Daily Archives: November 20, 2015

Citigroup Promotes Banker Who Hayes Said Knew of Libor Rigging

Citigroup Inc. promoted an executive who Tom Hayes, a former colleague who is now a convicted felon, has repeatedly said was aware of Libor manipulation, according to two people with knowledge of the situation.

Brian McCappin, who once ran Citigroup’s Japanese investment bank, was named co-head of institutional sales for the New York-based bank’s foreign exchange business in September, said one of the people, who declined to be identified as details of his appointment haven’t been made public.

Ex-Citigroup and UBS Group AG derivatives trader Hayes, who was sentenced to 14 years in jail for conspiracy to rig yen Libor in August, testified during his trial that McCappin knew about his attempts to move the London interbank offered rate. McCappin, who was chief executive officer of Citigroup’s Japanese investment bank at the time, hasn’t been accused of wrongdoing by prosecutors.

Citigroup, which fired Hayes following an internal review in 2010, said it stood by McCappin.

Read on.

Oops! How a clerical error may cost JPMorgan Chase $1.5 billion

Everyone makes mistakes … even lawyers! Most of the time we don’t even know it because the error is either minor or doesn’t affect the outcome. In this article, we discuss a small error by an attorney that could cost his client $1.5 billion. That’s billion with a “B”.

During 2001, GM obtained $300 million in financing from certain lenders including JPMorgan Chase Bank (“Chase”). Chase served as  agent for the loan and was identified on the financing statement as the secured party of record. Five years later, GM entered into a separate loan unrelated to the first loan providing GM with approximately $1.5 billion in financing from a different group of lenders. Chase also served as administrative agent and secured party on the second loan. So far, so good.

During 2008, GM planned to repay the first loan and directed its counsel to prepare a form termination statement releasing Chase’s lien on GM’s property. The form used to terminate the security interest (commonly referred to as a “UCC-3”) is straight forward so a paralegal prepared the UCC-3 for the first loan. Unfortunately, the paralegal also mistakenly prepared a UCC-3 releasing the security on the $1.5 billion second loan. No one picked up the mistake: not the business people from GM or Chase or their lawyers.  An attorney from Chase even responded stating “Nice job on the documents.”

The termination statement for the $1.5 billion loan was filed and soon after that GM filed for bankruptcy. The committee of creditors in GM’s bankruptcy estate uncovered the mistake and sued to have the $1.5 billion loan declared as unsecured (resulting in Chase receiving payment in “little bankruptcy dollars” with other general creditors, instead of off the top, like other secured creditors).

The bankruptcy court granted judgment in favor of Chase and against the creditors’ committee, holding that Chase did not “authorize” filing of the erroneous termination statement within the meaning of the law because the record established that Chase “intended to grant, and granted, authority to GM to terminate [the first loan] only…. [and] . . . . [a]s importantly . . . this was GM’s belief as well.”[1] Put simply, the bankruptcy court concluded that because the parties’ only intended to terminate the security interest in the first loan, Chase did not authorize termination of the financing statement relating to the second loan.

a href=”http://www.lexology.com/library/detail.aspx?g=00a725d9-0903-4f9c-b8ba-284a789f06a9”>Read on.

Congressman-auto dealer accused of conflict of interest

Nov. 19, 2015: This story has been updated to include comment from U.S. Rep. Roger Williams of Texas.

Buried deep within a massive transportation bill that passed the House of Representatives is a little-noticed provision that won’t have much effect on highway projects, but is of great interest to automobile dealers.

The provision, an amendment offered just before midnight on Nov. 11, would allow dealers to rent or loan out vehicles even if they are subject to safety recalls. Rental car companies, meanwhile, don’t get the same treatment under the proposed law.

In essence, the amendment would allow an auto dealer to loan you a vehicle under active recall while you are getting your own fixed for the same defect.

The man who offered the amendment is no stranger to car dealerships. In fact, that’s his business. Rep. Roger Williams, a Texas Republican, sponsored the amendment. In introducing it on the floor of the House, he noted, “I am a second-generation auto dealer. I have been in the industry most of my life. I know it well.”

