Daily Archives: September 24, 2016

Yes, former Wells Fargo employees lawsuit against the bank includes failure to pay OT which is required under California law

Yes, California law requires that employers pay overtime, whether authorized or not, at the rate of one and one-half times the employee’s regular rate of pay for all hours worked in excess of eight up to and including 12 hours in any workday, and for the first eight hours of work on the seventh consecutive day of work …

overtime law – California Department of Industrial Relations


California Department of Industrial Relations

The lawsuit accuses Wells Fargo of wrongful termination, unlawful business practices and failure to pay wages, overtime, and penalties under California law.

Former employees Alexander Polonsky and Brian Zaghi allege Wells Fargo managers pressed workers to meet quotas of 10 accounts per day, required progress reports several times daily and reprimanded workers who fell short.

Polonsky and Zaghi filed applications matching customer requests and were counseled, demoted and later terminated, the lawsuit said.

While executives at the top benefited from the activity, the blame landed on thousands of $12-per-hour employees who tried to meet the quotas and were often required to work off the clock to do so, the lawsuit said.

Our Revolution Statement on Tulsa and Charlotte Police Shootings


Statement from Our Revolution website:

WASHINGTON — Keith Lamont Scott was a father of seven. Terence Crutcher was a father of four. They are just the two latest Black men in this country that have become hashtags—their names and faces shared by people around the country as we try to make sense of our feelings of grief, and of rage.

For many of us, the images and videos of police violence we’ve seen over the last few years can feel like too much to bear. The sad reality is that these images are only glimpses into systems of racism that extend back to the beginnings of our country and into every layer of our society and government.

What we as a nation are witnessing, and what we are feeling, are echoes of the experiences and emotions that communities of color—and Black people, in particular—have endured for generations.

In the face of these events, we cannot allow ourselves to be overcome by sorrow and hopelessness. The persistent killing of people of color has gone on for too long, but we can take steps to end it.

As a start, we can demand candidates for elected office support common sense reforms, including national use of force standards that train police officers to de-escalate confrontations, an end to racial profiling and an independent review of all police shootings.

Above all, we need to listen to and elevate the legitimate concerns and proposed solutions being shared by Black voices.

Our Revolution stands with all who are demanding and working toward justice and accountability, and we join with them in the fight to end our country’s long history of racial oppression.

Education Department Terminates Agency That Allowed Predatory For-profit Colleges to Thrive


The Education Department announced today that it is stripping the powers of one of the nation’s largest accreditors of for-profit schools.

The Accrediting Council for Independent Colleges and Schools, or ACICS, has been under scrutiny for continuing to accredit colleges whose students had strikingly poor outcomes.

As ProPublica has reported, schools accredited by the agency on average have the lowest graduation rates in the country and their students have the lowest loan repayment rates.

Accreditors are supposed to ensure college quality, and their seal of approval gives schools access to billions of federal student aid dollars.

As we have also reported, two-thirds of ACICS commissioners — who make the ultimate decisions about accreditation for schools — were executives at for-profit colleges. Many of the commissioners worked at colleges that were under investigation.

Wells Fargo Slammed With $2.6 Billion Lawsuit By Terminated Workers

And I wonder when the Wells Fargo former and current employees will sue the bank for OT (certainly they did OT) that they most likely weren’t paid for their time when they were pressured by upper management for sales goals to open fake accounts for customers who had know idea of these accounts.


The lawsuit (Polonsky v. Wells Fargo Bank & Co., BC634475, California Superior Court, Los Angeles County )  filed on Thursday, alleged that “Wells Fargo fired or demoted employees who failed to meet unrealistic quotas while at the same time providing promotions to employees who met these quotas by opening fraudulent accounts.”

The lawsuit on behalf of people who worked for Wells Fargo in California over the past 10 years, including current employees, focuses on those who followed the rules and were penalized for not meeting sales quotas. It accuses Wells Fargo of wrongful termination, unlawful business practices and failure to pay wages, overtime, and penalties under California law.

It also offers details of how low-level bankers were allegedly pushed to create at least 10 new accounts a day in a sales initiative that has blown up into a scandal and prompted U.S. lawmakers to call for Chief Executive Officer John Stumpf’s resignation. Bankers were “coached” to secretly open fee-generating accounts and often resorted to using false customer contact information like NoName@WellsFargo.comon accounts so they couldn’t be traced back, according to the complaint.

Former employees Alexander Polonsky and Brian Zaghi, who brought the lawsuit, allege Wells Fargo managers pressed workers to meet quotas of 10 accounts per day, required progress reports several times daily and reprimanded workers who fell short. Polonsky and Zaghi filed applications matching customer requests and were counseled, demoted and later terminated, the lawsuit said.


Part 3

Who engages in massive trades in penny stocks on the industry’s own “chill list”? And what happens when you sell a stock you don’t have? Victimized investor Chris DiIorio finds the answers in plain sight and wonders why no one else seems to care.

A FEW YEARS into his personal quest to understand how he had lost a million dollars on a penny stock, Chris DiIorio developed a sweeping hypothesis involving Knight Capital, the mammoth brokerage company that frequently traded in them.

Knight earned $333 million in pre-tax profits in 2008, and another $232 million in 2009. But DiIorio didn’t think Knight was making that kind of money simply from executing transactions for clients.

As a market maker, Knight was in the rare position of being able to legally sell a stock it didn’t have (the principle being that it will get that stock soon, so no worries). That’s called naked shorting. It’s illegal when regular people do it.

DiIorio suspected that Knight, either on its own behalf or on behalf of clients, made a practice of artificially increasing the number of shares available in a stock through naked shorting, thereby depressing the price.

His suspicion grew when he noticed that Knight often traded in securities that were red-flagged on the Depository Trust Company’s “chill list.”

