country's Capital Market Authority, "sources familiar with the matter" told Reuters.

The Office of the Comptroller of the Currency initiated cease-and-desist proceedings against Washington Federal NA over the Washington Federal Inc. unit's compliance deficiencies regarding Bank Secrecy Act and anti-money laundering rules.

In credit union news, the New Jersey Department of Banking and Insurance liquidated First Jersey CU, deciding that the credit union had no prospect for independently restoring viable operations. First Jersey CU is the second federally insured credit union liquidated in the U.S. this 2018.

Meanwhile, credit union service organization PSCU Inc. acquired CU Recovery and first-party collection company The Loan Service Center. CU Recovery handles post charge-off accounts and is a full-service collection agency, while The Loan Service Center is a first-party collection company.

The U.S. Securities and Exchange Commission has reportedly began its sweeping probe into cryptocurrencies. Sources "familiar with the matter" told The Wall Street Journal that the agency sent subpoenas and information requests to technology companies and advisers participating in initial coin offerings.

Separately, the SEC charged three-time "recidivist" Steven Muehler with running unregistered broker/dealers, facilitating an unregistered securities offering and defrauding small businesses. Muehler is also accused of violating a 2016 SEC-issued cease and desist order barring him from associating with any broker/dealer.

And in government and regulatory news, Federal Reserve Chairman Jerome Powell will testify before the Senate Committee on Banking, Housing and Urban Affairs on the Fed's semiannual monetary policy report.

In other parts of the world

Asia-Pacific: Resona to buy back ¥101.6B of shares; 2 Indian firms may launch IPOs in March

Europe: Commerzbank gets final offers for unit; AIB, Dexia post FY'17 results

Middle East & Africa: Afreximbank eyes triple African listing; Hapoalim ups provision for US tax case

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng was up 0.65% to 31,044.25, while the Nikkei 225 fell 1.56% to 21,724.47.

In Europe, as of midday, the FTSE 100 slipped 0.68% to 7,182.46, and the Euronext 100 slid 0.85% to 1,019.63.

On the macro front

The jobless claims report, the purchasing managers' manufacturing index, the ISM manufacturing index, the construction spending report, the EIA natural gas report, the Fed balance sheet and the money supply report are due out today.

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