Thursday, October 31, 2013

SAC Capital Advisors will shut its London office by the end of the year

Steven A. Cohen's SAC Capital Advisors will shut its London office by the end of the year as the hedge fund downsizes in response to a long-running insider trading investigation, according to a memo sent to staff on Tuesday.
In the memo, SAC President Tom Conheeney, who informed the London staff of the decision in person on Tuesday, also told employees that the hedge fund cut six portfolio managers based in the United States this week.
"As our negotiations with the government have unfolded, it has become clear to us that the outcome the government is demanding is likely to have a greater than first anticipated impact on the firm," Conheeney wrote in the memo, a copy of which was obtained by Reuters. "We have concluded that we must operate as a simpler firm and reduce our capital allocations."
He said the decision to close the office "was not something we had been contemplating."
An SAC official declined comment on the contents of memo. The size of the London staff was not disclosed.
The pending London closure was first reported by Bloomberg.
This summer, U.S. prosecutors indicted Cohen's firm, saying SAC fostered a culture in which employees flouted the law and were encouraged to tap their personal networks of contacts for inside information about publicly traded companies.
SAC is close to reaching a deal with U.S. prosecutors to resolve the insider trading case against it, Reuters reported last week.
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Wednesday, October 30, 2013

JPMorgan Chase's reported fine of $13 billion to settle claims

A lot of people are questioning whether JPMorgan Chase's reported fine of $13 billion to settle claims that it misled investors in mortgage bonds is excessive. It would, after all, be the largest settlement any single bank has ever paid to regulators.
But perhaps the better question is this: Why did CEO Jamie Dimon agree, if it has, to $13 billion?
Yes, regulators have plenty of evidence that JPMorgan (JPM) -- along with Bear Stearns and Washington Mutual, both of which JPMorgan bought -- sold bonds to investors that were not what they claimed. But every bank did that. And there is no evidence that JPMorgan was the worst offender. Fannie and Freddie lost more money on bonds underwritten by Bank of America (BAC) and Countrywide, which BofA acquired.
MORE: JPMorgan's fine is bad news for Bank of America, Wells
That, of course, isn't a good defense, but it should play into considerations of just how much money JPMorgan should have to pay. What's more, last year, the Justice Department and the Securities and Exchange Commission dropped a similar case it had pursued against Goldman Sachs (GS) without bringing charges. An SEC case against Wells Fargo (WFC) for selling mortgage bonds that the regulator has been pursuing for close to a year and a half appears to have gone nowhere.
JPMorgan isn't even getting immunity from criminal charges. The government faces an uphill battle, but those charges are still a risk even after $13 billion, which, just for comparison, is about $5 billion more than it would cost to build Elon Musk's hyperloop.
Some have called the fine extortion. The government has JPMorgan in the corner, and it's extracting as big a fine as it possibly can because it knows the bank can pay. The Wall Street Journal published an editorial on the fine titled "The Morgan Shakedown."
But that assumes JPMorgan had to pay, and that it had to pay now. It is hard to know what the bank's board of directors wanted, but there is little evidence there was a gun to Dimon's head to make a deal. JPMorgan's stock is up 28% in the past year, even as the bank's legal problems have intensified. So, it doesn't seem like shareholders were pushing for a settlement. Dimon could have fought the charges if he thought it was a bad deal.
MORE: JPMorgan: We're prepared for $23 billion in legal fees
Here's another way to look at JPMorgan's outsize fine: Perhaps it was a payoff. Regulators were looking for a win against banks. They could have pushed for Jamie Dimon to step down as CEO, or they could have forced him to give up his role as both chairman and CEO. Given the regulatory and legal troubles the bank has faced recently, pushing for Dimon to give up his dual role at the company would seem like justified punishment.
And remember, while 80% of the investor losses that JPMorgan is settling were on bonds originated by either Bear Stearns or Washington Mutual, that doesn't mean that 80% of the wrongdoing was committed by those two banks. The Justice Department's civil case, which appears to be the impetus for the large settlement, was based on mortgage bonds that JPMorgan sold from 2005 to 2007, well before it bought either of those banks. Dimon was the CEO for much of that time.
And yet there appears to be little or no heat on Dimon. In fact, while the details of the settlement aren't out yet, it appears that all of JPMorgan's current management will be safe from personal punishment. The bank has reportedly agreed to cooperate with regulators in cases against ex-employees but not against current executives, and presumably some of those employees the government wants to go after are from Bear Stearns or Washington Mutual. None of those cases appear to be part of this $13 billion settlement. So, once again, we have a bank paying an enormous fine to settle claims that it broke the law with no individuals being charged for doing anything wrong. The crimes committed themselves.
And Dimon knows that his scalp would be a valuable haul for the regulators. But a really, really large fine is nice too. So that's what Dimon gave them. Yes, regulators might have been asking for even more. But that doesn't mean that two-thirds of what they were looking for isn't a payoff for keeping Dimon and his top executives safe from punishment.
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Tuesday, October 29, 2013

former UBS (UBSN.VX) and Citigroup (C.N) trader, allegedly conspired with 22 others to manipulate Libor

