Daily Archives: June 24, 2013

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Shareholder wants Bank of America to investigate ex-employees’ lawsuit claims

Shareholder wants Bank of America to investigate ex-employees’ lawsuit claims

From the SEC website, here is the letter from the shareholder:

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

NOTICE OF EXEMPT SOLICITATION

 

  1. Name of the Registrant:

BANK OF AMERICA CORPORATION

 

2.   Name of the person relying on exemption:

FINGER INTERESTS NUMBER ONE, LTD.

 

3.   Address of person relying on exemption:

520 Post Oak Blvd., Suite 750, Houston, TX 77027

 

  4. Written Materials. Attach written material required to be submitted pursuant to Rule 14a -6(g)(1).

Dear Institutional Shareholders and Board of Directors:

Our firm, Finger Interests Number One, Ltd. is a long term holder of Bank of America and is interested in seeing Bank of America (BAC:NYSE) managed to maximize the long term value for all shareholders. In 2009, we were activist shareholders prior to the annual shareholder meeting, and encouraged shareholders to separate the Chairman & CEO position (successful), and to vote against three directors (all no longer serving).

WE ARE WRITING TO ENCOURAGE THOSE SHAREHOLDERS WITH ACCESS TO MANAGEMENT AND THE BOARD OF DIRECTORS TO:

(I) READ THIS ARTICLE AND RELATED LAWSUIT WITH AFFIDAVITS ( çsee link);

AND

(II) CONTACT MANAGEMENT AND THE BOARD OF DIRECTORS REGARDING THEIR COMMITMENT TO DEVELOPING AN ETHICAL CORPORATE CULTURE CONSISTENT WITH MAXIMIZING THE VALUE OF THE BANK OF AMERICA BRAND AND ITS COMMON STOCK.

Recent Allegations in Massachusetts Lawsuit – Not Just Another Lawsuit

On its face, the recent class action lawsuit filed in the U.S. District Court of Massachusetts in front of the Honorable Judge Rya W. Zobel looks like many of the other lawsuits that have been filed against Bank of America for its (and Countrywide’s) failures to properly service

 

  

 

 

     

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  Finger Interests Number One, Ltd.

 


mortgage loans. From a legal standpoint, Judge Zobel recently denied BAC’s request for dismissal, meaning BAC will have to respond to certain borrower’s claims in their respective state courts. From a business / shareholder perspective, one can say that these cases will ultimately get settled at some dollar cost.

But the case, and more importantly, the affidavits attached from former employees say volumes about the failures of senior management and the board of directors to materially change the corporate culture that has long existed at Bank of America prior to Brian Moynihan’s ascendance or (most of) this Board of Directors’ inauguration.

BAC and Brand Value

The concept of “brand value” is something that most companies serving consumers understand. Major brands like Coca Cola, Proctor & Gamble, American Express, and even General Motors understand the importance of developing a reputation for product quality, value and fairness when dealing with their customers. These companies actively manage their products and corporate image to develop the value of their brand in the marketplace, cultivating customer loyalty and in turn creating long term franchise value for shareholders. This lies at the essence of what Warren Buffet refers to when he invests in high quality, brand name companies. (Although Buffet invested in BAC in 2011, we believe he did so because he got such great terms. Note that he has not added to his BAC position since inception, but he has repeatedly increased his WFC position, as recently as Q1 2013.)

Bank of America’s Board and Management Just Don’t Get It

Bank of America was recently accused in six affidavits filed in a lawsuit alleging that bank employees were rewarded for delaying and denying Home Affordable Modification Program (“HAMP”) modifications so that Bank of America could generate more fees and steer existing borrowers to more profitable in house products. Additionally, attorneys general from North Carolina and New York are looking into BAC’s compliance with the recent industry-wide $25 BN global servicing settlement, adding credence to these allegations. If true, the recent allegations outlined in a story on NBC news (June 17, 2013) about Bank of America’s systematic denial of mortgage modifications for borrowers that qualified under HAMP is demonstration that Bank of America’s management and board of directors do not understand this concept of developing long term franchise value by building a reputation for quality, value and fairness. Fairness includes honesty and integrity. The recent allegations also show that nothing has really changed at Bank of America under Brian Moynihan and the Board of Directors led by Charles Holliday.

If true, the six affidavits filed by former employees of Bank of America in the Massachusetts case are damning, and evidence of unethical behavior and, more importantly point to a corporate culture of not just “short termism”, but of outright corruption and a disregard for

 

  

 

 

     

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  Finger Interests Number One, Ltd.

