The Wolves of Wall Street

Morgan Stanley and Merrill Lynch are two of the oldest names on Wall Street. Morgan long focused on serving corporations with investment banking services, while Merrill was more of a retail brokerage. Both got caught up in the transformation of the financial services sector. Morgan purchased brokerage firms Dean Witter and Smith Barney, while Merrill was taken over by Bank of America during the 2008 financial crisis.

During the past dozen years, both Morgan and Merrill have seen their reputations tarnished by a series of legal controversies. When Violation Tracker began collecting data on financial offenses in 2015, BofA appeared atop the list of banks that had paid more than $1 billion in fines and settlements, thanks mainly to cases involving Merrill. Morgan ranked 7th.

The database, now with information extending back to 2000, shows BofA with total penalties of over $80 billion, far more than any other parent company.  Morgan has paid out more than $9 billion.

Morgan and Merrill also feature prominently in the newest category of data to be added to Violation Tracker: penalties imposed on securities firms by the Financial Industry Regulatory Authority. Unlike the other agencies whose cases are compiled in Violation Tracker, FINRA is not a government entity. It is, however, authorized by Congress to acted as an industry self-regulator and is overseen by the SEC.

By reviewing all press releases issued since 2000 by FINRA and its predecessor, the National Association of Securities Dealers, we have assembled 726 cases with total penalties of more than $1 billion. And when we matched the firms named in the cases to their corporate parents, we found that roughly half of the actions were linked to the giants of Wall Street. Those companies account for an even larger share of the penalty dollars.

Morgan Stanley and Bank of America (mostly via Merrill Lynch) are tied for first place in terms of the number of cases, with 38 each. Morgan leads in penalty dollars, with a total of $150 million, followed by BofA with $134 million. The other firms with the highest total penalties include Credit Suisse, Citigroup, Wells Fargo, Deutsche Bank, and UBS. (The Morgan and BofA totals on Violation Tracker’s FINRA summary page do not match the amounts cited here because they have been adjusted avoid double-counting of some penalties linked to cases handled jointly with the SEC.)

Because the penalties imposed by FINRA are relatively low, the case numbers are perhaps more significant. What does it say about Morgan and Merrill that they have each been cited more than three dozen times for violating rules meant to protect investors? In one case, Merrill was cited for failing to prevent one of its representatives in Texas from operating a Ponzi scheme.

And what does it say about FINRA that it allows the big players to commit violations over and over again without doing more than imposing additional modest fines?  

It should be noted that the cases we collected from the FINRA press releases make up only a portion of the organization’s actions, with thousands more against firms and individuals contained in a proprietary database. In other words, the level of recidivism among the large Wall Street firms is probably even worse than what is suggested by the press releases.

Moreover, just a few days ago, after we finished processing the FINRA data, the organization imposed a new $3.25 million fine on Merrill Lynch and ordered it to pay $8.4 million in restitution to customers.

Neither government action nor industry self-regulation seems to be very effective at curbing financial misconduct.

Note: Along with the new FINRA cases, Violation Tracker has just been updated with information from the more than 300 federal, state and local agencies covered by the database. The Tracker now contains 490,000 entries with total penalties of $669 billion.

The European Banking Blacklist

The European Union has shaken up the financial world by excluding a group of large banks from participating in the marketing of bonds being floated to help in the economic recovery of member states. According to reports in various business publications, the ten banks are being singled out because of their involvement in cases in which they were accused of manipulating bond and currency markets. In other words, they are being punished for misconduct.

While these moves may not have a major bottom-line impact on the banks—which include U.S. giants JPMorgan Chase, Citigroup and Bank of America—the EU is sending an important message about corporate wrongdoing.

Large companies have come to assume they can essentially buy their way out of legal jeopardy by paying fines and settlements that have grown larger but are still far from seriously punitive. As Violation Tracker documents, the big banks are Exhibit A for this phenomenon.

The database shows that the financial sector overall has paid more than $300 billion in U.S. penalties over the past two decades, far and away more than any other part of the economy. Bank of America is at the top of the list of penalty payers, with a total of $82 billion. JPMorgan is second with $35 billion, and Citigroup is fourth with $25 billion.

