Credit Suisse Looks To Nix NYAG’s $11.2B RMBS Suit

Law360, New York (March 29, 2016, 10:25 PM ET) — Multiple Credit Suisse Group units on Tuesday asked a New York appeals court to find New York Attorney General Eric Schneiderman’s residential mortgage-backed securities lawsuit over $11.2 billion in investor losses to be time-barred, citing precedent from New York’s highest court.

Schneiderman sued the bank in 2012 under New York’s Martin Act, a broad anti-financial fraud statute, accusing Credit Suisse “deceived investors” about the quality of mortgages included in the securities and the care with which the bank evaluated them, both before and after investors purchased…

Source: Law360

N.Y. budget blocks NY A.G. from controlling JP Morgan settlement cash: NY AG loses $440M in housing funds under state budget

Bloomberg:

The budget deal reached by Governor Andrew Cuomo and lawmakers would require New York’s attorney general to cede control of cash obtained from settlements to the governor and legislature.

The move would cap a fight between Cuomo and Attorney General Eric Schneiderman, a fellow Democrat, over New York’s $613 million share of a $13 billion federal-state settlement withJPMorgan Chase & Co. (JPM) That November accord ended probes into the bank’s mortgage-bond practices and put the funds under Schneiderman’s supervision.

The provision, along with the rest of the $137.9 billion spending plan, is expected to be voted on in Albany today ahead of a deadline on April 1, the start of the fiscal year.

“Our concern has always been that the funds from Attorney General Schneiderman’s settlement with JPMorgan Chase be used for the purposes for which they were intended — to help struggling homeowners in New York,” said Damien LaVera, a spokesman for Schneiderman, in an e-mail. “We will review the budget proposal through that lens.”

During the dispute with the attorney general, Cuomo aides said the state constitution already required settlement cash to be deposited in the treasury, which the governor and legislature control.

Unfortunately, Schneiderman loses $440M in housing funds under the state budget. From NY Daily News:

Tucked away in the budget bills is a provision that strips Schneiderman of his control of the remaining $440 million the state will get in a national housing settlement with JP Morgan Chase.

Instead, the money will be put in a new fund and controlled jointly by Gov. Cuomo and legislative leaders. The bills say the money must be spent on multiple housing issues, including anti-blight projects, foreclosure assistance hotlines and counseling and mediation programs.

NY AG will continue to pursue its claims of fraud against BofA former CFO Joe L. Price

NY AG will continue to pursue its claims of fraud against BofA former CFO Joe L. Price

BofA CFO is the next on NY AG’s list…

NEW YORK — Attorney General Eric T. Schneiderman today announced a $25 million settlement with Bank of America Corporation and its former Chairman and Chief Executive Officer, Kenneth D. Lewis, regarding the bank’s actions as it sought to merge with Merrill Lynch & Co in 2008. Despite its top executives’ specific knowledge of mounting losses at Merrill Lynch that were forecast at more than $9 billion, Bank of America failed to disclose that information to shareholders prior to their vote on a proposed merger with Merrill Lynch. The Attorney General also alleged that the Bank’s former CEO and CFO, Kenneth Lewis and Joe Price, misrepresented to shareholders the impact that the merger with Merrill would have on Bank of America’s future earnings. The barring of Mr. Lewis from serving as an officer or director of a public company for three years, as well as the payment of $10 million to the State of New York, represents one of the first successful attempts by law enforcement to hold accountable a CEO or individual at a major institution since the financial crisis.

“Since I took office, I’ve acted on the belief that no one, no matter how rich or powerful, should escape accountability for their actions — especially ones that caused such damage to shareholders,” said Attorney General Schneiderman. “Today’s settlement demonstrates a major victory in our continued commitment to applying the law equally to individuals, as well as corporations. I would hope this closes one chapter of our ongoing efforts to ensure the frauds that occurred in and around the financial crisis are not forgotten.”

On April 4, the Attorney General intends to file a summary judgment motion against the remaining defendant in the case, Joe L. Price, the bank’s former Chief Financial Officer.