 


laws, regulation, and of course, customers. If false, then we have to question why former employees would want to risk their personal credibility and expose themselves to penalties of perjury for false statements. Regardless of whether you believe in the fairness of the HAMP programs to the 90% of borrowers in America that pay their mortgages on time, as a long term shareholder and owner of Bank of America, we are deeply concerned that this corporate culture of deceit has continued to exist under Brian Moynihan and Charles Holliday’s Board of Directors. Where Ken Lewis and his predecessor had created a culture of “yes” men and women, and intimidated (and fired) employees that had the courage to express dissent or question any course of action dictated by the CEO, based on statements from management, we frankly had expected much more from this new leadership.

Read more: http://www.sec.gov/Archives/edgar/data/70858/000119312513267693/d557453dpx14a6g.htm

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Snowden sought Booz Allen job to gather evidence on NSA surveillance

Snowden sought Booz Allen job to gather evidence on NSA surveillance

Fugitive whistle-blower reveals for first time he took job at US government contractor with the sole aim of collecting proof of spying activities.

Edward Snowden secured a job with a US government contractor for one reason alone – to obtain evidence of Washington’s cyberspying networks, theSouth China Morning Post can reveal.

For the first time, Snowden has admitted he sought a position at Booz Allen Hamilton so he could collect proof about the US National Security Agency’s secret surveillance programmes ahead of planned leaks to the media.

“My position with Booz Allen Hamilton granted me access to lists of machines all over the world the NSA hacked,” he told the Post on June 12. “That is why I accepted that position about three months ago.”

 

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‘YOU F–KED UP, YOU TRUSTED US’: TALKING RATINGS AGENCIES WITH CHRIS HAYES

‘YOU F–KED UP, YOU TRUSTED US’: TALKING RATINGS AGENCIES WITH CHRIS HAYES

“Standard & Poor’s has long had strict policies to reinforce the independence of our analytical processes. . . . We make our methodology transparent to the market.”

That was among the responses of a spokesperson for the ratings agency Standard & Poor’s when I contacted him a few weeks ago in advance of a new Rolling Stone feature, “The Last Mystery of the Financial Crisis,” which describes the role the ratings agencies played in causing the 2008 crash. The company was genuinely miffed that anyone would impugn its honesty. In one relatively brief e-mail, the spokesperson used variables of terms like “independent,” “integrity” and “transparent,” upwards of nine times.

Hold that thought.

“The Last Mystery of the Financial Crisis” makes great use of documents uncovered in years of painstaking research by attorneys at Robbins Geller Rudman & Dowd, a San Diego-based firm that was at the forefront of major lawsuits against the industry. The material those lawyers found leaves virtually no doubt that the great ratings agencies like Moody’s and S&P essentially put their analysis up for sale in the years leading up to the crash.

I picked some of the more damaging of these documents to ask about. Like for instance, an email from a company executive reading, “Lord help our fucking scam. . . . This has to be the stupidest place I have worked at.”

Read more: http://www.rollingstone.com/politics/blogs/taibblog/you-f-ked-up-you-trusted-us-talking-ratings-agencies-with-chris-hayes-20130621#ixzz2X8Myd0wf

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Bank of America Laying Off 400 from Mortgage Servicing Unit

Bank of America Laying Off 400 from Mortgage Servicing Unit

Bank of America (BAC) is laying off hundreds of workers from a unit that services troubled mortgages.

The bank will lay off 411 Dallas-area workers from its Legacy Asset Servicing unit, the company said Monday. The layoffs will take place Sept. 30 and the workers affected will be offered severance pay and benefits, it said.

Bank of America created Legacy Asset Servicing in 2011 as a repository for defaulted residential mortgages, many of them subprime loans originated by Countrywide, the home lender it purchased in 2008. The unit handles loan modifications and resolves repurchase claims.

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Lenders’ Anti-Discrimination Efforts Lagging, CFPB’s Cordray Says

Lenders’ Anti-Discrimination Efforts Lagging, CFPB’s Cordray Says

Lenders are falling short in efforts to prevent discrimination in areas outside housing, the head of the U.S. Consumer Financial Protection Bureau told members of Congress.

