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May 9, 2013
Deals Rumor Mill: Microsoft, Facebook, Billabong
Microsoft sends Barnes & Noble shares skyward by offering $1 billion for the bookseller’s stake in its Nook e-reader and digital books unit, while Facebook is closing in on a 10-figure deal of its own to swallow up an Israeli startup that would beef up its mapping capabilities.
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May 9, 2013
Falcone Faces Industry Ban Under $18M SEC Pact
Philip Falcone and his hedge fund Harbinger Capital Partners LLC have struck an $18 million settlement in two U.S. Securities and Exchange Commission suits that includes a two-year industry ban for the once-celebrated investment manager, the firm said Thursday.
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May 8, 2013
Paul Hastings Settles BankUnited Avoidance Action
A Florida bankruptcy judge on Wednesday signed off on a $400,000 settlement between Paul Hastings LLP and BankUnited Financial Corp., resolving an avoidance action that sought to recover more than $1 million that the firm received on the eve of the bank's Chapter 11 filing.
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May 8, 2013
Foreclosure Atty Who Fled With Millions Hit With 1st Client Suit
A lawsuit filed in Florida court last week is the first by clients of missing foreclosure defense attorney Timothy McCabe, who disappeared in early April and is being investigated for reports of millions of dollars in missing client funds.
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May 8, 2013
REIT Two Harbors Makes Play For Mortgage Servicing Rights
Real estate investment trust Two Harbors Investment Corp. said Wednesday that it would use the acquisition of a small mortgage servicer to expand into what is quickly becoming a hot corner of the market as big banks shed their servicing portfolios.
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May 8, 2013
FERC Mulls Market Manipulation Action Against JPMorgan
The Federal Energy Regulatory Commission is considering a possible enforcement action against JPMorgan Chase & Co. related to a probe into a JPMorgan energy unit’s alleged electricity market manipulation in California and the Midwest, the banking giant said Wednesday.
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May 8, 2013
W.Va. Frees RBC From Bid-Rigging MDL Tied To Muni Bonds
A New York federal judge on Wednesday signed off on an agreement dismissing West Virginia's claims against Royal Bank of Canada in multidistrict litigation over alleged bid-rigging on municipal derivatives.
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May 8, 2013
Prosecutors Get Last Laugh In $1B BofA Fraud Case
A controversial legal theory at the heart of a $1 billion mortgage fraud suit against Bank of America Corp. could become a go-to enforcement tool for civil prosecutors in the wake of a New York federal judge’s surprise ruling Wednesday, experts say.
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May 8, 2013
FDIC Tightens Squeeze On Failed Bank Execs
The Federal Deposit Insurance Corp. is taking a more aggressive stance toward officers and directors of failed banks, experts say, filing more lawsuits against executives as recent litigation victories and political pressures increasingly spur the agency to hold individuals accountable for bank failures.
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May 8, 2013
NY Ruling Against Goldman Pokes Hole In Diligence Defense
In rejecting Goldman Sachs & Co.'s argument that a bond insurer that sued for fraud should have checked a $275 million portfolio of bad mortgages loan-by-loan, a New York appeals court has limited the power of banking-industry defendants to knock out subprime suits simply by arguing that a plaintiffs' due diligence wasn't adequate, experts said.
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May 8, 2013
Freddie Mac Slams BofA's Doc Request In $2B MBS Fight
Freddie Mac on Wednesday blasted Bank of America for its “eleventh hour” bid to compel discovery in a New York federal court fight over more than $1.6 billion in mortgage-backed notes, saying the documents sought are largely irrelevant and should already be in the bank's possession.
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May 8, 2013
MBIA Strikes $350M Deal To End Societe Generale MBS Suit
MBIA Insurance Corp. reached a $350 million settlement Wednesday ending Societe Generale SA's claims that it fraudulently restructured $5 billion of Societe Generale's cash and securities in an attempt to escape coverage obligations to big banks after the 2008 financial crisis.
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May 8, 2013
Chesapeake Wins Bid To Buy Back $1.3B In Bonds
A New York federal judge Wednesday sided with Chesapeake Energy Corp. in its bid to call back and refinance $1.3 billion in bonds, rejecting arguments from trustee Bank of New York Mellon that the energy company had moved too late in redeeming the notes.
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May 8, 2013
Sen. Paul Urges Repeal Of Anti-Tax Evasion Law
Sen. Rand Paul, R-Ky., introduced a bill Tuesday that would nix U.S. Treasury Department attempts to cull information on U.S. tax cheats utilizing foreign banks accounts, saying the current law violates citizens' constitutional rights to privacy.
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May 8, 2013
Ziegler Slams Edwards Wildman Over Costly Discovery Mishap
Investment bank B.C. Ziegler and Co. on Tuesday hit law firm Edwards Wildman Palmer LLP with a suit in Illinois court alleging it released confidential customer information while representing the bank, setting off a flurry of claims against the bank involving a soured investment.
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May 8, 2013
ING Plans IPO For European Insurance Unit
After taking its American unit public last week, Dutch insurer ING Groep NV on Wednesday announced a similar plan for its European business, continuing efforts to repay a €10 billion ($13.2 billion) government bailout.
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May 8, 2013
NJ Cracks Down On Foreclosure Relief Scams
The New Jersey Department of Banking and Insurance is moving forward with new licensing, reporting and recordkeeping regulations for mortgage foreclosure consultants, as envisioned by a 2011 law intended to battle foreclosure rescue scams in the state.
