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Under pressure from the government to crack down on rogue stockbrokers, the Financial Industry Regulatory Authority (FINRA) is highlighting a fast-track program it began earlier this year to go after what it calls "high-risk brokers," the Wall Street Journal reported today. The results: Forty-two of the most troubled brokers were targeted for "expedited investigation," and 16 of them were thrown out of the securities industry, FINRA Chairman and Chief Executive Richard Ketchum wrote in a Nov. 13 letter to Sen. Edward Markey (D-Mass.). The letter includes other previously undisclosed details of what Ketchum described as increasing efforts by Wall Street's self-regulator to scrutinize repeat offenders among the 634,955 brokers licensed by FINRA. According to an analysis by the Journal of state securities records, more than 5,000 brokers licensed to sell securities earlier this year had worked at a firm that was expelled by FINRA from 2005 to 2012.

The government is imposing tougher restrictions on banks that offer short-term, high-interest loans that have been blamed for trapping some Americans in a cycle of debt, the Washington Post reported today. The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. issued identical guidance to limit the risks of loans tied to consumers’ paychecks, government benefits or other income directly deposited into their bank accounts. Critics say that these products carry the same abusive high interest rates and balloon payments as the payday loans offered by storefront and online operators. But industry groups contend that placing strict constraints on banks will only push people with limited access to credit into the arms of less-regulated vendors. “The OCC encourages banks to offer responsible products that meet the small-dollar credit needs of customers,” Comptroller of the Currency Thomas J. Curry said. “However, deposit advance products . . . pose significant safety and soundness and consumer protection risks.” Curry said that the guidance is meant to clarify the agency’s expectations for banks to understand and manage those risks. Neither the OCC nor the FDIC will bar banks from deposit-advance loans, but their policies could radically alter the operations of the handful of banks that offer the product. At least 15 states have already banned the service, while several others have imposed strict laws to limit the interest rates and the number of loans that can be made.

Jon Corzine and other ex-managers of bankrupt MF Global Inc. are appealing a court ruling calling for 100 percent repayment of customers of the failed brokerage, Bloomberg News reported yesterday. A notice of appeal was filed in bankruptcy court on Tuesday by Corzine, the ex-New Jersey governor and onetime Goldman Sachs Group Inc. co-chairman, and by managers targeted in a lawsuit including senior executives Bradley Abelow and Henri Steenkamp. They are challenging a Nov. 5 ruling by Bankruptcy Judge Martin Glenn that would allow all missing customer funds to be returned by the end of the year. MF Global Holdings Ltd., the brokerage’s parent company, filed for bankruptcy on Oct. 31, 2011, after a failed $6.3 billion bet on bonds of some of Europe’s most indebted nations. The company listed assets of $41 billion and debts of $39.7 billion. More than $1.6 billion in customer funds that should have been segregated were missing.

Bankrupt mortgage lender Residential Capital LLC's restructuring chief said that the company made no effort to put a value on the legal claims that are now an obstacle to its plan to repay creditors, Reuters reported yesterday. ResCap is in the midst of a six-day hearing before Judge Martin Glenn, seeking approval for the plan that would allow it to end its chapter 11 proceeding and begin paying back creditors, including the owners of residential mortgage-backed securities that collapsed in the 2008 mortgage crisis. Most creditors support the plan, but one group of bondholders wants the plan thrown out because they say it shortchanges them by $340 million in owed interest payments. At a hearing yesterday, a lawyer for the bondholders asked the company's restructuring chief, Lewis Kruger, whether he and his team of advisers made efforts to quantify what the claims may have been worth. Kruger said they did not do so, but rather the company tried to reach a compromise that all sides could live with, and that would save the company years of expensive litigation and delay creditor payouts.

Bank of America Corp. told a judge it shouldn’t pay any penalty in a U.S. lawsuit accusing it of selling defective loans to Fannie Mae and Freddie Mac, Bloomberg News reported today. The government argued earlier that, given the egregiousness of the fraud, the Charlotte, North Carolina-based bank should pay the maximum penalty of $863 million. The bank, in its court filing yesterday said that it should pay $1.1 million at the most. Bank of America’s Countrywide unit was found liable by a federal jury last month for selling the government-sponsored entities thousands of defective loans in the first mortgage-fraud case brought by the U.S. to go to trial. Bank of America argues that the U.S. can’t prove that the scheme to misrepresent the quality of its High Speed Swim Lane or “HSSL” loans and not other factors were a proximate cause to any pecuniary loss to Fannie Mae and Freddie Mac.

