Banks braced for huge EU fines over Libor rate-rigging scandal
The interest rate-rigging scandal that has damaged the reputation of the banking sector looks likely to be reignited as Brussels is expected to impose multimillion-pound fines on a number of major firms for manipulating crucial benchmarks.
The action by Joaquín Almunia, the EU competition commissioner, will pile further pressure on Royal Bank of Scotland, the bailed-out bank already dealing with the fallout from a major systems meltdownthat left millions of customers without access to cash and allegations – which it denies – of mistreating its small business customers.
The 81% taxpayer-owned bank is reported to be among at least six major players in the financial markets, including Deutsche Bank in Germany and Citigroup in the US, caught up in the cartel investigation. The EU is said to be ready to impose record-breaking fines for alleged collusion for rigging key benchmark rates.
JPMorgan Chase & Co. : FINRA bars two ex-JP Morgan brokers for theft from elderly widow
Reuters) – Two former brokers for a JP Morgan Chase & Co unit have been barred from the securities industry after they allegedly stole$300,000 from an elderly client’s account and exploited her failing mental capacity to carry out the scheme, Wall Street’s industry-funded watchdog said on Tuesday.
Class Action: Bank of America Inspection Fees Racketeering
LOS ANGELES (CN) – Bank of America charged hundreds of thousands of distressed homeowners millions of dollars for unnecessary house inspections that forced them to default on mortgages, according to a RICO class action.
John Cirino sued Bank of America, BAC Home Loans Servicing fka Countrywide Home Loans Servicing and Bank Home Loans Servicing in a federal RICO complaint.
Cirino, of Mississippi, claims Bank of America charged millions of dollars to borrowers who “can least afford” it.
Mortgage servicing companies, unlike lenders who have an interest in home loans, make their money from managing loan accounts, Cirino says, and earn fees when borrowers go into foreclosure.
For that reason, he says, servicing companies are less concerned about whether borrowers are keeping up with payments on their loans.
“Financial institutions like defendants see opportunity where investors see failure, because borrowers are captives to companies who service their loans,” the lawsuit states. “Accordingly, when borrowers go into default and defendants unilaterally decide to instruct third parties to perform default-related services, borrowers have no option but to accept defendants’ choice of providers.”
That’s where loan inspections come in, Cirino claims, and it exemplifies “how America’s lending industry has run off the rails.”
Ex-WaMu CEO Killinger Said to Be Near Settlement in Bank Failure
Former Washington Mutual Inc. Chief Executive Officer Kerry Killinger and two other bank officials are in settlement talks with the Office of the Comptroller of the Currency, the last chapter in the government’s probe of the largest U.S. bank failure.
The regulator is weighing a settlement with Killinger, former chief operating officer Stephen Rotella and David Schneider, former head of the home-loan division, over claims they mismanaged the Seattle-based thrift, according to a person who was briefed and spoke on condition of anonymity because the talks aren’t public.
Report: Nationstar plans $158.2M RMBS sale
Bloomberg reporters noted in an e-mail Tuesday that mega server Nationstar (NSM) could price a $158.2 million residential mortgage-backed securities deal in the coming days.
Nationstar had no comment on the report.
The publication’s reporters, Jody Shenn and Christopher DeReza, suggested the deal will settle on Dec. 10. It reportedly comes with a triple-A rating, credit support, and a coupon rate of 3.75%, according to preliminary Bloomberg data.