Monthly Archives: August 2014

NY Attorney general goes after NY loan modification firm

Home Affordable Direct, a Farmingdale, N.Y., firm, is facing allegations by New York State Attorney General Eric Schneiderman that it defrauded struggling homeowners in a scheme to collect advance fees as part of a home loan modification business. The attorney general, in a petition filed Tuesday in Manhattan Supreme Court, asked the court to block Home Affordable Direct from doing business until it deposits $2 million in escrow, hands over customer files and pays restitution to customers.

On Wednesday, the AG secured a temporary restraining order that bars the company from collecting advance fees unless they accept loan modification agreements and says they cannot operate their business unless they provide disclosures required under federal Mortgage Assistance Relief Services, or MARS, rules. The order also freezes company bank accounts.

“The TRO [temporary restraining order] sought by petitioner is essential to protect the public from further harm and to ensure that funds are available from which to recover restitution for the many consumers victimized by respondents’ deceptive and illegal scheme,” said Assistant Attorney General Adam Cohen in a sworn affidavit. The AG is also asking the court for $5,000 in penalties for each consumer affected by the alleged scheme and to block company officials from transferring any assets.

Officials say the firm has closed four different bank accounts since 2012. – See more at:

Argentina to present debt restructuring regulation project before UN

Economy Minister Axel Kicillof and Foreign Minister Héctor Timerman have announced Argentina will present on September 9 a project before the United Nations aimed at regulating international debt restructurings and avoiding “vulture funds’ attack on sovereign nations.”

The project was proposed by Argentina and backed by nations gathered in the G77 group and China, among others. It states that if two thirds of bondholders accept restructuring terms, the rest of bondholders must accept them as well.

“The UN will discuss a project proposed by Argentina to regulate vulture funds,” Timerman announced from the Government’s House Conference Room.

“Argentina has become what is called a ‘leading case’ in the matter of how vulture funds can attack a country’s finance. Three billionaires and a judge are trying to bring down a whole country’s debt restructuring,” Kicillof explained.

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Goldman, JPMorgan, Others Dodge Aluminum Warehouse MDL

Law360, Los Angeles (August 29, 2014, 8:39 PM ET) — A New York federal judge on Friday freed Goldman Sachs Group Inc., JPMorgan Chase & Co. and others from multidistrict litigation alleging they conspired to manipulate the supply of aluminum to inflate its value, ruling that the plaintiffs lack antitrust standing and haven’t sufficiently pled the existence of a conspiracy.

U.S. District Judge Katherine B. Forrest granted a slew of motions to dismiss antitrust and state law claims brought against the defendants by buyers of aluminum and aluminum products. She allowed some of the plaintiffs leave…


EXCLUSIVE: SEC Mistakenly Reveals Whistleblower’s Employer

Law360, New York (August 29, 2014, 7:04 PM ET) — In trumpeting its first-ever whistleblower award to a compliance and audit professional, the U.S. Securities and Exchange Commission on Friday also inadvertently disclosed information that could be used to determine the identity of a person who faced an enforcement action because of the whistleblower’s tip.

In an order published on the SEC’s website, the agency said it was granting a whistleblower award to one person who had provided the agency with original information that led to an enforcement action. The order also denied an award to…

Source: Law360

Fraudulent Transfer: A Case Where Strong Arm Powers Were “An Inch Too Short”


Casey v. Rotenberg (In re Kenny G Enterprises, LLC), 512 B.R. 628 (C.D. Cal. 2014)

A Chapter 11 trustee sought to avoid a transfer of property under Section 544 of the Bankruptcy Code that occurred after (1) the bankruptcy petition was filed and (2) a chapter 11 plan of reorganization was confirmed. The defendants moved to dismiss on the basis that Section 544 applies only to prepetition transfers. The bankruptcy court denied the motion, and the defendants appealed.

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Citigroup : U.S. judge sets hearing in Argentina bond case over Citi subpoena

A U.S. judge overseeing litigation by Argentina and creditors who did not participate in the country’s past debt restructurings on Friday scheduled a hearing to assess whether Citigroup Inc should be forced to comply with a subpoena.

U.S. District Judge Thomas Griesa in New York scheduled a hearing for Sept. 10 at 2:30 p.m. EDT following a request by a lawyer for Elliott Management’s NML Capital Ltd, a creditor suing over Argentine bonds that have been in default since 2002.

Source: 4-traders

Bank of New York Mellon : Argentina to appeal U.S. judge’s order on bond payment

Argentina said on Friday it would appeal a U.S. judge’s decision declaring illegal a $539 million (324.69 million pounds) payment the country deposited with Bank of New York Mellon Corp for its restructured bondholders.

BNY Mellon in June obeyed a U.S. court ruling to block the $539 million interest payment on debt that was restructured following Argentina’s record 2002 debt default, paving the way for the country’s second default in 12 years in July.

Argentina said on Tuesday it had stripped Bank of New York Mellon’s authorization to operate in the South American country.

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BofA Works Out $447M Countrywide MBS Row With Insurer

Law360, Los Angeles (August 29, 2014, 4:41 PM ET) — Bank of America Corp.’s mortgage lending unit reached a deal Thursday to end a lawsuit over an insurer’s $447 million purchase of mortgage-backed securities from Countrywide Financial Corp., according to filings in California federal court.

National Integrity Life Insurance Co., Countrywide and the other parties agreed to end the suit, part of multidistrict litigation alleging the mortgage company ripped off investors by lying about the quality of the loans that were folded into the securities, court records show.

BofA, former Countrywide CEO Angelo Mozilo and other…

Source: Law360

RBS Sued by Bankrupt U.K. Student Housing Firm Over Libor

The owner of a bankrupt student housing company sued Royal Bank of Scotland Group Plc, saying the lender sold hedging products linked to Libor while trying to rig the interest-rate benchmark.

Stuart Wall, owner of Opal Property Group Ltd., added the Libor allegations to an existing lawsuit, according to documents filed at a London court in June and released this month. It’s at least the third U.K. case where bank clients have sought damages based on benchmark manipulation.

Revelations that traders tried to manipulate benchmark interest rates have led to regulatory fines of more than $6 billion and lawsuits from clients and counterparties who say they lost out. RBS agreed to pay about $600 million to U.S. and U.K. regulators over Libor-rigging charges, and was among six financial institutions fined a record 1.7 billion euros ($2.2 billion) by the European Union in December.

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Bank of America seeks to void verdict in $1.27 billion ‘Hustle’ case

(Reuters) – Bank of America Corp on Thursday asked a federal judge to throw out a jury verdict finding it liable for fraud over defective mortgages sold by its Countrywide unit that resulted in a $1.27 billion penalty.

The bank urged U.S. District Judge Jed Rakoff in Manhattan to rule for it as a matter of law or order a new trial, arguing that the evidence at trial did not support the jury’s October 2013 verdict.

Bank of America said prosecutors were required at trial to prove that loans originated by Countrywide Financial Corp in a process called “Hustle” that were then sold to government mortgage finance giants Fannie Mae and Freddie Mac were not as good as the lender represented.

“The trial evidence, even viewed in the light most favorable to the government, did not prove fraud under this standard,” the bank’s lawyers wrote.

A spokeswoman for Manhattan U.S. Attorney Preet Bharara, whose office brought the case in 2012, declined comment. Bharara’s office is expected to respond Sept. 18.


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