Daily Archives: September 18, 2012


SEC Chief Mary Schapiro considers resignation after illness

Mary Schapiro, chairwoman of the Securities and Exchange Commission, is considering resigning before her term expires in June 2014 as she recuperates at home from a recent illness, the New York Post reports.

Executives inside and outside the Beltway are speculating that the 57-year-old SEC chief, who has served for nearly four years, is mulling leaving her post and may announce her plans as early as November after the presidential election is decided.

“I suspect sometime after the election — regardless of how the election turns out — she will say, ‘I’m outta here,”’ said one former SEC official.

Read more here.

Romney “47 Percent” Fundraiser Host: Hedge Fund Manager Who Likes Sex Parties

When Mitt Romney at a private fundraiserdismissed all Barack Obama voters as moochers and victims—showing disdain for nearly half of the American electorate—he was speaking at the home of controversial private equity manager Marc Leder in Boca Raton on May 17, 2012. (It was Romney’s second fundraising event in Boca that day.) This is evident from references made by Romney within the full video recording of the event that has been reviewed by Mother Jones.

And there is more about Marc Leder:

But Leder does differ from Romney in one significant fashion: how he likes to have a certain sort of fun. In August 2011, the New York Post reported,

It was as if the Playboy Mansion met the East EBond at a wild party at private-equity titan Marc Leder’s Bridgehampton estate, where guests cavorted nude in the pool and performed sex acts, scantily dressed Russians danced on platforms and men twirled lit torches to a booming techno beat. The divorced Sun Capital Partners honcho rented a sprawling beachfront mansion on Surf Side Road for $500,000 for the month of July. Leder’s weekly Friday and Saturday night parties have become the talk of the Hamptons—and he ended them in style last weekend with his wildest bash yet. Russell Simmons and ex-wife Kimora Lee attended a more subdued party thrown by Leder—who’s an event chair for Simmons’ Art For Life charity—on July 29 together. But the revelry hit a frenzied point the next day before midnight when a male guest described as a “chubby white meathead” and a “tanned” female guest stripped and hopped into the pool naked.

Read more from Mother Jones.

BofA told fired disabled employee “ Bank of America doesn’t have ADA rules”: court document

Courthouse News Service.

PITTSBURGH – After Bank of America bought out Merrill Lynch, the new boss told a disabled man that accommodating him “wouldn’t be fair to people with two hands,” and that “Bank of America doesn’t have ADA rules,” a fired worker claims in Federal Court.

Read court document.

Citi Execs Depart Bank After Mortgage-Fraud Settlement

Two Citigroup Inc. executives are departing after federal prosecutors named them earlier this year in a mortgage-insurance fraud case that resulted in a $158.3 million settlement and an admission of wrongdoing by the bank.

Jeffery Polkinghorne, a senior risk manager at the CitiMortgage division, is leaving after 16 years of “dedicated service,” according to an internal memo obtained by Bloomberg News and confirmed by Mark Rodgers, a spokesman for the New York-based bank. Donald Houghtalin, a compliance officer at the unit, has already left, he said in a phone interview. Neither man was sued by the government.

Both were among CitiMortgage executives named in a suit against Citigroup filed by the U.S. Justice Department earlier this year which claimed the bank saddled taxpayers with losses after falsely declaring defective home loans fit for a federal insurance program. The government alleged that some officials pressured other employees to change reports on faulty loans. Citigroup paid to settle the claims in February.

Read on.

Fannie Mae Pays Banks $1.5 Billion So It Can Fire Them

Fannie Mae has paid $1.5 billion to a dozen banks that manage its massive home loan portfolio so that it can hire companies it thinks will do a better job keeping homeowners out of foreclosure, according to a government watchdog report released Tuesday.

The report, issued by the inspector general for the Federal Housing Finance Agency, concludes that Fannie Mae is probably contractually required to pay a breakup fee in order to move these loans, but that in many cases the government-backed mortgage giant appeared to be paying millions of dollars too much.

The report does not say how much Fannie might have overpaid, only that the company should not be paying more than what its boilerplate contracts with banks dictate. The inspector general found that while these contracts allow for a breakup payment of twice the annual fees a bank would collect to “service” a loan, Fannie has paid on average 2.3 times that amount in order to quickly close the transactions and forestall a bank from marketing those servicing rights on its own.

“FHFA should ensure that Fannie Mae does not have to pay a premium to transfer inadequately performing portfolios,” the inspector general concluded.

Read on.

Fannie Mae Paid BofA Premium to Transfer Soured Loans

* Watchdog urges more scrutiny of Fannie Mae payments

* Members of Congress asked watchdog to review loan deal

* Inspector general has concerns about controls on program

Sept 18 (Reuters) – Fannie Mae agreed to pay Bank of America Corp about 20 percent more than it was contractually obligated to last year in order to transfer the servicing of troubled loans to another firm, a report by a watchdog found.

In a report to be issued on Tuesday, the inspector general for the Federal Housing Finance Agency urges the regulator to ensure Fannie Mae applies more scrutiny to the pricing of such transactions and possibly revise its contracts with mortgage servicers.

“FHFA should ensure that Fannie Mae does not have to pay a premium to transfer inadequately performing portfolios,” the report says, referring to the regulator of Fannie Mae and sibling Freddie Mac.

Rest here…

JP Morgan unit seeks money from California ISO in complaint

(Reuters) – A unit of U.S. bank JPMorgan Chase & Co (JPM.N) has filed a complaint with federal energy regulators against the California power grid operator, claiming the grid failed to pay the bank unit about $3.7 million for the dispatch of some generation.

In its complaint to the U.S. Federal Energy Regulatory Commission (FERC), J.P. Morgan Ventures, the J.P. Morgan unit, claimed the California Independent System Operator (ISO) exceptionally dispatched generation controlled by the bank unit on at least 18 occasions in April, May and June 2012, but failed to pay the full amount owed for those exceptional dispatches.

FERC, meanwhile, has been investigating complaints that J.P. Morgan Ventures may have bid up electricity prices in California and the Midwest by some $73 million.

Read on.

Ex-Sterling Lenders Receive Long Prison Terms for Fraud Scheme

Two former loan officers at Sterling Financial in Lancaster, Pa., have been sentenced to lengthy prison terms and ordered to pay $53 million in restitution for their role in a multi-year fraud scheme that led to massive losses at Sterling and ultimately forced the bank to sell itself.

The Securities and Exchange Commission said last week that a Pennsylvania court has sentenced Joseph M. Braas of Lititz, Pa., to 15 years in federal prison and sentenced Michael J. Schlager to 20 years after both pleaded guilty to orchestrating the fraud.

Braas and Schlager were loan officers at Equipment Finance LLC, a specialty lender to the logging industry that had been wholly owned by Sterling. In 2007, Sterling uncovered a fraud scheme at the lending unit that was designed to hide problem loans and had been going on for roughly five years. The scheme led to $281 million of charges that wound up wiping out half of Sterling’s equity and erased three years of earnings. Soon after the scheme was discovered, Sterling was sold to PNC Financial Services Group (PNC).

Read on.