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A large group of creditors of MF Global Holdings Ltd.'s bankrupt brokerage unit will soon receive their first payout, as $518.7 million of checks start to be mailed out on Friday, the third anniversary of the company's chapter 11 filing, Reuters reported yesterday. James Giddens, the trustee liquidating the MF Global Inc. brokerage unit, said yesterday that the payout to unsecured general creditors will cover 39 percent of claims he has deemed valid. He said another $32.3 million will be distributed to some "priority" claimants, covering all of their valid claims. Giddens is keeping roughly $300 million in reserve for unresolved unsecured and priority claims, and said he expects another significant distribution by next June.

The U.S. Court of Appeals for the Ninth Circuit ruled the $203 million judgment awarded by U.S. District Judge William Alsup is based on "substantial evidence" that Wells Fargo & Co. made misleading statements about its policies for charging overdraft fees, the Recorder reported today. "The record is replete with examples of Wells Fargo's false and misleading statements," Judges M. Margaret McKeown, Sidney Thomas and William Fletcher wrote in a six-page unpublished opinion. "The district court's calculation of the restitution award was based on factual findings that are not clearly erroneous." Lieff Cabraser Heimann & Bernstein partner Michael Sobol, who argued the case for plaintiffs in early October, said Wednesday's order means more than 1 million California customers are entitled to relief. Filed in 2007, Gutierrez v. Wells Fargo alleged that the bank rearranged customer charges, deducting larger purchases first, solely to accrue more overdraft fees. Finding the business practice violated California law, Judge Alsup ordered $203 million in restitution following a 2010 bench trial.

The three-year-old U.S. consumer protection agency said that it discovered that the largest mortgage servicers have been mishandling loan modifications and harming borrowers since new rules came into effect in January, Bloomberg News reported yesterday. Consumer Financial Protection Bureau supervisors have made spot checks to examine the books and practices of bank and nonbank servicers, the agency said in a report yesterday, without naming the firms. Supervisors found “substantial delays” in modifying loans that resulted in “negative consequences,” such as higher mortgage payments and unjustified blemishes on borrowers’ credit reports, the report said. The consumer bureau, created by the Dodd-Frank law and empowered to rid the mortgage industry of abusive practices, rolled out regulations that took effect this year. The bureau is examining the compliance of the rapidly expanding servicing industry as a New York regulator bears down on its biggest non-bank participant, Ocwen Financial Corp., whose shares have plunged this year.

After spending much of the last six years purchasing trillions of dollars of bonds in efforts to help revive the American economy, the Federal Reserve is going to be curtailing the purchases, the New York Times reported today. While this marks the third time since 2008 that the Fed has announced such a move, the central bank said yesterday that the economy no longer needed quite so much help, signaling to many analysts an important milestone in the nation’s painfully slow recovery from the Great Recession. The Fed still plans to keep short-term interest rates near zero for a “considerable time,” it said in a statement after a two-day meeting of its policy-making committee. And it said it would replace maturing bonds to keep its holdings at about $4.5 trillion.

McGraw Hill Financial said yesterday that its Standard & Poor’s unit was in “active discussions” with federal and state regulators on a possible settlement over ratings on six commercial mortgage-backed securities issued in 2011, the New York Times DealBook blog reported today. The company added that it took a $60 million charge in the third quarter for the legal costs. “There can be no assurance that this amount will be sufficient to resolve these matters or that definitive settlement agreements will be reached,” McGraw Hill said in a statement. In July, McGraw Hill disclosed that the Securities and Exchange Commission had sent a Wells notice concerning S&P’s ratings of the securities, alerting the company that the agency was considering a possible enforcement action. The attorneys general of New York and Massachusetts have also been investigating S&P over the commercial mortgage-backed securities.

