Daily Archives: March 13, 2014

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Bank of America back in court over $2.1 billion fraud penalties

Bank of America back in court over $2.1 billion fraud penalties

A U.S. judge wrestled on Thursday with a U.S. Justice Department request that Bank of America Corp pay $2.1 billion in penalties after being found liable for fraud over defective mortgages sold by its Countrywide unit.

In a second hearing on the penalties to be imposed on the bank, U.S. District Judge Jed Rakoff in New York said he had not yet decided how to rule in what was one of the few cases to go to trial stemming from the financial crisis.

But he tested the government’s arguments that it should be awarded penalties based on revenue Countrywide Financial Corp earned selling loans to government-sponsored mortgage finance companies Fannie Mae and Freddie Mac.

Rakoff even asked why the government had not sought even more in penalties, based on the $4.8 billion paid by Fannie and Freddie, rather than seeking just $2.1 billion based on revenue earned only on the defective portion of the loans sold by Countrywide.

“I’m interested in the logic,” Rakoff said. “It may be there is logic to the $2.1 billion, but at least to me there is logic under your theory of the case that would lead you to claim a gross gain of $5 billion.”

Assistant U.S. Attorney Pierre Armand, meanwhile, suggested the government would increase its request for penalties from Rebecca Mairone, a former Countrywide executive, from $1.1 million to $1.6 million based on a $487,000 bonus she recently earned from her employer, JPMorgan Chase & Co.

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Federal Home Loan Mortgage Corp : Courts will decide on Fannie, Freddie shareholders: U.S. lawmaker

Federal Home Loan Mortgage Corp : Courts will decide on Fannie, Freddie shareholders: U.S. lawmaker

The leaders of the U.S. Senate Banking Committee’s new legislative framework to wind down Fannie Mae and Freddie Mac will not determine whether their investors can share in the companies’ renewed profitability, the panel’s top Republican said on Thursday in a televised interview.

Private shareholders, including Perry Capital and Fairholme Capital Management, had sued the government over Fannie and Freddie’s bailout terms. They claimed the arrangement that sweeps the companies’ profits to the U.S. Treasury without paying down the government’s stake in the companies is illegal.

The government-owned agencies own or guarantee 60 percent of all U.S. home loans.

“They have filed suit right now in order to challenge the way that the current conservatorship is managing the current profitability of Fannie Mae and Freddie Mac,” Senator Mike Crapo, an Idaho Republican, told Bloomberg Television.

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Who’s making millions at Citi? The Mexico chairman. The CEO. And Peter Orszag

Who’s making millions at Citi? The Mexico chairman. The CEO. And Peter Orszag

Citigroup’s “Mr. Mexico” gets a pay cut but still makes millions. The CEO and Peter Orszag are taking home big paychecks too. And a birthday shout-out to Jamie Dimon.

Pay clawbacks?: Citigroup Inc. C +1.86% says it might take back paypreviously given to employees after the embarrassment of its Mexico subsidiary, Banamex, getting defrauded by oil-services giant Oceanografia.

The bank also cut the 2013 pay of its Mexico chairman, Manuel Medina-Mora. Don’t feel too sorry for him, though. “Mr. Mexico” is still getting $14 million in salary, bonus and other awards, by SEC calculations, down 7% from the year before.

US Rep. Marcy Kaptur: “LOOK AT THOSE OVER AT THE JUSTICE DEPARTMENT AND WHERE THEY WORKED BEFORE THEY GOT THERE”

US Rep. Marcy Kaptur: “LOOK AT THOSE OVER AT THE JUSTICE DEPARTMENT AND WHERE THEY WORKED BEFORE THEY GOT THERE”
WE NEED TO LOOK AT THOSE OVER AT THE JUSTICE DEPARTMENT AND WHERE THEY WORKED BEFORE THEY GOT THERE BECAUSE I THINK ONE OF THE REASONS PROSECUTION ISN’T THE LEVEL THAT IT SHOULD THERE IS SOME PARALYSIS IN SOME PLACES BECAUSE OF THOSE WHO ARE ABLE TO BLOCK A PLAY.

 

http://stopforeclosurefraud.com/2012/03/18/congresswoman-marcy-kaptur-look-at-those-over-at-the-justice-department-and-where-they-worked-before-they-got-there/

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Watch an expert teach a smug U.S. senator about Canadian healthcare

Watch an expert teach a smug U.S. senator about Canadian healthcare

A U.S. politician’s I-don’t-need-no-stinkin’-facts approach to health policy ran smack into some of those troublesome facts Tuesday at a Senate hearing on single-payer healthcare, as it’s practiced in Canada and several other countries.