Non-U.S. banks being singled out by the EU have also accumulated substantial U.S. penalties, apart from what they have paid elsewhere. For example, Deutsche Bank has paid out $18 billion and NatWest (formerly the Royal Bank of Scotland) $13 billion.

The EU’s move is focused on a particular set of scandals in which these banks were alleged to have colluded to rig markets. Among these are cases involving the manipulation of currency markets. In 2015, Citigroup, JPMorgan, Barclays and Royal Bank of Scotland each paid hundreds of millions of dollars in settlements to resolve criminal charges brought by the U.S. Justice Department.

Unlike many other situations in which large corporations are offered deferred prosecution or non-prosecution agreements, the banks in this case had to plead guilty to the felony charges. Yet there was little in the way of consequences beyond the penalty payments. The banks were put on probation, on the assumption this would cause them to cease their bad behavior. Yet all the banks continued to rack up regulatory violations in subsequent years.

Reuters estimates that the blacklisted banks will lose out on about 86 million euros in syndication fees. This is a lot less than what the banks have paid in penalties. Yet, if banks begin to see that misconduct will cause them to be excluded from business opportunities, that may be more of an inducement to avoid corrupt behavior.

The dilemma for policymakers is that misconduct is so widespread in the financial sector that it is difficult to find service providers with clean hands. While excluding the ten banks, the EU turned to a group of others to handle the debt issue. Those included the likes of HSBC and BNP Paribas, which have their own substantial corporate rap sheets. Perhaps a larger blacklist is needed.

The 200-Year-Old Corporate Criminal

Boston-based State Street Corporation traces its history back to 1792 and now manages more than $3 trillion in assets, yet it has always maintained a lower profile than the goliaths of Wall Street. Recently, the company was in the spotlight, though not in a good way.

The U.S. Attorney’s Office for Massachusetts announced that State Street would pay a $115 million criminal penalty to resolve charges that it engaged in a scheme to defraud a number of its clients by secretly overcharging for expenses related to the bank’s custody of client assets.

“State Street defrauded its own clients of hundreds of millions of dollars over decades in a most pedestrian way,” said Acting U.S. Attorney Nathaniel Mendell. “They tacked on hidden markups to routine charges for out-of-pocket expenses.”

What’s remarkable is this simple fraud went on, according to prosecutors, for 17 years. This suggests that a large number of company executives were in on the scheme. In effect, it became part of State Street’s standard operating procedure.

It is disappointing that, aside from the monetary penalty—which can be easily absorbed by a company of its size–State Street was let off with what amounted to a slap on the wrist. Like numerous large corporate violators before it, State Street was allowed to enter into a deferred prosecution agreement rather than being compelled to enter a guilty plea.

The DPA is all the more controversial because State Street did not have a pristine record prior to this case. As shown in Violation Tracker, it has paid more than $1 billion in penalties in previous cases dating over a decade. These included a 2010 case in which it had to pay $313 million to resolve allegations by the Securities and Exchange Commission and the Massachusetts Attorney General that it misled investors about their exposure to subprime investments while selectively disclosing more complete information to specific investors.

Later, in 2016, State Street paid $382 million to the resolve an SEC case alleging that it misled mutual funds and other custody clients by applying hidden markups to foreign currency exchange trades. Hidden markups seem to be a recurring theme for State Street.

Since 2010 the company has paid out another $400 million in cases brought by the SEC and state regulators as well as class action lawsuits involving its management of pensions and benefit plans.

Yet perhaps the most disturbing entry on the Violation Tracker list is a 2017 case in which State Street paid a $32 million penalty to the Justice Department to resolve charges that it engaged in a scheme to defraud a number of the bank’s clients by secretly applying commissions to billions of dollars of securities trades.

As in this year’s criminal case, State Street was allowed to wriggle out of those charges by signing a deferred prosecution agreement. That puts the company in the dubious group of corporations that, as a 2019 Public Citizen report showed, have been offered multiple DPAs or non-prosecution agreements.

The ability of a corporation to obtain multiple leniency agreements makes a mockery of DPAs and NPAs. These arrangements are justified as a way to encourage a wayward company to change it practices, yet the ability to obtain multiple get-out-of-jail-free agreements does nothing more than incentivize more misconduct.

