CEO of scandal-hit Wirecard resigns

The founder and chief executive of scandal-hit Wirecard resigned on Friday after the German payments provider was hit with fresh fraud allegations that have left it struggling for survival.

Markus Braun "resigned today with immediate effect", the firm said in a statement, adding that the decision was made "in mutual consent with the supervisory board".

He will be replaced on an interim basis by US manager James Freis.

The bombshell comes a day after auditors from Ernst & Young said 1.9 billion euros ($2.1 billion) were missing from Wirecard's accounts, intensifying a months-long crisis in the company.

The news prompted investors to abandon the once popular fintech company in droves, sending Wirecard's share prices into a tailspin.

The stock has plunged by more than 76 percent since Thursday morning and was trading at 23.90 euros a share by 1130 GMT on Friday.

It marks a stunning fall from grace for the Bavarian start-up, set up in 1999 and once seen as a darling of the fintech scene thanks to the growing global popularity of electronic payments.

It entered Germany's prestigious DAX 30 index with great fanfare in 2018 after nudging out traditional lender Commerzbank.

But since then Wirecard has been dogged by a series of articles in the Financial Times alleging accounting irregularities in its Asian operations.

The company's four board members -- including Braun -- have been under investigation since early June by Munich prosecutors for "market manipulation", and Wirecard's headquarters were searched as part of the probe.

The scandal deepened on Thursday when the firm was forced to delay the publication of its 2019 results for a fourth time.

Instead, Wirecard said in a statement that auditors Ernst & Young had identified "spurious balance confirmations" relating to "cash balances on trust accounts".

- Ticking clock -

The auditors' red flag was raised over escrow accounts at two Asian banks, which were supposed to hold 1.9 billion euros to manage risk for merchants using Wirecard's payment services.

Wirecard said there were "indications" that the balances had been falsified "in order to deceive the auditor".

The two Philippine banks that were supposed to hold the cash denied having a relationship with Wirecard, according to Bloomberg News.

Wirecard's board responded by fling a legal complaint against "unknown persons", saying they could have fallen victim to a vast fraud.

"It is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred," Braun said on Thursday.

But the clock is ticking for Wirecard, as two billion euros of credit could be withdrawn if it is unable to publish its results for last year by Friday.

According to preliminary figures, the group said it had processed 173 billion euros of transactions in 2019, up 38.5 percent.

Revenues grew 37.5 percent, to 2.8 billion euros, while net profits added 39 percent at 482 million, Wirecard said. 

Agence France-Presse

PNB opens Filipinotown branch in time for holiday remittances

LOS ANGELES - Christmas is coming and one of the more popular ways of giving gifts to loved ones back home has just expanded into one of the biggest Filipino neighborhoods in Los Angeles.

Caregiver Amelia Bernachea remits money once a month to pay for her children's tuition. She said she used to send more boxes more often but even before the price hikes and reports of boxes being opened, she realized that sending money may be a safer alternative.

Each year, remittances have grown. While the Philippine National Bank or PNB is not certain if the increase in remittance is a direct result of issues surrounding the balikbayan boxes, they say part of the growth is fueled by positive economic reports and more financial awareness in the Philippines.

"I believe that sending the money or even putting it in a savings account is a much better way than just sending them clothes or electronics or other items that are not really going to last that long or not as sustainable," said PNB General Manager Joanne Rivera.

In 2014, the Philippines received close to $25 billion in remittances. Just as the holidays are kicking into full gear, the PNB continues its US expansion by offering more remittance and financial services in one of LA's Filipino neighborhoods.

source: www.abs-cbnnews.com

Real Estate in the Internet Age

It will come as no surprise when I say that the Internet has transformed our lives. For instance, today’s travel industry bears little resemblance to the industry of 20 years ago. Travel agents are largely gone and consumers book flights and hotels or through sites like Priceline and Expedia that are programmed to find the cheapest deal.

From retailing (Amazon) to auctions (eBay) to job searching (Monster), to sending a letter or photo (Email) to advertising, the Internet has dramatically changed the way we do things, making it faster and cheaper to get what we want.

In real estate, big sites like Realtor.com and Zillow make it easy to shop for a house anywhere in the US while wearing your pajamas in the comfort of your home. You can find a mortgage online from Internet lenders like us, Total Mortgage, that offer more attractive rates than you might find locally. There are even “for sale by owner” sites that help spread the word for those sellers who prefer to go it alone.

The Old Way or the Highway

Yet the essential mechanism and cost structure for residential real estate transactions has changed little in more than 100 years. Hiring a professional to sell your house requires you to agree to pay a commission—a percentage of as much as 6 percent of the sales price.

This is more or less the same way your grandparents’ generation sold their homes. In fact, the multiple listing service, which at the center of the housing marketplace, was created in the 19th century not to make life easier for consumers, but to make it easier for their brokers to match buyers and sellers.

