Daily Archives: April 16, 2015

Bank CEO Moynihan questioned about calls to break up Bank of America

Bank of America CEO Brian Moynihan argued Wednesday that the Charlotte bank shouldn’t be broken up, as shareholders prepare to vote on the topic this spring.

Moynihan discussed the issue Wednesday during the bank’s first-quarter earnings conference. Analysts asked him why the bank recommends shareholders vote against a proposal that urges the company to look at ways to split itself up.

If the bank breaks up, “the question would be: What would we look like after?” Moynihan said. “We’d have capital we can’t deploy, and we’d have less earnings power.”

Moynihan also noted the bank has already taken steps to simplify the company, including selling off non-core business operations.

Mary McCulley: Still the $6 Million Woman

Great news!!!


Mary McCulley profile pic

That’s right.  Mary beat the bank.  Again.

In an appeal, U.S. Bank tried to get out of paying Mary McCulley the $6 million a Montana jury awarded her back in 2014.  Yesterday, the Supreme Court of Montana decided against U.S. Bank—they’re going to owe McCulley the $6 million, plus interest from the earliest possible date they could owe it, not the later one that had been bandied about.

Here is the Court’s own synopsis:

Mary McCulley bought a condominium in Bozeman and sought a 30-year, residential loan for $300,000 from Heritage Bank, which later merged with U.S. Bank. She later sued the Bank, alleging the Bank defrauded her by instead issuing an 18-month, $300,000 commercial loan, and failing to notify her of the change. When McCulley could not obtain refinancing and the condominium went into foreclosure, she attempted suicide. The jury found that the Bank defrauded McCulley and…

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Why Is WalMart Mysteriously Shuttering Stores Nationwide For “Plumbing Issues”?

You know this is BS from Walmart about plumbing issues. Hat tip to Zerohedge:

Here’s more from a local CBS affiliate:

10 News called the county. Officials say they have no record of any code or permit violation at the Brandon location.

And when 10 News was at the Walmart Tuesday, there were no marked septic trucks or plumbing vehicles in the lot.

“Where is everybody if they’re supposed to be working on everything where are all the trucks?” asked shopper Melissa Dupuis.

10 News asked a Walmart spokesperson whether the five stores were built from the same design, whether they had the same contractor, anything to understand why all of them closed on the same day for “plumbing issues.”

The only thing they have in common, the spokesperson said are the highest number of plumbing incidents.

Leaving some customers to wonder “how many things have they not said. That’s scary,” said shopper Norma Espinosa.

And here’s more from a local ABC report in Florida:

BRANDON, Fla. – Employees of a Walmart in Brandon that abruptly closed Monday were among more than 2,000 employees nationwide who learned almost simultaneously they were being laid off.

In a nearly identical manner at every store, Walmart corporate officials visited the five locations, called an impromptu meeting in the back of the store and told employees that the stores would be closing that evening.

Besides Brandon, the affected locations were in Pico Rivera, Calif., Livingston, Texas, Midland, Texas, Tulsa, Okla.

“The issues mostly relate to clogs and water leaks in the plumbing – we’ve had persistent issues over the last several years,“ said a Walmart spokesperson said.

“These incidents impact the availability of water and create drainage issues for critical areas of the store which impacts our ability to serve customers,” she said.

“Normally, we do our best to avoid disrupting a store’s operations. However, given this particular store had one of the highest incidences of plumbing issues in the entire fleet and in order to reduce the costs associated with these incidents, we felt it was in the store’s best interest to invest in making the necessary improvements to resolve these issues,” the spokesperson said.

The I-Team has learned that none of the five affected stores have sought any plumbing permits for future repairs.

Elizabeth Warren Hammers The Endless Failures Of Wall Street Regulators

WASHINGTON — Sen. Elizabeth Warren (D-Mass.) assailed the nation’s top bank regulators on Wednesday for coddling Wall Street offenders and ducking the responsibilities Congress assigned them in the wake of the 2008 financial meltdown.

At a conference hosted by the Levy Economics Institute, Warren called not only for structural change to the banking system but for a revamping of the weak enforcement culture at the Federal Reserve, the Securities and Exchange Commission and the Department of Justice, according to a transcript of her prepared remarks. Although Warren did not cite any officials by name, the regulatory failures she highlighted reflect poorly on a host of key policymakers, including U.S. Attorney Loretta Lynch, nominated to be the next attorney general; Fed General Counsel Scott Alvarez; and SEC Chair Mary Jo White.

“The Department of Justice doesn’t take big financial institutions to trial ever — even when financial institutions engage in blatantly criminal activity,” Warren said. She accused DOJ of turning deferred prosecution agreements, designed for low-level offenders, into “get-out-of-jail-free cards for the biggest corporations in the world.”

“The SEC is even worse,” Warren said, noting that the agency has repeatedly granted significant regulatory perks to companies that it has charged with civil securities fraud. The senator also criticized the SEC for slow-walkingCEO pay regulations required by the 2010 Dodd-Frank financial reform law and for protecting the secrecy of corporate political contributions.

“The SEC needs to get its act together,” Warren said. “In all sorts of ways and on all sorts of issues.”

Read on.

It’s Even Hard to Buy a House When Your Father Runs Wells Fargo

I’m all broken up in tears for her… Not!!!

Even the daughter of the CEO of the largest U.S. mortgage lender is found it hard to buy a home in one of the country’s hottest housing markets.

On a conference call Tuesday, Wells Fargo WFC +1.14% & Co. Chairman and CEOJohn Stumpf offered up his daughter as an example of the difficulties first-time buyers face in San Francisco, thanks to the influx of affluent tech industry employees and the lack of housing supply.

Mr. Stumpf was responding to an analyst question about where first-time home buyers have returned to the market. While Wells Fargo executives noted that credit on a national basis has become easier to obtain and houses have become more affordable, that’s less true in expensive urban markets like San Francisco where the bank is based.

“My daughter and son-in-law bought a house recently. You have to write a letter to tell them how nice you are, tell them how many children you have,” Mr. Stumpf said, adding that sending a “nice letter” to the sellers is simply the price of admission to participate in the bidding process.

The letter-writing tactic has become more widespread in recent years as competition over scarce housing in places like Silicon Valley and Seattle has increased and buyers have looked for ways to distinguish themselves. “The heartfelt missives, often accompanied by personal photos, aim to create an emotional bond that can give their writers an edge—especially in situations where multiple bidders are vying for the same house,” The Wall Street Journal’s Joann Lublin wrote in the newspaper in January 2013.

Read on.

SEC puts an end to Carrington Capital’s deal with New Century investigation

After 18 months, they got nothing

After an 18-month investigation, the Securities and Exchange Commission will not issue any penalties or pursue any enforcement action against Carrington Capital Management, the company announced Wednesday.

Carrington was under SEC investigation for, among other items, its acquisition of failed subprime lender New Century Financial. The investigation dealt with how Carrington financed the $188 million deal, which relied in part on the firm issuing preferred securities to Carrington Investment Partners, LP, a fund managed by Carrington Capital Management.

The investigation also delved into the valuation of those preferred securities, which were used to finance the acquisition and operation of New Century’s mortgage servicing platform.

Read on.