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The Comptroller of the Currency has finally handed down its punishment for the compliance failures that helped bring about an end to the tenure of Citibank CEO Michael Corbat.

After Citi announced that Corbat would be replaced by Jane Fraser, who will soon become the first CEO of an American megabank, it was revealed that the Office of the Comptroller of the Currency was preparing to fine Citigroup for compliance failures that had apparently become part and parcel of Corbat’s executive blindness – an issue he had neglected, that ultimately lead to his downfall – or at least that’s what we’ve taken from the press reports.

On Wednesday evening, Bloomberg reported that Citi had struck a deal with the OCC and the Fed to fix several “longstanding compliance problems” involving its risk-control and reporting measures.

As part of the deal, Citi will pay a $400 million fine. It’s a slap on the wrist, but news of the settlement hit Citi’s shares after hours (though at least the Feds had the decency to wait until after the close to break the news). The bank’s board must also now submit a report as part of the deal outlining how it intends to fix these problems.

Citigroup Inc. has agreed to pay $400 million and must seek the government’s sign-off for major acquisitions after regulators identified several longstanding problems with its risk controls.

Citigroup Inc. has agreed to an order from the Federal Reserve to fix several longstanding problems with its risk controls, according to a statement released Wednesday. The Fed’s cease-and-desist order — issued alongside a related sanction from the Office of the Comptroller of the Currency — directs the lender to “correct practices previously identified by the Board in the areas of compliance risk management, data quality management, and internal controls.” Citigroup was given a series of deadlines to analyze and report back to the Fed on how it’s fixing issues identified by the regulator. Within 120 days, the bank’s board of directors must submit a report detailing how it will hold senior management accountable and how executive compensation will be “consistent with risk management objectives,” the Fed said.

At the same time, the Federal Reserve issued a cease-and-desist order that directs the lender to “correct practices previously identified by the Board in the areas of compliance risk management, data quality management, and internal controls.”

As Bloomberg explained, the deal is just one more costly misstep for the bank, as it must now divert money away from lucrative technology investments and building out its cutting edge high frequency trading capabilities and instead hire more compliance officers who will hide in a basement in Sarasota or where ever and crank out SARs, as the FinCEN leaks revealed.

The bank noted it’s made structural changes to better comply with the regulators’ orders, including by hiring Karen Peetz as its new chief administrative officer to “steer these programs to completion.”

The orders come just weeks after Citigroup mistakenly sent $900 million to lenders of the cosmetics giant Revlon Inc. The bank ultimately chalked the wayward payment up to employee error, noting it was in the middle of transitioning to new software for its syndicated loan business.

The ensuing legal battle was an embarrassment for the bank as many of the lenders balked at Citigroup’s pleas to return the funds. For regulators, who began scrutinizing the mistaken payment within days, the incident was illustrative of broader problems at the bank.

“We appreciate the urgency of the tasks at hand and we are committed to fulfilling our obligations to all of our stakeholders,” Citigroup said in the statement.

The fine may be a slap on the wrist, but Citi has already pledged to spent $1 billion on these costs this year. How much more will the bank be required to spend?

In a brief statement on Twitter, President Trump praised the healthcare workers that helped him recover (and those across the nation – “we have the greatest people in the world”) claiming that getting COVID-19 “was a blessing from God,” as it enabled him to better understand the virus and its various potential treatments.

Specifically, Trump said he thought Regeneron was “the key” to his recovery.

“I felt good immediately,” he said in the clip,

“I view these – they called them theraputic, but to me it wasn’t theraputic, it just made me better. I call that a cure.”

The president then declared that he wants everyone who needs it in the nation to get the same treatment he did and will “make it free for everyone.”

Trump ended by making it very clear who is to blame for this awful virus: “this is China’s fault, just remember that… and China’s gonna pay a big price for what they have done to the world.”

Watch the full message below:

A MESSAGE FROM THE PRESIDENT! pic.twitter.com/uhLIcknAjT

— Donald J. Trump (@realDonaldTrump) October 7, 2020

Regeneropn shares jumped over 3% after hours on the comments…

We are sure President Trump’s use of the word “cure” will trigger the outrage mob… and we wonder just how long before Twitter takes that tweet down!!

 

Real Vision managing editor, Ed Harrison, is joined by editor, Jack Farley, to break down the vanishing fiscal stimulus and the K-shaped economic recovery. Ed interprets the latest economic data to give Jack his market outlook over the next six months. Ed then looks at how the impasse in the fiscal stimulus may widen the chasm between large corporations and small businesses. He and Jack then turn their gaze to the credit markets where the bifurcation between the haves and the have-nots is becoming even more apparent. In the intro, Real Vision’s Peter Cooper takes a look at how President Trump has pulled the plug on fiscal stimulus negotiations, what he’s targeting now, and how markets have been taking in the news.

Phillips 66 went against the grain during the midst of the coronavirus pandemic. While the rest of the world was encouraging its employees to work from home, the oil company instead instituted a “work from work” policy for its Houston headquarters, despite the fact that the surrounding area was experiencing a Covid-19 outbreak.