The Legacy of Financial Services Racism

At a time when numerous large corporations have been expressing support for the Black Lives Matter movement, it is important not to forget that big business has played a role in perpetuating systemic racism and widening the racial wealth gap.

This reality became clearer for me while I was collecting a new category of data for Violation Tracker: class-action lawsuits brought against financial services corporations engaging in discriminatory practices against their customers.

I was able to identify a total of 30 cases in which banks, insurance carriers and consumer finance companies paid a total of $400 million in settlements over the past two decades to resolve allegations that they charged higher premiums or interest rates to minority customers.

These private lawsuits are in addition to dozens of similar cases already in Violation Tracker that were brought by the Justice Department and state attorneys general during the same time period.

A wave of this litigation came in the early 2000s, when all the major automobile financing companies—including subsidiaries of carmakers such as Ford, General Motors, Toyota, and Honda—agreed to settle allegations that they allowed dealers to charge inflated interest rates on loans to African-American customers.

Subsequent years saw settlements with major insurance companies such as John Hancock, which in 2009 agreed to pay $24 million to resolve allegations that for decades it sold only inferior policies to Black customers. As recently as 2018, Travelers Indemnity settled a suit alleging it engaged in racial discrimination by refusing to write commercial policies for landlords who rented to tenants using Section 8 vouchers.

Over the past decade, major banks have faced private discrimination lawsuits concerning their mortgage lending practices. The defendant in four of these cases was Wells Fargo, which has paid more than $28 million in settlements. These include a case resolved just last year in which the City of Philadelphia had sued the bank on behalf of minority residents it allegedly steered to mortgages that were riskier and more expensive than those offered to similarly situated white homebuyers.

Discriminatory practices such as redlining began many decades ago. What the consumer civil rights lawsuits now documented in Violation Tracker show is that these injustices are not entirely a phenomenon of the distant past. The financial services sector has more work to do to ensure that their customers of color are treated equitably.

Note: with the addition of these lawsuits and other recent cases, Violation Tracker now contains a total of 438,000 entries involving $633 billion in fines and settlements.

The Other Regulators

When it comes to business regulation, we tend to focus on federal agencies, which for the financial sector means the SEC, the CFPB, the Federal Reserve and the like. Yet there is another world of financial regulation at the state level, which at a time of weakening enforcement is more important than ever.

My colleagues and I at the Corporate Research Project have just completed a deep dive in this world for a major expansion of Violation Tracker. We collected enforcement data dating back to the beginning of 2000 for each state’s regulatory agencies dealing with banking, consumer finance, insurance and securities. In all, we created 15,000 entries with total penalties of more than $17 billion.

The number of cases and penalty amounts vary greatly from state to state. Among the more than 150 agencies we looked at, some disclosed hundreds of successful enforcement actions while others reported a few dozen. Some states are active in one of the areas we examined and weak in others.

The state that has by far collected the most in overall penalties is New York, whose total is more than $11 billion. Its Department of Financial Services has gone after the world’s biggest financial institutions and has won major settlements such as the $2.2 billion paid by the French bank BNP Paribas for violating international economic sanctions and the $715 million paid by the Swiss bank Credit Suisse for facilitating tax evasion.

California is second in penalties at just over $1 billion but far ahead in the number of cases. Its financial regulatory agencies have carried out more than 2,000 successful actions. Their biggest settlement was the $225 million paid in 2017 by Ocwen Loan Servicing for mortgage abuses.

Three other states have collected more than $100 million in penalties: Arizona ($665 million in 488 cases), Texas ($632 million in 1,097 cases) and New Jersey ($339 million in 398 cases).

If we focus on the area of insurance, in which the states have pretty much exclusive jurisdiction, the largest number of penalties of $5,000 or more were found in California (1,475), Texas (950) and Virginia (633). Yet in terms of total penalty dollars, New York was first with $808 million, followed by Texas ($617 million) and California ($541 million).

We also identified more than 100 cases in which regulators from different states brought cases jointly. These actions are similar to the multi-state attorneys general cases we analyzed in our Bipartisan Crime Fighting by the States report published in September 2019.

