Robosigning Woes Alive and Well In the Bay State?
This entry was posted on Thursday, April 17th, 2014 at 10:03 am
A new case came down from the state’s appellate court yesterday (it can be found here, with a couple clicks, although that’s only a temporary resting place) that looks like it could have a couple interesting wrinkles for local foreclosure law. I’m in the middle of rounding up some legal experts to run over the full implications — some of the issue discussed are bit technical — but one thing jumps out that could put some fresh grey hairs on the heads of servicers and their attorneys: Robosigning reared its ugly head.
The homeowner in the case, Joseph Sullivan, challenged the bank’s right to foreclose on his home, saying the lender involved, Kondaur Capital Corporation, shouldn’t be able to foreclose because it didn’t have proper legal title, due to problems with the legal documents used to transfer the mortgage between banks (the assignment). The Land Court judge which originally heard the case bounced it right out of court, saying that the homeowner didn’t even have standing to sue in the matter.
The Appeals Court disagreed. While it rejected some of the homeowner’s claims, it handed them a couple victories as well — first, by saying the homeowner had the right to bring the case in the first place despite the fact that they weren’t a party to the assignment. It also agreed with the homeowner that at least one of the assignments in the case was so flawed it didn’t automatically transfer good title:
“Sadly, the second assignment is further illustration of the phenomenon observed in the concurrence to [the landmark Ibanez case]… ‘what is surprising about these cases is … the utter carelessness with which the [foreclosing lenders] documented the titles to their assets,’” the Appeals Court scolded.
BofA, NYSE, Brokerages Sued Over High-Frequency Trading
Bank of America Corp. and the New York Stock Exchange are among dozens of exchanges, brokerages and traders sued over high-frequency trading by the city of Providence, Rhode Island, over claims they rigged securities markets to divert billions of dollars from buyers and sellers of shares to themselves.
Scrutiny of high-frequency trading and whether it gives some investors unfair advantage intensified this year amid government probes and the March 31 publication of “Flash Boys” by Michael Lewis.
One defendant in today’s complaint, Virtu Financial Inc., a high-frequency trader that delayed its initial public offering, has received inquiries from the office of New York’s attorney general, Eric Schneiderman, according to a person familiar with the matter. Schneiderman announced last month that he’s investigating high-frequency traders.
Section 1 claims dismissed in LIBOR, TIBOR class action
On March 28, 2014, Judge Daniels of the Southern District of New York dismissed antitrust and unjust enrichment claims against over 20 banks accused of manipulating prices in the Euroyen interbank lending market by submitting false rate quotes to Yen-LIBOR and Euroyen TIBOR rate-setting organizations. Laydon v. Mizuho Bank, Ltd., No. 12-cv-3419 (S.D.N.Y. Mar. 28, 2014). The plaintiff, a short purchaser of Euroyen TIBOR futures contracts, also brought claims under the Commodities Exchange Act, which the court allowed to go forward.
The court based its dismissal of the price-fixing claim on lack of antitrust standing and failure to allege a restraint of trade. The plaintiff lacked antitrust standing for two reasons: (1) failure to plead antitrust injury and (2) the indirect, remote and speculative nature of his alleged injury—while the alleged misconduct involved manipulating present-day interbank lending rates, the alleged injury was suffered in the futures market. Although the plaintiff alleged that prices were distorted, he failed to allege that the distortion resulted from a reduction in competition. The ruling was partially based on the unique nature of the rate-setting process, which is neither supposed to be competitive nor collaborative. Instead, “each bank was supposed to independently contribute its submission to be evaluated collectively with other bank submissions.”
JPMorgan To Pay Madoff Victims $218M After Judge’s OK
Law360, New York (April 18, 2014, 3:37 PM ET) — A New York federal judge on Thursday finalized a $218 million settlement between JPMorgan Chase & Co. and victims of Bernard Madoff, ending a class action suit that accused the bank of turning a blind eye to the decadeslong Ponzi scheme.
U.S. District Court Judge Colleen McMahon entered the final judgment and order dismissing with prejudice the claims brought by Paul Shapiro, Stephen Hill and Leyla Hill on behalf of themselves and other investors.