Tom Hayes, a former UBS (UBSN.VX) and Citigroup (C.N) trader, allegedly conspired with 22 others to manipulate Libor benchmark interest rates, a London court heard on Monday.
The 34-year-old, who appeared alongside former RP Martin brokers Terry Farr and James Gilmour at Southwark Crown Court, was charged with eight counts of conspiracy to defraud with staff from at least 10 banks and brokerages between 2006 and 2010.
The three Britons are the first suspects to face trial in an inquiry stretching from North America to Asia into whether traders manipulated rates such as Libor, against which around $300 trillion worth of products, from derivatives to mortgages, are priced worldwide.
The high-profile trial will provide a test for David Green, head of Britain’s Serious Fraud Office (SFO), who has staked his reputation on the success of “top tier” investigations such as the global inquiry into the manipulation of benchmarks such as Libor (London Interbank Offered Rate).
Judge Jeremy Cooke said the indictments against Hayes and Farr had not been signed – meaning they were only in draft form – and therefore would be amended to remove the names of alleged co-conspirators. He emphasized no formal charge or complaint had been made against these other individuals.
The judge made the decision after lawyers representing some of the unnamed parties complained that their clients had only been told they would be named in court in a letter sent by the SFO on September 30.
Some of the alleged co-conspirators have not even been interviewed by the SFO, the lawyers said.
The next hearing is planned for December with a trial not expected until 2015.
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Monday, October 28, 2013

Bank of Canada’s economists don’t write too good

An internal report card says the Bank of Canada’s economists don’t write too good.
Economists’ writing skills were identified by many as an area for improvement,” says an audit ordered by the central bank.
“This includes difficulties being succinct, grammatically correct, and prioritizing the data into useful information.”
Auditors examined an elite group of bank economists, most of them with graduate degrees, who regularly dissect the current state of the Canadian and international economies.
The group’s advice is in high demand by Stephen Poloz, the governor, and his five deputies, who together must set Canada’s monetary policy in a volatile financial climate.
The workload of the group has grown tremendously since the global meltdown of 2008, the audit notes.
“The number of requests for analysis coming from the Governing Council members has increased as they seek to understand the impact of a growing number of factors impacting the economy, respond to questions concerning short-term forecasting, and prepare for public appearances,” says the internal report.
Ad-hoc demands by the governor and others for quick analysis, which now absorb up to half the time of these economists, also appear to have created a paper jam as managers must then edit the below-standard English or French.
“The cause for lengthy review was in part attributed to writing skills, both in terms of basic communication, as well as how to convey an appropriate level of detail in telling ‘the story,“’ says the audit.
The group clearly needs training in writing skills, the report concludes, and the bank’s management agreed to provide it.
The Canadian Press recently obtained a largely uncensored copy of the audit under the Access to Information Act.
Last year, the central bank provided only a redacted copy, in which all references to the economists’ weak writing were deleted.
But after a complaint to the information commissioner of Canada and a subsequent year-long investigation, the Bank of Canada relented and delivered a mostly intact copy of the March 2012 document.
The audit otherwise praises the work of the so-called “Current Analysis” section of the central bank.
Spokeswoman Jill Vardy declined to respond immediately to questions, saying the Bank of Canada was currently in a communications “blackout” ahead of Wednesday’s key policy announcement, when the bank announces the overnight rate that influences general interest rates.
The “blackout” policy in the days leading to the announcement forbids senior bank officials from “speaking to the news media or other outside parties about the economic outlook and the direction of monetary policy, or about anything else that could be considered relevant to economic outlook and their interest rate decision.”
Vardy said the economists who were reviewed by the auditors take part in the process by which the bank determines its monetary policy.
“Given that your questions pertain to the economic staff and departments that are involved in formulating the economic outlook, we consider the (blackout) guidelines to apply,” she said in an email.
Economics, by its very nature, is a discipline dense in jargon.
The last monetary policy report, issued by the central bank in July, for example, offered sentences such as: “Financial fragmentation continues to impair the transmission of monetary policy, however, as reflected in the divergence between lending rates in the peripheral and core economies.”
Federal government policy requires bureaucrats to speak plainly to the public.
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Sunday, October 27, 2013

