Daily Archives: December 9, 2016

Whistleblower Didn’t Live to See Landmark Allied Mortgage Verdict, Taxpayers Recover $92 Million

In May, 2011, Peter Belli filed a complaint in Boston. With guidance from whistleblower experts at Mahany Law, he accused Allied Home Mortgage Capital Corporation of massive mortgage fraud in a False Claims Act “qui tam” whistleblower lawsuit.

Over five years later, and after a trial that lasted five weeks, a jury found both the corporation and its CEO, Jim Hodge, guilty of knowingly representing to Housing and Urban Development (HUD) that certain loans were properly prepared and eligible for Federal Housing Administration (FHA) insurance, when in fact they were not.

Belli had managed several Allied branches in Massachusetts, Rhode Island, Arizona, and other states. He was thus in an ideal position to observe Allied Capital’s fraudulent practices, and he was determined to bring the scheme to light. Unfortunately, he passed away before the verdict came out only days ago in Texas. The move to a Texas court had been a choice of the defendants.

Read on.

Minneapolis explores ending its Wells Fargo relationship; bank responds

The Minneapolis City Council on Wednesday asked staff to explore ways the city could “stop doing business with financial institutions that invest in the fossil fuel industry and in projects such as the Dakota Access Pipeline,” including Wells Fargo.

The nation’s fourth largest bank, which was founded in the Twin Cities as Northwestern National Bank in 1872, took notice of the council’s action and on Thursday jumped to reaffirm its value to Minneapolis and its investments here.

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Wells Fargo Ex-Managers’ Suit Puts Scandal Blame Higher Up Chain


  • Area president may be highest-ranking alleged to direct scheme
  • Ex-branch managers claim workers taught to cheat, threatened

The lawsuits piling up against Wells Fargo & Co. over its fake accounts scandal have expanded to include three former branch managers alleging that an area president ordered employees to open bogus accounts to juice sales.

The area president, who may be the highest-ranking bank employee alleged to have directed the opening of fraudulent accounts, told employees to “do whatever it takes” to meet sales quotas and keep their jobs, according to the lawsuit.

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JPMorgan Hit Hardest as EU Fines Euribor Trio $521 Million

JPMorgan Chase & Co., HSBC Holdings Plc and Credit Agricole SA were fined a total of 485.5 million euros ($521 million) for rigging the Euribor benchmark as European Union antitrust regulators wrapped up a five-year investigation into the scandal.

The trio colluded to rig the Euribor rate and exchanged sensitive information to suit their trading positions in correlated derivatives markets, in breach of EU antitrust rules, the European Commission said on Wednesday in an e-mailed statement. JPMorgan was fined 337.2 million euros, HSBC got a 33.6 million-euro penalty and Credit Agricole must pay 114.7 million euros.

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Fast food giant McDonald’s to move non-US tax base to UK

McDonald’s is moving its non-US tax base to Britain from Luxembourg amid a battle with EU regulators.

The fast food giant is creating a new holding company through which it will route non-US royalties.

The announcement was welcomed by the Prime Minister’s official spokeswoman.

McDonald’s, led by Briton Steve Easterbrook, has come under fire from EU officials investigating claims that it has avoided more than €1bn (£800m) in tax through the use of a loophole in Luxembourg.

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Exclusive: U.S. regulator set to fail Wells Fargo on community lending test – sources

A U.S. bank regulator is ready to fail Wells Fargo on a national scorecard for community lending, sources familiar with the decision said on Wednesday, in a move that could limit near-term expansion for the bank.

Wells Fargo is due to be deemed a bank that “needs to improve” under the Community Reinvestment Act (CRA), a law meant to promote lending to poor neighborhoods.

The move is a two-notch downgrade from the “outstanding” tag Wells Fargo has held since 2008 and the change would give regulators a greater say on day-to-day matters like whether they may open new branches.

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U.S. derivatives regulator to move on from Dodd-Frank under Trump

The U.S. derivatives regulator will move on from reforms created in the wake of the 2007-09 financial crisis to a new focus on U.S. competitiveness and the potential for shocks to the global $710 trillion (£564.37 trillion) swaps markets under President-elect Donald Trump.

J. Christopher Giancarlo, in line to head the Commodity Futures Trading Commission once Trump is inaugurated on Jan. 20, has said the agency should look beyond mandates from the 2010 Dodd-Frank Wall Street reform law to current trends in financial markets. He counts among those cyber threats, liquidity risk, market concentration and de-globalisation.

As the sole Republican on the CFTC, Giancarlo will at least temporarily run the commission where he is currently the minority member.

Read on.