Daily Archives: May 29, 2014


PNC Financial Services : U.S. Has Opened at Least 15 Probes into Bank-Processing Activities — 4th Update

PNC Financial Services : U.S. Has Opened at Least 15 Probes into Bank-Processing Activities — 4th Update

WASHINGTON–U.S. officials have opened at least 15 civil and criminal investigations into whether banks and payment-processing firms helped enable fraudulent activity, according to Justice Department documents made public Thursday.

Archived Financial Crisis Records Kept in the Dark

Courthouse News:

(CN) – The D.C. Circuit rejected a government watchdog’s request for records created by a commission that issued a report on the causes of the 2010 financial crisis.
President Barack Obama established in 2009the Financial Crisis Inquiry Commission, which reported its conclusions on the “causes, domestic and global, of the current financial and economic crisis in the United States.” Its report was released to the public in January 2011.
The commission disbanded a month later, and its records were deposited with the National Archives.
Cause of Action, a nonprofit dedicated to government accountability, then sought access to the records under the Freedom of Information Act (FOIA).
The D.C. Circuit ruled Friday, however, that the records were not transformed into an agency record subject to the FOIA when they were transferred to the Archives.
As precedent, the court considered a case that asked whether President John F. Kennedy’s autopsy records, transferred to the National Archives, were subject to an FOIA request.
“We held they were not, in part because they were ‘personal presidential materials when they were first created, and therefore at no time were they ever agency records.’ In other words, the depositing of these materials with the Archives did not convert them into ‘agency records’ subject to FOIA,” Judge Arthur Randolph wrote for the three-judge panel.

Here is the court document. Click here.


Ex-RBS Banker in Libor Probe Sues for Race Discrimination

Ex-RBS Banker in Libor Probe Sues for Race Discrimination

Jezri Mohideen, a former Royal Bank of Scotland Group Plc (RBS) manager who was fired during its investigation into Libor-rigging, sued the lender for racial discrimination and unfair dismissal.

Mohideen, the former head of rates trading for Europe and Asia-Pacific, filed his lawsuit at aLondon employment tribunal, according to court documents that didn’t give any further details about the case. He is at least the second former employee to sue the bank in London over theLibor probe.

Revelations that banks manipulated global interest-rate benchmarks have triggered regulatory fines totaling more than $6 billion, a European competition probe and criminal prosecutions of some of the traders involved. RBS agreed to pay about $600 million to U.S. and U.K. regulators over rigging charges, and was among six companies fined a record 1.7 billion euros ($2.3 billion) by the European Union in December.

Santander Bank faces pending lawsuit over lending discrimination

Some banks are still doing redlining..

 According to an articlein The New York Times, the city of Providence plans to files a suit against Santander Bank for just this.

“The attitude is, if we can’t do subprime loans, predatory loans in the black community, we won’t do any loans at all,” said John P. Relman, the lead lawyer on the case. “For us it is a civil rights issue.”

The lawsuit claims that between 2009 and 2012, the number of new mortgages made by Santander in white neighborhoods in Providence was 25 percent higher per year than it was in 2006 and 2007, while the number of new mortgages in minority neighborhoods declined by 63 percent. 

Source: NYT


Justice Dept. Seeks More Than $10 Billion Penalty From BNP Paribas

As The WSJ reports,


The U.S. Justice Department is pushing BNP Paribas SA  to pay more than $10 billion to resolve a criminal probe into allegations it evaded U.S. sanctions against Iran and other countries for years, which would represent one of the largest penalties ever imposed on a bank, according to people familiar with the negotiations.


A final resolution of the yearslong investigation of the French bank is likely weeks away, and it’s possible the ultimate settlement amount could total far less than $10 billion. BNP is looking to pay less than $8 billion, according to the people familiar with the settlement discussions, although a person close to the bank said its negotiators have never mentioned the $8 billion figure in talks with U.S. authorities.


BNP and the U.S. authorities also remain locked in negotiations over whether the bank will temporarily lose the ability to transfer money into and out of the U.S., the people said.


Prosecutors are continuing to try and extract a guilty plea from the bank and, in recent negotiations, have pointed to the muted market reaction in the wake of Credit Suisse AG’s admission to conspiring to aid tax evasion as evidence that a guilty plea by BNP would not be disastrous, according to a person familiar with prosecutors’ thinking.