The DTC is an obscure financial industry-owned company that manages the custody of more than $1 quadrillion in securities annually, recording the transfers with journal entries and guaranteeing the trade. The company makes it easy for people to buy and sell securities without needing to exchange paper stock.

But when the DTC senses trouble, it will stop clearing trades on a stock temporarily.

A chilled stock can still trade — as long as the market participants handle the physical certificates themselves. But it can be a sign that something is gravely wrong. The DTC states on its websitethat it chills stocks “when there are questions about an issuer’s compliance with applicable law.”

Read on.


Part 2 by David Dayen

Part 2

A self-appointed stock sleuth finds financial giants trading extensively in little penny stocks like the one he owned that tanked. And he learns something amazing: Some brokers can sell shares that don’t actually exist.

CHRIS DIIORIO HAD lost a million dollars when the penny stock he was betting on shed 98 percent of its value in a matter of weeks. But when he looked deeper, he found this wasn’t a typical penny stock pump-and-dump scheme. He was determined to get to the bottom of it.

For one thing, there were two huge companies involved.

UBS, one of the world’s largest private banks, seemed to have no business trading in penny stocks. “This was a $50 billion-plus bank, it didn’t seem like penny stocks would move the needle,” DiIorio said. But just in December 2011, UBS’s trades in 32 penny stocks represented over half of the firm’s total share volume, according to his calculations.

In a one-line response to a series of detailed questions from The Intercept, UBS media relations director Peter Stack wrote in an email: “UBS applies strict due diligence and anti-money-laundering standards to all its business.”

After some research, DiIorio became even more disturbed by the presence of the other company, Knight Capital, which has traded an average of more than 2 billion shares of penny stocks daily for the past three years.

Read on.


Part 1

After a stock analyst lost $1 million on one penny stock, he set off to find out how — and soon discovered signs of a far bigger scheme than he had ever imagined.

CHRIS DIIORIO HAD just lost a million dollars.

This was back in 2006. DiIorio, who was 39 at the time, had recently moved with his new wife from Boston to Castle Pines, Colorado, a leafy suburb of Denver, and was toiling in finance as a market researcher, analyzing the financial statements of public companies and giving recommendations to portfolio managers.

He had previously worked on Wall Street as an institutional equity trader and research analyst for a subsidiary of the now-defunct investment bank Donaldson, Lufkin, and Jenrette. He had 13 years experience executing massive trades for large mutual fund clients like Fidelity and Putnam.

But in his new life, DiIorio happened upon a technology company called E Mobile (symbol: EMTK), a small computer chipmaker that claimed to hold patents on an antenna-type Wi-Fi router and other products. He reviewedcompany press releases, as well as investor chatter online claiming that E Mobile’s chips were provoking interest from Chinese content companies.

E Mobile didn’t trade on the New York Stock Exchange or Nasdaq, however. It was an over-the-counter stock, traded on an electronic exchange called thePink Sheets that is home to what are commonly called “penny stocks.”

A penny stock is actually any equity that trades for $5 a share or less. But many shares can be had for a literal penny, or even a fraction of one. They are purchased on the Pink Sheets and the over-the-counter Bulletin Board market, through your regular brokerage account.

Read on.

Lawsuits claim banks failing to honor loan modifications

Bank of America sold the mortgage servicing rights of $650,000 home loans to a company called Green Tree. Green Tree said it received no record from Bank of America of Adella King’s loan modification and declared her mortgage in default.

Consumer lawyers in Western Washington say they are seeing increasing instances of banks failing to honor home loan modifications.

“It scared the heck out of me. I pretty much lost it because I thought I was going to lose everything,” said Adella King of Enumclaw.

King says her home of 20 years was foreclosed upon after her bank denied that she had been granted a modification.

King says Bank of America gave her the loan modification – a reduction in her monthly payment – in 2013 after her husband’s death. But later that year, she says, BOA sold the loan to Green Tree Loan Servicing.

“(Green Tree) said they had received the documents but that there was no record of a loan modification,” said King.

After weeks of negotiation, King came home one day to find a foreclosure notice tacked up on her front door.

Read on.

Investment group calls on Wells Fargo to appoint new directors, take back pay

Wells Fargo is facing more pressure to make changes at the top, with a group that advocates for labor union pension funds calling for two new board directors and taking back compensation from the executive that ran its community banking unit.

In a letter Friday to Wells Fargo’s lead independent director, CtW Investment Group also calls for the bank to commission an outside review of its practices, including the risks incentives carry for encouraging unethical behavior.

“We see little indication that Wells Fargo management and its board has recognized that its high-pressure, punitive corporate culture is one that breeds fear of penalty in employees – not trust that they can honestly share their views,” the letter says.

“Worse still, the steps that Wells Fargo has taken so far – including allowing Community Banking executive Carrie Tolstedt to retire with approximately $124 million in severance and accumulated equity – have been inadequate and send exactly the wrong signal.”

A Wells Fargo spokesman declined to comment.

Miami investors win access to secret documents in Fannie Mae fight

A federal judge on Tuesday ordered the U.S. Treasury Department to release more than 50 documents it tried to keep secret in a lawsuit over government-backed mortgage giants Freddie Mac and Fannie Mae.

The plaintiff is Miami-based mutual fund Fairholme Fund, which filed suit in the Federal Court of Claims in 2013. Fairholme is one of many Freddie and Fannie investors suing the federal government in different venues. The plaintiffs claim the government illegally seized the companies’ earnings after the bailout. The Obama administration says it is acting within the guidelines of Congressional legislation.

Judge Margaret Sweeney has previously ordered the government to release documents over which it exerted executive privilege. The latest batch of documents — mainly internal memos and correspondence between top Treasury officials and the White House — will remain under seal, available only to Fairholme’s attorneys.