Brokerages own and operate the nation’s 900 or so MLSs and a dozen or so national franchises and big regional companies dominate real estate brokerage business. Try as they might, Internet companies and the federal government have failed to bring about wholesale, consumer-friendly changes like those in travel, employment, financial services, and retailing.

Selling your house on your own today is actually harder and more expensive than it used to be. No wonder the percentage of “FSBO” sales declined from 13 percent in 2001 to 9 percent in 2014.

Incremental Change

One of the big reasons sellers still need human agents has nothing to do with the real estate transaction, per se. Federal and state laws governing mortgages and home sales, most of them ostensibly to protect consumers, instead make transactions more complex, and virtually impossible for consumers to take on by themselves. In fact, the paperwork mistakes is the leading reason that 20 percent of real state deal fail to close.

So the real estate has made the relatively painless migration from bricks and mortar to the Internet, but now changes in the choices available are creating cracks in the wall.


 Discount Brokers vs Hybrid Brokers

Sellers care most about saving money. For many years fee-for-service brokerages have uncoupled their services and sell them for a fixed price like menu at a restaurant: listing a property on the Internet, providing a competitive marketing analysis, staging the house, etc. Others simply charge less than their competitors or rebate a percentage of their commission when the deal closes. For some sellers, these have been a good alternatives, yet they constitute a small segment of the real estate industry.

What’s happening today is different. New entrants into real estate business are seeking ways to utilize the things the Internet does well to the real estate business to save money for sellers and save costs for brokers by turning task over to computer platforms that have been handled by real people.

These include proactively matching properties with buyers through social media, technology platforms that take the transaction from lead to closing online, “virtual” agents who handle properties from a much larger geographic area than traditional agents by concentrating on marketing exclusively online, and providing services, like state-of-the-art home valuation, that empower sellers to make more informed decisions.

These brokers are “hybrid” because many offer traditional services or traditional ways to be compensated alongside their new options, affording a choice to consumers. As the real estate industry continues to evolve, expect to see more and more of them.

source: totalmortgage.com

HSBC hit with record fine for ripping off elderly

LONDON — Britain's financial regulator slapped a record 10.5 million pound ($16.4 million) fine on HSBC on Monday for mis-selling investments to pay care home costs for older customers.

Europe's biggest bank is likely to pay another 29.3 million pounds in compensation to "particularly vulnerable" elderly clients, who were given inappropriate advice by HSBC's NHFA subsidiary, the Financial Services Authority said.

The advice was unsuitable because in many cases the life expectancy of customers was below the minimum recommended five-year investment period.

The average age of NHFA's clients was almost 83. One client was 94 at the point of sale and had a life expectancy of 3 years and 3 months, the FSA said.

The fine, the biggest-ever for a retail banking offense, comes at a time of low public trust in banks following the financial crisis, which required taxpayers to bail out lenders in several countries.

British banks are already having to pay billions of pounds to compensate customers wrongly sold payment protection insurance (PPI), which allowed borrowers to keep up debt repayments in case of loss of income.

"NHFA was trusted by its vulnerable and elderly customers. It breached that trust to sell them unsuitable products. This type of behavior undermines confidence in the financial services sector," said Tracey McDermott, the FSA's acting director of enforcement and financial crime.

HSBC said on Monday it is cutting 550 UK jobs as it reorganizes due to "the very challenging economic environment."

Banks are being forced to hold more capital and liquidity to make them safer, prompting many banks to review their business model. Most job losses are in its commercial bank arm, and about 220 of the positions being cut will be redeployed in the bank.

The losses are part of a plan to cut 30,000 jobs globally as chief executive Stuart Gulliver streamlines the business to make it more profitable.

‘Unsuitable sales’

NHFA was the leading supplier of independent financial advice on long-term care products in Britain, with a market share of near 60 percent.

The FSA said between 2005 and 2010 some 2,485 customers were advised to invest in its products, and unsuitable sales were made to about 87 percent of them. Some 285 million pounds was invested during the five-year period, or an average investment of 115,000 pounds.

HSBC Actuaries and Consultants Ltd (HACL) bought NHFA in 2005 and the business was transferred to HSBC UK Bank operations when HACL was sold in 2009.

NHFA gave advice through a network of between 15 and 31 advisers on structuring finances to meet care costs, and advised around 11,000 customers during the period under review.

"This should not have happened and I am profoundly sorry that it did," said Brian Robertson, chief executive of HSBC's UK business. "We are undertaking a full review of the advice given to impacted customers and I can guarantee that every customer who is found to have not been treated fairly will not be disadvantaged."

HSBC closed NHFA to new business in July, it said. — Reuters

source:gmanetwork.com