bank – Our Story Insight

JPMorgan’s push to replace Silicon Valley Bank for startups

admin — Mon, 16 Mar 2026 12:24:12 +0000

People line up outside of the shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California.

Justin Sullivan | Getty Images

Three years ago, JPMorgan Chase executive Doug Petno was at a New York City party celebrating a colleague’s retirement when his boss, Jamie Dimon, called Petno over.

It was March 9, 2023, and the customers of a West Coast lender known for catering to startups had been withdrawing deposits in droves.

“Jamie looks at me and says, ‘Get on this call,'” Petno told CNBC this week in an exclusive interview.

On the line were regulators with an urgent question: Was JPMorgan interested in buying Silicon Valley Bank?

California’s finance regulators seized SVB the next day, completing the sudden collapse of an institution at the heart of the American startup community. Over that weekend, Dimon, Petno and other JPMorgan leaders repeatedly weighed whether they should purchase the bank, which had just lost $42 billion in deposits. They decided against it, in part because thousands of SVB clients were signing up for JPMorgan accounts, anyway, in a flight to safety.

“We had three years’ worth of incoming clients in a weekend,” said Petno, who is co-head of JPMorgan’s commercial and investment bank. “Onboarding teams were opening up accounts around the clock.”

Emboldened by what they were seeing, Petno had an idea: What if JPMorgan could build a true competitor to SVB — as well as startups Brex, Ramp and Mercury — all of whom had carved a profitable niche serving founders and venture capital investors?

“We went to our board and said, ‘there’s a vacuum in the market,'” Petno told CNBC. “At that very moment, everybody saw the opportunity.”

Keeping tabs

For JPMorgan, already a giant in Main Street and Wall Street finance, winning the more specific niche of startup banking from West Coast rivals is about more than gaining deposits. It’s both a key element of the growth strategy for a bank with more than $180 billion in revenue last year, and also a means to help the New York-based lender stay close to technology developments for itself.

JPMorgan, with a tech budget of nearly $20 billion this year, is aiming to not only serve startup clients and VC investors better, but to learn from them. The firm keeps a close eye on Silicon Valley startups for solutions to problems the bank itself faces, from cybersecurity to quantum computing.

In fact, when a JPMorgan client announces a round of artificial intelligence-related cutbacks to jobs and expenses, the firm will often send a team of bankers to investigate how the client is doing it, said Petno.

Typically, the bankers find that implementing new AI agents is only a fraction of the reason for layoffs, while other factors like over-hiring and inefficient processes account for the rest, he said.

Co-CEOs of Commercial & Investment Bank at JPMorganChase, Troy Rohrbaugh and Douglas Petno.

Courtesy: JPMorganChase

JPMorgan began its startup banking business in 2016 as it became aware of its tech-focused rivals during its westward expansion. In the beginning, it only served bigger, more mature startups.

That’s in part because the bank didn’t yet have a digital banking solution that younger founders in particular craved, Petno said. It also didn’t have enough investment bankers at the time to target smaller, riskier startups.

For years, the view on JPMorgan from some in the VC community was that it took too long to open an account, or that resolving issues around payments involved dealing with time-consuming visits to a branch, investors told CNBC.

“They want to go to the website to open an account, and if it’s more than 15 minutes, they’re done,” says Petno.

But in the weeks that followed the SVB collapse, Petno and his team moved quickly, hiring a few key players from SVB, including then-SVB Capital President John China, who today leads JPMorgan’s innovation economy business along with Andrew Kresse.

By late April of 2023, JPMorgan found itself looking at buying another wounded California-based bank. This time, it made the winning bid for First Republic, which also catered to the tech community.

With fresh learnings from SVB and the banking operations of First Republic, JPMorgan doubled its revenue from startup banking in 2023, according to the company.

Despite the digital banking focus, a startup founder will still sometimes walk into a Chase branch to deposit a huge funding check into a regular account. Now, when that happens, JPMorgan’s systems immediately gets that client moved to the startup team, Petno says.

Killer app?

JPMorgan has now quadrupled the number of total clients it has in the business to nearly 12,000, served by 550 bankers on both coasts, according to the lender, all of whom draw resources from different parts of the company.

Founders and VC investors are clients of the private bank, while the startups are covered by the commercial bank and VC funds are separate clients in a business largely acquired from First Republic.

While JPMorgan declined to give specific revenue figures, Petno said the startup business had a “dramatically higher” growth rate than the bank’s main business lines.

And yet, Petno still isn’t satisfied with the firm’s digital banking offerings for startups, describing a project underway that will help them leapfrog competitors.