The cases brought by groups of state insurance and securities regulators have yielded about $2 billion in penalties since 2000. The companies that have paid the most in penalties in these cases are: Citigroup ($251 million), American International Group ($204 million), Bank of America ($201 million) and the Swiss bank UBS ($179 million). 

Looking at both single-state and multi-state actions in banking, insurance and securities combined, the companies that have paid the most in total penalties turn out to be the big foreign banks, which account for every spot in the top ten. That New York sanctions case puts BNP Paribas on top with more than $2 billion, followed by Deutsche Bank and Credit Suisse.

The U.S. companies with the largest overall penalty totals are State Farm Insurance ($368 million), UnitedHealth Group ($354 million), Citigroup ($295 million), American International Group ($275 million) and MetLife ($263 million).  

With the addition of the state financial cases, Violation Tracker now contains 437,000 cases with total penalties of $627 billion imposed by more than 50 federal and 200 state and local agencies.

Another Crooked Bank?

For the past three years, Wells Fargo has been pilloried for having created millions of bogus accounts to extract unauthorized fees from its customers. Now it seems Wells may not have been the only financial institution to engage in this type of fraud.

The Consumer Financial Protection Bureau, despite having been somewhat defanged by the Trump Administration, has just filed suit against Fifth Third Bank for similar behavior. Based in Cincinnati, Fifth Third is a large regional bank with branches in ten states and total assets of about $170 billion.

According to the CFPB’s complaint, the problem at Fifth Third arose when it, like Well Fargo, imposed overly aggressive cross-selling targets on its employees, causing them to create bogus accounts to meet those goals. These actions not only generated illicit fees, the complaint states, but also exposed customers to a higher risk of identity theft when, for example, online banking accounts were created without their knowledge. The issuance of unauthorized credit cards may have harmed customers’ credit scores.

The agency is asking a federal court to order Fifth Third to stop these practices and pay damages and penalties for its actions. The bank issued a press release denying the allegations and vowing to fight the lawsuit vigorously.

Although its “rap sheet” is a lot shorter than those of Wells Fargo and the other megabanks, Fifth Third has not been free from controversy. Violation Tracker’s tally on the company runs to more than $132 million in penalties.

One of the cases on the list was brought by the CFPB. In 2015 the agency announced that Fifth Third would pay $21.5 million to resolve two actions—one involving allegations of using racially discriminatory loan pricing and another involving deceptive marketing of credit card add-on products. The second case included allegations similar to those in the new case: telemarketers for the bank were alleged to have failed to tell cardholders that by agreeing to receive information about a product they would be enrolled and charged a fee.

Fifth Third’s largest past penalty was the $85 million it agreed to pay in 2015 to settle a case brought by the Justice Department and the Department of Housing and Urban Development concerning the bank’s improper origination of federally insured residential mortgage loans during the housing bubble.

In 2013 Fifth Third paid $6.5 million to settle an SEC case concerning the improper accounting of commercial real estate loans in the midst of the financial crisis. It has also paid out more than $8 million in wage theft lawsuits.

If the allegations against Fifth Third hold up, bank regulators and federal prosecutors will also have to determine whether the scheme occurred at other financial institutions. Megabanks such as JPMorgan Chase and Bank of America have run up billions of dollars in fines and settlements for many different kinds of misconduct. We need to know whether the creation of sham accounts should be added to the list.

Justice Deferred at Wells Fargo

In finally resolving its investigation of Wells Fargo for a brazen scheme to bilk customers through the creation of millions of sham fee-generating accounts, the Trump/Barr Justice Department employed some tough language but administered what amounted to a slap on the wrist.

DOJ issued a press release quoting Deputy Assistant Attorney General Michael Granston as saying that the settlement “holds Wells Fargo accountable for tolerating fraudulent conduct that is remarkable both for its duration and scope.” The release was accompanied by a 16-page summary of the bank’s abuses, including the adoption of “onerous sales goals and accompanying management pressure [that] led thousands of its employees to engage in: (1) unlawful conduct to attain sales through fraud, identity theft, and the falsification of bank records, and (2) unethical practices to sell products of no or low value to the customer, while believing that the customer did not actually need the account and was not going to use the account.”

The document states that senior Wells executives were well aware of the unlawful behavior yet continued to ratchet up the sales pressure on employees.

