Daily Archives: October 23, 2014

WATCH | Jimmy Kimmel uses Sen. Coburn’s ‘Wastebook’ for ‘Expenditure or Stoner?’ quiz

As election approaches, anti-foreclosure activists ramp up rhetoric against GOP congressional candidate David Trott


Republican candidate for Congress David Trott was the subject of some street theater this week.

Trott is running for the U.S. House seat in Metro Detroit’s 11th district.

He’s also a former co-owner of the Trott & Trott law firm, which specializes in home foreclosure work on behalf of banks. It prospered during the recent housing crisis, foreclosing on up to 80,000 homes in 2009 alone.

Many homeowners who have dealt with Trott & Trott accuse the firm of deceptive, unethical business practices. A group calling themselves “Trott survivors” shared their stories during a mock trial in front of a Birmingham bank.

Their “testimony” was a series of accusations outlining Trott & Trott’s “dishonest and destructive” tactics, like stonewalling on loan modifications, dual tracking (pursuing foreclosure while also negotiating modifications), improper notice, and document fraud.

Read on.

Wells Fargo settles for $14.7 million for shorting employees on commissions

SAN FRANCISCO (CN) – A federal judge Wednesday awarded $3.6 million in attorneys’ fees from a settled $14.7 million class action accusing Wells Fargo Home Mortgage of shorting employees on commissions.
U.S. District Judge Jon Tigar granted final approval of the settlement, awarded fees and awarded two key plaintiffs $10,000 in incentives apiece for their key roles in the litigation.
Of the class of 8,695 branch sales managers or home mortgage consultants, only 3 opted out of the settlement, Tigar found.

See court document. Click here.

Citigroup to revisit U.S. court over Argentine bond payments

A U.S. judge has scheduled a Dec. 2 hearing to weigh whether or not Citigroup Inc can process an expected interest payment by Argentina on bonds issued under its local laws following its 2002 default.

The hearing before U.S. District Judge Thomas Griesa in Manhattan, set out in an order issued late Wednesday, would be less than a month before a Dec. 31 interest payment by Argentina on the bonds is due.

Citigroup has said it faces regulatory and criminal sanctions by Argentina, which defaulted again in July, if it cannot process the country’s interest payments on U.S. dollar-denominated bonds issued under Argentine law.

Read on.

The Big Bank Backlash Begins

Last week, I visited an alternate universe. The real world sees a pandemic of bank misconduct, but to the white-collar defense lawyers of Washington, the banks are the victims as they bow beneath the weight of regulators’ remarkably harsh punishments.

I was attending the Securities Enforcement Forum, a gathering of top regulators and white-collar defense worthies. The marquee section was a panel that included Andrew Ceresney, the current S.E.C. enforcement director, and five of his predecessors. Four of those former S.E.C. officials represent corporations at prominent white-collar law firms: Robert S. Khuzami, President Obama’s first enforcement director who now plies his trade at Kirkland & Ellis; Linda Chatman Thomsen, who served at the George W. Bush-era S.E.C. and now works for Davis Polk & Wardwell; William R. McLucas, the longest-serving agency enforcement director who is now at WilmerHale; and George S. Canellos, who just left the Obama S.E.C. to work for Milbank Tweed. (The well-known Stanley Sporkin, who served in the agency in the 1970s, rounded the panel out.)

The conference turned into a free-for-all of high-powered and influential white-collar defense lawyers hammering regulators on how unfair they have been to their clients, some of America’s largest financial companies.

The critics have multiple complaints about the S.E.C.

Mr. McLucas and Ms. Thomsen assailed the S.E.C. for applying the “broken windows” theory to corporate crime. Indeed, in a nice bit of message-discipline, one of the Republican commissioners of the agency attacked the practice in a speech at the conference earlier in the morning. This theory, borrowed from the urban policing tactic, argues that crime is deterred when law enforcement agencies arrest people for minor infractions, like riding public transportation without paying the fare. The lawyers argued that the commission has focused too much on smaller infractions, like minor misrepresentations in corporate filings. The lonely Mr. Ceresney explained patiently that the agency was only going to go after patterns of real violations, even if they were small. Not allowing small violations to slide puts companies on notice that the S.E.C. is vigilant, he argued.

Mr. Khuzami and Ms. Thomsen raised questions about whether it was fair for the agency to use administrative proceedings to push its cases. Administrative hearings happen before a specialized court without the usual rules and checks of a true proceeding in the courts. The critics liken it to getting a hometown judge instead of putting the cases up to the test of judges and juries. Banks send their disputes to arbitration rather than the courts. When the government does it, they scream foul.

Read on.

Senator Tom Coburn’s Wastebook 2014: What Washington doesn’t want you to read


Unbelievable, the people involved in this wasteful spending should be fired.

Voodoo Dolls, Gambling Monkeys, Zombies in Love and Paid Vacations for Misbehaving Bureaucrats Top List of the Most Outlandish Government Spending in Wastebook 2014

Examples of wasteful spending highlighted in “Wastebook 2014” include:

  • Coast guard party patrols – $100,000
  • Watching grass grow – $10,000
  • State department tweets @ terrorists – $3 million
  • Swedish massages for rabbits – $387,000
  • Paid vacations for bureaucrats gone wild – $20 million
  • Mountain lions on a treadmill – $856,000
  • Synchronized swimming for sea monkeys – $50,000
  • Pentagon to destroy $16 billion in unused ammunition — $1 billion
  • Scientists hope monkey gambling unlocks secrets of free will –$171,000
  • Rich and famous rent out their luxury pads tax free – $10 million
  • Studying “hangry” spouses stabbing voodoo dolls – $331,000
  • Promoting U.S. culture around the globe with nose flutists – $90 million

Read Senator Coburn’s full report here.

MA AG Martha Coakley’s foreclosure suit against Freddie Mac, Fannie Mae dismissed by judge

BOSTON — A federal judge has dismissed a lawsuit filed by Attorney General MarthaCoakley against the Federal Housing Finance Agency and mortgage giants Fannie Mae andFreddie Mac, saying the court doesn’t have oversight of the matter.

Coakley sued the agencies earlier this year for refusing to comply with a state law designed to ease the tide of foreclosures in Massachusetts.

Coakley said Fannie Mae and Freddie Mac violated a 2012 Massachusetts law allowing the sale of homes in foreclosure to nonprofit organizations who intend to restructure the loan and sell the property back to the original homeowner.

U.S. District Court Judge Richard Stearns dismissed the lawsuit, saying federal lawmakers have “expressly removed such conservatorship decisions from the courts’ oversight.”

Read on.