Monthly Archives: July 2014

Chavez v. JPMorgan Chase Bank, N.A. | Chase did not acquire the Mortgage loan as part of the sale from the FDIC instead pursuant to a mortgage loan purchase and sale agreement by and between WAMU and Bank of America

Chase did not acquire the Mortgage loan as part of the sale from the FDIC. Here are the court documents. Click here and here.

 

 

Lloyds Banking Group Admits Wrongdoing in LIBOR Investigation, Agrees to Pay $86 Million Criminal Penalty

U.S. Department of JusticeJuly 28, 2014
  • Office of Public Affairs(202) 514-2007/ (202) 514-1888
 

WASHINGTON—Lloyds Banking Group plc has entered into an agreement with the Department of Justice to pay an $86 million penalty for manipulation of submissions for the London InterBank Offered Rate (LIBOR), a leading global benchmark interest rate.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Antitrust Division, and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

A criminal information will be filed today in U.S. District Court for the District of Connecticut that charges Lloyds as part of a deferred prosecution agreement (DPA). The information charges Lloyds with wire fraud for its role in manipulating LIBOR. In addition to the $86 million penalty, the DPA requires the bank to admit and accept responsibility for its misconduct as described in an extensive statement of facts. Lloyds has agreed to continue cooperating with the Justice Department in its ongoing investigation of the manipulation of benchmark interest rates by other financial institutions and individuals.

“For more than three years, traders at Lloyds manipulated the bank’s LIBOR submissions for three currencies to benefit the trading positions of themselves and their friends, to the detriment of the parties on the other side of the trades,” said Assistant Attorney General Caldwell. “Because investors and consumers rely on LIBOR’s integrity, rate-rigging fundamentally undermines confidence in financial markets. Lloyds is the fifth major financial institution that has admitted LIBOR manipulation and paid a criminal penalty, and nine individuals have been criminally charged by the Justice Department. Our active investigation continues, as we work to restore trust in the markets.”

Read on.

Tennesseans have complaints about Bank of America

Bank of America has had more complaints filed against it by Tennesseans than any other bank, and it’s not even close.

The Consumer Financial Protection Bureaugets a lot of complaints from banking customers — more than 400,000 complaints since it was launched in 2011 — and it makes many of them public. So far, the CFPB has made more than 250,000 complaints public. And using that database, one bank in particular is getting a lot of complaints from Tennesseans.

Of the more than 7,400 complaints filed by Tennessee residents, 514 of them were about Bank of America. The second largest collector of banking complaints was Wells Fargo with 236 complaints. Bank of America is the fifth largest bank in the Memphis metro with more than $750 million in local deposits. Wells Fargo is also a heavy-hitter locally, coming in with more than $455 million in local deposits.

The largest bank in the Memphis area, with more than $7.2 billion in local deposits, is Memphis-based First Tennessee Bank. First Tennessee had only 59 complaints.

Bank of America and Wells Fargo are also the most complained about banks nationwide, finishing first and second, respectively.

To see more data on bank complaints, click here.

Read on.

Argentina accuses US of judicial malpractice for triggering needless default

Wow!

Country threatens to take US to The Hague after defaulting on its debts for the second time in 12 years.

Argentina has threatened to take the US to the International Court of Justice for judicial malpractice, accusing the country of gross incompetence for allowing two small hedge funds to push the Argentine state into default, regardless of the mayhem caused for other creditors and the damage to ordinary people.

The bitter attack came after a New York court prevented Argentina paying $539m to its creditors even though the Peronist government of Cristina Kirchner wants to do so, in the latest bizarre development in the country’s long struggle to regain access to global capital markets.

Judge Thomas Griesa said Argentina must first pay $1.5bn in arrears to “hold-out” investors who never accepted a restructuring deal following Argentina’s last default 12 years ago, even though many scooped up the bonds for a fraction of their face value during the crisis.

Read on.

 

U.S. Attorney Warns Andrew Cuomo Over Potential Obstruction, Witness Tampering

July 31 (Reuters) – A U.S. attorney has threatened to investigate the administration of New York Governor Andrew Cuomo for possible obstruction of justice or witness tampering, amid its broader probe into the disbanding of an anticorruption commission, the New York Times reported on Thursday.

The warning was sent in a letter to the lawyer for the disbanded commission on Wednesday from the office of Preet Bharara, in Manhattan, which has been investigating the panel’s shutdown and pursuing its unfinished corruption cases.