Besides SVB, which is now owned by First Citizens Bank, and the startups Mercury and Ramp, competitors in the space include Stifel and Customers Bank. In January, Capital One acquired Brex for $5.15 billion.

Since most startups fail, JPMorgan identifies companies that it expects to be winning bets, seeking to develop relationships with them earlier in their life cycle, like SVB did.

That way, it can provide not only core bank accounts, but lucrative investment banking advice along the way.

JPMorgan’s ultimate vision is to become the one-stop shop for founders, serving all their needs, including international expansion, from the seed round to initial public offering and beyond.

“Once you’re onboarded, you can never outgrow JPMorgan, from unicorn all the way to a Magnificent 7,” Petno said.

Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

The post JPMorgan’s push to replace Silicon Valley Bank for startups appeared first on Our Story Insight.

Crypto startup Erebor becomes first bank approved in Trump’s 2nd term

admin — Sat, 07 Feb 2026 08:43:12 +0000

Crypto-focused Erebor Bank became the first bank to receive a national bank charter during the second term of the Trump administration, the Wall Street Journal reported Friday.

The approval allows the Palmer Luckey-backed entity to operate as a bank nationwide, and occurred less than eight months after it applied for a charter with the Office of the Comptroller of the Currency.

The OCC did not immediately respond to a Reuters request for comment.

The approval allows the Palmer Luckey-backed entity to operate as a bank nationwide. Bloomberg via Getty Images

Launched by Anduril co-founder Luckey, Erebor received conditional approval from US banking regulators in October.

Palantir co-founder Joe Lonsdale is an investor in the bank, while Peter Thiel has also been widely reported to back the initiative.

Erebor plans to serve technology businesses in artificial intelligence, crypto, defense and manufacturing, as well as individuals who work at or invest in them, according to its charter application.

It is also aiming to fill the void left by Silicon Valley Bank’s collapse in 2023, which was a key banking channel for early-stage technology firms and venture capitalists deemed too risky by traditional banks.

Like Anduril and Palantir, Erebor takes its name from J.R.R. Tolkien’s “The Lord of the Rings” series. ©New Line Cinema/courtesy Everet

Many startups struggled to access capital and meet immediate obligations, such as payrolls after the bank collapsed.

Like Anduril and Palantir, Erebor takes its name from J.R.R. Tolkien’s “The Lord of the Rings” series. In the books, Erebor is the “Lonely Mountain,” a fortress whose treasures are reclaimed from the dragon Smaug.

The post Crypto startup Erebor becomes first bank approved in Trump’s 2nd term appeared first on Our Story Insight.

Can Deutsche Bank Center and Masa return to former glory?

admin — Sun, 23 Nov 2025 21:00:34 +0000

As restaurant lovers debate whether Masa will survive its Michelin guide demotion from three stars to two, real estate-watchers are asking: Can the Deutsche Bank Center “Restaurant Collection” regain its past glory, which was based on its unique pair of three-star eateries?

While other dining venues came and went at the shopping and dining mall inside the former Time Warner Center — V Steakhouse, Cafe Gray, Landmarc, A Voce, Bluebird London and most recently steakhouse Porter House — the longevity of its three-star establishments on the fourth floor, Masa and Thomas Keller’s Per Se, lent the complex culinary creds even among New Yorkers who disdain malls.

Although Quality Branded’s Bad Roman and Twin Tails have juiced the still lively third floor, an eerie sense of loss pervades the fourth floor, where Porter House and its sister cafe Center Bar closed after Labor Day.

Masa is facing an uncertain future in the wake of it losing one of its Michelin stars. Angel Chevrestt

A rep for Related Companies, the tower’s developer and the mall’s operator, declined to comment. A source said sprawling Center Bar might reopen as early as next month under different management.

Meanwhile, Masa itself faces an uncertain future, industry sources said.

Chef Masayoshi Takayama’s 26-seat omakase spot risks losing at least 25% of its business once its current reservation list runs out, according to one restaurateur who knows well the damage that a lost Michelin star can cost.

“It won’t happen overnight, but Masa will be hurt,” the insider said. He said that while Michelin stars matter less to New Yorkers than do local reviewers — and even social-media influencers — they remain the last word for many European and Asian visitors who regard the “red book” as gospel and chose where to eat in New York entirely on the basis of Michelin stars.

Masa reigned atop the sushi scene since the building opened in 2009. But it was upstaged in the just-out 2026 New York City guide, which upped 18-month-old Sush Sho to three twinklers from two.