The move helped hold white collar workers to the same standards as the company’s refinery staff, who didn’t have a choice to work from home, Reuters noted. 

And while the company was mostly able to sidestep the outbreak while remaining full staffed, some employees were left “feeling bruised” and the decision has taken its toll on morale. Several employees that spoke to Reuters said that the idea made them feel like they were put at risk – and others noted that executives and senior managers were “kept safer” via the use of private elevators and offices. 

Additionally, the company wasn’t totally able to sidestep Covid. In fact, Phillips 66 at one point saw a rise in infections that “was almost twice that of the per capita rate of Harris County where the headquarters is based.” On July 8, 24 employees were listed as active cases, representing about 1.04% of the 2,300 workers on site. 

As the months drag on and the price of oil continues to be under pressure, despite warnings to short sellers from Saudi Arabia, Phillips 66 has seen its stock under pressure. PSX traded above $100 to start the year and now trades at about half that, closing recently at $51. CEO Greg Garland told employees in a May video that the company had “bled $1.6 billion in cash” in Q1. 

By June, most employees had been recalled back to work. 

One employee said: “They’ve always said employees’ health and welfare came first. Pre-COVID, I would say that was true… Now the attitude is we don’t care about you. We just care about our company, our stock price and our dividend.”

Another former employee said the company’s decision to keep people at work contributed to him leaving the company. 

And company police is different from other players in the industry, like Chevron, who has kept its headquarters at 25% capacity. ConocoPhillips had allowed its staff to stay home until last week, also.

Scott Packard, chief communications officer for Houston’s health department, said: “People should minimize contact with others whenever possible and avoid leaving home except for essential needs. [To mitigate risk] employers should provide telecommuting options to the extent possible and follow public health guidelines.”

Phillips 66 spokesman Dennis Nuss responded: “[Phillips 66] is committed to the safety of everyone who works in our operating facilities and offices. [The company] supports our decision that our dedicated employees can and have safely returned.” 

“Our intent is to not address employees’ feedback through public channels,” he continued. He also noted the company spent $400,000 in PPE for its employees. “The change in protocols did not impact the relatively low number of cases in the office, although we believe the more frequent use of face coverings made it easier for employees to remember to utilize them both inside the office and away from the workplace,” Nuss concluded.

And not everybody hates the idea. Another employee, Bryan Kaus, wrote in a blog post in May that a return to work had “been good in many ways” because it “created a sense of normalcy and optimism.”

Kaus wrote: “It was surprising to see a packed elevator, people shaking hands, and eating together.”

Authored by Mark Glennon via Wirepoints.org,

Can you walk across a river with an average depth of five feet?

Put in terms that simple, the fallacy of relying on an average should be obvious. Knowing the average doesn’t help. It depends where you cross and how tall you are.

But that same fallacy constantly appears in discussion about COVID-19 and policies to fight it. Averages that mean little have been overdone, nationally and here in Illinois.

Most recently, the COVID debate is moving in a new direction that demands better awareness of the fallacy of averages.

This is important not only to the coronavirus debate, but provides a broader lesson why primary schools ought to be requiring students to read books like Innumeracy: Mathematical Illiteracy and Its Consequences, How to Lie With Statistics and Thinking Fast, Thinking Slow. Too many people, including much of the media and government, seem unaware of the fallacy.

The fallacy most commonly appears in discussion about fatality rates. From the start of the pandemic, the average mortality rate from an infection has understandably been central to perceptions about the virus, and initial estimates almost always were provided as a single average. They were scary. Headlines were common in the spring with words like “staggering death tolls” of 1.3%. 

In March, Dr. Anthony Fauci estimated the mortality rate at about 2% and the World Health Organization pegged it at about 3.4%.

Estimates gradually dropped for a number of reasons, but a single, average number continued to be the focus. Until last month the Center for Disease Control published only one average number, which it put at 0.65% in July.

Hold on, many scientists are now saying. Focus on what’s inside those averages. Thousands of scientists and medical practitioners are now signing on to what’s called the Great Barrington Declaration, asking for what they call “focused protection.” Signers include what the Wall Street Journal calls “dozens of esteemed medical experts with blue-chip academic credentials.” Their statement says,

The most compassionate approach that balances the risks and benefits of reaching herd immunity, is to allow those who are at minimal risk of death to live their lives normally to build up immunity to the virus through natural infection, while better protecting those who are at highest risk. We call this Focused Protection. 

Underpinning their approach is the starkness of the age variance within the “average” fatality rate. Below is the breakdown newly provided by the CDC. This is its “current best estimate” of chances of dying if you get infected. Death rates are clearly far, far lower than originally said for most of the population. The averages were distorted up largely because most of the deaths are older people. In Illinois, 86% of deaths have been over age 60.

Stay laser-focused just on those at risk and leave younger people alone because they face no material risk – that’s what’s behind the new declaration. Since April, that’s the approach we’ve often said makes sense.

