“Subprime” Northern Rock can attack Societe Generale fraud in the United States

Le Monde. fr (translated in English):

 

An American court refused to classify without following a complaint from the British bank Northern Rock, which accused Société Générale of having cheated on the quality of subprime mortgages ( “subprime” ) that it had sold him, opening the way for a lawsuit against the French bank.

According to court documents released Tuesday, Aug. 12, Judge Melvin Schweitzer New York believes that Northern Rock debacle saved from “subprime”by the British state has evidence “sufficient” to deal in justice Société Générale fraud.

34 MILLION DOLLARS CLAIMED

The French bank may still avoid a lawsuit by entering into a settlement agreement.And in case of trial, it would not take place before 2015, said counsel for Northern Rock, the British bank that according to Societe Generale claims $ 34 million.

In detail, accuses Northern Rock bank financing and investment Societe Generale, SG CIB, him having sold in June 2007 related to complex financial products RMBS (Residential Mortgage-Backed Securities) and CDOs toxic loans (collateralized derivatives to credit property).

Important! Banks push U.S. Fed to delay up to 7 years of the Volcker rule : WSJ

Memo to Yellen: Don’t give in to the banks…

(Reuters) – Banks are lobbying U.S. policy makers for a delay of up to seven years from a provision requiring them to sell investments in private-equity and venture-capital funds, the Wall Street Journal reported, citing people familiar with the matter.

Bank officials, trade groups and lawmakers are quietly pressing the Federal Reserve for a multiyear delay of the rule that limits their investments in private-equity and venture-capital funds, the Journal said. (http://on.wsj.com/1l12Pi8)

The “Volcker rule,” part of the Dodd-Frank law, restricts banks’ ownership stake in hedge funds and private equity funds.

The rule prohibits banks from making speculative bets with their own money.

A delay of the rule would affect large banks such as Goldman Sachs Group Inc (>> Goldman Sachs Group Inc), JPMorgan Chase & Co (>> JPMorgan Chase & Co.) and Morgan Stanley (>> Morgan Stanley), the Journal said.

The private equity business has become less appealing in general to banks because of the 2010 Dodd-Frank financial reform law. The Volcker rule, expected to be implemented in a few years, prohibits banks from investing in any fund they do not manage.

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Saxena White P.A. Files Securities Fraud Class Action Against Ocwen Financial Corporation

Another Ocwen lawsuit…

Ocwen Financial Corporation

CASE DETAILS

Class Period:	May 2, 2013 – August 11, 2014
Date Filed:	August 12, 2014
Case Number:
Jurisdiction:	Southern District of Florida

SUMMARY

The Complaint brings forth claims for violations of the Securities Exchange Act of 1934.  The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects.

Specifically, Defendants made false and/or misleading statements and/or failed to disclose a myriad of material information regarding the Company’s improper business and operational practices including, among other things, the fact that Ocwen’s mortgage servicing practices violated applicable regulations and laws; that the Company’s executives allowed related company Altisource Portfolio Solutions, S.A. (“Altisource”)—a company of which Defendant William C. Erbey, Ocwen’s Chairman of the Board, owns approximately 27% of its shares outstanding—to impose wholly unreasonable rates for services provided to Ocwen; and that Defendant William C. Erbey, along with other directors and officers, were directly involved in approving Ocwen’s conflicted transactions with Altisource.  In addition, the Company’s financial results were artificially inflated during the Class Period, resulting in a restatement of the Company’s financial results.

View Complaint (pdf)

 

 

Block & Leviton LLP Investigates Ocwen Financial Corp. After Announcement That The Company Will Restate Its Financials

BOSTON, Aug. 12, 2014 /PRNewswire/ — Shares in Ocwen Financial Corp. (“Ocwen” or the “Company”)OCN +4.89% have plunged precipitously on news that the Company has initiated an investigation of its internal and accounting controls, and anticipates restating its financial results for at least the first quarter of 2014 and all of 2013.  The Company stated that there may be material weakness in how it accounted for particular transactions, particularly the sale of mortgage-servicing rights to Home Loan Servicing Solutions Ltd.

The first indication of the irregularities came when Benjamin Lawsky, superintendent of New York’s Department of Financial Services, in his role as the top financial regulator for New York state, sent a letter on August 4, 2014, to Ocwen questioning regular payments the company indirectly makes to Altisource Portfolio Solutions SA, (“Altisource”).  Altisource is owned by Ocwen officials.  Lawsky intimated that Ocwen may be funneling as much as $65 million in questionable fees to one of its affiliates, and expressed concern that Altisource will generate significant revenue for the Company without performing any value-adding services.  Additionally, Ocwen’s executive chairman William Erbey apparently played a significant role in personally approving the payments to Altisource, in direct contrast with his repeated representations that he recuses himself from decisions involving affiliates.  The Company followed up the news of Lawsky’s investigation with its August 12 announcement that it would restate its financials for at least the previous five quarters.

Block & Leviton LLP is investigating the Company and certain of its officers and directors to determine how widespread any potential accounting violations extend and whether any insiders at the Company such as Mr. Erbey personally profited by the alleged accounting improprieties.

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