The news at a glance

Allegations of illegal Iran deals; Firm nearly felled by software havoc; Starbucks and Square team up; Banks spread the blame around; The end of stocks?

Banking: Allegations of illegal Iran deals

A major British bank was stung this week by allegations that it had laundered $250 billion for the Iranian government, said Tom Braithwaite and Sharlene Goff in the Financial Times. A New York state financial watchdog accused Standard Chartered of using its New York branch to conceal more than 60,000 transactions with Iranian banks and corporations between 2001 and 2010, reaping hundreds of millions of dollars in fees. Calling Standard Chartered a “rogue institution,” New York’s Department of Financial Services threatened to revoke the bank’s state license for leaving “the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins, and corrupt regimes.”

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Trading: Firm nearly felled by software havoc

Trading firm Knight Capital narrowly avoided bankruptcy after a computer glitch last week resulted in millions of faulty trades, said John McCrank and Angela Moon in Reuters.com. The firm, one of the largest traders of U.S. stocks, lost $440 million in a single day, more than the $289 million it earned in revenue last quarter. A group of investors stepped in this week with a $400 million rescue plan that gives the group a 73 percent stake in the firm at a sizable discount. The deal keeps Knight in business, but “comes at a huge cost to existing shareholders.”

Mobile payments: Starbucks and Square team up

Starbucks is set to become the first national chain to allow customers to pay for their purchases with the mobile-payments app Square, said Harry McCracken in Time.com. Beginning this fall, 7,000 Starbucks locations in the U.S. will allow customers to pay with a simple tap of their smartphone. Square, which is already used by about 40,000 businesses nationwide, will also receive a $25 million investment from Starbucks, putting it in closer competition with rival payment app Google Wallet.

Libor scandal: Banks spread the blame around

It’s every bank for itself in the ongoing investigations over manipulation of a key global interest rate, said Azam Ahmed in The New York Times. A number of big banks in the U.S. and Europe, facing billions in fines and blows to their reputations for their roles in fixing the Libor interest rate, are “turning on one another.” They’re admitting wrongdoing in the hopes of getting lenient treatment, but are also providing evidence that actions by other banks were worse. Every bank is trying to prove it’s “not as bad as the next guy,” said one official involved in the investigations.

Markets: The end of stocks?

“The bond king says stocks are dead,” said Steven Russolillo and Kirsten Grind in The Wall Street Journal. Bill Gross, the co-founder of Pimco, the world’s largest bond fund, says there’s no longer any benefit to buying and holding stocks for the long run. “The cult of equity is dying,” he wrote in his latest monthly investment note to clients. With slowing economic growth around the globe, the inflation-adjusted returns of 6.6 percent a year that the market has enjoyed for the past century are a thing of the past, Gross said.

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