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Banking
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June 19, 2013
2nd Circ. Sets Up Hurdle For Asset-Freeze Hearings
The Second Circuit ruled Wednesday that criminal defendants must show they have insufficient assets to hire counsel of choice before being awarded a pretrial hearing to recover frozen assets for that purpose, denying a Bernard Madoff associate’s bid for such a hearing.
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June 19, 2013
UK Watchdog Calls For Overhaul Of Banker Oversight, Pay
Senior bankers must be held more accountable for their actions, including facing the risk of criminal charges for particularly reckless behavior, a U.K. parliamentary commission said Wednesday in a report proposing a banking system overhaul that also calls for stronger controls on payment practices.
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June 19, 2013
Chicago Says Vacant-Property Ordinance Isn't Preempted
An attorney for the city of Chicago told an Illinois federal judge Wednesday that the Federal Housing Finance Agency's suit challenging a local vacant-property ordinance should be axed because the ordinance is not preempted by federal law and the agency lacks authority to bring the case.
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June 19, 2013
ABN Amro Unit Fined $1M For Fund Segregation Issues
A U.S. unit of Netherlands-owned state lender ABN Amro Bank NV has agreed to cough up $1 million in fines to settle allegations it failed to segregate or secure customer funds in violation of the Commodity Exchange Act.
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June 19, 2013
G-8 Backs AfDB Infrastructure Plans, Calls For More Support
Some of the world's largest national economies threw their weight behind the African Development Bank in a Wednesday note ahead of their upcoming Group of Eight summit, lauding the investor for efforts to improve infrastructure and ensure fairness in contracts for natural resource developments.
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June 19, 2013
Citibank Wins Arbitration Of Student Loan TCPA Class Action
A California federal judge on Tuesday granted Citibank NA’s bid to compel arbitration in a proposed class action accusing the bank of violating the Telephone Consumer Protection Act by repeatedly calling student loan holders, finding the dispute fell within the scope of an arbitration provision.
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June 19, 2013
FDIC's $219M Suit Blames Advanta Execs For Bank's Collapse
The Federal Deposit Insurance Corp. launched suit Monday in Pennsylvania federal court to recover $219 million from two top executives of the failed Advanta Bank Corp. who allegedly crippled the bank and alienated customers by increasing credit card interest rates to unprecedented levels.
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June 19, 2013
Banks Not Yet Compliant With Mortgage Deal, Report Says
The five largest U.S. mortgage servicers still have work to do before they’re fully compliant with the terms of last year’s $25 billion national mortgage settlement deal, the federal monitor overseeing the settlement said in a report released Wednesday.
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June 19, 2013
UK High Court Nixes Sanctions On Iranian Bank
The U.K.'s highest court on Wednesday overturned the country's sanctions on an Iranian bank that was allegedly linked to Iran's pursuit of nuclear weapons, ruling it was unfair for the government to single out the company for punishment.
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June 19, 2013
Mayer Brown Settles Claims It Aided $1.5B Refco Fraud
Mayer Brown LLP has agreed to pay an undisclosed amount to Refco Inc.’s bankruptcy trustee to settle claims the law firm aided a $1.5 billion fraud scheme that produced a flurry of criminal convictions, the parties said Tuesday in a Second Circuit filing.
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June 18, 2013
SEC To Seek More Admissions Of Guilt In Settlements
U.S. Securities and Exchange Commission Chairman Mary Jo White reportedly reiterated on Tuesday a recently announced change to the agency's controversial no-admit, no-deny policy, in which defendants will be required to admit guilt in order to settle some civil lawsuits.
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June 18, 2013
Verizon Finishes Off Creditor Suit Over $9B Idearc Spinoff
Verizon Communications Inc. on Tuesday defeated a $9 billion fraudulent transfer suit that targeted its spinoff of the former Idearc Inc., when a Texas federal judge ruled that the bankrupt phone directory company’s creditors couldn't prove that Verizon had intended for the spinoff to fail.
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June 18, 2013
Rothstein Trustee Wants Investors' Evidence Excluded
The trustee overseeing the liquidation of Ponzi schemer Scott Rothstein's law firm asked a Florida bankruptcy court Monday to exclude evidence from investors objecting to a provision in the exit plan that bars suits against TD Bank NA.
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June 18, 2013
IRS Should Tax Virtual Money Spent On Real Goods, GAO Says
Role-playing gamers who exchange virtual currency for real money or products should have to pay taxes for those transactions, but the Internal Revenue Service shouldn't implement a stringent compliance system just yet, according to a Government Accountability Office report issued Monday.
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June 18, 2013
NY AG Fights For Credit Suisse Mortgage Suit
New York Attorney General Eric Schneiderman on Monday defended his case alleging Credit Suisse Securities USA LLC's misrepresentations of its residential mortgage-backed securities caused investors to lose $11.2 billion, saying his case was timely filed and doesn’t conflict with the banks’ previous settlement with securities regulators.
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June 18, 2013
House Republicans Blast CFPB Budget, Retention Rates
Republican members of a House finance committee Tuesday blasted a top Consumer Financial Protection Bureau official over what they called the agency's lack of accountability, excessive spending and poor retention rates, while committee Democrats criticized Republicans for stonewalling agency director Richard Cordray.
