Daily Archives: February 27, 2015

New York’s Top Financial Cop And Head Prosecutor Vie With Feds To Look Tough On Banks

hands_clapping

Top financial regulators and prosecutors in New York are making clear that oversight of big banks must be tougher. New York Attorney General Eric Schneiderman and Financial Services Superintendent Benjamin Lawsky on Wednesday separately announced initiatives to increase supervision of banks and boost their presence on the Securities and Exchange Commission’s beat.

In a speech at Columbia Law School, Lawsky offered proposals that would sharply increase liability in wrongdoing for executives at financial firms. The top financial regulator in the state, Lawsky wants bank officials to personally attest to their firm’s protections against money laundering – putting individual CEOs on the hook if dirty cash flows through.

And in the wake of major cyberattacks, including a breach at JPMorgan that compromised the data of 80 million clients, Lawsky would have banks secure third-party assurances that their networks are secure.

Lawsky isn’t just fretting about customer privacy, though. “We are concerned that within the next decade,” he said, “we will experience an Armageddon-type cyber event that causes a significant disruption in the financial system for a period of time.” His worries echo a growing chorus of Wall Street watchdogs pointing to the systemic risks posed by financial cyberattacks.

Other proposals include surprise audits of banks’ transaction monitoring protocols, which prevent against money laundering, and regular assessments of their cybersecurity systems.

Also on Wednesday, state Attorney General Schneiderman proposed that the state reward whistleblowers and extend them greater protections. Intending to make the New York “the gold standard for states seeking to expose and hold individuals accountable for financial crimes,” Schneiderman asked for a state law that would dole out cash to those who raise red flags over securities fraud.

Read on.

Keller Rohrback L.L.P. Investigates Ocwen Class Action Re: Unfair Service Fees

SEATTLE, Feb 27, 2015 (BUSINESS WIRE) — Attorney AdvertisingKeller Rohrback L.L.P. is investigating Ocwen Financial Corporation and Ocwen Loan Servicing, LLC (“Ocwen” or “the Company”) (NYSE:OCN) regarding unfair and excessive fees charged to homeowners in a recently filed class action. These fees are often imposed for “default-related services,” and may show up on your fee statement as “attorneys’ fees” (even if you’ve never spoken to or dealt with an attorney), “inspection fees” (for an inspection that consists of someone driving by your home), “preservation” fees (even though your house is just fine), or “taxes” or “insurance” (though no taxes are owed and no insurance is necessary). The Ocwen complaint alleged that these default services are often performed by Ocwen-affiliated companies such as Altisource Portfolio Solutions S.A. A recently filed class action complaint against Ocwen alleges that Altisource and other affiliated companies inflate the fees for those services which are then passed on to homeowners.

Read on.

Wells Fargo CEO John Stumpf awarded $1 million in stock

Wells Fargo CEO John Stumpf received a bonus of $1 million in restricted stock as part of his 2014 compensation, the bank said in a securities filingThursday.

Stumpf was awarded the 18,061 shares on Tuesday, when they closed at $55.37 each. The award matched the $1 million value of the 21,702 shares Stumpf was awarded a year ago.

More details on Stumpf’s total compensation for 2014, including any cash bonuses and additional stock he might receive, will be reported in the bank’s annual proxy filing, which is usually released in March. Compensation for the bank’s other top executives will also be disclosed in the proxy filing.

Things at Ocwen just went from bad to much, much worse

Very bad news for Ocwen…

Just when it looked Ocwen Financial (OCN) may finally begetting some good news, in the form of Moody’s Investors Service saying that the $1.3 billion acquisition of Ocwen associate Home Loan Servicing Solutions (HLSS) by New Residential Investment (NRZ) will actually help stabilize Ocwen’s own servicing operations and improve Ocwen’s future prospects, the troubled nonbank was just hit with an avalanche of bad news.