The Times reported last week that Cuomo’s office meddled with the commission, which he created last year to root out corruption in state politics.

In the letter, prosecutors alluded to public statements made by panel members earlier this week in which they defended Cuomo’s handling of the commission, and said at least some of the statements were prompted by requests by the governor or people acting on his behalf, the Times said.

“We have reason to believe a number of commissioners recently have been contacted about the commission’s work, and some commissioners have been asked to issue public statements characterizing events and facts regarding the commission’s operation,” prosceutors wrote, according to the letter which was read to the Times.

“To the extent anyone attempts to influence or tamper with a witness’s recollection of events relevant to our investigation, including the recollection of a commissioner or one of the commission’s employees, we request that you advise our office immediately, as we must consider whether such actions constitute obstruction of justice or tampering with witnesses that violate federal law.”

Read on.

Hedge fund billionaire pushes Argentina into default

The hedge fund firm of billionaire Paul E. Singer has about 300 employees, yet it has managed to force Argentina, a nation of 41 million people, into a position where it now has to contemplate a humbling surrender.

Argentina on Wednesday failed to make scheduled payments on its government bonds. The country has the money to pay the bonds. But a federal court in Manhattan has ruled that unless Argentina settles its debt dispute with Mr. Singer’s firm, Elliott Management, it is barred from paying its main bondholders.

After more than five hours of meetings on Wednesday, the sides failed to reach an agreement and the court-appointed mediator said that Argentina would “imminently be in default.” Because a $539 million interest payment was not made, the ratings agency Standard & Poor’s said that Argentina was in default on those bonds.

The government of Argentina now faces a stark choice: Try to restart negotiations with investors it has repeatedly called “vultures,” who have insisted on full repayment. Or it can remain ensnared in a default that could weigh on the country’s fragile economy and unsettle global markets.

After the talks collapsed, the economy minister of Argentina, Axel Kicillof, characterized the negotiations as extortion.

“We’re not going to sign any deal which compromises the future of Argentines,” he said at a news conference in Manhattan.

The campaign against Argentina shows how driven and deep-pocketed hedge funds can sometimes wield influence outside of the markets they bet in. George Soros’s successful wager against the pound in 1992 affected Britain’s relationship with Europe for years.

While Mr. Singer’s firm has yet to collect any money from Argentina, some debt market experts say that the battle may already have shifted the balance of power toward creditors in the enormous debt markets that countries regularly tap to fund their deficits. Countries in crisis may now find it harder to gain relief from creditors after defaulting on their debt, they assert.

“We’ve had a lot of bombs being thrown around the world, and this is America throwing a bomb into the global economic system,” saidJoseph E. Stiglitz, the economist and professor at Columbia University. “We don’t know how big the explosion will be — and it’s not just about Argentina.”

Read on.

Is JPMorgan About To Bailout Argentina?

From Ambito:

Italian bondholders say a private agreement also would trigger the clause RUFO

The representative of a group of debt holders Argentina Italy, Tulio Zembo said that any agreement between private RUFO also would trigger the clause.

“I do not understand the idea of banks because that would trigger the RUFO” Economy Minister said yesterday. Please do not help us because it makes the situation worse,” said Zembo in dialogue with Radio La Red

“All that is settlement discussion will have to olvidárselo until January 2015, because you can not argue,” he said.

For the representative of Italian bondholders “the drama of a default is when the debtor is kneeling and can not pay, that would be a problem, here’s a serious problem but should concentrate all legal guns to go,” he said by way of conclusion.

As WSJ reports,

 
 

Still, the bonds remain at lofty prices because some investors seem hopeful that Argentina can quickly emerge from default. Many were focusing on a potential private-sector solution. Argentine press has reported this week that private-sector banks are trying to hatch a plan to help Argentina pay off the debt.

 

 

J.P. Morgan is in discussions to buy the defaulted bonds of Argentina’s holdout creditors, according to a person familiar with the matter.

 

Buying the bonds is one of many options, and the talks between J.P. Morgan and Argentine bondholders were still fluid, the person familiar said.

 

 

“The expectation of a bank deal is supporting bond prices,” said Siobhan Morden, head of Latin America strategy at Jefferies LLC. “But it’s difficult to trade these headlines when you’re getting whiplashed” by sharp price moves in thin trading. “Most people have adopted their view, taken their positions, and waited to see what the final outcome will be,” Ms. Morden said.