This recitation echoes the content of a 100-page notice issued earlier by Wells’ primary regulator, the Office of the Comptroller of the Currency. While the OCC imposed substantial financial penalties against several former executives of the bank, DOJ has not charged any individuals.

Justice imposed a $3 billion monetary penalty on Wells, which resolves criminal issues such as false bank records and identity theft as well as civil issues under the Financial Institutions Reform, Recovery and Enforcement Act and securities violations that may be brought by the SEC. That penalty is not insignificant but it will not be too much of a burden for a bank whose profits last year exceeded $19 billion.

Moreover, the impact of the criminal portion of the case was diminished by the inclusion of a deferred prosecution agreement rather than the filing of any actual charges. This overused gimmick (like its evil twin, the non-prosecution agreement) allows DOJ to give the impression it is being tough with corporate bad actors while actually failing to do so.

In its press release on the Wells case, DOJ tries to justify the use of the DPA by noting factors such as the bank’s cooperation with the investigation. Yet it also cites “prior settlements in a series of regulatory and civil actions.”

How are the bank’s prior bad acts, which according to Violation Tracker have resulted in more than $17 billion in penalties, an argument for leniency? If anything, they militate against the use of DPA, which was originally meant to provide an incentive for a company caught up in a single case of misconduct to return to the straight and narrow.

Wells Fargo, in fact, was the recipient, via its acquisition Wachovia, of a previous DPA in 2010 for anti-money-laundering deficiencies as well as a 2011 non-prosecution agreement in connection with municipal bond bid-rigging. Those deals do not appear to have much of a beneficial effect on the ethical climate at the bank.

Allowing Wells to once again evade true criminal responsibility is sending the wrong signal to a corporation whose conduct was so pernicious, both in cheating its customers and in coercing lower-level employees to participate in the massive fraud.

Behavior like this calls out for tougher penalties. In 2018 the Federal Reserve took a step in that direction by barring Wells from growing any larger until it cleaned up its business practices. The agency also announced that the bank had been pressured to replace four members of its board of directors.

Meanwhile, the Justice Department continues to rely on prosecutorial approaches that have done little to stem the ongoing wave of corporate criminality.

The Belated Crackdown on Wells Fargo

It took three years but a leading federal bank regulator has finally gotten tough with probably the most lawless large financial institution in the country.

The Office of the Comptroller of the Currency, an arm of the Treasury Department, recently took action against the former chief executive of Wells Fargo in connection with the scandal in which the bank pressured employees to create bogus accounts that extracted millions of dollars in fees from unsuspecting customers.

Many observers were surprised that the OCC, not known for aggressive action, fined John Stumpf $17.5 million – the largest penalty it has ever imposed on an individual – and banned him for life from the banking industry. The agency also penalized two other former senior officials at Wells Fargo and charged five others. Among those five is Carrie Tolstedt, the former head of retail banking at Wells, against whom the OCC is seeking a penalty of $25 million, substantially more than what Stumpf agreed to pay.

OCC’s belated severity may have something to do with the fact that the agency’s posture toward Wells is the subject of a pending investigation by the Treasury inspector general. That inquiry will likely address the failure of the agency to pursue complaints it had received about abusive practices at Wells long before the sham-account scandal erupted in 2016. The agency admitted this lapse in an unflattering report about its conduct released in 2017.

Along with the announcement of its charges against Tolstedt and the others, the OCC released a 100-page Notice which reads like an indictment. It argues that for more than a decade the bank maintained a business model that pressured employees to engage in “serious misconduct” by imposing “intentionally unreasonable sales goals” and “fostered an atmosphere that perpetuated improper and illegal conduct.”

The document relates in detail how that pressure worked to the detriment both of the customers who were being defrauded and the bank’s lower level employees. Those employees were turned into accomplices in a corrupt scheme described by the document as “immense” in magnitude.

Also contained in the document are indications that Wells managers were seeking to cover up the wrongdoing. They pretended to monitor improper conduct by lower-level employees but were far from aggressive in that effort. The document notes that the bank’s Head of Corporate Investigations testified before the OCC that there was nearly a 100% chance an employee’s boss would know if she failed to meet her sales goals, but the chances were very small that an employee would be caught for issuing an unauthorized product or service. Those employees clearly got the message that if they wanted to keep their jobs they had to go along with the scheme.