The longevity of its three-star establishments on the fourth floor, Masa and Thomas Keller’s Per Se, lent the Deutsche Bank Center culinary creds even among New Yorkers who disdain malls. Bloomberg via Getty Images

Charlie Gasparino has his finger on the pulse of where business, politics and finance meet

Thanks for signing up!

Sushi Sho’s menu starts at a “mere” $450 per person, compared with the.$750 minimum at Masa.

Masa’s perch at the top of the omakase spectrum was also damaged by competition from other expensive omakase eateries in the past ten years, all boasting of precious fish and other ingredients flown in from Japanese markets.

The omakase explosion also saw a flood of cheaper options open all over town — even including one called Sushi Akira that replaced a dry cleaner on this reporter’s East 75th Street block.

Power publicist and voracious omakase-eater Lizzie Grubman, who doesn’t represent any omakase restaurants, commented, “There are so many good places now where you don’t have to spend hundreds of dollars just to sit at a counter. Many fantastic places cost under $100 whether you sit at the counter or a table.”

The post Can Deutsche Bank Center and Masa return to former glory? appeared first on Our Story Insight.

Citi chief financial officer Mark Mason to leave bank next year

admin — Thu, 20 Nov 2025 22:40:07 +0000

Citigroup said Thursday that Chief Financial Officer Mark Mason will step down from his role in early March before leaving the bank next year.

The Jane Fraser-led lender named Gonzalo Luchetti, currently the bank’s head of US personal banking, as his successor.

Citi said on Thursday that Mark Mason, chief financial officer of the Wall Street giant since 2019, will leave the company next year. citi

Mason, who has been the company’s CFO since 2019, will become executive vice chair and senior executive advisor to chair and CEO Fraser starting in the spring.

But the US financial giant said that the Queens native will leave the bank before the end of next year so he can “pursue his leadership aspirations outside of Citi.”

Mason, who joined Citi in 2001, said in a statement that “serving as CFO for the last seven years” was “one of the most demanding and fulfilling chapters of my career.”

Scotland-born Fraser, 58, said that the former Goldman Sachs banker “has proven himself to be a leader for all seasons, having helped Citi navigate some of our most challenging times.”

Fraser named Gonzalo Luchetti, an Argentine national, as the firm’s incoming chief financial officer REUTERS

Luchetti, who previously worked at JPMorgan Chase and Bain & Company, will take over as CFO once the firm files its year-end reports for 2025 in March.

Citi said the Argentine national, who has been the head of US banking since 2021, had presided over solid business growth since taking up the post while modernizing its branch network and successfully strengthening risk and controls.

Luchetti used to work for JPMorgan and the consultancy Bain & Company LinkedIn/Gonzalo Luchetti

“The evolution of our leadership team and structure is well timed as it puts in place our next generation of leaders ahead of our upcoming investor day [in May] when we will lay out our plans to further grow our returns,” Fraser added.

The British-American CEO was handed a one-time bonus last month worth $25 million, along with just over 1 million stock options potentially worth tens of millions of dollars more.

The Harvard Business School graduate is in the midst of her turnaround plan to slash costs and streamline operations.

The cost of a Citi share stood at $97.63 just after the closing bell on Thursday, with the announcement of the bank’s management reshuffle being made shortly afterwards.

The post Citi chief financial officer Mark Mason to leave bank next year appeared first on Our Story Insight.

Bank of America CEO Brian Moynihan seeks Mamdani meeting

admin — Wed, 12 Nov 2025 03:52:45 +0000

Bank of America CEO Brian Moynihan says he’s ready to meet with New York City Mayor-elect Zohran Mamdani to discuss the city’s future as competing states try to court concerned business owners away from the Big Apple.

“Now that a mayor is in office, whether it’s this city or any other city, we have an obligation as a company to work with him to try to make the city successful,” Moynihan said Tuesday on Fox News.

“I’ve got 16,000 teammates who work just in the neighborhood here, and we’ve got to make it successful.”

The key to that, he said, is how Mamdani approaches “governing all the people in the whole city, and [how] he has to carry the budget and the tax base.”

Moynihan argued that the company’s success is partly tied to the success of elected officials like Mamdani and the cities, towns and states they represent.

He told “Fox & Friends” co-host Brian Kilmeade he plans to request a meeting with the mayor-elect, calling the issue “important” to thousands of Bank of America employees and their families who rely on New York City being “great.”

