Daily Archives: September 6, 2012

Fired Wells Fargo employee files civil rights complaints, employee’s legal battle might clear the way for a national class-action lawsuit

Richard Eggers, a call center worker fired in July for putting a cardboard cutout of a dime in a laundry machine 49 years ago, has filed state and federal civil rights complaints against Wells Fargo, the firm that did his criminal background check, and federal banking regulators.

Eggers, 68, of Des Moines, filed the complaints with the U.S. Equal Employment Opportunity Commission and the Iowa Civil Rights Commission, according to attorney Leonard Bates, who is representing him for the Newkirk Law Firm.

The complaints clear the way for a possible class-action lawsuit on behalf of thousands of low-level bank employees like Eggers who have been fired this year under tightened regulations meant to deter the kind of high-level excesses that helped precipitate the global financial crisis, Bates said.

“We have to exhaust our administrative remedies under the law, and that’s why we’ve filed these complaints,” he said.

Rea on.

Fourth JPMorgan trader in UK dragged into London Whale probe over $6bn trading loss

A fourth London-based JPMorgan Chase trader is under scrutiny in the investigation by US authorities into the bank’s nearly $6bn (£3bn) trading loss, according to reports.

Julien Grout, a trader who joined JPMorgan Chase (JPM.N) in 2009, is drawing attention because he worked in the bank’s Chief Investment Office and reported to Bruno Iksil, the French credit trader who is a central figure in the federal probe, Reuters claimed, citing two sources familiar with the situation.

US authorities are trying to determine whether traders in the bank’s London office, including Iksil, took steps to try to hide some of the losses the bank was incurring on a series of complex derivatives trades. In the trading community in London, Iksil became known as the London Whale because of the large positions he and his colleagues were taking on.

Grout is still working for JPMorgan, according to a bank spokeswoman. He has declined to comment, she said.

Read on.

Human Rights Report: Bush Admin. Used Waterboarding on Libyans in Afghanistan

The Bush Administration legacy of torture grows, and its claims to Congress were false, according to a new report by Human Rights Watch.

The United States government during the Bush administration tortured opponents of Muammar Gaddafi, then transferred them to mistreatment in Libya, according to accounts by former detainees and recently uncovered CIA and UK Secret Service documents, Human Rights Watch said in a report released today. One former detainee alleged he was waterboarded and another described a similar form of water torture, contradicting claims by Bush administration officials that only three men in US custody had been waterboarded.



JPMorgan Said To Face Escalating Senate Probe Of CIO Loss

JPMorgan Chase & Co.’s (JPM) wrong-way bets on derivatives are the focus of an escalating probe by a U.S. Senate panel led by Carl Levin that has grilled executives from banks including Goldman Sachs Group Inc. and HSBC Holdings Plc, three people briefed on the inquiry said.

Levin’s Permanent Subcommittee on Investigations is seeking testimony from people who worked in or helped lead JPMorgan’s chief investment office, according to the people, who declined to be identified because the inquiry isn’t public. The unit’s London staff lost at least $5.8 billion this year on the botched bets, which were large enough to shift markets.

Tara Andringa, a spokeswoman for Levin, didn’t immediately respond to a message seeking comment, and Joe Evangelistiat JPMorgan declined to discuss the panel’s inquiry. “As always, the company has fully cooperated with all regulatory and governmental requests around this matter,” Evangelisti said.

Read on.

Banks Face Suits as States Weigh Libor Losses

The scandal over global interest rates has state officials like Janet Cowell of North Carolina working intensely behind the scenes to build a case for suing the nation’s largest banks.

Ms. Cowell, the state’s elected treasurer, and several of her staff members have spent the summer combing through the state’s investments trying to determine how much the state may have lost because of suspected manipulation of the London interbank offered rate, or Libor, which is used as a benchmark for trillions of dollars of financial contracts around the world.

