Daily Archives: March 18, 2014


Citigroup fined $1.1 mln for illegal short selling

Citigroup fined $1.1 mln for illegal short selling

NEW YORK (MarketWatch) — Citigroup Inc.’sC -0.15% U.S. based brokerage and securities arm Citigroup Global Markets Inc. has been ordered to pay $1.1 million by the Financial Industry Regulatory Authority and the BATS Exchange for alleged short selling securities ahead of participating in five public offerings. Citigroup allegedly violated supervisory requirements related to Rule 105 of Regulation M and that the firm sold securities short within the five business days leading up to the pricing of five public offerings in those securities, and then purchased securities in those offerings. The charges were related to transactions between 2009 and 2010. The payments include a disgorgement of more than $538,000, plus interest, of profits and improper financial benefits, and approximately $559,000 in fines, according to a statement from FINRA. As part of the settlement, Citigroup neither admitted nor denied the charges. 


In twist, Wall Street fights tax backed by GOP lawmaker: WSJ

In twist, Wall Street fights tax backed by GOP lawmaker: WSJ

Wall Street is mobilizing against a threat from an unlikely source: a bank tax championed by a Republican lawmaker, The Wall Street Journal reported on Tuesday.

The Journal reported that a clutch of big banks— including Bank of America,Goldman SachsCitigroup and JPMorgan Chase—are organizing to beat back a proposed bill that would tax the largest U.S. financial firms. The plan is being spearheaded by Dave Camp, a Michigan Republican, and is opposed by other GOP members, the report said.

Out of ire over the bill, Goldman Sachs went as far as to cancel a planned fundraiser for the National Republican Congressional Committee, the report said, citing an unnamed source. However, Goldman still contributes to both Democrats and Republicans through its political action committee.

Meet The Brand New, And Shocking, Third Largest Foreign Holder Of US Treasurys

Something hilarious, and at the same time pathetic, happened earlier today: at precisely 9 am the US Treasury released its delayed Treasury International Capital data (which was supposed to be released yesterday but was delayed because it snowed) which disclosed all the latest foreign Treasury holdings for the month of January. Among the key numbers tracked and disclosed, was that China’s official holdings increased from $1.270 trillion to $1.284 trillion, that Japan holdings declined by a tiny $0.2 billion, that UK holdings increased by $7.8 billion to $171 billion, and that holdings of Caribbean Banking Centers, aka hedge funds, declined by $16.7 billion. Here is Reuters with the full data summary (save it before this article is pulled).

So why is it hilarious and pathetic? Because just three short hours later, the Treasury – that organization that has billions of dollars at its budgetary disposal to collate, analyze and disseminate accurate and error-free data – admitted that all the previously reported data was in effect made up!

Of course, it didn’t phrase it as such. Instead, what TIC did was release an entire set of January numbers shortly after it had released the “old” numbers, which differed by a small amount but differed across the board – in other words, not a small typo here and there: a wholesale data fudging exercise gone horribly wrong. For example:

  • Instead of a $14 billion increase, China’s revised holdings were only $3.5 billion higher.
  • Instead of unchanged, Japan’s holdings suddenly mysteriously increased by $19 billion in January.
  • Instead of plunging by $17 billion, the Caribbean Banking Centers were down by a tiny $1 billion.
  • And instead of the previously reported increase of just under $1 billion, the all important Russia was revised to have sold $7 billion, bringing its new total to just $132 billion ahead of the alleged previously reported dump of Fed custody holdings in mid-March.

That this glaring confirmation that all TIC data is made up on the fly, without any real backing, and merely goalseeked is disturbing enough. For what it’s worth, the latest TIC data is here. Feel free to peruse it before it is revised again

However, what was perhaps more disturbing than even that was the revelation that as of January, the US has a brand new third largest holder of US Treasurys, one which in the past two months has added over $100 billion in US Treasury paper, bringing its total from $201 billion in November, to $257 billion in December, to a whopping $310 billion at January 31.

The country? Belgium

The same Belgium which at the end of 2013 had a GDP of just over €100 billion, or a little over one-third what its alleged UST holdings are.

And somehow the Treasury expects us to believe that tiny Belgium – the center of the doomed Eurozone which is all too busy running debt ponzi scheme of its own – bought in two months nearly as much US Treasurys as its entire GDP?