The U.S. economy has been hurt by a recent budget standoff in Washington

The U.S. economy has been hurt by a recent budget standoff in Washington and it is important that the nation does not go through another around of brinkmanship, Treasury Secretary Jack Lew said on Sunday.
Speaking on NBC's "Meet the Press" program, Lew said he was confident the economy, which he described as resilient, would recover from the 16-day partial shutdown of the federal government.
He described events leading to the shutdown, which eroded both business and consumer confidence, as a political crisis rather than an economic one.
"We know that from the shutdown, there was a loss of economic activity," Lew said. "We need to make sure that government does not go through another round of brinkmanship. This can never happen again."
A last minute deal in Congress pulled the country from the edge of an unprecedented debt default. It restored government funding through January 15 and extended its borrowing authority through February 7, though the Treasury Department might be able to stave off a default for several weeks past that point.
There are worries that Wednesday's deal may have set the stage for another standoff in the future.
Lew, the administration's front man during the stalemate over increasing the country's borrowing limit, has attempted to separate the debt ceiling from other policy conditions.
"I think the message that we have to send going forward is that there was a turning point on Wednesday night and this won't happen again. It can't happen again," he said.
Similar sentiments were echoed by Republican John McCain, who told the NBC's "Meet the Press" program that the shutdown hurt his party. McCain said there would be no second shutdown.
"Those involved in it went on a fool's errand, that's just a fact," McCain said. "This has harmed the lives of millions of people and thousands of people in my state ... I have an obligation to them to try to prevent that from happening."
Lew did not quantify the damage to the economy.
Economists estimate the shutdown shaved as much a half a percentage point from fourth-quarter gross domestic product growth, with much of the direct hit through the loss of output from the federal government.
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Saturday, October 26, 2013

Check processing for internet and retail stores

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Friday, October 25, 2013

MasterCard forms partnership with competitor Travelex

MasterCard logo used on cards 1997 to present.
MasterCard logo used on cards 1997 to present. (Photo credit: Wikipedia)
MasterCard has forged a partnership with competitor Travelex to establish a multi-currency prepaid overseas credit card that will benefit both companies. The alliance will enable consumers to travel overseas with a reloadable and replaceable credit card available in five currencies. MasterCard's Seth Eisen says MasterCard serves as the network where the transactions for the cards are routed, while Travelex sells the cards to consumers. The card network's Michael Weitzman notes that partnerships are sensible for MasterCard because "we believe financially it can be greater than the sum of its parts," and the collaboration expands MasterCard's reach to overseas customers and allows Travelex to extend revenue on conversions and partner with a global brand. Weitzman cites the alliance's potential to bolster MasterCard's worldwide brand, noting "our secret sauce is to authorize, clear, and settle transactions between 23,000 financial institutions and 35.9 million merchants." MasterCard also collects fees from the transactions and increases overseas revenue, and the company encourages partnerships with various collaborators.
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Thursday, October 24, 2013

Deutsche Bank AG will pay $11.5 million to resolve a probe of its role in funding subprime

A unit of Deutsche Bank AG will pay $11.5 million to resolve a probe of its role in funding subprime mortgage loans in Nevada, the state's attorney general said on Thursday.
The investigation focused on mortgage loans provided by other lenders but funded, bought and securitized by DB Structured Products Inc between 2004 and 2007, Attorney General Catherine Masto said.
At issue was whether the other lenders misled borrowers about the actual interest rates on their loans or piled on risky features without considering a borrower's ability to repay, and whether Deutsche Bank knew about such practices when it helped to finance the loans.
The bank neither admitted nor denied the state's allegations but agreed to review any future Nevada loans it helps to finance for similar problems.
"I remain committed to enforcing Nevada's laws against the players - including those on Wall Street - that contributed to and profited from mortgage lending and sales practices that misled Nevada consumers into loans that they did not understand and could not repay," Masto said in a statement.
Deutsche Bank spokeswoman Renee Calabro said the bank was pleased to resolve the matter.
The money from the settlement will be used to pay some affected borrowers and cover the costs of the investigation, Masto said.
Nevada, one of the states hardest hit by the recent housing crisis, has also since been one of the most aggressive in pursuing cases against financial institutions that funded risky loans that fueled the crisis.

