Daily Archives: May 4, 2016

Citi, JPMorgan, Others Paying $324M In Rate-Fixing Deal

Law360, New York (May 3, 2016, 5:15 PM ET) — Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. were among seven banks that on Tuesday agreed to pay a total of $324 million to settle class action litigation alleging that they rigged a benchmark interest rate used to set terms for swaps transactions.

The banks, which lost a motion to dismiss the complaint in March, also agreed to cooperate with counsel for the plaintiffs in further investigation of manipulation of the so-called ISDAfix, a tool which determines valuations for interest rate derivative products,…

Source: Law360

And there is one: Trump last man standing, Kasich bails out.

It’s official. Kasich drops out today after Cruz drops out from the race yesterday. The Trumpster is now the presumed Presidential nominee. We shall see if Trump will be announced as the Presidential nominee at the Republican National Convention in July. Just read that some conservatives are rattled that Trump is the last man standing and some are switching parties. Get the popcorn, folks!

 

//platform.twitter.com/widgets.js

Wells Fargo : ‘criticized’ loans rise 62 percent, driven by energy

Wells Fargo & Co saw a 62-percent increase in commercial and industrial loans that regulators have classified as “criticized,” according to its first-quarter regulatory financial filing released on Wednesday.

Read on.

George Will takes on #FannieGate, says GSEs ‘should never have existed’

Well, it seems we can’t go more than a few days without a prominent, national media personality commenting on the stability and standing of Fannie Mae and Freddie Mac, how the government-sponsored enterprises ended up in conservatorship, and what’s next for the GSEs.

Last month, Rolling Stone’s Matt Taibbi wrote that there was a government conspiracy behind the bailout and subsequent takeover of Fannie and Freddie, and that the government is preparing to hand the housing finance system over to the big banks.

And now, no less than George Will has weighed in on “#FannieGate,” the now viral movement first covered by HousingWire.

ICYMI: #FannieGate includes some Fannie and Freddie shareholders, many of which claim that the government’s “sweep” of all of the GSEs’ profits was unwarranted, unwanted and maybe even illegal.

In what appears to be a syndicated column, spotted on DelawareOnline.com, Will writes about the “misadventures of Fannie and Freddie,” and it’s clear from reading Will’s piece that not only does he think the GSEs current status is unsustainable and unhealthy, he also thinks the creation of Fannie and Freddie was a giant mistake.

Will’s piece starts out:

Gigantic government’s complexity and opacity provide innumerable opportunities for opportunists to act unconstrained by clear law or effective supervision. Today’s example, involving the government’s expropriation of hundreds of billions of dollars, features three sets of unsympathetic actors — a grasping federal government, a few hedge funds nimble at exploiting the co-mingling of government and the private sector, and two anomalous institutions that should never have existed.

Read on.

ONE OF OUR GREATEST JUSTICES, ARTHUR SCHACK, HAS PASSED AWAY! — Deadly Clear

Originally posted on Clouded Titles Blog: BREAKING NEWS! It is with great sadness that I report to you that Kings County, New York Judge Arthur Schack has died at age 71. He was a champion of the truth and will be notably remembered for being reversed in the HSBC BANK USA NA v Taher case because…

via ONE OF OUR GREATEST JUSTICES, ARTHUR SCHACK, HAS PASSED AWAY! — Deadly Clear

Trump train: Trump becomes presume Presidental nominee, Cruz throws in the towel, and Kasich stays in the race

//platform.twitter.com/widgets.js

Blocking Wall Street’s Revolving Door

Truthout:

The Wall Street investment bank Lazard held its annual shareholder meeting April 19 at Bermuda’s luxurious Elbow Beach Hotel. Bermuda is known for its beautiful sandy beaches and, less flatteringly, as an offshore tax haven. Headquartered in New York City, Lazard is incorporated in Bermuda.

Like a tax shelter that lacks economic substance, Lazard’s shareholder meeting seemed empty of meaningful content. There was no discussion of the company’s performance, as is customary at other shareholder meetings. I felt like the only attendee who was not affiliated with the company.

Lazard’s corporate secretary ran through the entire meeting agenda in less than five minutes. Lazard’s board of directors and a number of other executives attended the meeting but did not speak. My job: to present an AFL-CIO-sponsored shareholder proposal. as required by the U.S. Securities and Exchange Commission’s regulations.

The AFL-CIO’s shareholder proposal asked Lazard to ban the payment of unvested equity to senior executives if they enter into government service. Known as “government service golden parachutes,” this unvested equity would normally be forfeited after an executive’s voluntary resignation.

Paying executives to enter government service fosters a “revolving door” between Wall Street and financial regulators. Government service certainly rates as commendable, but financial regulators should be free from any perceived bias due to extra compensation received from their previous employers.

