Trust Digest 74 (November 25, 2014)
Does Bad Behavior Really Hurt Business?
Silicon Valley seems to have more than its share of companies behaving badly. Among up-and-comers in the tech world, privacy abuses and executive gaffes have become viral sensations. But is all that bad behavior actually bad for business?
Key Words: Uber, Culture, Tech Companies
Trust Issues: Trust Repair, Communication, Benevolence
Citigroup Fined $15 Million for Analyst Supervisory Failures
Citigroup Inc. (C), the third-biggest U.S. bank, was fined $15 million by the Financial Industry Regulatory Authority for failing to supervise research analysts and their handling of material non-public information. The lender didn’t adequately protect against “potential selective dissemination of non-public research to clients and sales and trading staff” from January 2005 to February 2014, Finra said today in a statement. New York-based Citigroup issued roughly 100 warnings about analyst communications with clients and sales and trading staff and when it found violations, it took too long to discipline staff or didn’t do enough, the industry-funded regulator said.
Key Words: Citigroup, Finra, Stock Research
Trust Issues: Integrity, Regulation, Transparency
RBS Bonuses Under Fire as Restructuring Group Executives’ Testimony Questioned
Bonuses handed out to senior bosses at Royal Bank of Scotland are facing renewed scrutiny after the chairman of the bailed-out bank apologised for inaccuracies in evidence given to MPs about its restructuring division. Sir Philip Hampton admitted evidence given by two of the most senior bankers to the Treasury select committee was incorrect. The division is facing accusations about its treatment of small businesses.
Key Words: RBS, Executive Pay
Trust Issues: Capability, Benevolence
High Court Judge Orders Goldman Sachs to Disclose Libya Profits
A high court judge has ordered Goldman Sachs to reveal how much profit it made on a deal that lost Libya’s government more than $1bn when financial bets turned sour. The Libyan Investment Authority, created in 2006 to look after the country’s oil riches, accused the Wall Street bank of duping it into making investments that its “naive” staff didn’t understand. The $66bn sovereign wealth fund is suing Goldman in the high court in London after it lost $1bn from investing in complex derivative investments that collapsed in value during the 2008 financial crisis.
Key Words: Goldman Sachs, Libya
Trust Issues: Responsibility, Accountability, Capability
Americans Relatively Sanguine About Online Privacy, Study Says
A survey released on Monday suggests that revelations about government online snooping provided by Edward Snowden did not raise concerns about online privacy to the same degree in the United States as in other countries. But it also indicates that a majority of Americans are worried about the security of personal information.
Key Words: Privacy, Security
Trust Issues: Alignment of Interests, Transparency
What’s a CEO Really Worth? Too Many Companies Simply Don’t Know
The pay that CEOs and other executives receive is not aligned well with company performance, primarily because companies and boards lack the tools to accurately measure how much success executives are actually having in their jobs, a new study concludes.
Key Words: Executive Pay
Trust Issues: Capability, Responsibility
Unsuspecting Indians Lose Billions to Bogus Investments
"When he realised he'd lost all our money, more than $9,000 [£5,661] in savings, he had a massive heart attack," says Gita Mandal tearfully. She pauses as grief chokes her throat mid-sentence. Gita, 55, is recounting how her husband Sunil died suddenly last year, leaving her penniless with six mouths to feed. Gita's family is one of 300 in Daspara village, an hour's drive south from Calcutta, which were swindled in a variety of unregulated "investment" schemes that have swept across India - swallowing up the life savings of some of the country's poorest citizens.
Key Words: India, Ponzi Schemes
Trust Issues: Regulation, Responsibility, Capability
JOHN KERRY: Trust Us, These Iran Negotiations Are Working
Secretary of State John Kerry said on Monday that carving out a nuclear deal with Iran simply takes a lot of time, as he explained why the talks blew past yet another deadline that very day. "This takes time, the stakes are high are the issues are complicated and technical. And each decision affects other decisions," Kerry said. "And each decision deeply affects international security and national interests. It also takes time to do this because we don't want any agreement — we want the right agreement."
Key Words: Kerry, Iran, Nuclear Power
Trust Issues: Transparency, Capability, Alignment of Interests
RBS 'Wanted Critic Tomlinson's Mortgage Back'
A businessman who wrote a government report that criticised RBS has been told he can no longer remain a customer of the bank, Panorama has learned. In the 2013 report, Lawrence Tomlinson accused RBS of systematically wrecking viable businesses. And in 2014, RBS deputy chief executive Chris Sullivan told him he would have to take his mortgage, business and personal accounts to another bank. But RBS said the decision had nothing to do with the critical report.
Key Words: Tomlinson, RBS, Retaliation
Trust Issues: Accountability, Integrity