Daily Archives: November 28, 2014

Goldman Sachs Hit With More Metal-Rigging Claims

Law360, Los Angeles (November 25, 2014, 10:57 PM ET) — A putative class on Tuesday added to allegations that Goldman Sachs Group Inc. and others unfairly pulled strings in metals markets with a suit that says the bank fixed prices in platinum and palladium, in what plaintiffs firm Labaton Sucharow LLP called the first nationwide suit over those metals.

Goldman, a BASF SE unit, HSBC Bank USA and Standard Bank PLC used their influence as the only parties in a teleconference twice per day that set the rates for platinum and palladium to unfairly benefit their own…

Source: Law360

How Bank of America and JPMorgan locked down a captive market

Bank of America’s original, no-bid deal with the Treasury Department was to manage federal inmates’ accounts and prison store inventory. It was worth $14.4 million. In 14 years, the contract has expanded to include electronic money transfers, phone technology and e-messaging and grown to at least $76.3 million.

JPMorgan’s first contract to issue government debit cards was awarded in 1998. Treasury says the initial agreement is no longer available. A 2008 contract provided by Treasury was also awarded without competitive bidding.

This timeline tracks how the two deals broadened and became more lucrative as together they were amended at least 40 times. Dollar figures reflect the total value of the contract as of that contract amendment.

Read on.

The Fed Needs More Than an Audit

With Republicans soon to hold majorities in the House and Senate, many commentators are speculating that the Federal Reserve will receive much more critical attention in 2015. In September, a large bipartisan majority in the House passed a bill to have the Government Accountability Office audit the Fed’s activities, including its monetary policies. The bill went nowhere thanks to Senate Majority Leader Harry Reid , but it could have significant support in next year’s Republican Senate.

Fed Chair Janet Yellen has expressed a legitimate fear that the Federal Reserve Transparency Act would endanger the Fed’s independence on monetary matters. But the Fed has now accumulated so much regulatory power that it can no longer claim the right to avoid congressional oversight. If the central bank hopes to maintain its monetary independence over time, it will have to surrender its regulatory authority.

There are serious potential conflicts of interest between the Fed’s regulatory and monetary roles. This became clear during the financial crisis, when the central bank used its existing authority under the Federal Reserve Act to provide assistance to financial institutions that were having liquidity problems. Many of these firms—bank holding companies, banks and their nonbank subsidiaries—are regulated directly or indirectly by the Fed. Their failure could have been seen as regulatory failure by the Fed. Did the Fed provide financial assistance to avoid this criticism, or because it was best for the economy and the financial system? It’s a painful question to consider, but the fact that it can legitimately be asked suggests the problem—and a reason why the Fed should not have both monetary and regulatory powers.

Read on.

Bank does the unthinkable in foreclosure against 90-year-old man

Man, how cruel of the bank. The man is 90 years old. Too Big To Behave Banks continue because Federal Regulators are Too Timid To Send Banksters To Jail.

Real Time

imagesA 90-year-old man facing foreclosure on a Boynton Beach home he no longer owns is off the hook after his mortgage servicer decided to pursue another party in the case.

Abraham Maisner, who owned a 3,200-square-foot home in Valencia Lakes, went into foreclosure in 2012 after failing to make payments since May 2010. Maisner sold the home in September for $405,000, more than enough to pay off the principal balance given to his attorneys by the lender.

But the payoff balance was short about $42,000 _ the unpaid interest accrued on the loan _ and Maisner was left holding the bag once it was realized the payoff amount was just a preliminary statement, not the full payout. Even the new homeowners had to get involved in the foreclosure lawsuit.

The Palm Beach Post wrote about the predicament last week.

After a hearing on Friday, mortgage servicer Rushmore Loan Management Services…

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