Daily Archives: October 7, 2014

Company That Sues Soldiers Pledges Reform, Changes Name

USA Discounters has undergone a makeover.

The Virginia-based retailer was the focus of a ProPublica investigation in July into its lending practices to service members. The company still sells high-priced furniture, electronics and appliances outside military bases across the country, but it has adopted a new name for its stores, USA Living, and says it has made reforms to its collections processes.

As before, USA Living advertises that active military customers, regardless of their financial histories, are “always approved” for credit. But it has traded in the USA Discounters’ tagline, “Your incredible credit store,” for a new USA Living tagline, “Credit for the life you want.”

Hannah Arnold, a company spokeswoman, said the name change was made to avoid confusion. “[T]he company is not a discount store,” she wrote in an email.

Despite the name change, USA Living continues to make loans much the same way it did as USA Discounters.
Read on.

Goldman Sachs ordered to pay Libyan legal costs

Goldman Sachs has been ordered to pay Libya’s sovereign wealth fund legal costs worth hundreds of thousands of pounds after making a U-turn on its efforts to throw out a $1.2bn lawsuit.

In an early victory for the Libyan Investment Authority (LIA), the UK’s High Court on Tuesday ordered that the Wall Street bank pay indemnity costs of at least £200,000 within 14 days.

The LIA is suing Goldman Sachs in London, claiming that executives at the bank fooled Libyan officials into making investments that they did not understand during the Gaddafi era, while making huge profits along the way.

Banker Pleads Guilty Over Libor Manipulation

A senior banker from a British bank has admitted conspiracy to defraud over the Libor manipulation.

The banker is the first person in Britain to plead guilty to the offence.

The person cannot be named for legal reasons.

The Serious Fraud Office (SFO) said in a statement: “A senior banker from a leading British bank pleaded guilty at Southwark Crown Court on 3 October 2014 to conspiracy to defraud in connection with manipulating Libor.

“This arises out of the Serious Fraud Office investigations into Libor manipulation. Further details cannot be given at this time for legal reasons.

Read on.

HSBC Directors Quit In Protest At Jail Threat

Two directors of HSBC’s UK arm are poised to quit in protest at new Bank of England rules that pave the way for lengthy jail sentences to be imposed on senior managers of failed lenders.

Sky News can exclusively reveal that Alan Thomson, a member of the audit and risk committees of HSBC Bank plc, has tendered his resignation and will leave the board at the end of October.

John Trueman, the deputy chairman of the legal entity that manages the UK high street and commercial bank, is also understood to be on the verge of resigning, despite having only taken on that role in December last year.

Sources close to the situation said that the likely departures of both men were a direct consequence of Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) proposals to strengthen accountability for senior bankers.
Read on.

Selling Hope: Foreclosure scam results in charges

To his clients and business partners, Paul Pysczynski was a hard-working lawyer with a penchant for helping struggling homeowners to avoid foreclosure and bankruptcy.

But police reports now contend that the 46-year-old attorney was embezzling funds from those he was hired to help.

Pysczynski is accused of stealing from nearly a dozen clients in the greater Tampa Bay area through a scheme that mirrors those surfacing nationwide.

In May, he was arrested in St. Louis for practicing law with a suspended license. He also faces more than a half dozen felony charges tied to his Southwest Florida foreclosure and loan rescue efforts.

“It appears he was operating an illegal foreclosure rescue and bankruptcy scheme,” Assistant State Attorney Daniel Yuter said. “It’s a relatively complex and unique case.”

Read on.

Wells Fargo CEO Stumpf: Putbacks Are Hurting Housing

WASHINGTON — Credit availability is being stifled in part by a fear that lenders will be forced to buy back loans they sell into the secondary market, according to John Stumpf, the chief executive of Wells Fargo.

Speaking at a National Press Club event on Wednesday, Stumpf discussed a range of issues, including the economic outlook and the current strict regulatory environment.

But he spent a considerable chunk of his remarks focused on why housing has not picked up despite a prolonged period of low interest rates. In addition to citing factors including high student loan debt and a tough job market, Stumpf pointed to credit availability as the main culprit.

He said putbacks by Fannie Mae, Freddie Mac and the Federal Housing Administration, in which lenders are forced to buy back loans after they are determined not to meet those agencies’ standards, are hampering lending.

“There are certain parts of the market where you that can’t get a conforming mortgage because we know what happens” when loans go into default, Stumpf said.

Read on.

Ex-U.S. Treasury Secretary Timothy Geithner defends AIG bailout

Former U.S. Treasury Secretary Timothy Geithner on Tuesday defended the government’s rescue of American International Group Inc (>> American International Group Inc)in September 2008, saying the action was necessary to prevent the country from plunging into a possible second Great Depression.

Geithner’s comments came in testimony he provided in the trial of a lawsuit brought by Hank Greenberg, AIG’s top executive from 1968 to 2005, who contends the terms of the government $85 billion loan to AIG cheated its shareholders.

Read on.