Calif. treasurer wants Wells CEO gone; Cryptocurrencies may not comply

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Time to clean house?: California State Treasurer John Chiang called for Wells Fargo CEO Timothy Sloan to step down Monday, the day before the bank’s annual shareholder meeting. Citing a “laundry list of misdeeds,” Chiang said Wells “reeks of betrayal” and is a “shadow of its former self.” Chiang said he plans to ask John D. Baker, one of the bank’s longest serving directors, why he hasn’t done more to help to prevent the bank’s various problems. “If he cannot answer these questions, then he too must go,” Chiang said.

David Paul Morris/Bloomberg

Wells is also under pressure to dump KPMG as its long-time auditor. Glass Lewis, the shareholder advisory service, is urging Wells investors to end the bank’s relationship with KPMG, which has been ongoing since 1931.

Remembered: Richard H. Jenrette, a co-founder of Donaldson, Lufkin & Jenrette, the first Wall Street firm to sell shares to the public, died Friday in Charleston, S.C., at the age of 89.

Wall Street Journal

Raining on the parade: UBS beat expectations when it reported a 19% increase in first quarter profits, but that may be as good as it gets for a while, both for the Swiss bank and its European counterparts. “The stock trading activity that helped UBS and its rivals at the start of this year has already evaporated,” the Heard on the Street column says. “And for many European rivals, a good chunk of that rebound in equities trading may actually have been captured by U.S. peers anyway.”

In limbo: “Presidential mismanagement and senatorial obstruction” are blamed by Peter Conti-Brown, an assistant professor at the University of Pennsylvania’s Wharton School, for Randal Quarles’ unclear tenure as the Federal Reserve’s vice chairman for supervision. Quarles was confirmed to finish a term that expired on Jan. 31 and was nominated for a full term, which "Senate Democrats have delayed," Conti-Brown says. With other vacancies on the Board, Quarles could have been given a longer tenured term. The "failure to do so may suggest a desire [of President Trump] to exert undue control over the independent central bank—or, much likelier, a lack of awareness of the complexity of the Fed’s governance structure," he writes.

Financial Times

Talk about a glitch: Customers at the U.K.’s TSB were unable to check their balances while some found themselves with access to other people’s money during the weekend transfer of 1.3 billion accounts from its former parent Lloyds Banking Group. “The troubles caused by TSB’s switch to a new system highlight the difficulties of major IT projects for older banks, which have often developed complex and arcane webs of computer infrastructure over years of development and acquisitions,” the paper says. U.K. banking regulators are looking into the matter.

New York Times

Violators?: Gary Gensler, the former chairman of the Commodity Futures Trading Commission under President Obama, “is plunging into the world of the blockchain” and doesn’t like what he sees. The former Goldman Sachs partner, now a professor at the Massachusetts Institute of Technology, said in a speech Monday that Ether and Ripple, the second and third most popular cryptocurrencies after bitcoin, may be in violation of American securities regulations.

“There is a strong case for both of them — but particularly Ripple — that they are noncompliant securities,” he told the paper, although he thinks bitcoin can remain exempt from securities laws.

Quotable

“2018 is going to be a very interesting time. Over 1,000 previously issued initial coin offerings, and over 100 exchanges that offer I.C.O.s, are going to need to sort out how to come into compliance with U.S. securities law.” — Gary Gensler, the former chairman of the CFTC.