Financial Agencies: Caught in the Web…Who Can Do What To Whom

Source: Stop Foreclosure Fraud


JPMorgan, Homeowners Settle In Mortgage Modification MDL

JPMorgan, Homeowners Settle In Mortgage Modification MDL

Case Information

Case Title

Durmic et al v. J.P. Morgan Chase Bank, NA

Case Number




Nature of Suit

Contract: Other


Richard G. Stearns

Law360, Los Angeles (May 28, 2014, 9:20 PM ET) — A Massachusetts federal judge on Wednesday preliminarily approved a settlement deal between JPMorgan Chase Bank NA and a class of mortgage loan borrowers who said the bank breached mortgage modification agreements under the federal Home Affordable Modification Program, tentatively resolving the long-running multidistrict litigation.

The agreement, which was reached May 14 after extensive, arm’s length settlement negotiations, would end claims brought by class representatives Virginia and Theodore Luscinski on behalf of the settlement class in the heavily litigated MDL. The plaintiffs alleged that JPMorgan failed to…


Wells Fargo To Pay $62M To Exit Investor Class Action

Wells Fargo To Pay $62M To Exit Investor Class Action

Case Information

Case Title

The City of Farmington Hills Employees Retirement System v. Wells Fargo Bank N.A.

Case Number




Nature of Suit



Donovan W. Frank

Law360, New York (May 29, 2014, 1:23 PM ET) — A group of about 100 investors on Wednesday asked a Minnesota federal judge to sign off on a $62.5 million settlement with Wells Fargo Bank NA to resolve allegations that the bank’s risky strategies breached the terms of their securities lending contracts.

In a 29-page motion, the group led by pension fund The City of Farmington Hills Civil Employees Retirement System asked that the court grant preliminary approval for the agreement, which came after “extensive arms-length negotiations.” In addition to placing $62.5 million in escrow, the…


US probes possible overcharging by banks on foreclosure fees

US probes possible overcharging by banks on foreclosure fees

The U.S. Attorney’s office in Manhattan is investigating at least five banks over whether they overcharged the government for expenses incurred during foreclosures on federally backed home loans, filings and interviews show.

PNC Financial Services Group Inc (>> PNC Financial Services Group Inc), PHH Corp (>> PHH Corporation), MetLife Inc, Santander Holdings USA Inc <SOV_pc.N> and Citizens Financial Group Inc, the U.S. unit of Royal Bank of Scotland (>> Royal Bank of Scotland Group plc), have all disclosed in filings with the Securities and Exchange Commission that they’ve received subpoenas. U.S. Attorney Preet Bharara’s office is seeking information on claims on foreclosed loans insured by the Federal Housing Administration or guaranteed by Fannie Mae and Freddie Mac, according to records reviewed by Reuters.

The subpoenas, coming years after the height of the foreclosure crisis, seek information about banks’ foreclosure-related expenses, which generally include court filings and posting or mailing legal notices.

“You’ve got a lot of people trying to clean up the servicing industry, but the truth is we are seeing the same servicing problems over and over,” said Ira Rheingold, director of the National Association of Consumer Advocates in Washington. “It was built into the model to charge as many fees as they could.”

At least one of the subpoenas sent to a bank specifically asks about expenses by New York law firms, one person familiar with the matter said.

The probe is being conducted pursuant to the Financial Institutions Reform, Recovery and Enforcement Act, according to Citizens Financial, which on May 12 became the most recent bank to disclose receiving a subpoena. Passed in response to the savings-and-loan crisis of the 1980s, the law has become a key tool of the Justice Department in pursuing cases against banks.


U.S. probing at least 10 banks, processors for fraud: documents

U.S. probing at least 10 banks, processors for fraud: documents

U.S. federal prosecutors have opened criminal probes of four payment processors, one bank and some officials as part of a wide-ranging consumer fraud probe, according to documents released on Thursday by a congressional committee.

The Justice Department was also investigating at least 10 banks and payment processors as of last November under a civil fraud law, the documents showed.

The House of Representatives’ Oversight Committee released the documents related to a DOJ investigation known as “Operation Chokepoint,” which aims to crack down on fraud by going after firms that handle and move money for various businesses.