Daily Archives: January 26, 2013

Libor Suit List Shows Barclays Probe Spanned NY to Tokyo

Bloomberg:

The Barclays list also includes Tim Bond, the former head of asset allocation strategy at Barclays’ investment bank. He publicly described Libor figures as “divorced from reality,” saying in a Bloomberg Television interview that firms were routinely misstating their borrowing costs to avoid the perception they were facing stress.

Mark Dearlove, head of the bank’s money-market desk and responsible for the bank’s Libor submissions, and Stephen Morse, former compliance chief, were also included. Del Missier told lawmakers that Diamond instructed him to submit artificially low Libor rates and “passed the instruction along” to Dearlove.

The list derived from the probe evidence included employees that worked at offices in cities including London, SingaporeTokyo and New York. While most are traders, desk heads and executives, the list also includes Julian Callow, chief international economist at Barclays.

Britain may refuse to produce RBS Libor documents, Canada argues

(Reuters) – Britain cannot be relied on to force Royal Bank of Scotland Group Plc (RBS.L) to give Canadian authorities documents on alleged interest rate rigging, because the British government is RBS’s majority shareholder, Canada’s Competition Bureau argued this month.

An affidavit filed by Canadian lawyer on behalf of the Competition Bureau was the latest salvo in a sometimes nasty battle between the bureau and RBS over whether the bureau can compel the British banking group’s Canadian subsidiary to hand over potentially damning records held at RBS’s head office or elsewhere outside Canada.

Read on.

Wells Fargo sued by German agency for $160 mln in CDO losses

NEW YORK, Jan 23 (Reuters) – Wells Fargo Bank, N.A. was sued Wednesday by a German government agency that accused it of mismanaging a collateralized debt obligation, resulting in more than $160 million in losses.

Wells Fargo and Collineo Asset Management GMBH, a German financial services company, allowed investments of overly risky assets not permitted under the contracts governing House of Europe Funding I Ltd, a Cayman Islands CDO issuer, according to the lawsuit filed in Manhattan federal court.

The German agency, Erste Abwicklungsanstalt, and the CDO itself both sued Wells as trustee and Collineo as asset manager for allowing the ineligible purchases.

House of Europe Funding I’s investments in other CDOs far exceeded the limit of 15 percent of the portfolio, the lawsuit said.

Since April 2006, House of Europe Funding I purchased over $171 million of CDO securities in at least six separate transactions, all in breach of contract, according to the complaint.

Over 80 percent of the improper assets defaulted and are worth almost nothing, the complaint says.

Read on.

Where’s the Money?

HOUSTON – Davis-Lynch Holding Co. claims Bank of America refuses to pay up on a confidential settlement concerning “an embezzlement scheme run through their bank at Davis-Lynch’s expense,” in Federal Court.

Source: Courthouse News

Trader loses £30m bonus over ‘rigging’ at Deutsche

Christian Bittar, one of the bank’s best-paid traders, has had the scheduled payout “clawed back” by his former employer.
Deutsche Bank dismissed Mr Bittar in 2011 for allegedly colluding with a Barclays trader to fix benchmark interest rates in his favour in order to boost the value of his trades.
The lender said the $53m (£34m) bonuses it has withheld were “unvested compensation”, meaning that Mr Bittar earned them in the years before 2011 but they had yet to pay out.

Read on.

Exclusive: UBS Chairman proposes industry-wide settlement over Libor

(Reuters) – UBS Chairman Axel Weber raised the possibility of an industry-wide settlement for the rest of the banks involved in the Libor rate fixing scandal at a meeting of top bankers in Davos, sources familiar with the matter said.

Among the top bankers and officials present at the meeting on Thursday were Bank of Canada Governor Mark Carney, JP Morgan Chase Chief Executive Jamie Dimon, Citigroup CEO Mike Corbat and HSBC Chairman Douglas Flint. Carney is due to take over as head of the Bank of England later this year.

Swiss bank UBS reached a $1.5 billion settlement in December with U.S. and British regulators over its role in the manipulation of the London interbank offered rate, a benchmark used for trillions of dollars of financial instruments ranging from home loans to complex derivative products. It was the second bank to settle, after Britain’s Barclays.

U.S. British and other regulators are investigating more than a dozen global banks over manipulating the rate, which is compiled from data banks submit about how much interest they are charged for loans from other banks.

Weber used the meeting of bankers at the annual World Economic Forum in the Swiss Alpine resort to argue that an industry-wide settlement – similar to deals which have been struck with U.S. regulators in the past – would prevent further reputational damage to the industry.

One of the sources said that although the idea was discussed briefly during the meeting, there was no agreement on pursuing it. UBS declined to comment on the meeting, which was held in private. The sources spoke on condition they not be named.

Read on.

[VIDEO] Attorney General Conway Files Suit Against “MERS” In Foreclosure Investigation

And approximately, 60% of mortgages in Kentucky is registered under MERS. Here is the video. Click here.

And here is MERS’ reaction of Kentucky AG’s lawsuit:

MERS Statement on Kentucky AG Complaint

Reston, Virginia, January 23, 2013—“There is no merit to the allegations leveled at MERS by Kentucky Attorney General Jack Conway in today’s news conference.   All MERS mortgages are registered in the local land records and all recording fees are properly paid.   The MERS® System’s role in the mortgage industry has reduced chain of title issues, provided efficiencies through e-commerce, and resulted in lower mortgage borrowing costs.  Our business model is straightforward and transparent, and MERS role is clearly spelled out in the contract between borrower and lender.  MERS® System data is not used by servicers to make loan modification, refinance or foreclosure decisions.

In Kentucky, all foreclosures are judicial foreclosures and as such are processed by the court system. MERS’ standing as mortgagee has been upheld in –In re Jessup, No. 09-5229 (Bankr. E.D. KY 2010).   MERS and CitiMortgage’s Motion for Summary Judgment was granted and the court held that “the language in the Lender’s own instrument is sufficient to identify MERS as [the mortgagee].”

For descriptions of other cases and materials pertaining to MERS’ business model and role in U.S. housing, please visit www.mersinc.org.