In the past two years, units of Royal Bank of Scotland Group plc and Morgan Stanley entered into similar settlements with the state, paying $42 million and $40 million, respectively.
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Wednesday, October 23, 2013

Should Jamie Dimon resign?

Jamie Dimon
Jamie Dimon (Photo credit: SuperSleuther)
Jamie Dimon (Photo credit: SuperSleuther)
New York Times columnist Andrew Ross Sorkin puts his finger on the disconnect between average everyday folk and the Wall Street establishment with his assertion that, when it comes to criticizing JPMorgan-Chase (JPM) chief executive officer Jamie Dimon, some people “matter” and others don’t. The “pundit class,” as he put it, seems to want Dimon to resign in the face of multiple regulatory and criminal investigations, which have prompted the bank to set aside $23 billion for potential legal costs. The bank reported its first quarterly loss since 2004, and its first under Dimon, on Oct. 11. Dimon told analysts on the earnings call: “This is very painful for the company.”
Sorkin writes:
“When I called Dennis Kelleher, president of BetterMarkets, a nonprofit Wall Street watchdog, he put it this way: ‘By any objective measure, Jamie Dimon should be fired. The compliance failures are egregious and systemic.’ Yet there is an almost bizarre disconnect between the headlines and what the people who matter—the investors, analysts, board members, and, yes, even regulators—are seeking. None of them want him fired.”
It might be the first time that someone has admitted, quite so openly, what those who aren’t among the chalk-striped class have long suspected: Wall Street couldn’t care less about how everyone else views what it does. A similar sentiment emerged on CNBC a couple of weeks ago during an interview with a Dimon critic that generated a huge amount of attention: “The company continues to churn out tens of billions of dollars in earnings and hundreds of billions of dollars in revenue,” CNBC anchor Maria Bartiromo said, as if that would obviously insulate him from scrutiny. “How do you criticize that?”
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Tuesday, October 22, 2013

MBA Fastnet Challenge

Fastnet or Carraig Aonair
Fastnet or Carraig Aonair (Photo credit: Wikipedia)
After 3 days of an exciting and diverse sailing race the first MBA Fastnet Challenge has come to a successful end!
“Unbelievable that it’s already over” – this was the conclusion of a very tired but happy crew of 12 MBAs from 4 business schools and 4 Team Heiner coaches sitting together at the 24 hour bar at Plymouth harbor right after having finished Rolex Fastnet 2013, one of the four famous 600 miles Rolex races, toasting with champagne. The past couple of days had been very intense in every respect and while the team was proud to be back in Plymouth having arrived in 6th across the line in their class, but 12th position with handicap and 212th overall, most also felt a bit sad that it was all over.

After having trained towards this race for months in Holland, Portugal and England including sea survival training, ups and downs in sailing performance, qualification RORC races in the Channel and a torn main sail finally the big race was about to begin. On August 10th everyone met in Southampton for the last preparations on the boat, final training to get rid of any cobwebs, and a last proper dinner on land. On Sunday, August 11th, finally the big moment had come: together with the other 379 boats, the MBA Fastnet Challenge 2013 team embarked upon their boat Team Heiner One (Volvo 60) to the start line for the Fastnet race.

The two hours prior to the start of Class IRC Z in front of Cowes (Isle of Wight, UK) were overwhelming, interesting and exciting: Boats from various countries, small to big, beautiful to ugly, manned with professional crews as well as amateurs were circling in the Solent, accompanied by helicopters, spectator boats and ribs taking care of TV and photo coverage. Team Heiner One had a good start and made good progress in nice weather. “Light winds and strong tides required every competitor to make their own call with regards to the racing strategy and choice of course,” stated navigator Ben Grosman. So after a couple of hours first the fleet and later also Team Heiner One’s main competitors disappeared to follow their own race, with Team Heiner One pursuing an offshore strategy, following the southern coast of England to the west, crossing the Celtic Sea, then up to the Fastnet Rock off the southwest coast of Ireland.