In an interview with Fox News, Moynihan said, “Now that a mayor is in office, whether it’s this city or any other city, we have an obligation as a company to work with him to try to make the city successful.” AP

Moynihan believes that the future of NYC being successful is how the mayor-elect governs residents across the city. Dennis A. Clark

“As I look forward, I hope that the mayor will engage with us, and we’ll give him some ideas,” he added.

Mamdani’s win has inspired some right-wing voices to entice residents and businesses to flee the Big Apple to come their way.

New Hampshire Gov. Kelly Ayotte, for one, worked to recruit those eyeing a greener pasture by advertising with a large van covered in rotating digital posters, one of which read, “NYC business owners: Mamdani got you down? Come on up to New Hampshire for no Communism, less red tape, and less taxes.”

Bank of America CEO Brian Moynihan plans to have a meeting with New York City Mayor-elect Zohran Mamdani to discuss the future of the Big Apple. Christopher Sadowski

A Times Square billboard – reportedly funded by a super PAC supporting Vivek Ramaswamy’s Ohio gubernatorial campaign – invited New Yorkers to flee “radical socialist” Mamdani for the “freedom” promised in the Buckeye State.

Moynihan’s comments come after he announced a major initiative to hire 10,000 veterans over the next five years, a pledge he outlined during his appearance.

“We believe our company is a great company for veterans, and we believe we owe it to make sure we’re bringing those veterans into our company. Even if they come to work for us for five years and get a job somewhere else, we’ve given them a great start and helped them make that transition,” he said.

The post Bank of America CEO Brian Moynihan seeks Mamdani meeting appeared first on Our Story Insight.

Bank of America CEO Brian Moynihan to hold his first investor day since 2011

admin — Tue, 04 Nov 2025 12:43:25 +0000

It took him long enough.

This week, Bank of America CEO Brian Moynihan will hold his first “investor day” since 2011 – breaking 14 years of silence that nicely highlights the positively awful job he has done communicating with investors.

Insiders say that 66-year-old Moynihan, who only recently laid out a succession plan, was likely prodded to call the Wednesday powwow by his board, which is fielding shareholder demands for a clear plan to boost the bank’s stock price – and a strategy to compete against its archrival, Jamie Dimon’s JPMorgan Chase.

This week, Bank of America CEO Brian Moynihan will hold his first “investor day” since 2011 – breaking 14 years of silence. Getty Images

BofA is the US’s second-largest bank by assets, right behind JPM. But by many other metrics, it’s an also-ran. Its stock perennially lags JPM’s – and all the other big banks, for that matter. It fails to win big banking assignments that go to JPM and Goldman Sachs. Nor does it capitalize on trading volatility because it’s been so risk averse.

Insiders blame Moynihan, a lawyer by training who cut his managerial teeth as general counsel of Fleet Boston, which was among the multitude of acquisitions that led to the creation of the modern BofA. He took over as CEO in 2010, in the aftermath of the 2008 financial crisis that nearly caused BofA to collapse.

More From Charles Gasparino

Moynihan won praise for his early caution, but according to critics inside and out of the bank, he’s been running the place the same way ever since by scaling back on risk and merely managing the bank’s balance sheet. It’s the reason why the stock has lagged JPMorgan and all of the Big 6 banks.

Critics say part of Moynihan’s problem is that he never left Boston. He still manages BofA’s sprawling operations there with a few confidantes, even though its main headquarters is in New York (with a huge hub in Charlotte where it was once domiciled before its massive expansion). The investor day is being held not in NYC but in Boston.

BofA shareholders seek a clear plan to boost the bank’s stock price – and a strategy to compete against its archrival, Jamie Dimon’s JPMorgan Chase. REUTERS

Another problem is BofA’s board. It’s considered among the most CEO-friendly in finance, which is why Moynihan didn’t set a succession timetable until recently (he wants to stay in job for the next five years).

“The board and those that he surrounds himself with have allowed him to operate this way for some time,” said one BofA insider. “At some point, it becomes overly obvious how much of an outlier you are to your peers.”

A BofA spokesman said it’s “completely untrue” that the board prodded him to hold the annual meeting or announce his succession plans. “The day gives us a chance to tell the comprehensive story of our franchise, how we are growing each of our businesses, and the opportunities for growth in the future,” the spokesman said, adding that analysts are starting to buy into Moynihan’s future growth plans. As many as 25 analysts now have buy recommendations on BofA stock.

A BofA spokesman said it’s “completely untrue” that the board prodded him to hold the annual meeting or announce his succession plans. REUTERS

Whether it’s because of pressure from the board, his employees, investors or all three, Moynihan has been more visible lately. In addition to creating a succession plan and elevating a trio of executives to pole positions to succeed him, Moynihan has been doing media as he attempts to explain BofA’s new strategy.