According to a report from Compass Point Research and Trading, the HLSS deal will actually have a “material adverse impact” on Ocwen’s servicing margins, due to the increased cost of maintaining the relationship with HLSS, and operational changes that are required by regulators, including the New York Department of Financial Services.

But that’s not all. Compass Point believes that New Residential may actually pull the servicing on the HLSS portfolio from Ocwen.

“We believe the risk of having servicing pulled on private label trusts or transferred by New Residential is high,” Compass Point Analysts Kevin Barker and Jesus Bueno said in the report. “If this were to occur, it would have a serious adverse impact on the sustainability of Ocwen’s business model.”

Barker and Bueno cite the recent servicer downgrades as a reason for a potential Ocwen-HLSS separation.

Read on.

As state AG, Andrew Cuomo put in place a mass deletion policy for emails in his office that were more than 90 days old, made it difficult for the public to know how — or whether — his office investigated bank fraud

Wow, and now Gov. Cuomo  purges state government emails amid federal corruption probe…

Earlier this month, New Yorkers watched an inferno tear through a warehouse full of old government records from the bygone paper era. Many probably felt relief in thinking that such records are now often digitized and therefore not at risk of being accidentally incinerated. Yet as Gov. Andrew Cuomo’s administration is showing this week, many records are vulnerable to another form of destruction: deliberate deletion.

In a memo obtained by Capital New York, Cuomo officials announced that mass purging of email records is beginning across several state government agencies. The timing of the announcement, which followed through on a 2013 proposal, is worth noting: The large-scale destruction of state documents will be happening in the middle of a sprawling federal investigation of public corruption in Albany. That investigation has been looking at state legislators and the Cuomo administration.

Cuomo’s move to purge state emails follows a similar move he made as state Attorney General. International Business Times confirmed that in 2007, he put in place a mass deletion policy for emails in the New York Attorney General’s office that were more than 90 days old, making it difficult for the public to know how — or whether — his office investigated bank fraud in the lead-up to the financial crisis of 2008. In the Cuomo administration’s announcement this week, the governor’s chief information officer, Maggie Miller, justified the new email purge as a cost-saving measure aimed at “making government work better.”

But former prosecutors and open-government advocates interviewed by IBTimes say the move seems designed to hide information.

“The government belongs to the people and the government has to be transparent,” said Hal Hardin, a former judge and U.S. Attorney who famously investigated Gov. Ray Blanton of Tennessee. “Citizens ought to be able to know what our government is doing. The average email generated by a government owned by the people should be available to the people.”

Read on.

Court says unaware of trial proceedings against Deutsche Bank CEO

* Der Spiegel report said case put forward for trial

* Deutsche Bank declined to comment (Recasts with comment from prosecutor’s office and court)

Feb 26 (Reuters) – The Munich district court and prosecutor’s office are unaware of any formal steps to initiate court proceedings against Deutsche Bank co-Chief Executive Juergen Fitschen and four former board members, they said on Thursday, after a magazine reported that the quintet are to face trial in Munich.

German weekly Der Spiegel said that Fitschen and four former board members will be tried on suspicion of having provided false testimony in a civil case to resolve a dispute with Kirch Group.

The presiding judge at the Munich court, Peter Noll, has allowed the case to go forward, Der Spiegel said, citing unnamed sources.

Read on.

Ocwen set to lose mortgage-servicing contracts with Wells Fargo after default

(Bloomberg) — Ocwen Financial Corp., the mortgage servicer under attack for its handling of home loans, is being fired from overseeing debt backing two bond deals, according to notices sent to bondholders.

Wells Fargo & Co., the trustee for the transactions, said in letters dated Feb. 24 that a majority of investors had directed it to terminate Ocwen. The bank said that it had issued Atlanta-based Ocwen notices informing the servicer that it was doing so.

Downgrades of Ocwen’s servicing ratings last year triggered technical defaults in the bonds, prompting Wells Fargo to solicit instructions from investors on what to do next. They were also among deals where some bondholders had accused Ocwen of “imprudent and improper servicing practices.”

Read on.