A bipartisan group of U.S. House and Senate members is seeking to make it easier for investment fraud victims to seek compensation, after investors in Allen Stanford's Ponzi scheme were deemed ineligible under current law to file claims, Reuters reported yesterday. The bill, introduced by Sens. David Vitter (R-La.), Charles Schumer (D-N.Y.), Reps. Scott Garrett (R-N.J.) and Carolyn Maloney (D-N.Y.), would bestow greater powers on U.S. securities regulators to oversee the process of determining whether customers of failed brokerages qualify for compensation. The legislative proposal comes as the Securities and Exchange Commission awaits a crucial decision from a U.S. appeals court over the fate of the Stanford victims. The SEC is trying to get the court to force an industry-backed fund that protects investors to start court proceedings so Stanford victims can file claims to recover a least a portion of the millions they lost. The Securities Investor Protection Corp., or SIPC, which administers the fund, has refused the SEC's request, saying Stanford investors do not meet the legal definition of "customer" under the federal law designed to protect investors if their brokerage collapses.

JPMorgan Chase & Co. will pay a record $13 billion to resolve U.S. Justice Department probes into the bank’s sale of mortgage bonds that officials said helped feed the financial chaos of 2008, Bloomberg News reported yesterday. The accord settles allegations that JPMorgan, the biggest U.S. lender by assets, misled investors and the public when it sold bonds backed by faulty residential mortgages, according to the Justice Department. U.S. and state officials blamed the bank’s actions in the statement for helping to cause the credit crisis, and said the settlement doesn’t shield JPMorgan or its employees from criminal charges. Jamie Dimon, JPMorgan’s chief executive officer, said that the settlement resolves a significant portion of claims tied to mortgage-backed securities issued by the lender and two firms it bought during the credit crisis, Bear Stearns Cos. and Washington Mutual Inc.’s bank unit. The sum is covered by reserves, and JPMorgan is cooperating with the Justice Department’s criminal case, the bank said.

Two top regulators are raising new — and late — objections to the "Volcker rule," arguing that it is too soft on banks and threatening to further delay its implementation beyond the year-end deadline set by the Obama administration, the Wall Street Journal reported today. The objections from officials at the Securities and Exchange Commission and the Commodity Futures Trading Commission, two of the five agencies Congress charged with drafting the rule, are disrupting a frantic scramble by regulators to complete the rule, which is designed to curb risk-taking by banks. At the SEC, a newly installed Democratic commissioner, Kara Stein, has raised a number of concerns about the current version of the rule, which has been under discussion for three years. Stein, a former congressional staffer who helped draft the Dodd-Frank law, believes the rule allows banks to sidestep its purpose. CFTC Chairman Gary Gensler, meanwhile, has told officials working on the rule that he is concerned that it doesn't crack down hard enough on proprietary trading, an activity banned by the Volcker rule, named for former Federal Reserve Chairman Paul Volcker.

Federal Reserve Chairman Ben S. Bernanke said the Fed will probably hold down its target interest rate long after ending $85 billion in monthly bond buying, and possibly after unemployment falls below 6.5 percent, Bloomberg News reported today. “The target for the federal funds rate is likely to remain near zero for a considerable time after the asset purchases end, perhaps well after” the jobless rate breaches the Fed’s 6.5 percent threshold, Bernanke said yesterday. In deciding when to wind down open-ended purchases of bonds, Fed officials are weighing both the “cumulative progress” since they began the program in September 2012 as well as “the prospect for continued gains,” Bernanke said. The labor market has shown “meaningful improvement” since the start of the program, although recent job reports have been “somewhat disappointing,” he said.

Banks including Barclays PLC that are enmeshed in the global investigation into potential manipulation of foreign-exchange markets are looking into the possible roles played by their salespeople, the Wall Street Journal reported today. The focus on sales staff, part of the banks' internal reviews of their involvement in the probe, represents an expansion of an investigation that until now dwelled primarily on whether bank traders improperly worked together to influence currency markets. The possible involvement of salespeople could prove significant because they deal with external clients, as opposed to bank traders who mainly interact with other traders. The investigation into potential foreign-exchange manipulation got under way in the U.K. in April when the Financial Conduct Authority started scrutinizing the market. Since then, authorities in several other jurisdictions, including the U.S., Switzerland and Hong Kong, have opened their own civil or criminal probes. More than a half-dozen major currencies-dealing banks around the world have reported being contacted by regulators in the investigation.