His new soundbite is “responsible growth”. Company insiders say Moynihan is still a firm believer in avoiding balance sheet risk, so don’t expect big trading profits when the markets get crazy like you see from Goldman Sachs. BofA also doesn’t post surprise trading losses. One metric Moynihan’s flacks keep touting: The bank recorded more than a dozen years of consistent growth in its sales and trading division.

Which means when you cut through the spin, his strategy is more of the same. It’s important to note Moynihan’s caution has cost his shareholders money. In 2021, his team misread interest rates and dived headfirst into super safe treasuries that got crushed when inflation spiked and the Fed raised interest rates.

Jim DeMare, head of global markets and a potential successor to Moynihan, is expected to speak on Wednesday. REUTERS

A key reason that BofA — despite its massive balance sheet — remains an also-ran is that he hasn’t allowed traders to use that balance sheet even to support client deals, thus it doesn’t get the best client assignments, insiders say.

Charlie Gasparino has his finger on the pulse of where business, politics and finance meet

Thanks for signing up!

On Wednesday, Moynihan won’t be the only one doing the talking; more than a dozen BofA executives are expected to speak including the three men poised to take his job: Dean Athanasia, head of regional banking, chief financial officer Alastair Borthwick and Jim DeMare, head of global markets.

DeMare is seen to have the inside track on the inside track because of the bank’s new found love of taking capital markets risk, albeit in a responsible manner – whatever that means.

The post Bank of America CEO Brian Moynihan to hold his first investor day since 2011 appeared first on Our Story Insight.

Evolve Bank CEO fired propositioning FBI agent who posed as teen boy

admin — Sat, 01 Nov 2025 21:55:50 +0000

Bob Hartheimer, CEO of Tennessee’s Evolve Bank & Trust, was fired after U.S. law enforcement officials caught him propositioning a law enforcement officer posing as a 15-year-old boy on gay dating app Grindr.

On Oct. 19, an employee of the Federal Bureau of Investigation logged onto Grindr while pretending to be a teen boy, and a user called “Tomm” wrote a message to that person saying, “Hey any chance u would hu with an older and chill guy,” according to an affidavit from a special agent with the Federal Bureau of Investigation that was unsealed on Tuesday.

The two discussed getting together in person later in the week, according to the affidavit. On Snapchat, they talked about the sex acts they might perform. “Tomm” asked for a photo of the “boy” without shorts on, and he also sent the undercover agent a picture of himself naked. The FBI was able to obtain an IP address for “Tomm” from Snapchat, as well as an address from Comcast, the affidavit showed.

Hartheimer was arrested in Memphis on Oct. 23 for attempted production of child pornography and transfer of obscene material to a minor, according to a warrant.

An Evolve spokesperson and Blake Ballin, a lawyer representing Hartheimer, told CNBC on Saturday that Evolve has fired the CEO.

“Bob’s family is aware of the charges,” Ballin wrote in an email. “His family loves and supports him and requests privacy during this difficult period in their lives. We have no further comment at this time.”

The Wall Street Journal reported on Hartheimer’s firing from Evolve Bank on Friday.

Evolve said its finance chief, Mark Mosteller, and its general counsel, Joelle Weltzin, will be in charge of the bank’s operations, as they were before the bank hired Hartheimer in August.

“We are in close contact with the U.S. Attorney’s office and have been assured that this is a personal matter and does not relate to the Bank or its operations in any way,” the spokesperson wrote in an email.

Last year, Evolve was caught up in the bankruptcy of financial technology startup Synapse, which cut off access to a system for handling transactions and account details. Fintech apps such as Yotta worked with Evolve and other banks, with Synapse acting as a middleman.

Synapse’s method of keeping app users’ money in various banks, including Evolve, created accounting problems, and up to $96 million in deposits went missing. Thousands of Americans lost money, CNBC reported.

In 2024, Evolve also suffered a cyberattack, during which hackers obtained customer information and demanded a ransom. The bank said it did not pay any ransom and the data was eventually posted online.

“This is a structural change, demonstrating our continued commitment to doing the hard work to earn back the trust of our customers, employees, regulators, and investors,” Evolve said in an August statement announcing the selection of Hartheimer to replace CEO Scott Stafford, who retired after joining in 2004.

The bank touted Hartheimer’s experience as director of the Federal Deposit Insurance Corporation’s Division of Resolutions, as well as his years as a regulatory consultant for fintech companies.

