compliance

Five regulatory agencies are going to be voting today on the Volcker rule, which limits the ability of banks to invest in hedge funds or trade the money they hold for their own gain, The New York Times reports. Meanwhile, "lobbyists for Wall Street banks and business trade groups," including the U.S. Chamber of Commerce, are hinting that they will litigate to undercut the rule, The Times further reports.

At the same time as the financial sector plans to fight the rule to some extent, "Wall Street is also throwing resources into compliance.  Banks are writing new compliance manuals, training their traders and rewriting computer programs that effectively automate whether a trade is out of bounds under the Volcker Rule," The Times also reports.

The five agencies are the Federal Reserve, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation and the Comptroller of the Currency.

Even though JP Morgan agreed to pay nearly $1 billion in fines for its conduct in the 'London Whale' incident in which the bank’s chief investment officer lost more than $6 billion and then regulators were misled about the losses, the investment bank's legal troubles appear to be far from over. The New York Times' DealB%k Blog reports there is "an unusual wave of scrutiny for JPMorgan, which is now facing investigations from at least seven federal agencies, several state regulators and two foreign nations. The investigations span across the bank. Its mortgage business, debt collection practices and its hiring of the children of well-connected Chinese officials are all under fire in Washington."

The New York Times has this interesting profile of JPMorgan's general counsel, Stephen M. Cutler, who has talked tough in the past on the importance of compliance with financial rules and regulations but on whose watch "JPMorgan had agreed to admit wrongdoing and pay nearly $1 billion in fines for its conduct in the 'London Whale' matter, in which the bank’s chief investment office lost more than $6 billion and bank officials misled regulators about the losses."