Daily Archives: November 20, 2016

Rhode Island Will Join Investors Demanding Wells Fargo Come Clean

Press Releases

Treasurer Magaziner Co-files Shareholder Proposal Calling on Wells Fargo to Address Unacceptable Consumer Fraud

Rhode Island has joined a group of institutional investors filing a shareholder proposal demanding Wells Fargo (NYSE:WFC) address recent revelations of widespread consumer fraud and take steps to protect customers and shareholders from illegal predatory banking going forward, General Treasurer Seth Magaziner announced today.

“Wells Fargo allowed millions of Americans to fall victim to widespread fraud and the full extent of the damage to their customers, employees, and shareholders is still unknown,” said General Treasurer Seth Magaziner. “On behalf of Rhode Island taxpayers and members of the State’s pension system, we are entitled to know what Wells Fargo allowed to happen and what steps they are taking to ensure that it can never happen again.”

Thousands of Wells Fargo employees are alleged to have illegally opened accounts for bank customers without their permission, charging additional fees to customers and generating performance incentives for employees and managers. In September of 2016, Wells Fargo paid a $185 million settlement to the Consumer Financial Protection Bureau. This is only the latest in a series of penalties for charges of long-term widespread fraud, ethical lapses and discrimination within the company.

“The Employees’ Retirement System of Rhode Island believes that economic and financial prosperity are rooted in ethical businesses practices,” writes Treasurer Magaziner in a letter to Wells Fargo. “A full accounting of the root causes of widespread fraudulent activity at the company and a clear plan for corrective action going forward will go a long way toward rebuilding trust and increasing shareholder value.”

Read on.

AIG eyes ‘direct investments’ in mortgages – FT.com

Insurer American International Group, or AIG, is looking to move into residential property loans with plans to make what company representatives called direct investments in mortgages, the Financial Times reported Sunday.

The newspaper’s website reported that AIG’s Chief Investment Officer Doug Dachille has told investors that increasing AIG’s allocation to residential mortgages was one of his “key initiatives.”

Read on.

Deutsche Bank : clears chairman of blame for bank’s poor cooperation in Libor case – paper

Deutsche Bank has cleared its chairman of accusations by shareholders that he was partly to blame for the bank’s poor cooperation with authorities over alleged rate-rigging, daily Sueddeutsche Zeitung has cited financial sources as saying.

Last year, Deutsche Bank agreed to settle a case over the alleged manipulation of interbank rates such as Libor for a record $2.5 billion with U.S. and British authorities, which had accused the lender of obstructing their investigations.

Some shareholders subsequently accused Chairman Paul Achleitner and other board members of being responsible for the bank’s poor cooperation, which led to it having to pay more to settle the case than other lenders.

Read on.

Terms of Trump U settlement: $21 million to San Diego case, $4 million to NY and plaintiffs’ attorneys waive fees and work probono

And Donald Trump will pay up to $1 million in penalties to the state of New York for violating state education laws…

LA Times:

Under the terms, $21 million will be spread among the plaintiffs in the San Diego cases and $4 million will go to the New York case. The plaintiffs’ attorneys agreed to waive their fees and work pro bono, maximizing the amount the students could recover.

“The attorneys won’t be making money on this case. All will go to the students,” said San Diego plaintiffs attorney Jason Forge.

The 7,000 or so eligible members in the class-action suits should be able to recover at least 55% — and possibly 100% — of the money they spent on Trump University, Forge said.

Some students had paid up to $35,000 on “elite” memberships that offered a year of mentorship and said they were encouraged to max out credit cards to pay for the instruction.

“Students will be very pleased to be able to pay their credit card bills and move on with their lives,” said plaintiffs attorney Rachel Jensen.

One of those students was Sonny Low — a 74-year-old named plaintiff from Chula Vista representing California class members in the lawsuit that was to go to trial Nov. 28. He has been paying off a $9,000 credit card debt from Trump University and now will be able to recover that money, said one of his attorneys, Patrick Coughlin.

The law firm Zeldes, Haeggquist & Eck, which helped represent the plaintiffs, said in a statement Friday that it was “incredibly painful” to end the legal battle now.

“We stand behind their claims 100%,” the firm said, “but there is always risk in taking a case to trial and that was particularly so here, when the defendant was poised to be the next president of the United States.”

Memo to Trump: The Constitution doesn’t allow presidents to seek gifts from foreign agents

Section 9.

No title of nobility shall be granted by the United States: and no person holding any office of profit or trust under them, shall, without the consent of the Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.

Thinkprogress:

Friday evening, the Washington Post reported that about 100 foreign diplomats gathered at President-elect Donald Trump’s hotel in Washington, DC to “to sip Trump-branded champagne, dine on sliders and hear a sales pitch about the U.S. president-elect’s newest hotel.” The tour included a look at the hotel’s $20,000 a night “town house” suite. The Post also quoted some of the diplomats saying they intended to stay at the hotel in order to ingratiate themselves to the incoming president.

“Why wouldn’t I stay at his hotel blocks from the White House, so I can tell the new president, ‘I love your new hotel!’” said one diplomat from an Asian nation. “Isn’t it rude to come to his city and say, ‘I am staying at your competitor?’”

The incoming president, in other words, is actively soliciting business from agents of foreign governments. Many of these agents, in turn, said that they will accept the president-elect’s offer to do business because they want to win favor with the new leader of the United States.

In an exclusive exchange with ThinkProgress, Richard Painter, a University of Minnesota law professor who previously served as chief ethics counsel to President George W. Bush, says that Trump’s efforts to do business with these diplomats is at odds with a provision of the Constitution intended to prevent foreign states from effectively buying influence with federal officials.