“Over the past four decades, I’ve led, turned around, and advised institutions across the financial landscape,” Hartheimer wrote on his LinkedIn profile.

The 100-year-old bank reported net losses for each of the first three quarters of 2025 after being profitable since 2003, according to data on file with the Federal Financial Institutions Examination Council.

— CNBC’s Dan Mangan and Hugh Son contributed reporting.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC upon Comcast’s planned spinoff of Versant.

The post Evolve Bank CEO fired propositioning FBI agent who posed as teen boy appeared first on Our Story Insight.

How a string of bad loans has bank investors hunting for hidden risks

admin — Sat, 18 Oct 2025 06:00:14 +0000

Big banks including JPMorgan Chase and Goldman Sachs had just finished taking victory laps after a blockbuster quarter when concerns emerged from an obscure corner of Wall Street, sending a collective shiver through global finance.

Regional bank Zions late Wednesday disclosed a near total wipeout on $60 million in loans after finding “apparent misrepresentations” from the borrowers. The next day, peer Western Alliance said that it had sued the same borrower, a commercial real estate firm called the Cantor Group, for alleged fraud.

The result was a sudden and deep selloff among regional banks, drawing comparisons to the churn of the 2023 banking crisis that consumed Silicon Valley Bank and First Republic. This time around, investors are focused on a specific type of lending made by banks to non-depository financial institutions, or NDFIs, as the source of possible contagion.

“When you see one cockroach, there are probably more,” JPMorgan CEO Jamie Dimon said this week. “Everyone should be forewarned on this one.”

Concerns over credit quality had been simmering for weeks after the September collapse of two U.S. auto-related companies. JPMorgan, the biggest U.S. bank by assets, this week reported a $170 million loss tied to one of them, the subprime auto lender Tricolor.

But it wasn’t until a third case of alleged fraud around loans made to NDFIs that investors were jolted into fearing the worst, according to Truist banking analyst Brian Foran.

“You now have had three situations where there was alleged fraud” involving NDFIs, Foran said.

Dimon’s comments “really resonated with people who were like, ‘Oh, man, the tide went out a little bit, and now we’re seeing who was lacking their swim trunks,” Foran said.

What are NDFIs?

The episode cast a spotlight on a fast-growing category of loans made by regional banks and global investment banks alike. Rules put into place after the 2008 financial crisis discouraged regulated banks from making many types of loans, from mortgages to subprime auto, leading to the rise of thousands of non-bank lenders.

Moving riskier activities outside of the regulated bank perimeter, where failures are backstopped by the Federal Deposit Insurance Corporation, seemed like a good move.

But it turns out, banks are a major source of funding for non-bank lenders: commercial loans to NDFIs reached $1.14 trillion as of March, per the Federal Reserve Bank of St. Louis.

Bank loans made to non-bank financial firms were the single fastest-growing category, rising 26% annually since 2012, according to the St. Louis Fed.

“The surge in NDFI lending was really because all these different regulations added up to say there are a bunch of loans banks can’t do anymore, but if they lend to someone else who does them, that’s OK,” Foran said.

“We really don’t know much about these NDFI books,” Foran said. “People are saying, ‘I didn’t know it was so easy for a bank to think they had $50 million in collateral and find out they had zero.'”

‘Overreaction’ or early?

Part of what’s spooking investors is that, while some of the loan losses disclosed have been relatively small, they’ve been near total wipeouts, said KBW bank analyst Catherine Mealor.

“NDFI lending, because of the collateral involved, typically has a higher loss rate, and the losses can come very quickly and out of nowhere,” Mealor said. “It’s really hard to wrap your mind around these risks.”

Mealor said investors have been inundating her with questions around the level of NDFI exposures in her coverage universe, the analyst said. Firms including Western Alliance and Axos Financial are among those with the highest proportion of NDFI loans, according to an August research note from Janney Montgomery.

Still, regional banks are benefitting from an improving interest rate environment and rising mergers activity, which underpin valuations, Mealor said, adding she thinks this week’s stock selloff was an “overreaction.”

“You want to avoid companies that show up high in the screen for NDFI loans,” she said. “There are plenty of high-quality companies in the KRX that are trading at a massive discount.”

Correction: This article has been updated to remove an incorrect mention of losses at one of the regional banks tied to the alleged loan fraud.

The post How a string of bad loans has bank investors hunting for hidden risks appeared first on Our Story Insight.