Instead of that focused protection, however, policy in Illinois and much of the nation would be better described as carpet bombing – flatten the entire economy by restricting behavior of the entire population. In fact, Illinois’ approach might be considered the opposite of focused protection since its policies toward retirement facilities were so poor, as reported by the Chicago Tribune. Over half of Illinois COVID-19 fatalities have been in those facilities.

The fallacy was first evident in a different way in Governor JB Pritzker’s initial shutdown order and reopening plan, which lumped the entire state into one unit.

Regions with no COVID problem howled, and Pritzker gradually switched over to a more regionalized approach instead of state-wide averages.

But the state is still struggling under an inconsistent approach to the fallacy of averages.

St. Clair County’s positivity rates are better than the rest of its region, it insists, so it should stand alone in how restrictions are imposed. But the state is refusing to allow the county to be counted separately from Region 4. The county emergency management director says he sometimes feels like he is “in a war” with the Illinois health department, according to the Belleville News-Democrat.

And that’s inconsistent with how the state is dealing with Region 6. There, positivity rates are pulled way down by heavy testing at the University of Illinois – over 10,000 per day according to the News-Gazette. Heavy testing gets lots of negative results. So, the state decided to exclude the U of I county from Region 6 numbers. That has the rest of Region 6 squealing about the tougher restrictions it will face because of the exclusion.

That whole dust-up with excluding U of I, by the way, illustrates the silliness of focusing on positivity rates at all. They are heavily distorted by how much testing is being done and who is getting tested.

If all that is too much math for you, flunk with dignity and at least remember the main lesson: Don’t let anybody tell you whether it’s safe to walk across a river based on its average depth.

In what we would guess is likely a harbinger of less than stellar operating results to come, Tesla has announced that it has caught yet another pesky “malicious saboteur” at its Fremont factory.

A memo was circulated about two weeks ago at the $400 billion company that the rogue employee was fired last month, according to The Daily Mail. 

“Operations at the facility were disrupted briefly,” the company’s VP of legal, Al Prescott, said. Meanwhile, it appears Prescott is commenting because Tesla still does not have a General Counsel. 

Tesla said they got to the issue quickly. A company e-mail stated: “Two weeks ago, our IT and InfoSec teams determined than [sic] an employee had maliciously sabotaged a part of the Factory. Their quick actions prevented further damage and production was running smoothly again a few hours later.”

Tesla hasn’t identified the person who was fired but says that the individual destroyed a company computer during the incident in question. 

“Ultimately, after being shown the irrefutable evidence, the employee confessed. As a result, we terminated employment,” Tesla’s e-mail said. It continued: “We place tremendous trust in our employees and value everyone’s contribution. However, whatever the personal motivations of the attacker were, these are crimes, violations of our code of conduct, and are unfair to other employees.”

The e-mail concluded: “We will take aggressive action to defend the company and our people.”

Recall, this isn’t the first time Musk has warned of ‘sabotage’ at Tesla. Back in 2018, Musk warned that a ‘saboteur’ was on the loose within the company’s ranks, claiming the person “tweaked code on internal products” and “sent company data without authorization”.

This person was later identified to be whistleblower Martin Tripp, who alleged that Tesla was putting damaged and dangerous batteries into vehicles it was manufacturing.

We wonder if this incident of ‘sabotage’ leads to more whistleblower allegations…

Authored by Paul Jospeh Watson via Summit News,

Facebook-owned Instagram has announced that will ban all QAnon accounts, including ones that don’t promote violence, while refusing to remove ISIS propaganda accounts that celebrate 9/11 under the justification that “people may express themselves differently.”

In an update to its policy announced yesterday, Facebook said that it was moving beyond a measure taken back in August that removed QAnon accounts which contained “discussions of potential violence.”

“We’ve seen other QAnon content tied to different forms of real world harm, including recent claims that the west coast wildfires were started by certain groups, which diverted attention of local officials from fighting the fires,” said the social media giant.

Facebook specified that it would “remove any Facebook Pages, Groups and Instagram accounts representing QAnon, even if they contain no violent content.”

Many pointed out the hypocrisy of Antifa accounts still being allowed on the platform despite the movement’s involvement in numerous violent riots over the last six months.

But not Antifa, even though they’re literally a terrorist organization with cells in every major city, complete with uniforms and flags. https://t.co/mQAewCzGKW

— Mark Dice (@MarkDice) October 6, 2020

While banning all QAnon content, Instagram has simultaneously refused to remove literal ISIS propaganda accounts that celebrate 9/11.

As the Sun reveals, one such account posted an image of the World Trade Center being hit by a plane along with the caption, “One of the most beautiful scenes.”

As recently as Sunday the Abogasm_1990 account posted an execution clip, and was followed by “20 other pro-IS accounts with more than 7,700 followers.”

However, even after The Center for Countering Digital Hate reported the accounts to Instagram, the social media network refused to remove them, saying no breach of guidelines had occurred.

Partially defending the content, Instagram explained that as “a global community we understand people may express themselves differently.”

“It is unbelievably irresponsible, but sadly unsurprising,” said CCDH chief exec Imran Ahmed.

So mere discussion of QAnon is completely banned, but actual glorification of terror attacks against the United States are just part of free speech, according to Instagram.

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