Daily Archives: April 1, 2014


2nd Circ. Asked To Revive JP Morgan Whistleblower Case

2nd Circ. Asked To Revive JP Morgan Whistleblower Case

Law360, New York (April 01, 2014, 5:16 PM ET) — A former JP Morgan Chase & Co. employee urged the Second Circuit on Monday to revive a whistleblower suit claiming she was fired for voicing concerns about potential fraud, claiming the lower court applied an outdated and inappropriate legal standard when it tossed her case.

When U.S. District Judge Robert W. Sweet granted JP Morgan’s bid for summary judgment and nixed former wealth management banker Jennifer Sharkey’s claim that the company ran afoul of the Sarbanes-Oxley Act’s whistleblower provision by firing her, he faulted her for…


Citigroup : U.S. grand jury probing Deutsche Borse unit’s ties to Iran bank

Citigroup : U.S. grand jury probing Deutsche Borse unit’s ties to Iran bank

A U.S. grand jury is probing whether Deutsche Boerse AG’s Clearstream Banking SA unit took any steps to benefit Iran and its central bank, according to a court filing in a case that stems from the 1983 bombing of the U.S. Marine barracks in Beirut.

The grand jury subpoena issued in New York seeks documents related to any property held or any services rendered by Clearstream for the benefit of Iran or its central bank, Bank Markazi. The grand jury is looking at possible violations of money laundering and Iran sanctions laws, according to the subpoena.

A spokesman for Luxembourg-based Clearstream said the bank was aware of the subpoena but had no further information on the investigation.

The filing on Monday came as part of a lawsuit brought by family members of the victims of the Beirut bombing, who won a $2.7 billion judgment against Iran in 2007. The families have accused Iran of providing material support to Hezbollah, which carried out the attack, killing 241 U.S. servicemen.

The lawsuit was filed in 2010 after the U.S. Treasury Department uncovered $1.8 billion in Iranian funds held at Citibank in New York, part of Citigroup Inc.


HSBC : has ‘much work’ to do on anti-laundering fixes, U.S. says

HSBC : has ‘much work’ to do on anti-laundering fixes, U.S. says

(Reuters) – HSBC has made some progress in improving its anti-money laundering program as required by a 2012 deferred prosecution agreement with the U.S. Justice Department, but there remains “much work to be done,” federal prosecutors said in a Tuesday court filing.

The British bank paid nearly $2 billion in penalties in December 2012 to resolve charges that it failed to stop hundreds of millions of dollars in drug money from flowing through the bank from Mexico, and it promised to fix the problems.

The government had selected independent monitor and former New York prosecutor Michael Cherkasky to monitor HSBC’s compliance with the agreement. The Tuesday report describes Cherkasky’s conclusions to date.

“Based on his Initial Review and subsequent conversations with the Bank, the Monitor believes that the leadership of HSBC Group is appropriately committed to addressing the Bank’s longstanding compliance deficiencies,” the Justice Department said in the filing.


Investors accuse 12 banks of forex price rigging in U.S. lawsuit

Investors accuse 12 banks of forex price rigging in U.S. lawsuit

Twelve large banks have been sued in a consolidated antitrust lawsuit by investors who claim they conspired to rig prices in the roughly $5.3 trillion-a-day foreign exchange market.

Investors, including the city of Philadelphia and a variety of pension funds and hedge funds, accused the banks of conspiring since January 2003 in chat room discussions, instant messages and by email to manipulate the WM/Reuters Closing Spot Rates.

The private litigation was filed on Monday night in U.S. District Court in Manhattan; it combines several lawsuits that have been filed since November.

Defendants are Bank of America Corp, Barclays Plc, BNP Paribas SA, Citigroup Inc, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, HSBC Holdings Plc, JPMorgan Chase & Co, Morgan Stanley, Royal Bank of Scotland Group Plc and UBS AG.

The case comes amid civil and criminal probes worldwide into whether banks rigged prices to boost profit at the expense of customers and investors. The Financial Stability Board, which coordinates regulation for the Group of 20 leading economies, is also examining possible price manipulation.


Russia says JPMorgan ‘illegally’ blocked embassy money transfer

Russia says JPMorgan ‘illegally’ blocked embassy money transfer

Russia accused U.S. bank JPMorgan on Tuesday of “illegally” blocking a payment from one of its embassies to an insurance agency “under the pretext of anti-Russian sanctions.”

In a statement on its website, the Russian Foreign Ministry suggested the action, which it called “unacceptable, illegal and absurd,” would have consequences for the U.S. embassy and consulate in Russia.

One of the highest profile confrontations yet over U.S. sanctions, the move may increase tensions between Washington and Moscow and add to U.S. companies’ nervousness over doing business in Russia.

“Washington should understand any hostile action against a Russian diplomatic mission not only constitutes a flagrant violation of international law but is rife with consequences that will inevitably effect the work of the embassy and general consulate of the United States in Russia,” Russia’s statement said.


Court Rules that Wells Fargo is a Citizen of South Dakota, not California

Court Rules that Wells Fargo is a Citizen of South Dakota, not California


If, as some have said, corporations are people, then Wells Fargo might have to go outside and shovel its driveway about now.

The Ninth Circuit Court of Appeals ruled Thursday that although much of its business is in California and the company has many historic ties to the Golden State, Wells Fargo is a citizen of South Dakota because its “main office” is located there.

A California couple, Robert and Victoria Rouse, sued Wells Fargo and its Wachovia mortgage division in California superior court. Citing the principle of “diversity jurisdiction,”—that when a civil case involves residents of different states, the case can be heard by a federal court—the bank had the case removed to federal court, where it was dismissed.

The Rouses revised their complaint to include only violations of California law and refiled the suit in state court. According to Courthouse News Service, the federal district judge then sent the suit back to state court, saying a national bank is a citizen of both the state with its “principal place of business” and the state listed in its articles of association. Wells Fargo appealed the ruling and the Ninth Circuit agreed with the bank in a 2-1 decision.

Judge M. Margaret McKeown referred to a 2006 United States Supreme Court opinion in Wachovia Bank, N.A. v. Schmidt, which rejected the view of some circuits that a national bank is a citizen of every state in which they operate a branch. The court said that “a national bank . . . is a citizen of the state in which its main office, as set forth in its articles of association, is located.”

McKeown noted “One might think that 150 years after Congress established national banks in 1863, the question of their citizenship for purposes of diversity jurisdiction would be well established. Not so. The relevant statute is ambiguous, the courts are split on the question, and the Supreme Court has not squarely decided the issue.”


Former Rothstein Ponzi investors sue Bank of America

Former Rothstein Ponzi investors sue Bank of America

Dozens of former investors — who lost more than $385 million in convicted Ponzi schemerScott Rothstein’s massive fraud — filed a pair of civil lawsuits against Bank of Americaand four current or former employees on Monday.

The lawsuits, filed in Broward Circuit Court, allege that Bank of America and some of its employees knew about and “helped” Rothstein commit his fraud, then lied about their actions to people who were long-term bank clients.

“Bank of America’s goal was to impress Rothstein enough to induce him to deposit his ill-gotten billions at Bank of America and become the Rothstein scheme’s principal banker. After the Rothstein scheme crashed, [the bank] had its Senior Vice-President lie repeatedly under oath in deposition to try to cover up the Bank’s actions,” civil attorney William Scherer wrote in the lawsuits.