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May 22, 2013
UBS Ruling Allays Fear Factor For SEC Whistleblowers
A New York federal court ruling Tuesday that keeps alive a UBS AG whistleblower’s retaliation suit marks a key victory for the U.S. Securities and Exchange Commission as it looks to make reporting Wall Street fraud less intimidating, attorneys say.
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May 22, 2013
9th Circ. Won't Revive BofA Debit Card Fee Suit
A proposed class of Bank of America NA customers failed Wednesday to revive their suit over the bank's service fees for payroll debit cards, after the Ninth Circuit upheld a lower court's ruling that the National Bank Act preempts the suit's state law fraud and unfair competition claims.
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May 22, 2013
HSBC Client Avoids Jail After Cooperating With Tax Probe
A New Jersey man who pled guilty to conspiring with several HSBC bankers to hide money in India from the Internal Revenue Service avoided prison time Wednesday, instead receiving probation in exchange for assisting prosecutors in their investigation of the bank.
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May 22, 2013
Internal Whistleblowing Deserves Protection, Judge Tells UBS
The Dodd-Frank Act protects whistleblowers from retaliation even if they report wrongdoing internally rather than to the U.S. Securities and Exchange Commission, a New York federal court ruled Tuesday, rejecting UBS AG’s bid to dismiss claims by a former mortgage-backed securities strategist.
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May 21, 2013
Investors Prevail Over Citigroup In ARS Market-Bust Arbitration
Citigroup Global Markets Inc. must pay $1 million in damages to two Texas companies that faulted the firm for failing to pull their money out of the auction rate securities market before its collapse, an arbitration panel ruled Friday.
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May 21, 2013
BNY Mellon Win In Lyondell LBO Case Upheld By NY Court
A New York state appeals court on Tuesday said Bank of New York Mellon Corp. did not breach a fiduciary duty in its handling of Basell AF SCA's leveraged buyout of Lyondell Chemical Co. that bankrupted both companies, affirming a lower court's decision.
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May 21, 2013
Nationwide Mortgage Settlement Nets Over $50B In Relief
The five largest U.S. mortgage servicers have provided over $50 billion in relief to over 620,000 homeowners under last year's national mortgage settlement, according to an update released Tuesday by the federal monitor overseeing the settlement.
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May 21, 2013
WaMu Noteholders Can't Join $10B Fight, DC Circ. Says
The D.C. Circuit on Tuesday refused to let a group of Washington Mutual Bank noteholders enter Deutsche Bank AG's $10 billion suit over WaMu's poor-quality mortgages, ruling that their interest in the case was too conditional to justify intervening and that their inclusion could open the floodgates for other creditors.
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May 20, 2013
Morgan Stanley Wins Arbitration Of Tribe's $26M RICO Suit
A Florida federal judge on Friday refused to permit an Indian tribe to sue Morgan Stanley Smith Barney LLC for allegedly aiding an embezzlement spree that drained $26 million from tribal coffers, rejecting the tribe's bid to invalidate an arbitration agreement.
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May 20, 2013
Agencies Deserve Deference On Jurisdiction, Justices Say
The U.S. Supreme Court ruled Monday that courts should apply a deferential standard of review toward a federal agency's definition of its own jurisdiction, siding with the Federal Communications Commission in a fight with local government agencies over zoning rules for wireless facilities.
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May 20, 2013
Fannie, Freddie Exempt From Transfer Tax, 6th Circ. Says
The Sixth Circuit on Monday ruled Fannie Mae and Freddie Mac are federal agencies exempt from real estate transfer taxes, overturning a lower court that said two Michigan counties could collect such taxes and dealing a blow to similar suits across the country.
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May 20, 2013
FDIC Loses Fight Over $30M In Imperial Capital Bankruptcy
A California judge on Thursday rejected a bid by the Federal Deposit Insurance Corp. to claim $30 million in tax refunds as the receiver of the failed Imperial Capital Bank, saying the funds belong instead to the bank's parent under the terms of a prebankruptcy contract.
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May 17, 2013
Ex-Broker Gets Probation For Muni Bond Bid-Rigging
After cooperating with a sweeping multistate investigation, the former CEO of a New York-based brokerage was sentenced to two years of probation Friday for his role in a municipal bond bid-rigging conspiracy.
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May 17, 2013
Rakoff Gives Dexia's $774M JPMorgan MBS Suit 2nd Life
U.S. District Judge Jed S. Rakoff on Friday vacated an earlier decision dismissing Dexia NV/SA's suit accusing JPMorgan Chase Bank NA of selling defective residential mortgage-backed securities, saying that a New York state court should handle the Belgian bank's $774 million claim.
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May 17, 2013
Shareholder Can't Get Head Start In S&P Suit, Judge Says
A Florida pension fund can't use a special proceeding to get an upper hand in before bringing a shareholder derivative suit against McGraw-Hill Financial Inc. over the role of its affiliate Standard & Poor's in the mortgage-backed securities crisis, a New York state judge ruled Friday.
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May 16, 2013
Pa. High Court Won't Hear Appeal Of Predatory Lending Fine
The Pennsylvania Supreme Court said Wednesday it would not hear an appeal of a decision that upheld the Pennsylvania Human Relations Commission's ability to intervene in private business transactions involving mortgages and other loans, and to levy fines against predatory lenders.
