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Bank of America Gears Up for WikiLeaks Fallout; Wall Street Takes Note

By Justin Grant January 03, 2011 URL:

Bank of America is gearing up to defend itself in the event that it proves to be the bank that WikiLeaks' Julian Assange has pledged to take down.

After seeing its stock swoon last November amid rumors that Assange was in possession of an executive's hard drive containing potentially damning information about the firm, Bank of America has been on high alert.

According to the New York Times , the company assembled a team of 15 to 20 top officials - led by chief risk officer Bruce Thompson - to spearhead on broad internal investigation. For more than a month the team has been poring over thousands of documents and reviewing every case in which a computer has gone missing, searching for any sign its systems may have been compromised, the newspaper said.

From The New York Times:

In addition to the internal team drawn from departments like finance, technology, legal and communications, the bank has brought in Booz Allen Hamilton, the consulting firm, to help manage the review. It has also sought advice from several top law firms about legal problems that could arise from a disclosure, including the bank's potential liability if private information was disclosed about clients.

The company's chief executive, Brian T. Moynihan, receives regular updates on the team's progress, according to one Bank of America executive familiar with the team's work, who, like other bank officials, was granted anonymity to discuss the confidential inquiry.

Whether Mr. Assange is bluffing, or indeed has Bank of America in its sights at all, the bank's defense strategy represents the latest twist in the controversy over WikiLeaks and Mr. Assange.

Meanwhile, experts say Wall Street is keeping a close eye on the case as a roadmap for how to handle the theft of sensitive information.

From The New York Times:

That Mr. Assange might shift his attention to a private company - especially one as politically unpopular as Bank of America or any of its rivals, which have been stained by taxpayer-financed bailouts and the revelation of improper foreclosure practices - raises a new kind of corporate threat, combining elements of law, technology, public policy, politics and public relations.

http://advancedtrading.com/infrastructure/228901612?printer_friendly=this-page


automatic telling machines...

In addition to the Merrill documents, the team is reviewing material on Bank of America’s disastrous acquisition in 2008 of Countrywide Financial, the subprime mortgage specialist, the officials said. The criticism of Bank of America’s foreclosure procedures centers mostly on loans it acquired in the Countrywide deal, and one possibility is that the documents could show unscrupulous or fraudulent lending practices by Countrywide.

If that is the case, it would not only reignite political pressure on Bank of America and other top mortgage servicers, but it could also strengthen the case of investors pressuring the big banks to buy back tens of billions in soured mortgages.

“If something happens, we want to be ready,” one bank official said. “You want to know what your options are before it comes out, rather than have to decide on the spot.” Bank of America’s efforts are complicated by the fact that it has made several huge acquisitions in recent years, and those once-independent companies had different computer systems and security procedures.

http://www.nytimes.com/2011/01/03/business/03wikileaks-bank.html?_r=2&ref=business&pagewanted=print

your pension is for grab...

People’s retirement savings are a convenient source of revenue for governments that don’t want to reduce spending or make privatizations. As most pension schemes in Europe are organised by the state, European ministers of finance have a facilitated access to the savings accumulated there, and it is only logical that they try to get a hold of this money for their own ends. In recent weeks I have noted five such attempts: Three situations concern private personal savings; two others refer to national funds.

The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). In this extortionate way, the government wants to gain control over $14bn of individual retirement savings.

The Bulgarian government has come up with a similar idea. $300m of private early retirement savings was supposed to be transferred to the state pension scheme. The government gave way after trade unions protested and finally only about 20% of the original plans were implemented.

http://www.csmonitor.com/layout/set/print/content/view/print/353213

the currency/trade wars...

Brazil has warned that the world is on course for a trade war because of what it says is currency manipulation by China, the US and others.

Finance minister Guido Mantega said Brazil was preparing moves to prevent further appreciation of its currency.

He said his government would raise the issue at the World Trade Organization and the G20 group of rich and developing countries.

Mr Mantega was speaking in an interview with the Financial Times newspaper.

"This is a currency war which is turning into a trade war," Mr Mantega said in his first major interview since Dilma Rousseff took office as Brazil's new president on 1 January.

He said Brazil's trade with the US had slipped from an annual surplus of about $15bn (£9.6bn) to a deficit of $6bn because of US efforts to revive its economy through loose monetary policy.

"The exchange rate is one of the main drivers of economic policy, more so even than productivity," he said.

Mr Mantega added that China's "undervalued currency" was also distorting world trade.

http://www.bbc.co.uk/news/business-12148841