Daily Archives: October 11, 2014

Florida court system says access to public records will cost $132,000

When the Center for Public Integrity last summer requested records from Florida’s 17th judicial circuit regarding the procedures and policies surrounding foreclosure cases, officials were more than happy to comply — for a price.

A price of $132,348, to be exact.

Alexandra Rieman, general counsel for the circuit that includes Fort Lauderdale and Broward County, said the public records request would require staff to sort through 149,000 emails. That, in turn, would require 2,500 staff member hours at rates of either $45 or $53 an hour, which added up to the $132,348 figure.

And whatever records the court system did provide would cost another 15 cents a page, Rieman added, without including estimates of staffer hours and hourly rates.

The Center for Public Integrity refused to pay the amount, arguing that the fees were excessive.

More here…


An SEC investigation found that E*TRADE Securities and E*TRADE Capital Markets sold billions of penny stock shares for customers during a four-year period while ignoring red flags that the offerings were being conducted without an applicable exemption from the registration provisions of the federal securities laws.  E*TRADE Securities remains an E*TRADE subsidiary while E*TRADE Capital Markets was sold earlier this year and is now called G1 Execution Services.

E*TRADE Securities and G1 Execution Services agreed to settle the SEC’s charges by paying back more than $1.5million in disgorgement and prejudgment interest from commissions they earned on the improper sales.  They also must pay a combined penalty of $1 million.

In addition to the enforcement action, the SEC staff today published a Risk Alert and FAQs to remind broker-dealers of their obligations when they engage in unregistered transactions on behalf of their customers.

“Broker-dealers serve an important gatekeeping function that helps prevent microcap fraud by taking measures to ensure that unregistered shares don’t reach the market if the registration rules aren’t being followed,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement.  “Many billions of unregistered shares passed through gates that E*TRADE should have closed, and we will hold firms accountable when improper trading occurs on their watch.”

According to the SEC’s order instituting a settled administrative proceeding, the failures by E*TRADE occurredperiodically from March 2007 to April 2011.  The securities laws generally require all offers and sales of securities to be registered with the SEC unless those offers and sales qualify for an exemption.  When brokers facilitate an unregistered sales transaction on behalf of a customer, they must reasonably ensure that an exemption does indeedapply.

The SEC’s order finds that three customers of E*TRADE routinely deposited to their E*TRADE accounts large quantities of newly issued penny stocks they had acquired through private, unregistered transactions with little-known, non-reporting issuers.  The customers claimed that these penny stockswere “freely tradable” and they placed orders for E*TRADE to sell the securities to the public through “resales” without any registration statements in effect.  Following the resales, the customers immediately wired the sales proceeds out of their accounts.

According to the SEC’s order, E*TRADE encountered numerous red flags indicating potential improper sales of securities.  Nevertheless, the firm relied on a registration exemption for broker-dealers that permits them to execute a customer’s unregistered sales of securities if, after a reasonable inquiry, the broker-dealer is not aware of circumstances indicating that the customer is violating registration requirements.  E*TRADE initially failed to identify any exemptions potentially available to these customers.  When it later identified the purported exemptions upon which the customers claimed to be relying, E*TRADE failed to perform a searching inquiry to be reasonably certain that such exemptions applied for each unregistered sale executed by the three customers.

“E*TRADE failed to fulfill its obligation to determine whether any exemptions applied to  the sale of billions of shares of securities thereby depriving investors of critical protections under the federal securities laws,” said Stephen L. Cohen, Associate Director of the SEC’s Division of Enforcement.  “Firms must take their reasonable inquiry obligations seriously and do more than check the box, particularly when red flags are apparent.”

The SEC’s order finds that E*TRADE Securities and G1 Execution Services violated Sections 5(a) and 5(c) of the Securities Act of 1933.  In addition to the monetary sanctions and without admitting or denying the SEC’s findings, the two firms agreed to be censured and consented to the order requiring them to cease and desist from committing or causing any future violations of the registration provisions of the Securities Act.   