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June 18, 2013
Skip Financial Reform In EU Trade Talks, House Dem. Says
Rep. Maxine Waters, D-Calif., told President Barack Obama on Tuesday that next month's free trade agreement negotiations between the U.S. and the European Union shouldn't tackle financial reform issues because the discussion could harm financial reforms that Congress has passed.
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June 18, 2013
Commerce Bank Founder Wants New Trial On $17M Severance
Commerce Bancorp LLC founder Vernon Hill II asked a New Jersey federal judge Monday for a new trial over a $17.2 million severance payment he sought after an investigation into real estate dealings led to his resignation, saying a jury instruction made jurors believe the payment was legally prohibited.
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June 18, 2013
Citicorp Executive Gets 2 Years For Misuse Of Funds
A former executive for Citicorp Services Inc. was sentenced Tuesday in Tampa, Fla., to two years in federal prison and ordered to pay more than $824,000 in restitution for a wire fraud scheme she conducted for more than six years.
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June 18, 2013
Pa. McDonald's Hit With Class Action Over Debit Card Wages
A Pennsylvania woman hit a McDonald’s franchisee with a putative class action in state court on Thursday, alleging that the employer violated state laws by paying employees solely via debit cards.
Expert Analysis
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Alternative Investments: What Regulators Are After
Alternative investments, while attractive for their potentially higher returns, may incorporate complex strategies that are hard to understand. Increasingly, regulators have raised issues where registered representatives cannot explain how a product works in a way a customer can appreciate, say attorneys with Sutherland Asbill & Brennan LLP.
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Bank-Holding Cos. Can Benefit From TAAs In Bankruptcy
The increasing number of bankruptcy and district court decisions in favor of estates demonstrates the importance of understanding the bankruptcy implications of a tax allocation agreement entered into by any consolidated tax group, especially bank-holding companies. As shown by the Southern District of California ruling in In re Imperial Capital Bancorp Inc., the TAA terms could affect a significant estate asset: tax refunds, says Matthew Riopelle of Foley & Lardner LLP.
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Whyte V. Barclays Follows The 546 Safe Harbor Trend
In Whyte v. Barclays Bank PLC, the Southern District of New York recently dismissed the complaint of the trustee for the SemGroup estate seeking to avoid a novation made to Barclays pre-bankruptcy under a swap agreement. This is one of a number of cases in recent years that treats the safe harbors — particularly the section 546 safe harbors — as broadly protective of nondebtor transferees in financial transactions, say Jonathan Guy and Douglas Mintz of Orrick Herrington & Sutcliffe LLP.
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UK Joint Ventures: Sanctions And Corruption Risks
What should be at the forefront of the mind of any in-house counsel or compliance officer whose company operates in joint ventures is section 7 of the U.K. Bribery Act, which holds that an organization does not even need to be aware of corrupt conduct in order to be guilty of an offense, say attorneys with Dechert LLP.
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Another Usury Exemption For California Lenders
When Californians first passed an initiative precluding the charging of “usurious” interest in 1918, they could hardly have imagined the ever-more sophisticated schemes and exceptions allowing lenders to charge interest exponentially higher than the stated maximum rate of 10 percent. In Bock v. California Capital Loan Inc., a California Court of Appeal recently introduced yet another exception to a seemingly simple prohibition, say Brian Lauter and Mark Madnick of Robins Kaplan Miller & Ciresi LLP.
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Lehman Derivative Litigation Still Looms Large
The market’s attention is fixed firmly on the future of derivatives. Questions about the Dodd Frank requirements, and to what extent the use of swaps in structured finance and other transactions will return, are front and center. And yet, there are also lessons to be learned from the past use of these somewhat esoteric financial instruments, which continue to be tested in litigation — with more to come on the Lehman front, say attorneys with Orrick Herrington & Sutcliffe LLP.
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New Dark Pool Regulation On The Horizon
Dark pool operators readying for new governance might give advance thought to the trading system build-outs that may be necessary to comply with a price improvement rule. Additionally, they may take an introspective look at how they use their customer’s trading information and what they disclose to customers about such use, as well as their surveillance systems to identify areas warranting improvement, says Christina Davilas of Bingham McCutchen LLP.
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Is TAR Right For Your Discovery Project?
There are several critical decision factors to weigh to assess whether Technology Assisted Review is right for a discovery project — for example, the nature of the case, internal capabilities, production considerations and overall comfort with this technology, say Michele Lange and Joseph White of Kroll Ontrack Inc.
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Catch Me If You Can: How To Serve Foreign Defendants
You are sitting at your desk when your client calls to tell you that his or her customer breached an agreement. As you do your intake, you ask where the customer resides. You learn that the potential defendant has recently moved to “Country X.” Suddenly, what first appeared to be a simple breach of contract case has become a venture into the exotic world of international service of process and jurisdiction, say attorneys with Nossaman LLP.
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Class Arbitration Is Back In Arbitrators’ Hands
Arbitrators can still interpret contracts pretty much any way they want, according to the U.S. Supreme Court’s unanimous ruling in Oxford Health Plans LLC v. Sutter. The holding should come as no great surprise as it reflects decades of federal arbitration law, yet the unanimous ruling is a surprise, given what preceded it, says Christopher King of Homer Bonner Jacobs.