CME Sued, OCC Sharpens, BOE Deputy Search: Compliance

CME Group Inc. (CME), owner of the biggest futures market, and its Chicago Board of Trade unit were sued by shareholders who started with the exchange in the 1970s and claim operational changes to their trading rights have diluted the value of their memberships.

The old-line Class B members who sued claim they lost the free access and close proximity they once had to CME’s Globex Electronic Trading platform and must now pay for that access, according to the complaint. The change occurred after CME opened an electronic data center in Aurora, Illinois, in 2012, court papers indicated.

The changes cited in the complaint required the approval of Class B members, which was never obtained by CME, the traders alleged.

Laurie Bischel, a spokeswoman for Chicago-based CME, declined to comment on the complaint.

The case is Langer v. CME Group Inc., 2014ch00829, Cook County, Illinois, Circuit Court, Chancery Division (Chicago).

Compliance Policy

Big Banks Face Sharper Risk-Management Focus in OCC Policy Shift

Big banks may face quicker reprimands for risk-management failures under a new Office of the Comptroller of the Currency effort.

The national-bank regulator’s policy shift will remove hurdles to targeting lenders with certain enforcement actions, according to OCC Chief Counsel Amy Friend. Under the leadership of Comptroller Thomas Curry, who took office in 2012, the OCC has extracted the largest penalties in its 150-year history, fining HSBC Holdings Plc (HSBA) a record $500 million in 2012 for money-laundering faults. It also penalized JPMorgan Chase & Co. (JPM) twice -- reaching a $300 million settlement over the London Whale trading losses and a $350 million agreement resolving allegations that the bank failed to report suspicions about Bernard Madoff’s Ponzi scheme.

In an effort to spot problems earlier, Curry last year established internal reviews of the OCC’s performance and recently invited foreign regulators to look at its bank supervision.

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EU Lawmakers Voice Firm Opposition to EU Bank-Failure Fund Plan

The European Parliament’s lead lawmakers on a draft bank resolution law said European Union nations’ plan for a bank-failure fund won’t solve financial-sector problems.

Parliament renewed its opposition to the plan for agreement among governments on a Single Resolution Fund, part of broader push to create an EU Single Resolution Mechanism.

Lawmakers criticized the plan as including “serious impediments” to the speed and “efficient functioning” of the decision-making process.

EU finance ministers last month endorsed a plan to create a funded Single Resolution Mechanism for euro-area banks under EU law.

Comings and Goings

Osborne Extends BOE Transformation in Carney Deputy Search

Chancellor of the Exchequer George Osborne may further reshape the Bank of England with a fourth policy appointment upon the departure of Charlie Bean, deputy governor for monetary policy under Mark Carney, expected in less than six months.

Osborne needs to find a replacement to take charge of areas from economic forecasting and analysis to the BOE’s markets divisions. The appointment will mark the latest step in an overhaul that saw Osborne disband the Financial Services Authority, shift its powers to the BOE, and hire outsiders who revamped policy.

Bean, 60, will retire on June 30.

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To contact the reporter on this story: Carla Main in New Jersey at cmain2@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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