SEC order


NEW YORK, NY — (Marketwired) — 10/10/14 — Pomerantz LLP has filed a class action lawsuit against Ocwen Financial Corporation (“Ocwen” or the “Company”)(NYSE: OCN) and certain of its officers. The class action, filed in United States District Court, Southern District of Florida, West Palm Division, and docketed under 14-cv-81064, is on behalf of a class consisting of all persons or entities who purchased Ocwen securities between May 2, 2013 and August 11, 2014, inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).

If you are a shareholder who purchased Ocwen securities during the Class Period, you have until October 14, 2014 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.

Read on.

Local JPMorgan head says he’s out after disagreement “on a matter of principle”

Wayne Trotman, who has been the Philadelphia-based mid-Atlantic market president at JPMorgan Chase & Co. for the past three years, said the firm has “taken actions that have resulted in our separation,” according to an email he sent to colleagues Friday that was obtained by the Philadelphia Business Journal.

“The firm and I disagree on a matter of principle and they have taken actions that have resulted in our separation,” Trotmansaid in the email. “Their formal silence regarding my departure has been deafening and potentially damaging to my reputation in the industry. Consequently, I am compelled to inform you that I have neither committed, nor have I been accused of any wrong doing. I want to take this time to thank all of you for your friendship and partnership.”

Trotman went on to thank his colleagues from his two previous positions with the company for their friendship.

“JPMorgan is a great firm and has great promise but it is a work in process,” Trotman said. “I care deeply about the firm and wish it well.”

When reached by the Philadelphia Business Journal, Trotman declined comment.

Read on.

JPMorgan CEO: Nonbanks can derail the recovery

Gee, ya think, Jamie???

During the Institute of International Finance Membership meeting in Washington D.C. on Friday, JPMorgan Chase(JPM) CEO Jamie Dimon said there isn’t a lot that will keep the U.S. economy down.

But the one thing that could derail the recovery:

The $3.2 trillion nonbank financial system, or “shadow banks.” Per CNBC:

When asked what keeps him up at night, he said nonbank lending poses a danger “because no one is paying attention to it.” He said the system is “huge” and “growing.”

Nonbank lending was a contributing factor in the financial crisis due to firms lending money to low-quality borrowers who then defaulted on mortgages in droves.

“I’m a real long-term bull on the U.S. economy,” he added. 

Source: CNBC

Fannie Mae now owns a home with 6,000 brown recluse spiders

Fannie Mae now owns an upscale yet foreclosed home in Missouri that might be hard to unload at any price.

The family that owned it gave over ownership to – how to put this in a way that won’t leave readers unable to sleep? – 6,000 brown recluse spiders.

A family has been forced out of their country club home after 6,000 venomous spiders moved in.

Fumigators are now pumping poisonous gas into the house in the upscale neighborhood of Weldon Spring, Missouri in an attempt to kill the brown recluse spiders, which have been there for at least seven years.

After the couple, Brian and Susan Trost, moved out of the home and launched multiple lawsuits against the former owners and insurance companies, the home went into foreclosure.

The 2,400-square-foot, four-bedroom property, which has prime views across the Whitmoor Country Club, never sold – but McCarthy Pest Control believes they can finally take care of the problem.

Source: Daily Mail

Looming layoffs at Bank of America signal shift in mortgage servicing

Bank of America (BAC) is preparing to lay off nearly 200 workers in its North Texas mortgage servicing operations center as the impact of the bank’s $16.65 billion toxic mortgage settlement is beginning to be seen throughout the entire mortgage industry.

In August, Bank of America finally agreed to settle with theU.S. Department of Justice, other federal agencies and six states 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.

In the settlement, Bank of America admitted to failing to disclose known uncertainties regarding potential increased costs related to mortgage loan repurchase claims connected to more than $2 trillion in residential mortgage sales from 2004 through the first half of 2008 by the bank and certain companies it acquired, the Securities and Exchange Commission said when the settlement was announced.

Read on.