Working in 3 watches (3 hours rest, 3 hours stand-by and 3 hours sailing) each of the crew members pushed their own personal boundaries over the next 3 days. The team experienced moments of deep joy and happiness when sailing under star-filled night skies, watching shooting stars and schools of dolphins accompanying the boat or enjoying a bowl of warm porridge after a long cold night watching the sun rise. However, they also experienced moments of exhaustion after not having slept for a long time, being drenched with rain, sea sickness, moments of frustration from living in a very small space with 16, and constant equipment challenges from broken ballast tank pumps to generators to batteries and stubborn halyard locks. Thank goodness for the engineering prowess of Joost and Tom of Team Heiner! A race team is a micro cosmos mirroring all the characters that can be found in everyday life. However, the challenge is that there’s no break, no escape on a race boat. Roy Heiner summed it up: “The challenge was to grow together as a true team, with everyone giving truly their best, supporting each other and most importantly staying focused during the race to pursue the one big goal: to make the Volvo 60 fly to the Fastnet Rock and back.”

Despite very different race strategies, interestingly enough both Volvo 60s – Pleomax and Team Heiner One – arrived at the same time at the Fastnet Rock and – almost picture book perfect – the two identical boats were drifting in front of the Rock for almost an hour when winds suddenly died. For the rest of the race both boats competed fiercely for every boat length. Often only the top mast light of our competitor was visible in the lashing rain and dark night. While the MBA Fastnet challenge team fought most of the 600 miles upwind, the last 12 hours finally let us sail downwind. Despite the lack of sleep making focus hard, Team Heiner One managed to stay in front of Pleomax and to cross the finish line 6 minutes earlier than its immediate competitors and overall as boat no. 17th overall (uncorrected time = without handicap).

Very excited, relieved and happy, the team towed the boat and celebrated.  “It was exhausting but I’d do it again any time” sighed co-helmsman Herman De Knop. A proper good-bye dinner, a detailed debrief with Roy Heiner and the planning of a potential MBA Fastnet team for 2015 will follow this fall.

Until then, everyone will recover, enjoy the memories and continue to push the other challenge that the team has set itself: Sailing for water – i.e. raising money for ZOA, a charity organization that supports people who suffer because of armed conflict or natural disasters, in helping them to rebuild their livelihoods. The money that the MBA Fastnet Challenge team collects will be dedicated to the water supply of the 3 Cambodian villages. Every donation is welcome!
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Monday, October 21, 2013

Oracle claims second place

Image representing Oracle Corporation as depic...
Image via CrunchBase
IBM reported software revenue totaling $25.7 billion in the last four quarters, while Oracle's software revenue reached $27.8 billion. Oracle, citing public IT industry earnings reports, on Oct. 17 declared itself to be the second-largest software company in the world behind Microsoft. "Given IBM's recently announced quarterly results, we would like to take this opportunity to point out that Oracle's software business has been growing faster than IBM's software business, and now Oracle has moved up to become the number 2 software company in the world while IBM has slipped to number 3," Oracle said in an email advisory to the media.
Extending BI Systems & Data Warehouses for Real-Time Big Data Analytics Download Now 100% "Over IBM's last four quarters, they reported software revenue totaling $25.7 billion, while during Oracle's last four quarters, we reported software revenue totaling $27.8 billion. Microsoft earned $61 billion in the fiscal year ending June 30 for its various enterprise and consumer software products. The Forbes Global 2000, an annual ranking of the top 2000 public companies in the world by Forbes magazine, is based on a mix of four metrics: sales, profit, assets and market value. The top 10 companies on the 2013 list for Forbes' Software & Programming industry listing are ranked here: 1. Microsoft, United States 2. Oracle, United States 3. IBM, United States 4. SAP, Germany 5. Symantec, United States.
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Sunday, October 20, 2013

The new $100 bill will entered circulation

The new $100 bill will enter circulation on Tuesday
The new $100 bill will enter circulation on Tuesday
 
The Federal Reserve of the United States will begin circulating a new $100 bill on Tuesday. The redesigned bank note, which has been delayed by more than 2 and a half years, includes a number of measures designed to make it more difficult to counterfeit, including a 3D security ribbon and a new "bell in the inkwell."
Though the new note will still feature the familiar portrait of Founding Father Benjamin Franklin, alongside this will be a new vertical blue ribbon woven into the paper. The fine 3D nature of the ribbon creates a number of visual effects as the note is viewed or manipulated in various ways. Little bells that appear in the ribbon change to 100s as the angle of view is altered, and the pattern can be made to move either up and down or side to side by tilting the note in various directions.
Also on the front of the note is a copper-colored inkwell. This also includes a bell, which changes in appearance from copper to green as the note is tilted, with the effect that the bell seems to disappear and reappear. The large copper 100 in the lower-right corner of the front also color-shifts to green when tilted.
Other measures designed to make the note harder to reproduce are raised printing (used, among other places, on Franklin's shoulder), watermarks, serial numbers, and the microprinting of tiny characters on Franklin's collar, along the bill's quill, and around its borders. Such features have been used previously with other bill denominations. Other changes are designed to make the note easier to distinguish.
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Saturday, October 19, 2013