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May 16, 2013
Judge Backs Class Cert. In PHH Reinsurance Kickback Suit
A California magistrate judge on Tuesday recommended certifying a class of borrowers claiming that mortgage lender PHH Corp. used a shady reinsurance scheme to rake in an unlawful cut of the premiums they paid for mortgage insurance, finding the U.S. Supreme Court's recent Comcast ruling didn't create a barrier to certification.
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May 16, 2013
Wells Fargo Dodges Claim In $13M RE Investor Suit
A Nevada federal judge on Wednesday dismissed a claim of unauthorized mortgage banker activity in a suit filed against Wells Fargo Bank NA by a group of real estate investors that put $13.4 million into properties owned by a convicted Ponzi schemer, ruling that the claim was preempted by federal law.
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May 15, 2013
2nd Circ. Rules For Bank In $118M Asset Forfeiture Case
The Second Circuit ruled Wednesday that a Canadian bank does not have to hand over $118 million allegedly held by its Caribbean subsidiary to a U.S. commonwealth to settle a former resident's tax bill, backing a New York high court decision tightening the limits on asset turnovers.
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May 15, 2013
Lehman Agrees Citi Can Make $1.2B Claim Over Forex Deals
Citibank NA got the green light Tuesday to make a $1.2 billion claim against Lehman Brothers Holdings Inc.’s North American broker-dealer as part of a settlement stemming from an agreement over foreign exchange transactions that Citi cleared for Lehman affiliates.
Expert Analysis
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Pitfalls For Lenders Redeeming Ala. Property
In First United Security Bank v. McCollum, the Alabama Court of Civil Appeals addressed the rights of a lender that redeems property sold at a tax sale as a result of its borrower’s failure to pay his property taxes. In certain situations, the decision will penalize lenders and awards property owners with a financial windfall, says Jack Kubiszyn of Bradley Arant Boult Cummings LLP.
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More 'Dark Pools' Deepen Litigation Issues
Not surprisingly, dark pools are beginning to crop up in litigation settings. More cases are focusing on the misuse of information contained in dark pool trades, as well as dark pools acting as conduits to insider trading. In fact, there appears to be a correlation between the growth of dark pools and the number of criminal insider trading cases brought by government officials, says Adam Werner of Berkeley Economic Consulting.
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Rise Of The Machines — Predictive Coding Goes Mainstream
The pros of using predictive coding far outweigh the cons. Given the heavy pressure on law firms and in-house counsel to reduce discovery costs, as well as the Justice Department's recent stance on the subject, it appears predictive coding will continue to emerge from the obscure world of legal technology to the mainstream of legal practice, say Michael Moscato and Myles Bartley of Curtis Mallet-Prevost Colt & Mosle LLP.
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Unprecedented FCPA Wake-Up Call For US Broker-Dealers
The extraordinary criminal bribery charges against two registered representatives of a U.S. broker-dealer and a high-level Venezuelan government official highlight that a broker-dealer’s anti-money laundering procedures, as well as oversight of their registered people, should have a Foreign Corrupt Practices Act component if the firm is doing international business, say attorneys with Duane Morris LLP.
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Libor Litigation Must Overcome Significant Obstacles
When U.S. District Judge Naomi Reice Buchwald dismissed a consolidated, multidistrict batch of antitrust and racketeering suits in Manhattan earlier this spring, she suggested plaintiffs seeking to recover from banking giants at the heart of the interest rate-fixing scandal might have better luck with securities fraud claims. But those plaintiffs will need to be lucky indeed. Two recent developments show that obstacles are inherent and, perhaps, insurmountable, say attorneys with Choate Hall & Stewart LLP.
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SEC Eyes Advisory Contract Approval Disclosures
A recent settlement with the U.S. Securities and Exchange Commission by mutual fund directors and service providers answers a number of questions for many in the mutual fund industry and provides insight into SEC enforcement priorities, say attorneys with Morgan Lewis & Bockius LLP.
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How The Fed's Stress Test Rules Mitigate Systemic Risk
The savings and loan holding company regulatory regime established by the Dodd-Frank Act appears to be having the ultimate effect of reducing the number of SLHCs, especially those that are predominantly insurance enterprises, say attorneys with Debevoise & Plimpton LLP.
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The Who, What And Why Of Public-Private Partnerships
Public-private partnerships have been used in a wide range of sectors to provide public services, from power plants and railroads to hospitals and sanitation plants. Yet there are a variety of potential contractual arrangements and the financing of a PPP can be complex, say Maryam Khosharay and Herbert Glaser of Haynes and Boone LLP.
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A Tale Of 2 Burdens Of Proof In Ch. 11
As a matter of strategy, it can be vital to understand the differing burdens of proof under various provisions of the Bankruptcy Code and when those burdens shift. For example, the Southern District of New York recently clarified the distinction between section 362(d) and 363(e) burdens of proof in In re AMR Corp., say attorneys with Duane Morris LLP.
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Insights From An Under-The-Radar CDO Case
A case that seems to have gone relatively unnoticed is ASR Levensverzekering NV v. Swiss Re Financial Products Corporation. Dismissed by the New York Supreme Court, the case provides useful insights into the application of New York fraud and contract law in the context of complex financial transactions, say James Bliss and Kevin Broughel of Paul Hastings LLP.