Bank of America, BNY sued over alleged ties to Jeffrey Epstein

admin — Thu, 16 Oct 2025 04:46:24 +0000

A woman who says Jeffrey Epstein sexually abused her at least 100 times is suing Bank of America and Bank of New York Mellon over their alleged ties to the convicted predator, accusing the banks of maintaining relationships with him and failing to report suspicious activities until after his 2019 death.

The class-action lawsuits, filed in Manhattan federal court on Wednesday on behalf of a Jane Doe and other alleged Epstein survivors, claim the sicko couldn’t have run his trafficking operation without special treatment from banks including the defendants.

The complaint against Bank of America, the second biggest bank in the US, graphically describes the sexual violence Epstein allegedly inflicted on the plaintiff.

A new lawsuit against Bank of America over its ties to Jeffrey Epstein accuses the bank of maintaining a relationship with the convicted sex offender and failing to report suspicious activities until after his 2019 death. Roman Tiraspolsky – stock.adobe.com

“From 2011 through 2019, Epstein sexually abused Jane Doe on at least 100 occasions, including but not limited to, forcibly touching her, forcibly raping her, and forcing her to engage in sexual acts with other women for his own depraved sexual gratification,” the lawsuit stated.

The document also cites previous reports to illustrate the scale of the sicko’s alleged crimes, noting that “Epstein had been sexually abusing three to four young females per day.”

“It was a full-time job for him,” the suit stated.

The plaintiff is going by Jane Doe because of the “sensitive and highly personal nature of this matter” and concerns about possible retaliation, the suit said.

Spokespersons for Bank of America and BNY Mellon had no immediate comment.

The complaint describes in graphic detail the alleged sexual violence Epstein inflicted on the plaintiff. AP

The legal action centers on claims the Jane Doe plaintiff opened a Bank of America account in May 2013 at the instructions of Epstein’s accountant, adding that he transferred about $14,000 into it.

Epstein and the accountant continued to use accounts set up for the woman at the bank for years, including one that lasted until 2019 — the year Epstein committed suicide in a Manhattan jail cell — the suit said.

News of the Bank of America lawsuit, which seeks unspecified financial damages, was first reported by the Wall Street Journal.

The new cases add to the growing legal fallout over Epstein’s banking relationships.

The latest suits were brought by lawyers including Brad Edwards and David Boies, who have represented many of Epstein’s victims and previously filed similar class-action lawsuits against JPMorgan and Deutsche Bank in 2022.

“The other banks responsible for allowing Epstein’s trafficking should have contacted us during the previous litigation to do the right thing for these victims,” Edwards told the Journal.

“It is sad that only through lawsuits and Congress are we able to bring justice to this obvious problem,” he added.

Epstein is seen with Ghislaine Maxwell, a British former socialite who was convicted in 2021 of sex trafficking underage girls for the financier. SDNY

The plaintiffs accused BNY of giving a line of credit to modeling agency MC2. Epstein and French model scout Jean-Luc Brunel allegedly used the agency to traffic victims as BNY processed $378 million in payments to women trafficked by Epstein.

The suits cited the federal Trafficking Victims Protection Act, the main US law targeting sex trafficking. It enables victims to sue not only their traffickers, but anyone who “knowingly benefits” from a sex-trafficking venture, too.

The complaints included related tort claims under New York law, which the federal court has jurisdiction to hear alongside the federal counts.

Charlie Gasparino has his finger on the pulse of where business, politics and finance meet

Thanks for signing up!

Previous suits against big banks resulted in settlements.

JPMorgan and Deutsche Bank have said they regret their relationships with Epstein and settled the suits in 2023 without admitting wrongdoing. JPMorgan agreed to pay $290 million to victims, while Deutsche Bank paid $75 million.

Epstein’s estate recently provided Congress a list of more than 20 banks that held accounts for the perverted financier and entities related to him. Several banks had accounts for Epstein in his later years, according to the Journal.

The lawsuit cites previous reports to amplify the scale of Epstein’s alleged crimes, noting that “Epstein had been sexually abusing three to four young females per day.” DOJ

Banks are required to monitor and report suspicious activities to avoid enabling money laundering and other criminal activity.

Senate Finance Committee ranking member Sen. Ron Wyden (D-Ore.) recently revealed that several banks filed “suspicious activity reports,” or SARs, after Epstein’s 2019 arrest — years after the transactions occurred.

Bank of America filed reports in 2020 covering $158 million in transactions between Epstein and billionaire investor Leon Black, the former CEO of Apollo Global Management.

A review by Apollo’s board found that Black paid Epstein for estate planning and tax services.