As Sheila Bair, the former chair of the Federal Deposit Insurance Corporation, has put it, “Only in the Wonderland of Wall Street logic could one argue that this looks like anything other than a bribe…We want people entering public service because they want to serve the public. Frankly, if they need a [golden parachute], I’d rather they stay away.”

At the annual meeting, I also delivered a petition signed by more than 44,000 individuals that called on Lazard to stop this questionable pay practice. The petition was organized by the AFL-CIOPublic Citizen, and Americans for Financial Reform and targeted to Lazard, Morgan Stanley, JPMorgan, Citigroup, and Goldman Sachs. The AFL-CIO has shareholder proposals to ban government service golden parachutes pending at all these firms.

Who Can Go After Banks for the Foreclosure Crisis?

Cities are arguing that they, too, were damaged by risky loans, and that they should be able to take the lenders to court to regain their losses.

In the wake of the housing crisis, surprisingly few people or institutions have been held accountable for the risky lending practices that nearly wrecked the U.S. economy.  That’s partly because the people who were most damaged by the foreclosure crisis—the people who lost their homes—don’t have the resources to bring lawsuits.

But the families who lost their homes weren’t the only ones hurt by the foreclosure crisis. So there’s an argument to be made that they shouldn’t be the only ones who can go after the lenders. Cities, for example, lost tax revenue when homes sat vacant, and saw property values within their boundaries decrease when vacant and boarded-up homes sat empty. Cities had to pay for police and fire protection to keep those homes from being vandalized and to respond to reported break-ins and criminal activity at the houses.

So should cities be able to sue the banks, too?

That’s the question making its way through courts across the country after municipalities including Los Angeles, Miami, Oakland, and Providence all filed lawsuits against lenders under the Fair Housing Act. The lawsuits, which the banks are fighting to have dismissed, argue that the lending practices of these banks harmed the cities too. When lenders targeted minorities for risky loans, knowing that the borrowers would likely lose their homes, they knowingly deprived cities of tax revenue while making them shoulder the expenses of blocks of foreclosures, the lawsuits allege. Oakland, for instance, argues in its complaint against Wells Fargo that the city “has suffered economic injury based upon reduced property tax revenues resulting from (a) the decreased value of the vacant properties themselves, and (b) the decreased value of properties surrounding the vacant properties.” Last month a judge declined to dismiss the suit.

Read on.

Former Bank of America board member defends big banks

HIGHLIGHTS

Chad Gifford retired from the board of Charlotte-based bank last week

In a radio interview this week, he called big banks ‘absolutely critical when times get tough’

Financial crisis had many causes, not just large banks, he said

The U.S. would benefit from having big banks around if the country ever winds up in another big financial crisis.

That’s according to one of Bank of America’s former board members, who opened up on the topic in a radio interview after retiring last week from the board of the Charlotte-based bank.

“When another downturn happens, who is going to help the government out of the jungle?” Chad Gifford told Radio Boston in the interview this week.

“When Bear Stearns got into trouble, JPMorgan took them over,” he said. “(When) Merrill Lynch was tottering, Bank of America took them over. The government needs those kind of allies when we have difficulty.”

Gifford stepped down from Bank of America’s board following a 12-year run that began in 2004 when Bank of America bought FleetBoston Financial, where Gifford was CEO at the time.

Gifford, one of the longest-serving members on Bank of America’s board, was on the board during the bank’s 2009 purchase of Merrill Lynch and 2008 purchase of Countrywide.

Alabama House Speaker Mike Hubbard has accepted plea deal, with 18month sentence in exchange for testimony against Gov. Bentley, Senate President Del Marsh, and former Gov. Bob Riley, according to reports

Attorney Donald Watkins confirmed last night on his Facebook page that the deal had been finalized.

Watkins has answers:

Hubbard will: (a) resign from public office; (b) plead guilty to public corruption charges; (c) agree to an 18-month sentence, 12 months of which will be served in the Lee County jail and 6 months of which will be suspended; and (d) be allowed to register as a lobbyist after serving his sentence. As part of his deal,Hubbard will cooperate with state and federal prosecutors investigating allegations of public corruption by Governor Robert Bentley, former governor Bob Riley, and Senate President Del Marsh.

Our Facebook news team first reported on April 17, 2016, that early “street” reports of the deal had been confirmed, including the 18-month sentence. TheMeck.blogspot.com reported additional details of Hubbard’s deal in its story.

The Hubbard deal will be publicly announced after the legislature adjourns. The plea deal will be announced in open court on or before the start of Hubbard’s scheduled May 16, 2016, criminal trial.