Daily Archives: August 3, 2012

RBS admits having the involvement “a number of employees for misconduct” in LIBOR

The Black Series is not over. After announcing a net profit at half of the British bank RBS, saved and partly nationalized during the crisis, a new risk weighs on its books since the revelation late June manipulation scandal interbank rates between 2005 and 2009.

The case known as the Libor (London Interbank Offered Rate), which won the Barclays paid already 360 million UK and U.S. regulators, leads to other institutions in its wake.

After Deutsche Bank, which acknowledged this week have referred two people in this framework , RBS confirmed Friday, August 3 have returned a “number of employees for misconduct” and said working with the investigations launched in the world. She also continued as part of several class actions in the United States.

But she spent no provision because “it is not possible to quantify realistically the consequences of these investigations “ . All these cases “have taken the reputation of the sector to the lowest” , lamented Stephen Hester , CEO of the bank, whereas the industry is going through a “humiliating period” .

Read on.

American Express May Be Forced to Pay Refunds Amid CFPB Review

American Express Co., the biggest credit-card issuer by purchases, said it may be forced to refund customers as bank regulators weigh enforcement actions based on consumer-protection laws.

The lender “currently believes” the Consumer Financial Protection Bureau will take enforcement action against at least one of the company’s units and possibly a second, similar to measures the Federal Deposit Insurance Corp. had said previously it intends to pursue, New York-based Amex said yesterday in a quarterly filing.

The bank and its subsidiaries “continue to make changes to certain of their card practices and products and established accruals for, among other costs, expected refunds to cardmembers,” American Express said in the filing.

Read on.

Whistleblower employee says he caught Morgan Stanley in the act, bilking investors

Courthouse News Service.

MANHATTAN (CN) – A risk officer claims in court that Morgan Stanley fired him for blowing the whistle on an investment adviser who churned accounts “to bilk investors,” making Morgan Stanley tens of thousands of dollars at customers’ expense.
Click here to read Courthouse News’ Securities Law Review.
     Clifford Jagodzinski sued Morgan Stanley Smith Barney (MSSB), Morgan Stanley & Co. and Citigroup, in Federal Court. They are the only defendants.
     Jagodzinski says he worked for Morgan Stanley as a complex risk officer, identifying and reporting compliance risk issues and securities law violations.
     He always received exemplary reviews for his job performance in his 6 years with Morgan Stanley, Jagodzinski claims.
     “However, in late 2011, Mr. Jagodzinski discovered that one of MSSB’s newest wealth managers, Harvey Kadden, was flipping preferred securities in a manner that was generating tens of thousands of dollars in commissions but causing losses or minimal gains for his clients and exposing his clients to unnecessary risks,” the complaint states. “These trades were obviously designed to bilk investors.”
     Jagodzinski says he suspected Kadden of churning accounts to maximize commissions, in violation of FINRA and SEC rules, and reported the activities to his supervisors, but was told not to investigate them.
     “In December 2011, Mr. Jagodzinski reported these trades to his supervisors, David Turetzky and Ben Firestein,” the complaint states. “At first, the supervisors were very pleased with Mr. Jagodzinski’s work. Indeed, Mr. Firestein said, ‘Great job for catching this scam.’ Mr. Turetzky said in sum and substance, ‘I don’t want to be on a beach in Bermuda, fishing with my son, and get a subpoena for what Harvey Kadden is doing – flipping these preferreds.’
     “However, upon information and belief, MSSB had given Mr. Kadden a $25,000,000 guarantee. Consequently, MSSB had very significant earnings expectations for Mr. Kadden and did not want to take any steps to jeopardize Mr. Kadden’s book of business.




by traynickel on Jan 31, 2011 Link From: http://www.newzzcafe.com/ There were 18.4 million vacant homes in the U.S. in Q4 ’10 (11 percent of all housing units vacant all year round), which is actually an improvement of 427,000 from a year ago. The number of vacant homes for rent fell by 493 thousand, as rental demand rose. 471,000 homes are listed as Held off Market about half for temporary use, but the other half are likely foreclosures. And no, the shadow inventory isn’t just 200,000, it’s far higher than that. America’s home ownership rate, after holding steady for a while, took a pretty big plunge in Q4, from 66.9 percent to 66.5 percent. That’s down from the 2004 peak of 69.2 percent and the lowest level since 1998.

