Daily Archives: September 18, 2014

After 9 Months, Federal Probe of “Bridgegate” Finds No Link to Chris Christie, Federal Sources Say

The U.S. Justice Department investigation into New Jersey Gov.Chris Christie’s role in “Bridgegate” has thus far uncovered no information he either knew in advance or directed the closure of traffic lanes on the George Washington Bridge, federal officials tell NBC 4 New York.

The September 2013 closures — where several entrance lanes to the George Washington Bridge in Ft. Lee were shut down causing a traffic nightmare for commuters — has been the subject of several federal and state investigations.

Federal officials caution that the investigation begun nine months ago is ongoing and that no final determination has been made, but say that after nine months authorities have uncovered no information Christie either knew in advance or ordered the closure of traffic lanes .

According to one former federal prosecutor, who had no involvement in any of the probes into the bridge closure, investigations of this kind will often turn up a solid connection early in the inquiry.

Read on.

Judge who presided on now jailed Karen Rozier’s wrongful foreclosure case was censured for sex in chambers

Wow, that is one naughty judge.

From MSN of the the two Caifornia judges censured:

“Orange County Superior Court Judge Scott Steiner was censured by the state Commission on Judicial Performance for engaging in sexual activity in his chambers on multiple occasions with women. The commission called it “the height of irresponsible and improper” behavior.

“It reflects an utter disrespect for the dignity and decorum of the court, and is seriously at odds with a judge’s duty to avoid conduct that tarnishes the esteem of the judicial office in the public’s eye,” the commission said in a written order.

The commission said Steiner also wrote a letter of recommendation for one of the women to the Orange County District Attorney’s Office and called there to express irritation when she was not hired…

The commission also censured Kern County Superior Court Judge Cory Woodward, who it said carried on an intimate affair with his court clerk from July of 2012 until May of last year, engaging in sexual activity with her in his chambers and in public places.

The commission said Woodward passed notes of a sexual nature to the clerk during court proceedings and lied about the relationship when confronted by his presiding judges in a bid to block her transfer.

Judge Steiner ordered Karen Rozier to turn in her guns and not “threaten” opposing attorneys in her foreclosure case. Ms. Rozier was battling US bank over her home for years. The the law firm representing US Bank sought a restraining order for so-called “workplace violence” against Rozier in February 2013. More on Rozier’s case, please go to https://libertyroadmedia.wordpress.com/

Robbins Geller Rudman & Dowd LLP Files Class Action Suit against Ocwen

AN DIEGO, Sep 16, 2014 (BUSINESS WIRE) — Robbins Geller Rudman & Dowd LLP(“Robbins Geller”) (http://www.rgrdlaw.com/cases/ocwen/) today announced that a class action has been commenced in the United States District Court for the District of the U.S. Virgin Islands on behalf of purchasers of Ocwen Financial Corporation (“Ocwen”) (NYSE:OCN) common stock during the period between October 3, 2012 and August 11, 2014 (the “Class Period”).

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from August 12, 2014. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel,Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail atdjr@rgrdlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online athttp://www.rgrdlaw.com/cases/ocwen/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

Read on.

Treasury extends controversial bank-card deal with Comerica

Update, Sept. 15, 2014, 5:52 p.m.This story has been updated to include a response from a Treasury spokesman.

The Treasury Department has extended a deal with Comerica Bank to distribute benefits to the elderly and disabled on payment cards despite vowing last year to seek a new vendor for the program, which exposed poor and elderly Americans to fraud.

Treasury’s inspector general plans to review the selection process that led to another contract with Comerica, his counsel said in an email Monday.

Treasury’s announcement that it had signed a new, five-year deal with Dallas-based Comerica to distribute Social Security and disability on bank-issued, taxpayer subsidized cards came in the second-to-last paragraph of a blog entry posted on Friday afternoon. Treasury agreed last year to seek another bank partner after a report by The Center exposed fraud in the program and poor oversight of the contract to provide the cards, known as “Direct Express.”

Read on.

Glitches, complaints plague Ocwen, other mortgage servicers

Tyesha Hansborough and her husband, Christley Paton, had paid the property insurance on their Inglewood home along with their mortgage, putting the money in escrow like most homeowners.

Trouble is, the couple said, their mortgage servicer — Ocwen Financial Corp. — didn’t pass that money on to the insurance company for this year’s premiums.

They battled unsuccessfully for months to reinstate the lapsed policy without additional costs, the couple said. Ocwen instead imposed so-called force-placed insurance — expensive coverage that protects the lender’s interest but doesn’t shield the homeowners from loss.

“There have been so many home-invasion robberies around here, and if that were to happen to us, we wouldn’t be covered,” Hansborough said, prompting Patton to say: “I feel like we were robbed — by Ocwen.”

Read on.

