BANKING
Wells Fargo is slapped with Fed’s biggest fine
Wells Fargo & Co. has agreed to pay $85 million to settle civil charges that it falsified loan documents and pushed borrowers toward subprime mortgages with higher interest rates during the housing boom.
The fine is the largest ever imposed by the Federal Reserve in a consumer-enforcement case, the central bank said Wednesday.
Wells Fargo, the nation’s largest mortgage lender, neither admitted nor denied wrongdoing as part of the settlement. The bank agreed to compensate borrowers who were steered into higher-priced loans or whose incomes were exaggerated.
The Fed said a unit of Wells Fargo inflated borrowers’ incomes on loan documents to qualify for mortgages they otherwise couldn’t afford from 2004 until 2008. Sales personnel also pushed borrowers toward higher-interest subprime loans, even though they were eligible for lower-interest mortgages, the central bank said.
CALIFORNIA
PayPal helps power eBay past 2Q expectations
SAN FRANCISCO — EBay Inc.’s second-quarter results beat analyst expectations Tuesday with growth in its PayPal online payment service and marketplace business, although profit fell 31 percent on charges from its recent purchase of e-commerce retail site operator GSI Commerce.
For the quarter that ended June 30, eBay earned $283.4 million, or 22 cents per share, compared with $412 million, or 31 cents per share, in the year-ago quarter.
The company finished its acquisition of GSI in June in a deal valued at $2.4 billion. As a result, its operating expenses for the quarter rose 32 percent to $1.5 billion.
Excluding one-time items, the company earned 48 cents per share, 2 cents more than analysts expected.
NEW YORK
Trader who blamed affair gets prison
NEW YORK — A New York hedge fund trader who says her boss manipulated her into engaging in insider trading during their 20-year affair has been sentenced to 2 1/2 years in prison.
Danielle Chiesi was sentenced Wednesday. Her attorneys had asked for leniency. Her boss pleaded guilty and is serving a 27-month prison term.
Chiesi pleaded guilty in January to insider trading charges in what prosecutors have said was the biggest hedge fund insider trading case in history.
Her voice was prominent on audio played at the trial of onetime billionaire Raj Rajaratnam. He was convicted in May after prosecutors blamed illegal trades on more than $50 million in profits. He awaits sentencing.
CONNECTICUT
Supplier problems faulted in escalator fatality
HARTFORD — The chief financial officer of United Technologies Corp. says a supplier furnished substandard parts that caused a fatal accident on an Otis escalator in a Beijing subway station.
CFO Greg Hayes told investor analysts in a conference call Wednesday that Otis escalator sales in the Beijing area were suspended after a fatal accident July 5. He said no financial impact is expected.
Mr. Hayes was responding to an analyst’s question as the Hartford conglomerate released second-quarter financial results.
He said Otis, a subsidiary of United Technologies, has inspected more than 40 of 200 escalators and all will be back in working order.
Otis blamed the accident on a machine part that failed to stay in place. A spokeswoman for the Farmington-based company didn’t confirm details of the accident or the death.
From wire dispatches and staff reports
Please read our comment policy before commenting.