AIB has won approval in a US court to pursue a $500 million fraud claim againstCitigroup, which the bank alleges helped so-called rogue trader John Rusnak to run up a $691 million loss.
In the latest instalment in the long-running case, Manhattan-based US district Judge Deborah Batts on Tuesday declined to dismiss AIB’s claim, which involves the bank seeking $500 million of compensatory damages as well as punitive damages from Citigroup.
A spokeswoman for AIB declined to comment on the matter on Wednesday evening, saying the bank does not typically comment on legal cases.
Citigroup spokesman Scott Helfman also declined to comment, while Alan Levine, a partner at Cooley, the legal firm representing AIB, told Reuters: “We look forward to the trial.”
Mr Rusnak committed the fraud at AIB’s former subsidiary Allfirst Bank in Baltimore, where he hid mounting trading losses for at least five years before they were revealed in February 2002. The scandal, which was at that stage one of the biggest rogue trading incidents on record, almost brought down Allfirst.
Homeowners in Maine gained stronger protection against bank foreclosures under legislation approved late on Tuesday over the objections of some of the United States’ largest lenders in what consumer advocates called a win for homeowners.
The new law makes Maine one of few U.S. states to legislate over accusations nationwide that banks used suspect mortgage documentation in home foreclosures after the 2008 credit crisis.
The focus of the dispute is Mortgage Electronic Registration Systems (MERS), set up by U.S. banks before the housing bubble of the 2000s. MERS was meant to streamline the packaging of loans into mortgage-backed bonds. After the bubble burst, MERS was besieged by litigation.
More than 110,000 people have signed a petition to remove Mary Jo White as chairwoman of the Securities and Exchange Commission because she is too close to Wall Street to regulate it effectively, progressive group Credo said in a release.
The number of signatures gathered to replace a regulator who is relatively unknown outside Washington, D.C., policy circles is “pretty astounding, for something that wonky,” Credo’s political director, Becky Bond, told HuffPost. For comparison, she noted that the campaign to draft the much more visible U.S. Sen. Elizabeth Warren (D-Mass.) to run for president, gathered 365,000 signatures.
A June 16 report from Rootstrikers, a campaign finance reform group, criticized White for being to close to the financial firms that she used to represent as a corporate attorney.
Posted in Uncategorized
For immediate release: June 30, 2015
Contact: Hannah Harrill 919-508-7821
NMS Monitor: One Bank Fails New Test, Corrective Actions Working Joseph
Smith discovers one fail at Citi and reports an update on corrective action plans
Raleigh, N.C. – Joseph A. Smith, Jr., Monitor of the National Mortgage Settlement (NMS), today released a summary of five reports he filed with the United States District Court for the District of Columbia. This summary includes updates on compliance by Bank of America, Chase, Citi, Green Tree and Wells Fargo with the NMS mortgage servicing rules during the third and fourth quarters of 2014. Joseph Smith reports in Compliance Update that he and his professionals uncovered one failed test in the second half of 2014. Citi failed one of the new metrics Smith and the Monitoring Committee negotiated related to the loan modification process. Neither Bank of America, Chase, Green Tree nor Wells Fargo failed in any of the metrics tested in the second half of 2014. “I am pleased to see that the servicers are adhering to the NMS’s servicing rules, which aim to give borrowers better experiences,” Smith said. “Among five servicers and over six months, only one failure was uncovered, and of the servicers who had earlier fails to address, the corrective actions put in place were successful. “Green Tree completed eight corrective action plans (CAPs) to address the root causes of its previous fails. During the cure period, which is Green Tree’s chance to fix the issue, I found no evidence of any failures. “Citi failed one of the new metrics the Monitoring Committee and I negotiated to address the loan modification process. It also implemented an approved CAP and cured the fail in the next quarter.”