Check out CNBC video.


FL: BB&T tries to claim fraudulent default to collect from FDIC and keep the property to boot

Bryllaw website:

This is what happens when the government is capable of picking winners and losers in “private” business and when it has power to dole out sweetheart deals to “private” entities.

BB&T v. Kraz LLC, Case No. 10-CA-000304-K (FL Hillsborough Cir. May 18, 2012):

“Plaintiff [BB&T] stood to profit by declaring a fraudulent default under the subject loan, collecting from the FDIC under the [Purchase and Assumption Agreement with FDIC] for such default, and then enforcing the subject loan against [borrowers], and retaining the property until such time as a real estate turnaround occurred.”

Of course, this is not the first time FDIC has doled out a “sweetheart deal.”  One can only shudder at the thought of how many such sweetheart deals go unnoticed and uncovered.

The court’s order can be accessed here


BofA’s Surge In Refund Claims Said Tied To Non-Countrywide Loans

Bank of America Corp.’s surging claims for refunds on faulty mortgages in the second quarter stemmed mostly from loans made by the bank and its Merrill Lynch unit, rather than the company’s Countrywide subsidiary, said two people with direct knowledge of the matter.

The backlog of new claims from private investors probably will increase in the months ahead, according to the people, who asked for anonymity because mortgage disputes are private. The firm regards grounds for the demands as weaker than those triggered by Countrywide loans, the people said.

Bank of America said last month that total demands for buybacks from mortgage-bond investors and insurers surged more than 40 percent in three months to $22.7 billion. TheCharlotte, North Carolina-based company, ranked second by assets among U.S. lenders, has already committed more than $40 billion to resolve disputes on faulty loans and foreclosures, and shareholders are pressing the bank to stem the bleeding.

Read on.

Case of Libor: Barclays withdraws from Danish panel

Translated in English:

New twist in the case of Libor for Barclays. The British bank has decided toremove the group of institutions involved in the calculation of daily interbank rate in Danish kroner, the Cibor, announced Thursday, August 2nd the professional body in Denmark .

“Barclays bank has informed the Association that he had decided not to sponsor part of Cibor to date of August 27 “ , the organization said in a statement. The computation will continue with seven banks, five Danish, Swedish Nordea and the German Deutsche Bank .

The Banking Association said that in the wake of the scandal handling the London interbank rate, Libor, which involved mainly Barclays, the Danish government has launched an investigation to verify the integrity of Cibor.

Tax havens: the treasure of American technology giants

Apple has over $ 81 billion in accounts outside the U.S., Microsoft 54 billion,Google and Cisco 43 42, and they know what to make of these war chests.

These companies are trying to convince the authorities in Washington to arrange the tax code to be able to repatriate these funds without carrying too heavy a tax bill – this is in the interest of the country, they argue, to invest and create jobs in the States United.


Companies with high technologies , which have very high margins, are not alone in this: some estimate more than 1000 billion corporate cash parked overseas.

The phenomenon is particularly common in groups rich in intangible assets. “Any company that has intellectual property, whether software or a drug patent, has the ability to assign ownership to a foreign subsidiary based in a tax haven, “ said Robert McIntyre, director of the activist group Citizens for Tax Justice . In the case of Apple , “virtually all the money that is abroad has never been taxed by anyone” , says Mr. McIntyre.

Read on.

BofA Says Libor Probe Draws U.S. Subpoenas on Submissions

Bank of America Corp. (BAC), the second- biggest U.S. bank, received formal inquiries from investigators pressing their probe into the possible rigging of a key international lending benchmark.

The bank received subpoenas and requests for information from the U.S. Department of Justice, Commodity Futures Trading Commission and U.K. Financial Services Authority, the firm said yesterday in a filing. Bank of America also said regulators have asked whether the company properly oversaw vendors who sold identity-theft protection products to its customers.

Inquiries involve “submissions made by panel banks in connection with the setting of London interbank offered rates and European and other interbank offered rates,” Charlotte, North Carolina-based Bank of America said in the filing.

Read on.