Apparently yes. However we are not that naive.

So our question is: just who is Belgium being used as a front for?

Recall that for years, the “UK” line item on TIC data was simply offshore accounts transaction on behalf of China. Of course, since China hasn’t added any net US paper holdings in the past year, the UK, and China, are both irrelevant in the grand scheme of things.

Read more from Zerohedge. Click here.

Fannie Mae posts new job with interesting timing

An audit released by the Inspector General revealed that 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.

Instead, Fannie Mae is interjecting with its own battle plan to combat mortgage fraud.

The government-sponsored enterprise put out a job posting Tuesday seeking a Mortgage Fraud Investigator.

The job description reads:

Apply comprehensive knowledge of mortgage fraud schemes. Operate with considerable latitude to substantiate suspicion of fraud relating to single or multifamily originations, servicing or REO, and other frauds involving Fannie Mae financial instruments. Perform highly complex duties related to planning, conducting, and documenting inquiries into allegations of mortgage fraud. Reconcile fraud risk or recommend investigation. Utilize wide-ranging experience to conduct research and problem-solving on highly significant matters. Prepare and review complex reports.


JPMorgan Chase faces class action lawsuit over debt collection robosigning

JPMorgan Chase faces class action lawsuit over debt collection robosigning

The robosigning controversy has spread from mortgage to credit card debt asJPMorgan Chase Bank was accused in a Miami class action lawsuit of filing thousands of false affidavits in court. 

Miami resident Ruth E. Moya, hoping to form a class with other customers, filed the federal lawsuit on March 11 in the Southern District of Florida against the New York-based bank (NYSE: JPM) and its credit card division. She’s represented by attorneys Seth E. Miles and David Buckner, from Coral Gables-based Grossman RothP.A. 

The lawsuit seeks to form a class of Chase customers that were hit with default judgments after the bank submitted a robosigned affidavit in support of a motion for default. 

“To secure a default judgment, Chase relied upon and/or submitted improper, incorrect and fraudulent affidavits attesting to the alleged cardholders’ debts,” the lawsuit said. “These affidavits were executed by Chase employees en masse, often thousands at a time, one-after-the-other, without the affiant reviewing or verifying the information attested to in the affidavits.” 

The lawsuit also said the affidavits were notarized en masse by notaries who didn’t witness the first party’s signature. Chase was motivated to file affidavits as quickly as possible to obtain default judgments without ensuring the accuracy of the cardholders’ debt, the lawsuit said. 

28-Year Old Former JPMorgan Banker Jumps To His Death, Latest In Series Of Recent Suicides

From the NY Post:

Bellando, a former investment bank analyst at JPMorgan, is the son of John Bellando, chief operating officer and chief financial officer at Condé Nast. His brother, John, a top chief investment officer with JPMorgan, works on risk exposure valuations.


Several John Bellando emails were cited during testimony at the Senate Finance Committee’s inquiry into the bank’s losses during the infamous London Whale trade fiasco.


Kenneth Bellando — who grew up in Rockville Center, LI, and was a Georgetown graduate — worked as a summer analyst at JPMorgan while in school. Upon graduation in 2007, he was hired as an investment bank analyst and worked there for one year before moving on, according to his LinkedIn page.


The investment banker then went to Paragon Capital Partners, according to his LinkedIn page, until leaving at the end of 2013.

In summary, here are all the recent untimely financial professional deaths we have witnessed in recent months:

1 – William Broeksmit, 58-year-old former senior executive at Deutsche Bank AG, was found dead in his home after an apparent suicide in South Kensington in central London, on January 26th.

2 – Karl Slym, 51 year old Tata Motors managing director Karl Slym, was found dead on the fourth floor of the Shangri-La hotel in Bangkok on January 27th.

3 – Gabriel Magee, a 39-year-old JP Morgan employee, died after falling from the roof of the JP Morgan European headquarters in London on January 27th.

4 – Mike Dueker, 50-year-old chief economist of a US investment bank was found dead close to the Tacoma Narrows Bridge in Washington State.

5 – Richard Talley, the 57 year old founder of American Title Services in Centennial, Colorado, was found dead earlier this month after apparently shooting himself with a nail gun.

6 – Tim Dickenson, a U.K.-based communications director at Swiss Re AG, also died last month, however the circumstances surrounding his death are still unknown.