“We have found frequent instances where lenders had robust fair lending compliance programs for mortgage lending but weak or non-existent fair-lending compliance programs for other types of consumer lending,” CFPB Director Richard Cordray wrote in a June 20 letter to Representative Terri Sewell, an Alabama Democrat.

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Supreme Court to hear case tangentially related to CFPB director post

Supreme Court to hear case tangentially related to CFPB director post

The U.S. Supreme Court agreed to review an appellate court case that invalidated several of President Obama’s recess appointments to the National Labor Relations Board this week. 

While the case is not directly related to the president’s 2012 recess appointment of Richard Cordray to serve as director of the Consumer Financial Protection Bureau, the substantive legal issues correlate to similar arguments made in a separate court case involving Cordray’s recess appointment. 

“Should the court invalidate the NLRB appointments, the potential impact on the CFPB would be monumental,” said attorneys with Ballard Spahr in a news alert on the Supreme Court’s acceptance of the case. “This would call into question the validity of past CFPB actions, particularly any action involving the CFPB’s exercise of authority that was newly created by the Dodd-Frank Act, and the CFPB’s ability to act in the future.”

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10 firms named as first Libor trial begins

10 firms named as first Libor trial begins

The British banker at the center of a global investigation into rigging benchmark interest rates conspired with employees at eight other firms while working for UBS and Citigroup in Japan, according to prosecutors.

Tom Hayes appeared in court Thursday to hear eight charges of conspiracy to defraud by trying to manipulate the London Interbank Offered Rate (Libor) and other rates between August 2006 and September 2010.

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While working for UBS (UBS), prosecutors claim that Hayes conspired with colleagues at the Swiss bank and employees at JPMorgan Chase (JPMFortune 500), RBS (RBS),Deutsche Bank (DB), Rabobank, HSBC (HBC) and brokers ICAP (IAPLF), RP Martin and Tullet Prebon.

 

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Consultant For Big Banks Paid More Than $900 Million in Foreclosure Review

Consultant For Big Banks Paid More Than $900 Million in Foreclosure Review

Consulting for big banks pays well — really well.

A prominent Washington consulting firm run by a former top U.S. banking regulator was paid $927.5 million to conduct a review of foreclosure files, according to a letter sent by Promontory Financial Group to the Senate Banking Committee.

The disclosure comes as lawmakers on Capitol Hill and New York’s top banking regulator push regulators to more closely scrutinize the relationship between consulting firms and banks, amid concerns that the consultants are not truly independent.

Earlier this week, Deloitte LLP’s financial advisory services unit agreed to pay $10 million and accept a one-year ban from consulting for New York-regulated banks to settle regulators’ allegations the firm mishandled its anti-money-laundering work for U.K. bankStandard Chartered PLC. STAN.LN -0.46%

Under the agreement with New York’s banking regulator, Benjamin M. Lawsky, Deloitte also agreed to overhaul its internal safeguards and create standards to increase its independence from clients.

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Citigroup Inc : Citi Set to Open Office in Iraq

Citigroup Inc : Citi Set to Open Office in Iraq

Citigroup Inc. (C) is setting up operations in Iraq, the first U.S. bank to do so, as it seeks to tap into long-term growth potential of the oil-rich but war-torn country, the Financial Times reported on its website Monday, citing people close to the bank .

The banking group will announce on Monday that it will open a representative office in Baghdad, after receiving preliminary approval from the Central Bank of Iraq, the FT said.

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Ruling ensures lenders comply with mortgage law

Ruling ensures lenders comply with mortgage law

As the firm representing the homeowners in the recent Oregon Supreme Court case of Brandrup et al. v. ReconTrust et al., we would like to offer our inside analysis of the case and what it means for homeowners.

First, it is important to note that the court’s ruling is not an unequivocal win for either homeowners or lenders. While homeowners prevailed in three of the four questions before the court, lenders prevailed on one issue.

So where does this decision leave homeowners facing non-judicial (out of court) foreclosures?

First, the court completely adopted homeowners’ arguments regarding Mortgage Electronic Registration Systems Inc. (MERS). Homeowners argued that MERS could not be a beneficiary under the Oregon Trust Deed Act. The court agreed that MERS does not qualify as a beneficiary, regardless of what is stated in the trust deed.

Lenders, on the other hand, found a bit of qualified good news in the court’s ruling as well. The court agreed with lenders that an assignment of a trust deed must be recorded only when it has been written; the court also rejected homeowners’ interpretation that would have included assignments that arise automatically when the underlying note is sold.