Just two years after avoiding prosecution for a variety of crimes, some of the world’s biggest banks are suspected of having broken their promises to behave, the New York Times reported today. A mixture of new issues and lingering problems could violate earlier settlements that imposed new practices and fines on the banks but stopped short of criminal charges, according to lawyers briefed on the cases. Prosecutors are exploring whether to strengthen the earlier deals, the lawyers said, or scrap them altogether and force the banks to plead guilty to a crime. That effort, unfolding separately from a number of well-known investigations into Wall Street, has ensnared several giant banks and consulting firms that until now were thought to be in the clear. Prosecutors in Washington, D.C., and Manhattan have reopened an investigation into Standard Chartered, the big British bank that reached a settlement in 2012 over accusations that it transferred billions of dollars for Iran and other nations blacklisted by the United States, according to the lawyers briefed on the cases. The prosecutors are questioning whether Standard Chartered, which has a large operation in New York, failed to disclose the extent of its wrongdoing to the government, imperiling the bank’s earlier settlement.

The Federal Reserve is widely expected to announce on Wednesday the end of its latest bond-buying program, known as quantitative easing (QE), the New York Times reported today. Fed officials say that the purchases served to strengthen job growth, and the economic recovery no longer needs quite so much of the central bank’s support. “The exit protocol has been so well documented for the last nine months that the market has fully priced it in,” said Barbara J. Cummings, who manages a $3.5 billion fixed-income portfolio for the Boston Private Bank & Trust Company. The decision, expected at the end of a two-day meeting of the Fed’s policy-making committee, would cap a six-year period during which the central bank has expanded its holdings of Treasury and mortgage-backed securities to almost $4.5 trillion, from less than $1 trillion in mid-2008.

A major banking regulator is sounding the alarm about lax car lending standards that are leading to a new round of losses for banks, the Wall Street Journal reported today. There’s been a spike in the average size of car loans that banks and other lenders are writing off as a loss following months of unpaid bills by borrowers, an official of the Office of the Comptroller of the Currency, a unit of the Treasury Department, said yesterday. At banks, the average charge-off for a car loan was $7,618 in the fourth quarter of 2013, up 12 percent from a year ago, said Darrin Benhart, deputy comptroller for supervision risk management at the OCC, citing loan performance data from credit-reporting firm Experian. For the entire car-loan industry, the average charge-off was $8,520, up 17 percent from a year prior, according to Experian. Benhart also expressed concern over a growing trend in the car-loan industry of loans that exceed the value of the car. The average loan that major lenders gave out at the end of 2013 on new and used cars exceeded the value of the car at the time of purchase, he said.

An internal disagreement within the Securities and Exchange Commission is threatening potentially lucrative revenue streams at Bank of America Corp., the Wall Street Journal reported today. The SEC is deadlocked on whether to allow Bank of America, which recently settled an SEC probe into flawed mortgage-backed securities, to continue selling shares in hedge funds and startups to wealthy investors. Also at issue is the company’s ability to quickly issue stocks and bonds without the speed bump of an SEC review. The bank was restricted as a result of SEC rules that automatically make firms ineligible from such activities if they violate securities laws. Bank of America has been seeking waivers since the $136 million settlement with the SEC, which was wrapped into a $16.65 billion deal with the U.S. government. The restrictions wouldn’t go into effect until a court finalizes the settlement, a step that has been delayed as the SEC fights over the waivers. Bank of America isn’t alone in seeking such waivers, as dozens of other large banks have sought — and received — the same waivers in recent months after settling SEC charges, including Citigroup Inc., Barclays PLC and Royal Bank of Scotland Group PLC.

A group of Italian investors seeking payment of their defaulted Argentine bonds lost a bid to collect a portion of $539 million the South American country deposited in Bank of New York Mellon Corp., Bloomberg News reported yesterday. The judge overseeing Argentine bond litigation in New York rejected the claim yesterday, ruling sovereign funds located outside the U.S. are immune from seizure. U.S. District Judge Thomas Griesa said that the Foreign Sovereign Immunities Act, which limits the ability of people to sue foreign governments, doesn’t permit the investors to seize the funds. Argentina defaulted on a record $95 billion in 2001, roiling international markets and limiting the nation’s access to credit. Argentina exchanged 92 percent of its defaulted bonds for new ones, at a sharp discount, in restructurings in 2005 and 2010. The Italian investors said that they bought the bonds when they were issued and didn’t agree to exchange them for the new bonds.