The countries in question have successful and popular government-sponsored single-payer systems, provide universal coverage and match or outdo the United States on numerous measures of medical outcomes — for far less money than the U.S. spends. To explain this, Sen. Bernie Sanders (I-Vt.) asked seven experts to testify before his subcommittee on primary health and aging.

………..

Here’s a lightly edited transcript of the key moments, which start with Burr asking Martin about the observation in her written testimony that wait times for elective surgery in single-payer systems will lengthen as doctors move out of the public system:

 

BURR: Why are doctors exiting the public system in Canada?

 

MARTIN: Thank you for your question, Senator. If I didn’t express myself in a way to make myself understood, I apologize. There are no doctors exiting the public system in Canada, and in fact we see a net influx of physicians from the United States into the Canadian system over the last number of years.

 

What I did say was that the solution to the wait time challenge that we have in Canada — we do have a difficult time with waits for elective medical procedures — does not lie in moving away from our single-payer system toward a multipayer system. And that’s borne out by the experience of Australia. So Australia used to have a single-tier system and did in the 1990s move toward a multiple-payer system where private insurance was permitted. And a very well-known study by Duckett, et al., tracked what took place in terms of wait times in Australia as the multipayer system was put in place.

 

And what they found was in those areas of Australia where private insurance was being taken up and utilized, waits in the public system became longer. 

 

BURR: What do you say to an elected official who goes to Florida and not the Canadian system to have a heart valve replacement?

 

MARTIN: It’s actually interesting, because in fact the people who are the pioneers of that particular surgery, which Premier Williams had, and have the best health outcomes in the world for that surgery, are in Toronto, at the Peter Munk Cardiac Center, just down the street from where I work.

 

So what I say is that sometimes people have a perception, and I believe that actually this is fueled in part by media discourse, that going to where you pay more for something, that that necessarily makes it better, but it’s not actually borne out by the evidence on outcomes from that cardiac surgery or any other.

 

(The ultimate zinger came at the end of the exchange, when Burr thought he had Martin down for the count about wait times in Canada, and she neatly put the difference between the Canadian and U.S. systems in perspective.)

 

BURR: On average, how many Canadian patients on a waiting list die each year? Do you know?

 

MARTIN: I don’t, sir, but I know that there are 45,000 in America who die waiting because they don’t have insurance at all.  

Zing!

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David and Goliath fight: Taking on the largest US home lender, Wells Fargo

David and Goliath fight: Taking on the largest US home lender, Wells Fargo

Pack the courtroom Thursday, March 13, 1:15 p.m., Federal Building, Seventh & Mission, 17th Floor, Department 3.

The California Homeowners’ Bill of Rights is being tested in federal court.

As a filmmaker and activist based in San Francisco, I am suing Wells Fargo Bank, which assumed the predatory loan on my family home that traveled a slippery slope from Countrywide to World Savings Bank to Wachovia, all of which went out of business due to dubious, immoral and illegal activity.

The mortgage held now by Wells Fargo Bank is for our family home in Bernal Heights that was purchased over 50 years ago by my World War II veteran father and my mother, who worked in nursing. It’s been an on-going battle since the economic crisis began early in 2007 for me and my company, LaHitz Media.

 

The multi-billion dollar bullying LA law firm Anglin Flewelling Rasmussen Campbell and Trytten LLP represents Wells Fargo in the case that is headed by lead attorney Robert Bailey. This is truly a David vs. Goliath situation.

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Divestment: Shareholder David Goes After JPMorgan Chase Goliath

Divestment: Shareholder David Goes After JPMorgan Chase Goliath

In the face of inaction by the Congress and the courts, one shareholder decides to take on “too big to fail.”

By Francesca Rheannon

Six years after the 2008 financial meltdown, the banks are still too big to fail. That has experts worried about a repeat performance. It also worries at least one individual shareholder who has decided to force the issue at the JPMorgan Chase annual shareholders’ meeting this Spring.

Michael C. Davidson doesn’t seem like a radical. A Portland, Oregon, tax accountant, he has held more than 200 shares of JPMorgan Chase stock since 2002. But he’s afraid the bank is putting his investments—and the rest of the economy—at risk by continuing the practices that tanked the financial system and forced the government to bail out banks.

