An industry group which represents some of the nation’s largest investors is urging regulators not to back away from plans to require auditors to sign the financial statements they prepare for companies.
In my August 13 “Trade” column, I wrote of a struggle between the Public Company Accounting Oversight Board, which regulates the accounting industry, and the Securities and Exchange Commission over reforms to auditor disclosure. The PCAOB, and many accounting reformers and investment groups had pushed for this change.
The accounting industry and the SEC have resisted. The negotiations have been going on for years.
Law360, New York (August 21, 2014, 2:16 PM ET) — Bank of America Corp. on Thursday said it plans to appeal the $1.3 billion fine that U.S. District Judge Jed S. Rakoff slapped on the bank last month for defrauding Fannie Mae and Freddie Mac through a program designed to speed up mortgage issuing.
Judge Rakoff’s ruling on how to calculate the fine to impose on Bank of America came after a federal jury found in October that the bank’s Countrywide Financial unit and former executive Rebecca Mairone defrauded Fannie Mae and Freddie Mac through a mortgage…
“Whether cash payments are structured as penalties or legal settlements can determine whether targeted companies can declare them as tax-deductible business expenses. Also, consumer relief is an amorphous cost category: If Bank of America’s deal resembles the department’s previous settlements with JPMorgan (JPM) and Citigroup (C), that part could be less costly to the company than the huge figures suggest.
Some relief comes from actions that do not cost the banks anything, including making loans in depressed areas or reducing the principal of mortgages owned by outside investors.
Banks earn a multiple of each dollar spent on some types of relief. Under Citi’s deal, for example, each dollar spent on legal aid counselors is worth $2 in credits, and paper losses on some affordable housing project loans can be credited at as much as four times their actual value.“
MANHATTAN (CN) – A former manager sued Moody’s in a qui tam complaint, claiming the ratings service cost the federal government billions of dollars by falsely evaluating mortgage-backed securities and collateralized debt obligations before the financial crisis. Ilya Eric Kolchinsky sued Moody’s on Feb. 24, 2012 in a sealed complaint. The complaint was unsealed on May 30 this year, after the United States declined to intervene. According to the 107-page complaint: “Between 2004 and 2007, Moody’s issued credit ratings for tens of thousands of U.S. residential mortgage backed securities (‘RMBS’) and collateralized debt obligations (‘CDOs’). Motivated by Wall Street firms; willingness to pay hundreds of millions of dollars in fees to obtain investment-grade credit ratings, and Moody’s single-minded desire to increase its share of the lucrative and increasingly competitive CDO and RMBS markets, Moody’s issued its highest rating, Aaa, and similarly positive investment grade credit ratings, for the vast majority of those RMBS and CDO securities. Unbeknownst to investors, these ratings were not the product of independent, objective calculations, but rather the result of concealed conflicts of interest and Moody’s reckless profit-maximization policies. Moody’s concealed its profit-driven ratings inflation practices by its certification to the SEC to the contrary – that its rating reflected legitimate practices and policies. Moody’s certifications were a lie.”
In 2011, the United States attorney’s office in Los Angeles decided not to file criminal charges against Mr. Mozilo. But in recent months, the office’s civil division has turned the spotlight back on Mr. Mozilo, whose company originated mortgages that went to people with little income to repay them, causing devastating losses for investors who bought the loans.
But a complication has emerged: Mr. Mozilo’s lawyers have cautioned the prosecutors in Los Angeles that their client has a serious illness. The prosecutors have sought Mr. Mozilo’s health records, the people said, though for now the case remains on track.
In a statement, Mr. Mozilo’s lawyer, David Siegel, said that he would “not comment on reported rumors concerning any investigation.” He added, however, that “there is no sound or fair basis, in law or fact, to pursue any claim against Angelo Mozilo. This story has gone on more than long enough; Mr. Mozilo stands virtually alone among banking and mortgage executives to actually have been pursued by this government and already paid a record penalty” to the S.E.C.
Law360, New York (August 21, 2014, 11:49 AM ET) — Landesbank Baden-Wuerttemberg has reached an agreement in principle with a unit of The Royal Bank of Scotland Group PLC to end litigation over alleged misrepresentations the Scottish bank made about some $243 million worth of mortgage-backed securities certificates it sold to the German lender, an attorney for the plaintiffs said Wednesday.