7 – Ryan Henry Crane, a 37 year old executive at JP Morgan died in an alleged suicide just a few weeks ago.  No details have been released about his death aside from this small obituary announcement at the Stamford Daily Voice.

8 – Li Junjie, 33-year-old banker in Hong Kong jumped from the JP Morgan HQ in Hong Kong this week.

9 – James Stuart Jr, Former National Bank of Commerce CEO, found dead in Scottsdale, Ariz., the morning of Feb. 19. A family spokesman did not say whatcaused the death

10 – Edmund (Eddie) Reilly, 47, a trader at Midtown’s Vertical Group, commited suicide by jumping in front of LIRR train

11 – Kenneth Bellando, 28, a trader at Levy Capital, formerly investment banking analyst at JPMorgan, jumped to his death from his 6th floor East Side apartment.


REPLAY | Lanny Breuer on Whistleblowers and Prosecuting Bankers

Short clip explaining why US regulators failed to prosecute any bankers for fraud relating to the Global Financial Crisis. Lanny Breuer appearing on the PBS production of The Untouchables.


Mortgage servicers officially complete National Mortgage Settlement

Mortgage servicers officially complete National Mortgage Settlement

Banks officially fulfilled the consumer relief obligations of the National Mortgage Settlement and provided more than $50 billion of gross relief, which equates to more than $20 billion in credited relief, the Office of Mortgage Settlement Oversight said.

“I am happy we have gotten where we are and achieved this milestone in terms of consumer relief,” Joseph Smith, monitor of the National Mortgage Settlement said. “It was done in a shorter period of time than I could have hoped for and provided a lot of relief to a lot of families.”

On Tuesday morning, Smith filed with the U.S. District Court for the District of Columbia the final crediting reports on Bank of America (BAC), JPMorgan Chase (JPM), Citi(C) and Wells Fargo (WFC) on how the servicers gave consumer relief.


Clouded titles cleared in land trust case

Clouded titles cleared in land trust case

A judgment against the Boca Raton-based Fidelity Land Trust Co. clears the titles of hundreds of homes statewide that were signed over to the firm in what the Florida attorney general says was a foreclosure-rescue scheme.

The company had acquired about 100 homes in Palm Beach County before being shut down by the state in September 2012. It once boasted having more than 250 properties statewide.

While an attorney general’s civil case against multiple connected defendants continues in Broward County, the December judgment against Fidelity rescinds all deeds signed to the firm and declares them null and void. The judgment was filed in Palm Beach County official records last month.

Fidelity told struggling homeowners it could cancel their mortgages through a complicated legal maneuver that involved suing their lender after the homeowner signed their deed over to the firm. Fidelity also offered borrowers new mortgages through an affiliated company.





March 17, 2014 Washington, DC (March 17, 2014)—Following the issuance by the Department of Justice’s (DOJ) Inspector General of a report finding that the DOJ has not prioritized the investigation of mortgage fraud and has reported unreliable and inflated statistics regarding the scope of its prosecutorialefforts, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, Sen. Elizabeth Warren, Member of the Senate Committee on Banking, Housing and Urban Affairs, and Rep. Maxine Waters, Ranking Member of the Financial Services Committee, wrote to Attorney General Eric Holder requesting a meeting to review the Inspector General’s findings and to identify actions that will be taken to combat fraudulent mortgage practices. “This report calls into question the Department’s commitment to investigate and prosecute crimes such as predatory lending, loan modification scams, and abusive mortgage servicing practices,” Cummings, Warren, and Waters wrote. “We request a meeting to review the Inspector General’s findings and to understand the steps that will be taken to ensure that the Department’s efforts to identify and prosecute those responsible for fraudulent mortgage practices are equal to the harms such crimes have caused our constituents.” Nearly $200 million was appropriated to the Federal Bureau of Investigations (FBI) between 2009 and 2011 to investigate mortgage fraud. However, according to the Inspector General’s findings, the FBI ranked financial crimes lowest on a list of criminal threats. The Inspector General also found mortgage fraud was a low priority or not even identified as a priority in FBI Field Offices in Baltimore, Los Angeles, Miami, and New York. The Inspector General also found that DOJ officials reported inaccurate data regarding the number and scope of the prosecutions the Department had pursued to combat mortgage fraud.