“We think this could be as big as the mortgage crisis settlement, that this could be a really high impact situation and that we should be aggressive on this,” Ms. Cowell said, referring to the $25 billion settlement that the nation’s biggest banks entered with state attorneys general.

The activity provides a glimpse at how widely the Libor scandal has spread through the financial world, and how much damage may still be in store for the banks accused of manipulating Libor. Her work also suggests just how difficult it is, and how long it may take, to get to the bottom of the losses.

The attorneys general in Maryland, Massachusetts, New York and Connecticut have all been examining how much their states may have lost as a result of a lowered Libor. A spokeswoman for Connecticut’s attorney general, George C. Jepsen, said that the state’s work with New York’s attorney general, Eric T. Schneiderman, “has broadened significantly over the last few weeks and we are now coordinating with a much larger group of attorneys general.”

Read on.

When a Customer’s Bad Behavior Can Bring a Bank Down

Can a bank be liable for the wrongful acts of its customer? The frustrating and unsatisfying answer: It depends.

Lawsuits against banks for aiding and abetting the wrongdoing of their customers are frequent, as highlighted by the recent rash of litigation accusing banks of assisting their clients’ high-profile Ponzi schemes. And the stakes are high. Earlier this year, a jury in Florida awarded $67 million to an investor group that accused TD Bank of facilitating a $1.2 billion fraud perpetrated by its customer, Scott Rothstein, a now disbarred lawyer serving a 50-year prison term.

In some cases, a bank’s liability is obvious. For example, an employee’s active involvement in the customer’s misdeeds is all but certain to expose the bank to liability. In other cases, however, a fine line separates a finding of no liability and exposure to a massive jury verdict.

The requirements of an aiding and abetting claim are easy enough to articulate and are essentially the same throughout the country although a small number of jurisdictions do not recognize the cause of action at all. They are: an underlying violation (e.g. fraud) by the bank’s customer; knowledge of that violation by the bank and the bank’s substantial assistance of its customer. The difficulty arises with how judges interpret the knowledge requirement.

Read on.

Wells Fargo Bank’s foreclosure mistake leaves couple’s retirement home in ruins

Haven’t we heard this story before: Bank forecloses on the wrong house. Wells Fargo Bank and the rest of the four major banks that control 56% of the US economy need to be broken up. They are too big to manage. Here is the story:

TWENTYNINE PALMS, Calif. (KABC) — A local couple’s dreams have been shattered by a foreclosure mistake that left their retirement home in ruins.

When banks take over foreclosed homes, they often try to salvage the contents inside to recoup their losses. But what if they have no right to those contents in the first place? Alvin Tjosaas says that scenario is all too real for him.

Back in 1961, a 14-year-old Tjosaas literally helped his father build a vacation home in Twentynine Palms. He’s taken his family there ever since, sharing unforgettable moments.

“I put my whole life into this place, building it for my mom and dad,” said Tjosaas.

The house recently had valuables stored in the garage, including decades worth of family heirlooms. But the house was in ruins after Tjosaas says subcontractors hired by Wells Fargo entered the property with a foreclosure notice in hand. The notice had the name Stephen A. Janosik on it, but the address for the Tjosaas family home.

“It’s the wrong house, simple as that. It’s a big mistake, but sort of a simple mistake,” said Tjosaas.

Tjosaas says the subcontractors broke down doors, smashed windows, tore down walls, taking anything of value to sell later on.

He says they took three tractor mowers and three golf carts. Their camper trailer was badly damaged. His wife, Patricia, couldn’t believe her eyes.

“We had all of his masonry tools, all of his carpenter tools, all of his plumbing tools, everything that he owned,” she said.

Tjosaas said his dad’s WWI uniform and flag were also gone. The Tjosaas say they’ve tried to reach out to Wells Fargo for answers, but to no avail.

“The way it’s been going, I don’t think they really care. That’s the way it’s been for the three months. Now, all of a sudden, it’s you guys. Now, all of sudden, they call me,” said Tjosaas.

Read on.