JPMorgan Chase & Co posted its first quarterly loss

JPMorgan Chase & Co posted its first quarterly loss under Chairman and CEO Jamie Dimon after a tangle of legal and regulatory probes cost the biggest U.S. bank $7.2 billion.
Dimon managed to avoid posting losses during the financial crisis as the bank shied away from the worst subprime mortgage assets. But now legal woes, at least some tied to banks that JPMorgan bought during the crisis, are taking a toll.
JPMorgan posted a loss of $380 million, or 17 cents per share, for the third quarter, its first loss since the second quarter of 2004. A year earlier it reported a profit of $5.71 billion, or $1.40 a share.
Excluding litigation expenses and other special items, the company posted a profit of $5.82 billion, or $1.42 per share.
Analysts on average had forecast earnings of $1.17 per share excluding special items, according to Thomson Reuters I/B/E/S. It was not immediately clear if the results were comparable.
The legal expenses - $9.2 billion, or $7.2 billion after taxes - include money it is setting aside for future settlements. The bank disclosed exactly how much it has set aside for settlements, fines and other legal expenses: $23 billion.
"While we expect our litigation costs should abate and normalize over time, they may continue to be volatile over the next several quarters," Dimon said in a statement.
JPMorgan faces a welter of regulatory issues, including a Securities and Exchange Commission investigation into possible bribery in the hiring of sons and daughters of executives of Chinese state-owned companies, possibly fraudulent sales of mortgage securities, and its role in setting certain benchmark borrowing rates.
The bank has been focusing on its mortgage issues recently. In September, it tried to reach a settlement with the U.S. Department of Justice and other federal and state agencies in which it could have paid as much as $11 billion to resolve claims against the bank over its mortgage businesses. Dimon went to Washington to meet with U.S. Attorney General Eric Holder on September 25 as part of the talks, but no deal has resulted.
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Friday, October 18, 2013

Communications Security Establishment Canada

In an exclusive interview with CBC News, the former head of Canada’s most secretive intelligence agency says there should be greater parliamentary scrutiny of the clandestine spy service.
Calls for more openness are certain to get louder in the wake of fresh allegations the agency spied on Brazil's mining and energy ministry in search of corporate secrets.
John Adams, former chief of the Communications Security Establishment of Canada, says the secretive organization needs more parliamentary oversight. (CSEC)
In a rare interview, former spymaster John Adams told CBC News he thinks the government must do more "to make Canadians more knowledgeable about what the intelligence agencies are trying to do on their behalf."
Adams recently retired after seven years as head of the Communications Security Establishment Canada, and he admits the agency has deliberately kept Canadians in the dark about its operations for decades.
“There’s no question that CSEC is very, very biased towards the less the public knows the better, and in fact it seems to have worked, because you very seldom see them on the front page of the newspapers.”
Part of CSEC's mandate is to monitor foreign communications, including those coming into Canada.
But it cannot target domestic telephone or email traffic.
"That's against the law," says Adams, who left the highly secretive Ottawa-based agency last year. "Absolutely not."
But, he adds, "We have got capability that is unique to this country. No one else has it," Adams said.

Warning for Canadians

Adams admits that CSEC is not immune from some of the practices causing a furor in the U.S. and Britain, but stresses they are all legal.
For instance, he says, CSEC is gathering huge amounts of so-called metadata from phone companies and internet providers, information on large numbers of people including their complete phone and email records.
“Metadata is an issue, there’s no doubt about it,” Adams says, “but they can only use what is relevant to ongoing investigations.”
American internet users are also up in arms over revelations that the NSA has been making deals with major telecommunications companies to get past the security encryption codes protecting customer data.
Adams won’t reveal details about how CSEC spies operate in this country, but they are apparently breaking through encryptions.
“The reality is encryption is ubiquitous, it’s everywhere, so clearly if intelligence agencies are going to seek information, they’re going to be able to breach encryption.”
All of which helps to explain Adams’s warning for average Canadians: if you think anything you read, write or send via the internet is private, think again.
"The reality is if you're on the internet, you literally might as well be on the front page of the Globe and Mail," Adams says.
“You have to know that probably if someone’s interested in you, they may well be listening or reading or whatever it might be.”
Don’t count on passwords for protection, either.
“If you use a word that’s in the dictionary, they’ll crack it in less than a minute.”
Adams says about 900 of CSEC’s roughly 2,000 employees are involved in the spy business, both gathering intelligence and analyzing it.
A lot are young, talented computer hackers.
“These young people … they’re computer scientists, they’re engineers, they’re just interested in the business. And they can do things with CSEC that if they did them outside of CSEC would frankly be against the law.”