Shareholder Resolution Asks for Divestment of Investment Banking Services

Davidson has submitted a resolution to the SEC that would, if approved for a vote at the shareholders’ meeting, ask JPMorgan Chase to develop a plan to divest “all non-core banking business segments.” According to the resolution, businesses involved in global markets, global wealth and investment management and all operations other than consumer and business banking, consumer real estate services and global banking would be divested.

In effect, Davidson is asking JPMorgan Chase to allow its shareholders to vote on bringing back the separation between commercial and investment banking that was installed by the Glass-Steagall Act under FDR and torn down by President Bill Clinton on the advice of then-Treasury Secretary Robert Rubin (who later went on to head Citibank) and Larry Summers.

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A publicly shamed audit: Justice Department, FBI, failed to jail mortgage fraudsters

A publicly shamed audit: Justice Department, FBI, failed to jail mortgage fraudsters

Between 2009 to 2011, leadership at the Department of Justice stated publicly and repeatedly that tackling mortgage fraud was a top priority.

Today, that department’s Inspector General released an audit and concluded, despite the above claim, there is little proof the promise of high-levels of mortgage fraud prosecution ever took place.

“We… determined during this audit that DOJ did not uniformly ensure that mortgage fraud was prioritized at a level commensurate with its public statements,” said the audit, released today from Inspector General Michael Horowitz.

What did take place, however, was a high level of mishandling and lack of efficient law enforcement from a judicial level to effectively prosecute mortgage fraud cases, according to the audti.

The Federal Bureau of Investigation criminal investigative division in particular was lacking in prioritizing mortgage fraud. Despite nearly $200 million in funding to chase mortgage fraud, the crime remained at the lowest priority and was listed in a low-crime category.

Additionally, the Executive Office of United States Attorneys utilized a poor case-management system. Assistant attorneys informed Justice auditors that mortgage fraud cases were often misclassified and generally underreported.

“They further explained that mortgage fraud cases are often coupled with other criminal activities and that, when initiating a case file, an [assistant attorney] may fail to include the mortgage fraud code if it is not the leading charge in a case,” the audit states.

“In addition, EOUSA is unable to track the complexity of criminal cases or whether the individual defendants prosecuted were high-level officials. Capturing such information would allow DOJ to better understand its overall effort and to better evaluate its performance in targeting high-profile offenders.”

One specific example happened on October 9, 2012.

There is an interagency division called the Financial Fraud Enforcement Task Force. It is meant to play an important role in combating mortgage fraud through civil litigation and criminal investigation and prosecution.

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JPMorgan to HSBC Face EU Rate-Rigging Fines From Almunia

JPMorgan to HSBC Face EU Rate-Rigging Fines From Almunia

JPMorgan Chase & Co. (JPM) and HSBC Holdings Plc (HSBA) face a European Union complaint as soon as next month as the bloc’s antitrust chief races to fine a quartet of financial companies that snubbed rate-rigging settlements.

Joaquin Almunia, whose term ends on Oct. 31, is determined to punish the two banks as well asCredit Agricole SA (ACA) and interdealer broker ICAP Plc (IAP) before he leaves office, said three people familiar with the probe who asked not to be named because the process is private. To meet the target, he plans to send so-called statements of objections in the Euribor and Libor cases close to Easter, two of the people said.

“He will want to end on a high note,” Pierre-Henri Conac, a professor specializing in banking at the University of Luxembourg, said in an interview. “He’ll be happy to say: ‘I did it.’”

Fair-Housing Complaint Against U.S. Bank Cites Foreclosed Homes In New Haven

occupy homes sign

Housing activists Tuesday turned up the heat on U.S. Bank to better maintain repossessed homes in minority neighborhoods, using New Haven as an example of a city that has suffered because of the decaying properties.

The National Fair Housing Alliance renewed its criticism of the Minneapolis-based bank, accusing it of doing a betterjob taking care of homes repossessed through foreclosures in predominantly white neighborhoods compared with those in neighborhoods dominated by minority residents.

“Delaying maintenance because of race is prohibited under the Fair Housing Act,” Shanna L. Smith, the alliance’s president and chief executive, said during a webcast news conference.

Smith said ignoring maintenance on the properties contributes to a decline in property values in the surrounding area and undermines efforts by cities to revitalize neighborhoods.

The alliance has targeted U.S. Bank since 2012, when it filed a complaint with the U.S. Department of Housing and Urban Development. HUD has launched an investigation. This is the second time the alliance has added more cities to its discrimination complaint, which is pending. The alliance is seeking to keep up the pressure on U.S. Bank to change its practices and on HUD to pursue the complaint.

Read on.