Virginia attorney general sues 13 banks for fraud

State Seal
Commonwealth of Virginia
Office of the Attorney General

name and titleaddress

For media inquiries only, contact: 
Michael Kelly, Director of Communications
Phone: (804)786-5874
Email: mkelly@oag.state.va.us

HERRING BRINGS RECORD $1.15 BILLION LAWSUIT AGAINST BANKS FOR DEFRAUDING VIRGINIA TAXPAYERS

~ Largest suit ever brought under Virginia Fraud Against Taxpayers Act seeks accountability for banks that fraudulently sold mortgage-backed securities to the Virginia Retirement System ~

RICHMOND (September 16, 2014)–Attorney General Mark R. Herring today announced a historic lawsuit against some of the largest commercial banks in the world for fraud committed against Virginia taxpayers during the height of the real estate bubble. A lawsuit unsealed today in Richmond Circuit Court seeks $1.15 billion in damages against thirteen banks that are each accused of fraudulently misleading the Virginia Retirement System (VRS) during the sale of residential mortgage-backed securities (RMBS) to the state retirement fund. The VRS was entitled to accurate information about the underlying mortgages when making decisions on how to invest taxpayer money and contributions by employees. Instead, these large banks purposefully included high-risk mortgages in securities and fraudulently misrepresented the quality of those loans to rating agencies and large investors like VRS. The securities were purchased starting around 2004, and before 2010, Virginia was forced to sell the vast majority of these toxic securities built on junk mortgages and lost $383 million.

In 2013, VRS was funded approximately 66% by Virginia taxpayers and 33% by contributions from state employees, with nearly 600,000 members including 145,000 teachers, 105,000 employees of city and county governments, and 78,000 state employees, as well as state troopers, local law enforcement, and court employees.

This is a rare state-level action brought by an Attorney General to hold banks accountable specifically for damages their fraud and recklessness caused state taxpayers through a public retirement system. It is the largest financial fraud action ever brought by the Commonwealth of Virginia and is the largest case ever brought under the Virginia Fraud Against Taxpayers Act. The Commonwealth will also seek civil penalties against each bank in the amount of $5,500-$11,000 for each violation.

“The message today is clear. It doesn’t matter if you’re a small-time con artist or a multi-billion dollar Wall Street bank. If you try to rip off or defraud Virginia consumers or Virginia taxpayers, you will be caught and you will be held responsible,” said Attorney General Herring.“Every Virginian was harmed by the financial crisis. Homes were lost, retirement accounts were devastated, small businesses saw their credit dry up almost overnight, and state and federal budget cuts hurt vulnerable Virginians. It will take many more years to recover the economic strength and stability we lost, but I will not allow Virginians to be left holding the bag for the reckless, fraudulent business practices of a few big banks who thought they were above the law. These banks lied to Virginia, and taxpayers and state employees lost hundreds of millions of dollars as a result.”

Each bank is alleged to have bundled risky residential mortgages into securities which were then sold to VRS in various quantities. The named banks are:

  • Barclays Capital Inc.
  • Citigroup Global Markets Inc.
  • Countrywide Securities Corporation
  • Credit Suisse Securities (USA) LLC
  • Deutsche Bank Securities Inc.
  • Goldman, Sachs & Co.
  • RBS Securities, Inc.
  • HSBC Securities (USA) Inc.
  • Morgan Stanley & Co. LLC
  • UBS Securities LLC
  • WAMU Capital Corp.
  • J.P. Morgan Securities LLC (and as current owner of Bear, Stearns & Co.)
  • Merrill Lynch, Pierce, Fenner & Smith Incorporated(and as current owner of Banc of America Securities LLC)

Read on.

Big Blow to Banks as CFTC Policy Change Is Upheld

(CN) – A federal judge dealt a blow to big-banking interests by upholding a policy extending regulatory reach to the overseas subsidiaries of U.S. financial firms involved in derivative swaps.
The Commodity Futures Trading Commission (CFTC) announced a new policy regarding cross-border derivative swaps in July 2013, trying to address a problem made clear by the 2008 financial crisis: that the investment decisions of foreign offices had major ramifications for U.S. financial firms.
American International Group nearly failed because of the risks incurred by swaps made by its London-based subsidiary, AIG Financial Products – but the U.S. government bore the burden of bailing the company out.
And Lehman Brothers, which did not benefit from a government bailout, similarly guaranteed nearly 130,000 derivative contracts held by one of its London-based subsidiaries when it filed for bankruptcy in 2008.
The derivatives market has since rebounded from the crisis, and financial firms have an estimated $700 trillion derivatives exposure worldwide.
In a “Cross-Border Action,” which the CFTC described as a policy rather than a binding rule, the agency said major swap dealers must register with the CFTC to clear swaps involving a foreign party through a derivative clearing organization. Such registration aims to reduce the risk of default and imposes reporting obligations on swap participants, the CFTC said.
The policy states that “where the conduit is located outside the United States, but is owned and controlled by a U.S. person … to recognize the economic reality of the situation, the conduit’s swaps should be attributed to the U.S. affiliate(s).”

Read on.