The possibility that his action might be considered a conflict of interest was apparently not on his mind, though it certainly occurred to others.

Read on.

Congress Wants To Seize Your Passport For Unpaid Taxes

Submitted by Simon Black via SovereignMan.com,

Sometimes you just have to stand in awe at the level of corruption and incompetence in government.

Case in point, the new highway bill in the Land of the Free. And, trust me, you’ll love this.

The latest version of the highway bill is called the “Developing a Reliable and Innovative Vision for the Economy Act.”

And yes, they abbreviate it as the DRIVE Act.

I cannot even begin to imagine how large the team of monkeys is that works on these silly acronyms. And as is typical for legislation, the more high sounding the name of the law, the more destructive its consequences.

On the surface, the DRIVE Act aims to fund the federal transportation network and investments in highway infrastructure for the next several years, as well as recapitalize the Highway Trust Fund.

Federal trust funds are supposed to responsibly and conservatively manage money that has been set aside for a specific purpose to benefit taxpayers.

There are so many of these trust funds. There are the big ones like Social Security’s “Old Age Survivor’s Insurance” and “Disability Insurance” (which is literally days away from running out of money).

And there are many more you’ve probably never heard about, like the “Black Lung” trust fund and the “Leaking Underground Storage Tank” trust fund.

Most of these funds are insolvent, or at least pitifully undercapitalized, clearly proving the government to be one of the worst asset managers in history.

The Highway Trust Fund is no exception: it has completely run out of money, and at this point literally has a ZERO account balance. The DRIVE Act intends to fix that.

Is The Law Offices of Daniel C. Consuegra Closing Down on Nov 30th?

Had a tip earlier today that this was happening.

We will see.


Just last month it was announced the Tampa law firm Daniel C. Consuegra PL to lay off 150, close title company unit Consuegra Title LLC

– See more at: http://stopforeclosurefraud.com/2015/11/20/is-the-law-offices-of-daniel-c-consuegra-closing-down-on-nov-30th/#sthash.mLkrP9qn.dpuf

FINRA Fines Deutsche Bank Securities Inc. $1.4 Million for Violating Regulation SHO and Short Interest Reporting Rules

WASHINGTON–(BUSINESS WIRE)–The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Deutsche Bank Securities Inc. $1.4 million for violating Regulation SHO, FINRA’s short interest reporting rule and for related supervisory failures.

Reg SHO generally allows firms to track their positions in a security from certain trading operations or trading desks separately from other positions maintained at the firm through the use of an “aggregation unit.” Reg SHO requires, among other things, that in determining the net positions of aggregation units, firms cannot include the securities positions of a non-U.S.-broker-dealer affiliate. FINRA found that for over 10 years, Deutsche Bank has been improperly including securities positions of a non-U.S.-broker-dealer affiliate in numerous aggregation units when determining each unit’s net position.

In addition, FINRA requires firms, with certain exceptions, to regularly report their total “short” positions in all customer and proprietary firm accounts in equity securities. These short positions must be reported on a gross, rather than a net basis. FINRA found that from April 2004 to September 2012, Deutsche Bank reported the netted positions in its financial aggregation account as the firm’s short interest positions for that particular day.

Read on.

Feds set deadline to claim Independent Foreclosure Review relief funds

The clock is now ticking for borrowers eligible for payment under the Independent Foreclosure Review Payment Agreements who have not yet cashed or deposited their check, and if they don’t act soon, their money is going to borrowers who already cashed their checks.

The Federal Reserve Board and the Office of the Comptroller of the Currency announced Thursday that borrowers who have not cashed their check have until Dec. 31, 2015 to request a replacement check.

Those borrowers then have until March 31, 2016 to cash their new checks.

If there are still any remaining funds left over after March 31, 2016, the Federal Reserve said that it will direct the paying agent, Rust Consulting, to redistribute the funds to borrowers who have already cashed their checks.

Read on.