Daily Archives: October 4, 2015

First brokers stand trial over Libor

The first brokers to face prosecution in the global Libor investigation over allegations they helped traders from various panel banks to manipulate the rate by acting as middlemen will go on trial this week in London.

The case will highlight the role played by the brokers, from ICAP, Tullett Prebon and RP Martin, rather than traders and submitters from panel banks, who set the daily rate.

All six men standing trial are accused of conspiring with Tom Hayes, a former Tokyo-based trader for UBS who later joined Citigroup, and others to manipulate Libor tied to the Japanese yen.

Read on.

Big Ninth Circuit Win for ‘Chapter 20’ Debtors

(CN) – The ability to permanently dismiss foreclosure proceedings is still available to debtors who seek Chapter 7 bankruptcy immediately followed by Chapter 13 relief, the Ninth Circuit ruled Thursday.
Though the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCA) of 2005 prevents these so-called “Chapter 20” debtors from successive discharges, a three-judge panel of the Ninth Circuit said Thursday that “nothing prevents a debtor from taking advantage of the other Chapter 13 tools available to him.”
Even lien-voidance provisions that can permanently bar creditors from foreclosing are not applicable, the court found.
The ruling affirms the decision of a bankruptcy judge and a federal district judge in Washington to disallow HSBC’s lien on the home of Chapter 20 debtors Robert and Darlene Blendheim.
The last judge to deny HSBC relief had said that enforcing the bank’s lien against the Blendheims “creates an extremely harsh result: a debtor who successfully completed a Chapter 13 plan, obeying all the requirements approved by the court, would see many of his debts spring back to life.”
Affirming this decision Thursday, the three-judge panel in Seattle called it “undisputed that HSBC’s claim was not allowed.”
HSBC timely filed the lien claim, but failed to timely respond when the bankruptcy court denied the claim, according to the 47-page opinion.
“Where a claim is timely filed and objected to, on the other hand, disallowance is not automatic,” Judge Jay Bybee wrote for the court. “This case is a good example: HSBC timely filed its proof of claim, received service of the Blendheims’ objection, and then had a full and fair opportunity to contest the disallowance of its claim – it simply chose not to.”

Read on.

Morgan Stanley facing new racial bias claims, denying black financial advisors equal pay and opportunities

SAN FRANCISCO (CN) – A class action lawsuit claims Morgan Stanley is still denying black financial advisors equal pay and opportunities, despite its recent extension of a 2008 settlement agreement over similar claims.
Kathy Frazier, a former Morgan Stanley financial advisor, sued the company for race discrimination, retaliation and beach of contract Thursday.
Frazier claims the financial services titan has “no genuine intent” to reform its practices or abide by the spirit of settlement agreements reached in race and gender discrimination suits filed in 2006.
The plaintiff, who left Morgan Stanley in 2013, says she and other black employees were excluded from lucrative financial advisor teams and denied opportunities to take over highly profitable client accounts.
Last month, the company sent employees an email about extending parts of the 2008 Jaffe v. Morgan Stanley race discrimination settlement. Within the attached disclosure was a notice on page 19 of 22, stripping employees of their rights to pursue class action discrimination claims in court, Frazier alleges.

Read on.

The Delinquent Borrowers Leading a Student Loans Revolt

When the U.S. Department of Education announced in June the creation of a formal process for students defrauded by their college or university to seek loan forgiveness, it was a victory for the activist group Debt Collective. The impact of the policy could be huge: Granting forgiveness to everyone who in the past five years attended Corinthian Colleges—the for-profit company that filed for bankruptcy in May amid charges of predatory behavior—would wipe out $3.2 billion in debt owed to the U.S. government.

For members of the Debt Collective, which has been fighting for loan relief since its founding last year, it wasn’t nearly enough. The piecemeal approach of requiring individual borrowers to apply for loan forgiveness seemed unacceptably burdensome. “The right thing to do would be to issue a classwide discharge and understand that this happened to a group of people,” says Ann Larson, 41, one of the organization’s leaders. “No one who is paying attention can possibly think that the Department of Education is doing all it can.” The Debt Collective’s overarching goal, she says, is to persuade the millions of Americans who are severely late on their student loan payments to “revolt”—to turn the billions they collectively owe from a burden into a source of political power.

Read on.