As more firms fall foul of global regulators over issues such as money laundering, this publication updates the list of such organisations to highlight the scale of actions that have been taken.

(The item has been updated to take account of latest developments).

The “naughty corner” for miscreant banks and other wealth management institutions is getting crowded. Charges of interbank rate fixing, lax anti-money laundering controls and questionable pricing policies have been levelled - and in some cases punished heavily. Besides misbehaviour, there have also been some losses – such as at JP Morgan – which embarrassed the firms concerned.

Some of the failings that have been punished, such as Barclays’ misbehaviour over the interbank interest rate rigging affair, go back several years and as of the time of writing, firms have moved, or say they have done so, to clean up their act. But what must clients, such as those of wealth managers with ties to some of these banks, think? In almost every case, there is a variation on the line of “never again” and “we have turned over a new leaf”, until, almost inevitably, some other firm is punished for an offence. Would-be private clients must wonder where they can find an unblemished bank. (This is a fact likely to be seized upon by smaller firms.)

Having said all of which, I don’t doubt that the firms making the headlines recently, most obviously HSBC (anti-money laundering) and Barclays (LIBOR rigging) are aware of the work they must embark upon to improve their reputation. These firms must engage as openly as they can with clients (and for that matter, constructive critics such as this publication).

By way of a guide to some of the problems that have hit these firms, here is a summary of the main institutions. Not all of the cases mentioned are complete and could be subject to further action. In the case of JP Morgan, the loss is not necessarily the result of any wrongdoing. The summary here is in no way a comment by this publication as to the specific responsibility of the firms concerned.

Barclays

UK-listed Barclays has incurred penalties from US and UK authorities totalling £290 million (around $455 million) for misconduct relating to the inter-bank interest rate market. Chief executive Bob Diamond, a high-profile character renowned for his large bonuses and hard-charging style in running the bank, has resigned. Lord (Adair) Turner, chairman of the Financial Services Authority, the UK regulator, branded the LIBOR-rigging as a huge blow to London’s reputation as a financial capital. The FSA is probing other banks; a letter sent to the New York Federal Reserve, and recently published, mentioned Lloyds Banking Group as a firm that is possibly implicated. The US Justice Department is carrying out a criminal investigation into the rate-rigging affair. Lloyds has declined to comment on the claims that it was involved.

HSBC

The UK/Hong Kong-listed HSBC created dramatic headlines when its global compliance boss, David Bagley, resigned in front of a US Senate Committee that was grilling HSBC executives and other persons about a report claiming widespread shortcomings in how HSBC operated anti-money laundering controls. It was said that money laundering failings facilitated monies for drug gangs, rogue states such as Iran, and terrorists. Media reports – not yet confirmed – pegged a possible fine on HSBC as high as $1 billion.

Société Générale

The French banking giant has been reprimanded by Hong Kong's Securities and Futures Commission for lack of internal controls of its wealth management activities in its Hong Kong branch, leading it to reimburse customers more than $11 million (amounts are in US dollars unless otherwise stated). The SFC raised concerns that, in over 3,000 transactions undertaken between April 2003 and January 2006, customers of the bank's Hong Kong-based wealth management activities paid or received a different price for over-the-counter products, from the actual price transacted for them by SocGen, with the difference, or margin, being retained by the bank as a fee.

JP Morgan

Earlier it was revealed that the US bank had suffered losses of $2 billion, which had prompted a blunt apology from chief executive Jamie Dimon. Ina Drew stepped down as head of the chief investment office. The losses hit the image of a blue-blooded Wall Street firm that, unlike many of its peers, had seemed to emerge almost stronger from the 2008 financial turmoil. The issue has also reignited debate on how large banking firms should be structured to protect depositors. Commenting about its second-quarter results, the bank noted there had been “significant risk reduction” allowing the firm to move substantially all remaining synthetic credit positions to the investment bank. The CIO synthetic credit group has been shut down.

Coutts

The UK-based private bank was fined £8.75 million (around $13.8 million) by the FSA, the sixth-largest fine ever handed out by the regulator, for failing to take reasonable care to establish and maintain effective anti-money laundering systems and controls relating to high-risk customers, including “politically exposed persons”.

Merrill Lynch

The Bank of America-owned firm was fined $2.8 million for supervisory failures that led to it overcharging clients $32 million in unwarranted fees. The US Financial Industry Regulatory Authority also imposed the fine on the US securities firm for failing to provide certain required trade notices. Merrill Lynch repaid the nearly 100,000 affected clients with interest.

UBS

The Irish Central Bank fined UBS's international life insurance division in relation to various breaches of a new act introduced to protect the financial system from money laundering and terrorist financing. The Central Bank of Ireland and UBS agreed on 19 June that the latter will pay a financial penalty of €65,000 (around $81,700) for failing to comply with specific requirements of the Criminal Justice Act 2010.

The life insurer, part of the Swiss wealth management and banking group, was not accused of terrorist financing or money laundering as such. Among the breaches were failing to instruct staff and directors about the new directives promptly after the Act had come into force in July 2010. The firm had also failed to adopt adequate written policies and procedures in relation to the identification and reporting of suspicious transactions, the central bank said in a statement. The central bank's anti-money laundering and counter terrorist financing supervisory unit identified these breaches during an inspection of the firm carried out in December 2010.

Standard Chartered

On 15 August, Standard Chartered agreed with authorities in New York to pay a civil penalty of $340 million to settle charges over transactions linked to Iran. "The New York State Department of Financial Services and Standard Chartered Bank have reached an agreement to settle the matters raised in the DFS Order dated August 6, 2012. The parties have agreed that the conduct at issue involved transactions of at least $250 billion,” according to a statement issued by Benjamin Lawsky, New York Superintendent of Financial Services.

Wells Fargo

The Securities and Exchange Commission has charged the firm's brokerage firm and a former vice president for selling products tied to mortgage-backed securities without fully understanding their complexity or disclosing the risks to investors. Wells Fargo agreed to pay $6.5 million to settle after the SEC found it relied excessively on rating agencies when selling products. The money will be placed into a fund for the benefit of harmed investors. The products were sold by Minneapolis-based Wells Fargo Brokerage Services (now Wells Fargo Securities), between January 2007 and August 2007.

BlackRock

The Financial Services Authority fined BlackRock Investment Management  (UK) £9.5 million ($15.3 million) for failing to protect client money adequately. 

Nikolai Battoo

The US Securities and Exchange Commission  froze the US-based assets of an asset manager and two of his companies for fraudulently proclaiming to investors a track record of “exceptional risk-adjusted returns,” when in fact “particularly heavy losses” were incurred in 2008. According to the SEC, Nikolai Battoo claimed to manage $1.5 billion on behalf of investors globally, $100 million of which is on behalf of US-based investors. The losses he suffered in 2008 were due to his investments in the Bernard Madoff Ponzi scheme - in which several Battoo-managed hedge funds were heavily invested - and a failed derivative investment programme.