Unfortunately, the document is part of a civil proceeding when it should really be part of a criminal case against Wells and those who were running it. The shocking misconduct outlined by the OCC belongs in an indictment brought under the Racketeer Influenced and Corrupt Organizations Act.

There are reports that the Justice Department is pursuing a criminal investigation of Wells, but it is hard to be confident that Bill Barr’s DOJ will do the right thing.

A Boom Decade for Corporate Misconduct

Business journalists are looking back with amazement at the stock market’s track record over the past decade. Yet the 2010s were also a boom period for corporate crime and misconduct.

In Violation Tracker my colleagues and I have documented more than 240,000 cases for that period representing $442 billion in fines and settlements—more than twice the $161 billion total for the previous decade. (The numbers are not adjusted for inflation.)

The cases from the 2010s include 574 with a penalty of $100 million or more, 147 with a penalty of $500 million or more, and 67 with a penalty of $1 billion or more.

The top tier of these mega-cases is dominated by four corporations. BP is linked to the largest single case on the list—the $20.8 billion settlement with the federal government and five states to resolve civil claims stemming from the massive 2010 Deepwater Horizon oil spill in the Gulf of Mexico. BP paid out numerous other mega-penalties and smaller ones to put its total for the decade at nearly $28 billion.

The second biggest single penalty during the decade was Bank of America’s $16.65 billion settlement with the Justice Department in 2014 to resolve claims relating to fraud in the period leading up to the financial crisis, including such behavior on the part of Merrill Lynch and Countrywide Financial, which BofA acquired during that crisis. BofA also had plenty of other penalties during the decade—including two in excess of $10 billion—bringing its total for that period to an eye-popping $62 billion.

The third of the penalty leaders is Volkswagen, which in 2016 reached a $14.7 billion settlement with the federal government and the state of California to resolve allegations relating to systematic cheating on diesel pollution emission testing through the use of defeat devices. VW paid out several other multi-billion penalties related to the cheating and racked up a penalty total of more than $23 billion for the decade.

Rounding out the list of companies with individual penalties in excess of $10 billion is JPMorgan Chase, which in 2013 reached a $13 billion settlement to resolve federal and state claims relating to the sale of toxic mortgage-backed securities by the bank itself and by its acquisitions Bear Stearns and Washington Mutual. JPMorgan also had several other penalties of $1 billion or more, along with smaller ones, that pushed its penalty total for the decade to more than $29 billion.

Other big domestic banks had a substantial share of mega-penalties. These include Citigroup, with a $7 billion toxic securities settlement in 2014 (and a penalty total of $16 billion for the decade) and Wells Fargo, with a similar $5.3 billion settlement in 2012 (and a penalty total of $15 billion stemming from issues such as the creation of bogus accounts to generate illicit fees).

The decade also saw a slew of mega-cases involving foreign banks such as BNP Paribas, Deutsche Bank, Royal Bank of Scotland and Credit Suisse for offense such as violations of economic sanctions and their own toxic securities abuses.

Financial services companies of all kinds dominated the mega-penalty list, accounting for 41 of the 67 billion-dollar cases. Also worthy of mention are the pharmaceutical companies, including settlements by GlaxoSmithKline for $3 billion and Johnson & Johnson for $2.2 billion, both for marketing drugs for purposes not approved as safe by the Food and Drug Administration. That industry will end up paying much more when the pending multistate opioid litigation is resolved.

The list could continue. Suffice it to say that the decade’s major cases made it clear that corporate misconduct perseveres through good times and bad.

The 2019 Corporate Rap Sheet

While the news has lately focused on political high crimes and misdemeanors, 2019 has also seen plenty of corporate crimes and violations. Continuing the pattern of the past few years, diligent prosecutors and career agency officials have pursued their mission to combat business misconduct even as the Trump Administration tries to erode the regulatory system. The following is a selection of significant cases resolved during the year.

Online Privacy Violations: Facebook agreed to pay $5 billion and to modify its corporate governance to resolve a Federal Trade Commission case alleging that the company violated a 2012 FTC order by deceiving users about their ability to control the privacy of their personal information.