 

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Thursday, October 17, 2013

Others could face charges over swindler Allen Stanford

On the first day of its new term on Monday, the U.S. Supreme Court appeared divided over whether lawyers, insurance brokers and others who worked with convicted swindler Allen Stanford could avoid lawsuits by investors seeking to recoup losses incurred in his $7 billion Ponzi scheme.
New York-based law firms Chadbourne & Parke and Proskauer Rose and insurance brokerage Willis Group Holdings Plc were all sued by former Stanford investors.
They are part of a consolidated case along with two other defendants, financial services firm SEI Investments and insurance company Bowen, Miclette & Brittin, for which the Supreme Court heard a one-hour argument on Monday.
The defendants sought Supreme Court review after the New Orleans-based 5th U.S. Circuit Court of Appeals in March 2012 said the lawsuits brought under state laws by the former Stanford clients could go ahead.
The former Stanford clients are keen to pursue state law claims because the Supreme Court has previously held that similar so-called "aiding and abetting" claims cannot be made under federal law.
The defendants have argued that under the Securities Litigation Uniform Standards Act (SLUSA), the claims cannot be heard under state law either.
The class action lawsuits filed by the former investors accused Thomas Sjoblom, a lawyer who worked at both law firms, of obstructing a Securities and Exchange Commission probe into Stanford, and sought to hold the other defendants responsible as well.
Stanford's fraud involved the sale of certificates of deposit by his Antigua-based Stanford International Bank. Much of the litigation centers on whether these qualified as securities under applicable laws.
Stanford is serving a 110-year prison sentence.
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Wednesday, October 16, 2013

charges against 13 suspected members of the hacking group Anonymous

The United States brought criminal charges against 13 suspected members of the hacking group Anonymous on Thursday for allegedly attacking government, credit card and lobbying websites in a campaign in support of internet file-sharing.
A grand jury indictment of the 13 people was filed in U.S. District Court in Alexandria, Virginia, charging them with conspiracy to intentionally cause damage to protected computers as part of Anonymous' "Operation Payback."
The loose-knit international group known as Anonymous has been in frequent battle with U.S. authorities, not only over file-sharing but also other ideological causes such as the willingness of financial institutions to process donations for the anti-secrecy group WikiLeaks.
In March 2012, U.S. prosecutors in New York charged six suspected leaders of Anonymous for wreaking havoc on government and corporate websites.
The hackers launched "Operation Payback" in retaliation for the 2010 shutdown of Pirate Bay, a Swedish internet service that allowed users to share files such as films and music, according to Thursday's indictment.
They used what are known as denial-of-service attacks to overwhelm websites and make them inaccessible, starting with the website of the U.S. film industry lobbying group, the Motion Picture Association of America, the indictment said.
"This will be a calm, coordinated display of blood. We will not be merciful," said one set of instructions for the attacks quoted in the indictment.

Other websites targeted were those of the Library of Congress, Bank of America Corp, Visa Inc and MasterCard Inc, the Justice Department said.
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Tuesday, October 15, 2013