David J. Goldsmith of Labaton Sucharow LLP gave no details about the terms of the settlement in a brief letter he wrote to U.S. District Judge Paul G. Gardephe of the Southern District of New…
Nearly 17,000 Floridians will receive an excess of $1 billion in relief from the Bank of America (BAC) record settlementwith the Department of Justice, which is almost 14% of the total $7 billion that was allotted to consumer relief, according to the office of Florida Attorney General Pam Bondi.
Those eligible will receive relief in the form of first and second lien principle reductions and loan forgiveness.
“Our office worked closely with Bank of America to ensure that Florida homeowners would be treated fairly in any settlement, and I’m pleased that Floridians will be receiving one-seventh of the overall consumer relief,” Bondi said.
The $16.65 billion settlement with the U.S. Department of Justice, certain federal agencies and six states was to resolve claims over toxic residential mortgage-backed securities, collateralized debt obligations and an origination release on residential mortgage loans sold to Fannie Mae and Freddie Mac.
The Gateway Pundit can now confirm from two local St. Louis sources that police Officer Darren Wilson suffered facial fractures during his confrontation with deceased 18 year-old Michael Brown. Officer Wilson clearly feared for his life during the incident that led to the shooting death of Brown. This was after Michael Brown and his accomplice Dorian Johnson robbed a local Ferguson convenience store.
Local St. Louis sources said Wilson suffered an “orbital blowout fracture to the eye socket.” This comes from a source within the Prosecuting Attorney’s office and confirmed by the St. Louis County Police.
(File Image)
A blowout fracture is a fracture of one or more of the bones surrounding the eye and is commonly referred to as an orbital floor fracture. (AAPOS)
What is Cuomo afraid of in Ms. Teachout for twice being denied in court to remove Teachout off the primary ballot?
ALBANY — A New York State appeals court ruled on Wednesday that Zephyr Teachout, a law professor who is running against Gov. Andrew M. Cuomo in the Democratic primary, can remain on the Sept. 9 ballot.
Mr. Cuomo’s campaign, which had sought to disqualify her, said it would not appeal.
The campaign had questioned whether Ms. Teachout, who teaches at Fordham Law School, met the state’s five-year residency requirement to be governor, arguing that in recent years, she had intended for Vermont, where she grew up, to be her legal residence. It cited a variety of records in which Ms. Teachout used a Vermont address.
But a State Supreme Court justice rebuffed the challenge last week. Mr. Cuomo’s campaign appealed that ruling, and the appeal was argued in Brooklyn on Tuesday.
The court ruled that Mr. Cuomo’s campaign faced the burden of establishing “by clear and convincing evidence” that Ms. Teachout did not meet the residency requirement, and that the lower court’s decision rejecting the challenge was “warranted by the facts.”
“With this frivolous lawsuit behind us, I’m hopeful the governor will now agree to debate,” Ms. Teachout said in a statement shortly after the decision was announced. “We have very different visions for where we want to take the state.”
In Bloomberg news, the U.S. attorney’s office in Los Angeles is preparing a civil lawsuit against Mozilo and as many as 10 other former Countrywide employees over Countrywide loans. Several years back, federal prosecutors dropped the criminal probe against Mozilo without an explanation. From LA Times article in 2011:
A federal grand jury in Los Angeles began probing Mozilo in 2008, and four months ago he agreed to pay a $22.5-million fine and to repay $45 million in what the government said were ill-gotten gains to former Countrywide shareholders. The payments settled a civil action by the Securities and Exchange Commission.
But the criminal investigation has wound down without indictments of Mozilo or others at his Calabasas company, according to people familiar with both the prosecution and the defense teams, all of whom spoke on condition of anonymity because they were not authorized to discuss the matter.
“Sometimes the public thinks all you have to do is to indict someone and that’s it,” one of the federal sources said. “But you have to be able to prove your case, and it can be worse losing a case than not bringing one at all.”
The 72-year-old Mozilo hung up the phone when contacted for comment at his home in the Lake Sherwood golf community of Ventura County.
The criminal investigation into Mozilo was never announced publicly, and as a rule federal prosecutors make no formal announcement when such cases are closed.
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