Opioid Marketing Abuses: The British company Reckitt Benckiser agreed to pay more than $1.3 billion to resolve criminal and civil allegations that it engaged in an illicit scheme to increase prescriptions for an opioid addiction treatment called Suboxone.

Wildfire Complicity: Pacific Gas & Electric reached a $1 billion settlement with a group of localities in California to resolve a lawsuit concerning the company’s responsibility for damage caused by major wildfires in 2015, 2017 and 2018. PG&E later agreed to a related $1.7 billion settlement with state regulators.

International Economic Sanctions: Britain’s Standard Chartered Bank agreed to pay a total of more than $900 million in settlements with the U.S. Justice Department, the Treasury Department, the Federal Reserve, the New York Department of Financial Services and the Manhattan District Attorney’s Office concerning alleged violations of economic sanctions in its dealing with Iranian entities.

Emissions Cheating: Fiat Chrysler agreed to pay a civil penalty of $305 million and spend around $200 million more on recalls and repairs to resolve allegations that it installed software on more than 100,000 vehicles to facilitate cheating on emissions control testing.

Foreign Bribery: Walmart agreed to pay $137 million to the Justice Department and $144 million to the Securities and Exchange Commission to resolve alleged violations of the Foreign Corrupt Practices Act in Brazil, China, India and Mexico.

False Claims Act Violations: Walgreens agreed to pay the federal government and the states $269 million to resolve allegations that it improperly billed Medicare, Medicaid, and other federal healthcare programs for hundreds of thousands of insulin pens it knowingly dispensed to program beneficiaries who did not need them.

Price-fixing: StarKist Co. was sentenced to pay a criminal fine of $100 million, the statutory maximum, for its role in a conspiracy to fix prices for canned tuna sold in the United States.  StarKist was also sentenced to a 13-month term of probation.

Employment Discrimination: Google’s parent company Alphabet agreed to pay $11 million to settle a class action lawsuit alleging that it engaged in age discrimination in its hiring process.

Investor Protection Violation: State Street Bank and Trust Company agreed to pay over $88 million to the SEC to settle allegations of overcharging mutual funds and other registered investment company clients for expenses related to the firm’s custody of client assets.

Illegal Kickbacks: Mallinckrodt agreed to pay $15 million to resolve claims that Questcor Pharmaceuticals, which it acquired, paid illegal kickbacks to doctors, in the form of lavish dinners and entertainment, to induce them to write prescriptions for the company’s drug H.P. Acthar Gel.

Worker Misclassification: Uber Technologies agreed to pay $20 million to settle a lawsuit alleging that it misclassified drivers as independent contractors to avoid complying with labor protection standards.

Accounting Fraud: KPMG agreed to pay $50 million to the SEC to settle allegations of altering past audit work after receiving stolen information about inspections of the firm that would be conducted by the Public Company Accounting Oversight Board.  The SEC also found that numerous KPMG audit professionals cheated on internal training exams by improperly sharing answers and manipulating test results.

Trade Violations: A subsidiary of Univar Inc. agreed to pay the United States $62 million to settle allegations that it violated customs regulations when it imported saccharin that was manufactured in China and transshipped through Taiwan to evade a 329 percent antidumping duty.

Consumer Protection Violation: As part of the settlement of allegations that it engaged in unfair and deceptive practices in connection with a 2017 data breach, Equifax agreed to provide $425 million in consumer relief and pay a $100 million civil penalty to the Consumer Financial Protection Bureau. It also paid $175 million to the states.

Ocean Dumping: Princess Cruise Lines and its parent Carnival Cruises were ordered to pay a $20 million criminal penalty after admitting to violating the terms of their probation in connection with a previous case relating to illegal ocean dumping of oil-contaminated waste.

Additional details on these cases can be found in Violation Tracker, which now contains 397,000 civil and criminal cases with total penalties of $604 billion.

Note: I have just completed a thorough update of the Dirt Diggers Digest Guide to Strategic Corporate Research. I’ve added dozens of new sources (and fixed many outdated links) in all four of the guide’s parts: Key Sources of Company Information; Exploring A Company’s Essential Relationships; Analyzing A Company’s Accountability Record; and Industry-Specific Sources.