(Washington)

A couple of weeks ago we ran a piece quoting the SEC saying that it was trying to get advisors who had violated client disclosure rules to come forward themselves. The promise was that if they voluntarily came forward they would be treated with a much lighter hand. Well, the SEC has showed the other side of that coin this week, saying “Those of you who counsel investment advisors, we hope you will counsel them to participate in the program … If not, we promise that if we find them later we will punish them more severely”.

FINSUM: The SEC is really going to throw its weight around on this issue and it seems like advisors who have broken the rules would be well advised to come forward.

(New York)

One of the financial industry’s most astute crisis callers has just told Barron’s that she thinks we are in for another financial crisis. Sheila Bair, former head of the FDIC, has successfully called the Enron scandal and the subprime crisis, and now she sees another one looming. The context is that Trump and the White House are leading the charge for less bank regulation, which Bair sees as crazy given this point in the cycle. According to her, “To loosen capital now is just crazy. When we get to a downturn, banks won’t have the cushion to absorb the losses. Without a cushion, we will have 2008 and 2009 again.”.

FINSUM: We are not supportive of too much loosening of bank regulation. Banks have been very profitable since the Crisis, and it is not as if the current regulatory paradigm is over-constraining them

(San Francisco)

In what looks like a continuation of the recent meltdown of the Wells Fargo brand, a new scandal has come to light. The company is having several senior executives resign as a new Justice Department investigation is underway into bad practices in its wealth management unit. The accusations surround overcharging customers and inappropriate advice to wealth management clients.

FINSUM: Who knows how big this one might blow up? The scandal in its core banking business had not really affected the wealth management unit so far, but that may change.

(Moscow)

US-Russia relations, already on the rocks, took a definitive turn for the worse yesterday. Using the Russian version of the state of the union address as a platform, Russian leader Vladimir Putin decided to use his speech to warn the US and the West to listen to Russia as it has bolstered its nuclear capabilities. In a nearly two-hour speech, Putin said “Efforts to contain Russia have failed, face it”. Putin highlighted new nuclear capabilities, such as cruise missiles with unlimited range. The speech was accompanied by videos of the weapon systems.

FINSUM: The rumor is that Putin did this more for internal political purposes than to actually antagonize the West. Hopefully that is the case.

(New York)

Rockefeller is a storied US name, but not exactly so in wealth management. That may be set to change as a new Rockefeller-branded wealth manager, Rockefeller Capital Management, has just launched with some high profile backing and executives. Industry star Greg Fleming, a former president at Merrill Lynch and former head of wealth and asset management at Morgan Stanley, is leading the young firm, which has its eye on getting $100 bn under management. The firm is backed by a Rockefeller family trust as well as a number of other investors.

FINSUM: The name alone will probably attract capital, but $100 bn is a lofty goal for a brand new wealth manager.