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May 8, 2013
MasterCard Can't Put £400M UK Antitrust Case On Hold
A British court ruled Friday that retailers seeking nearly £400 million ($621 million) from MasterCard Inc. over its multilateral interchange fees don't need to wait for the result of the credit card giant's related European Union antitrust appeal to pursue their case.
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May 8, 2013
Buchanan Ingersoll Adds K&L Finance Pro To NC Ranks
Former K&L Gates LLP partner Evan N. Wolkofsky has joined Buchanan Ingersoll & Rooney PC as a shareholder, the firm announced Wednesday, bolstering the growing finance team in its Charlotte, N.C., office.
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May 8, 2013
$1B BofA Mortgage Suit OK'd Under Controversial Fraud Law
U.S. District Judge Jed Rakoff on Wednesday pared a $1 billion mortgage fraud suit against Bank of America Corp., dismissing False Claims Act allegations but allowing civil prosecutors to seek penalties under a controversial 1989 law designed to protect banks from fraud.
Expert Analysis
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Collection Letters Must Clearly Convey Validation Notice
The Third Circuit’s ruling in Caprio v. Healthcare Revenue Recovery Group LLC is a reminder to debt collectors that, even where the technical requirements of the Fair Debt Collection Practices Act are met, a debt collector must be sure that its notices to consumers do not cause any confusion to the very consumers that the statute was designed to protect, say attorneys with Day Pitney LLP.
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The Latest On Lehman
The takeaway from the most recent Lehman Bros. holding by the U.S. Bankruptcy Court for the Southern District of New York is that in the context of the true mega-case, where an endless number of issues need to be resolved in an extremely short period of time, provisions that authorize the payment of professional fees for individual committee members, as well as ad-hoc committees and individual creditors, are likely to become more common, says Kenneth Enos of Young Conaway Stargatt & Taylor LLP.
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Riverisland Erodes Calif. 'Parol Evidence Rule'
Lenders and counsel will likely devise a number of provisions making it difficult for borrowers to be believed in court if they come up with claims of fraud contrary to the terms of written contracts they have signed. The lesson from the California Supreme Court decision in Riverisland Cold Storage Inc. v. Fresno-Madera Production Credit Association, however, is that doing so at the contract drafting and execution stage is more important than ever, says Perry Mocciaro of Cox Castle & Nicholson LLP.
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Gabelli And For Whom The Clock Tolls
While the U.S. Supreme Court ruling in Gabelli v. SEC was undeniably a significant loss for the government, the opinion does not necessarily mean the limitations period for claims subject to § 2462 will in all cases be limited to a hard-and-fast five-year period beginning when the alleged fraudulent conduct occurred. Perhaps in an effort to preserve flexibility, the U.S. Securities and Exchange Commission kept a few of its eggs out of the Gabelli basket, say James Meyers and Justin Bagdady of Orrick Herrington & Sutcliffe LLP.
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Recession-Era Loss Causation: Disentangling Under Dura
The Second Circuit recently hinted that loss causation principles could result in the elimination of any recovery for losses that cannot be distinguished from “the global financial crisis” and related factors. Several courts have entertained this kind of disaggregation analysis at the pleading stage, say attorneys with Cahill Gordon & Reindel LLP.
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Strategy Savvy From Strategic Growth's Mile High Bank Buy
Strategic Growth Bancorp Inc.’s successful acquisition and recapitalization of Mile High Banks illustrates the potential advantages of undertaking a distressed bank recapitalization in the context of a section 363 sale. The process is a complex one, however, and requires the near-seamless integration of bankruptcy, mergers and acquisition, tax and bank regulatory issues, say attorneys with Davis Polk & Wardwell LLP.
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How Not To Plead A Multistate Class Action
The plaintiffs’ class counsel can be their own, and their Bar’s, worst enemy. Thomas v. UBS AG and the Seventh Circuit decision should not be taken as precedent — or its ambiguities stretched to stare decisis. Instead, it is an example of what a frustrated judge can do, when given his reins by a case truly not well thought out before the complaint was filed, says Fred Isquith of Wolf Haldenstein Adler Freeman & Herz LLP.
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The Most Unlikely Financial Crisis Fall Guy
Abacus Federal Savings Bank — a small family-owned bank in New York City's Chinatown — is the only bank in the U.S. to be criminally indicted as an institution for mortgage fraud in the wake of the financial crisis. The mere indictment builds political capital, regardless of whether there’s any factual basis for the claims, says Rosalie Valentino of Goetz Fitzpatrick LLP.
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6 Areas Often Underestimated In Law Firm Mergers
While mergers in other industries are driven by cost efficiencies or economies of scale, law firm mergers are typically focused on the potential to leverage clients and the overall quality of the attorney population, branding and market position. As a result, full disclosure of third-party vendor or support function operating costs can be a secondary concern until after the deal closes. Firms need to hit the ground running the moment the merger is inked, says Matthew Sunderman of HBR Consulting LLC.
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Gabelli Could Kickstart The 'Civil' Prosecution Debate
The U.S. Supreme Court has unanimously ruled against the U.S. Securities and Exchange Commission in Gabelli v. SEC. While this important statute of limitations issue did not require the court to discuss our increasingly prosecutorial administrative state, the mere fact that the issue was openly acknowledged during oral argument is encouraging for future targets of civil administrative prosecution, and ominous for the SEC and other agencies that benefit from a lopsided playing field, says Russell Ryan of King & Spalding LLP.