bitcoin digital currency dropped after U.S. law enforcement

The price of the bitcoin digital currency dropped after U.S. law enforcement authorities shut down Silk Road, an online marketplace used to buy and sell illegal drugs.
The bitcoin, valued by many for its anonymity, fell to $129 from over $140 a day before, according to a website for trading bitcoins, Mt.Gox. Earlier, the currency traded as low as $110.
Supporters say using bitcoins offers benefits including lower fraud risk and increased privacy, though critics argue the anonymity it offers makes the currency a magnet for drug transactions, money-laundering and other illegal activities.
The digital currency's drop came after the FBI arrested alleged Silk Road owner Ross William Ulbricht, 29, known as "Dread Pirate Roberts," on Tuesday in San Francisco.
Silk Road allowed tech-savvy sellers to post ads for drugs and other illegal products, which they sold for bitcoins and shipped to customers through the mail, according to the federal criminal charges filed against Ulbricht.
As well as Silk Road shoppers, drug traffickers who worried about the FBI tracking them down with data confiscated from Ulbricht may account for some of Wednesday's bitcoin selloff, said Garth Bruen, a security expert at Internet consumer group Digital Citizens Alliance.
"They're going to be pouring all over his records, getting subpoenas for every piece of data and account he has ever used and trying to figure out who all these different dealers are," said Bruen. "People are jumping ship."
While bitcoins, which are not backed by a government or central bank, have begun to gain a footing among some businesses and consumers, they have yet to become an accepted form of payment on the websites of major retailers such as Amazon.com.
The charges against Ulbricht said that Silk Road generated sales of more than 9.5 million bitcoins, roughly equivalent to $1.2 billion. There are currently about 11.8 million bitcoins in circulation.
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Monday, October 14, 2013

Windows 8.1 features tighter Outlook.com integration

Webmail gets touchy. Microsoft's long-awaited Windows 8.1 update will include a revamped, mobile-friendly Mail app that features tighter Outlook.com integration. Inspired by the company's Outlook.com webmail service, Microsoft's Windows 8.1 operating system update will include a default email app that is designed with tablet users in mind. A new Mail app awaits Windows 8.1 users when it is released Oct. 17 in the U.S., one that "is optimized for mobile devices, built for touch" wrote Dawn Martynuik, director of Outlook.com Product Marketing in a blog post. She added that one of Outlook.com's most popular features, Sweep, "is coming to the Mail app exclusively for people with an Outlook.com email account." Sweep is a time-saving option that automates common email tasks and allows users to organize their inboxes. By invoking Sweep, users can move or delete all emails from a certain sender in one fell swoop. Users can optionally set Sweep rules for future emails or schedule the deletion of emails from certain senders after 30, 60 or 90 days. Other Outlook.com integrations include automatic replies and newsletter and social update categories that automatically organize emails fitting those criteria into separate views, further uncluttering the main inbox. Mobile devices and their increased use also factored into the redesigned Mail app. Ryan Gavin, general manager Microsoft Apps and Services, wrote in a Windows Experience Blog post that "email is one of the most frequently performed activities for consumers on a tablet." Data collected by Microsoft backs up those claims. Indicating that the service is growing fast, he added that "Outlook.com mobile usage has tripled in the last year." On May 2, the company reported "over 400 million active Outlook.com accounts, including 125 million that are accessing email, calendar and contacts on a mobile device using Exchange ActiveSync," according to Outlook.com Group Program Manager Dick Craddock. As a reflection of these mobile trends, Microsoft is touting the touch-enabled strides the company made with the Mail app for Windows 8.1. "Building for touch brought a wide range of improvements across the Mail app in Windows 8.1," wrote Gavin.
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Sunday, October 13, 2013

Vormetric study shows that many organizations do not restrict the actions

New data from a Vormetric study shows that many organizations do not restrict the actions that a privileged user can take on a network. One of the biggest data breaches of all time occurred not by a malicious external actor, but by IT contractor Edward Snowden, who was able to take privileged information from the National Security Agency (NSA). The fact that Snowden had access is not a unique problem for the NSA, according to a new study sponsored by security firm Vormetric. "One of the big revelations in the survey is that 73 percent of respondents said they don't block privileged users from access to sensitive data," Vormetric CEO Allan Kessler told eWEEK. The Vormetric-sponsored study was conducted by Enterprise Strategy Group and surveyed 700 IT security decision makers. Fifty-four percent of the survey respondents also indicated that it is now more difficult to protect against an insider threat than it was two years ago. There are several reasons for this, according to Kessler, among them being the growing use of cloud computing and virtualization. Contractors are also a particular challenge. Kessler noted that Snowden was a contractor and he had tremendous access to data. "The fundamental problem is that the folks that have access to manage an internal system have incredible amounts of privileges," Kessler said. He added that system administrators need to have privileged access to be able to manage servers and big data stores. "However, very few organizations realize that they can keep privileged users from seeing data and still allow them to do their job," Kessler said. The growing use of the cloud exacerbates the issue of privileged users. Kessler noted that when an enterprise puts its workloads in the cloud, those same privileged users can also see data and can potentially do damage.
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Ontario won't stop double-ending

Ontario moves to tighten rules around real estate agents 'double-ending,' but won't ban the practice If legislation is pa...