House Judiciary Committee ranking member Jamie Raskin (D-Md.) recently sent letters to the CEOs of BNY Mellon, Bank of America, JPMorgan and Deutsche Bank asking how Epstein and his associates were able to conduct more than $1.5 billion in suspicious transactions for years without detection.

The House Judiciary Committee has deliberated sending subpoenas to the banks after internal congressional memos showed repeated delays in reporting large transfers tied to Epstein and his network.

“Over the ensuing years, from 2011 through 2019, Epstein sexually abused Jane Doe on at least 100 occasions,” according to the lawsuit. SDNY

Last year, the New York Times revealed that Bank of America processed Epstein-related payments through at least 2018 — despite earlier internal warnings about cash withdrawals and transfers to accounts linked to young women.

Senate investigators have demanded the bank explain how it handled those transactions and whether any of its compliance staff raised concerns internally before Epstein’s death.

In a letter released this month, Wyden said financial institutions must “show the public they are not shielding the powerful and connected from accountability.” He called on the Treasury Department to release all Epstein-related financial records still under seal.

The post Bank of America, BNY sued over alleged ties to Jeffrey Epstein appeared first on Our Story Insight.

Charlie Javice sentenced to 7 years for defrauding bank

admin — Mon, 29 Sep 2025 19:40:00 +0000

US businesswoman Charlie Javice (L), founder of Frank, arrives for her sentencing hearing at federal court in Manhattan on Sept. 29, 2025, in New York City.

Timothy A. Clary | AFP | Getty Images

Charlie Javice, founder of a startup acquired by JPMorgan Chase in 2021 for $175 million, was sentenced to just over 7 years in prison Monday for defrauding the bank by overstating how many customers the fintech firm had, Reuters reported.

In March, a 12-person jury found Javice and her chief growth officer Olivier Amar guilty on three counts of fraud and one count of conspiracy to commit fraud. Prosecutors had sought a sentence of 12 years.

Javice, 33, cried as she delivered an emotional statement to the court Monday. Standing to address the judge, Javice said she felt profound remorse for her actions and asked for forgiveness from JPMorgan, employees of the startup, shareholders and investors.

At one point Javice turned and directly addressed her family, sitting in the front row, to apologize and thank them for what she called unwavering support.

“I will spend my entire life regretting these errors,” Javice said.

“I’m asking with all of my heart for forgiveness,” she said. “I ask your Honor to temper justice with mercy … I will accept your judgement with dignity and humility.”

JPMorgan bought the startup, called Frank, to help the biggest U.S. bank by assets market its financial products to students. Frank was a digital platform that helped students apply for financial aid. In September 2021, JPMorgan told CNBC in an exclusive interview on the deal that the fintech firm had served more than 5 million students since Javice founded it.

But months after the deal closed, JPMorgan discovered that Frank had fewer than 300,000 real customers; the rest were synthetic identities created by Javice with the help of a data scientist.

Javice was arrested in 2023 on charges that she defrauded JPMorgan in the deal. Details that emerged later showed that Frank employees expressed disbelief when Javice directed them to boost their customer roster before the acquisition.

The week before selling her company to JPMorgan, Javice directed an employee to fabricate millions of users. When the employee declined, Javice reassured him, according to testimony given earlier this year.

“She said: ‘Don’t worry. I don’t want to end up in an orange jumpsuit,'” the employee testified.

Not Theranos

A courtroom sketch of Charlie Javice at her sentencing at court on Sept. 29, 2025 in New York City.

Elizabeth Williams | CNBC

On Monday, Javice’s attorney Ronald Sullivan argued for a lighter sentence for his client, making the case that Frank helped customers. He contrasted the case against that of Elizabeth Holmes of Theranos infamy, whose fraud he said had “dangerous medical consequences” and who was sentenced to 135 months in prison.

“Ms. Javice’s sentence should be nowhere near Elizabeth Holmes’,” Sullivan told the judge.

Assistant U.S. Attorney Micah Fergenson disagreed, arguing that Javice’s crime was fueled by greed.

“JPMorgan didn’t get a functioning business, they acquired a crime scene,” Fergenson said.

The episode was embarrassing for JPMorgan, which was thought to be one of the most sophisticated of corporate acquirers. Concerned about threats from fintech and big tech firms, the bank, led by CEO Jamie Dimon, went on a shopping spree of smaller fintech firms starting in 2020.

But JPMorgan, eager to edge out rivals bidding for the startup, failed to confirm that Frank actually had millions of customers before shelling out $175 million for the company.

This story is developing. Please check back for updates.

The post Charlie Javice sentenced to 7 years for defrauding bank appeared first on Our Story Insight.