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Banking
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May 16, 2012
Ex-Morgan Stanley Legal Chief Rejoins Ranks At Cravath
Longtime Cravath Swaine & Moore LLP securities and antitrust partner Francis P. Barron has rejoined the law firm in New York after a two-year stint as Morgan Stanley's chief legal officer, Cravath announced Tuesday.
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May 16, 2012
Asian Development Bank Sells $339M In Clean Energy Bonds
Japanese retail investors have bought $339 million in clean energy bonds from the Asian Development Bank, fueling support for a growing pipeline of climate-friendly projects in the region, the bank said Wednesday.
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May 16, 2012
Merrill Can't Cut Ex-Brokers From Class In Bias Suit
An Illinois federal judge ruled Wednesday that former employees should be included in a proposed class of black Merrill Lynch & Co. Inc. financial advisers suing the Bank of America Corp. unit for discrimination, shooting down the defendant's attempt to limit the class to current employees only.
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May 16, 2012
PNC Bank Class Certified In Overdraft Charge MDL
A Florida federal judge on Wednesday certified a nationwide class and 11 regional subclasses of account holders in a suit against PNC Bank NA alleging the company used a computer software scheme to illegally collect hundreds of millions of dollars in excessive overdraft fees.
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May 16, 2012
Linklaters Aids Investor Group In $4B E.ON Gas Network Buy
Utility giant E.ON AG has sold Germany's largest transregional natural gas distribution system for €3.2 billion ($4 billion) to a consortium of infrastructure investors led by Australian bank Macquarie Group Ltd., the companies announced Wednesday.
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May 16, 2012
Silver Manipulation May Have Just Been 'Hedging': JPMorgan
JPMorgan Chase & Co. told a New York federal judge Wednesday its large bet against silver during the financial crisis may have amounted to simple hedging, denying putative class action claims that it sought to manipulate the market and reap outsize profits.
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May 16, 2012
2 New Bills Would Bolster Protections Against Foreclosure
Homeowners could have more protections against foreclosure under two bills introduced in Congress on Tuesday, including a House bill that would make it harder for banks and lenders to foreclose on members of the armed forces.
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May 16, 2012
GOP Says SIFI Rule Won't Fit Insurers, Other Nonbanks
House Republicans said Wednesday that the Federal Reserve's proposal for regulating nonbank financial firms that could pose systemic risk hewed too close to rules for banks and did not properly take into account how insurers and other different types of companies operate.
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May 16, 2012
Merrill, Goldman Accidentally Release Short-Selling Docs
Merrill Lynch & Co. and Goldman Sachs Group Inc. made public, evidently by accident, documents that they had sought to have sealed in a dismissed lawsuit in California state court alleging the firms conspired to engage in “naked” short selling of Overstock.com Inc shares.
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May 15, 2012
ABN Amro, Other Madoff Funds To Get Review By NY Judge
A New York federal judge on Tuesday agreed to review a slew of cases against Bernard Madoff feeder funds, as well as ABN Amro Bank (Ireland) Ltd., in order to consider tax and securities issues contained within them that involve nonbankruptcy law.
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May 15, 2012
Ex-Partner Says Troutman Shafted Him Over $20M MetCap Fee
A former Troutman Sanders LLP partner accused the firm Monday of improperly releasing his signature to allow a merger agreement amendment depriving boutique investment bank MetCap Securities LLC of a $20 million fee for advising on a $2 billion acquisition of a nursing home operator.
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May 15, 2012
Senate Breathes New Life Into Ex-Im Bank
The U.S. Senate agreed Tuesday to extend the authority of the Export-Import Bank of the U.S., lengthening its lending authority through September 2014 and increasing its financing cap from $100 billion to $140 billion, one week after the U.S. House of Representatives did the same.
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May 15, 2012
9th Circ. Won't Review Revival Of BofA Overdraft Suit
The Ninth Circuit on Tuesday refused to reconsider its revival of a putative class action against Bank of America NA over the alleged false advertising of its overdraft protection services.
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May 15, 2012
Assured Guaranty Sues GMAC, Ally Over $56M Losses
Assured Guaranty Municipal Corp. on Friday hit GMAC Mortgage LLC along with Ally Financial Inc., its beleaguered mortgage unit Residential Capital LLC and others in a lawsuit accusing the firms of misrepresenting the quality of securitized mortgage loans for which it had to pay out $55.7 million in claims.
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May 15, 2012
11th Circ. Backs Broad Fraudulent-Transfer Liability
A bankruptcy court may force a creditor to disgorge funds it received from a debtor if the funds were acquired through a fraudulent transfer, the Eleventh Circuit ruled Tuesday in a published decision that backed a broad view of liability while ruling against entities that lent money to homebuilder Tousa Inc.
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May 15, 2012
ResCap To Cease Funding $1.7B In Home Equity Credit Lines
Residential Capital LLC, the troubled mortgage unit of Ally Financial Inc. that entered into a prepackaged bankruptcy Monday, won permission from a bankruptcy judge Tuesday to inform customers it will stop funding $1.7 billion in consumer home equity lines of credit.
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May 15, 2012
Ex-Deutsche Exec Pushes 2nd Circ. To Revive Bonus Suit
A former top executive with Deutsche Bank AG's Latin American group on Tuesday asked the Second Circuit to reopen his employment contract-related suit against the bank, saying it breached a deal to pay him a large bonus after he defected from a rival.
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May 15, 2012
After JPMorgan Loss, GOP Delays Bills Weakening Dodd-Frank
House Republicans on Tuesday postponed a vote on bills that would loosen some of the Dodd-Frank Act's rules for over-the-counter derivatives, a sign that JPMorgan Chase & Co.'s $2 billion trading loss has at least temporarily given financial reform advocates some traction.
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May 15, 2012
OPIC Commits $88M To Canadian Fund Of Funds
The Overseas Private Investment Corp., the U.S. government's development finance institution, has committed $87.5 million in financing to the first fund of funds in the agency's portfolio, OPIC said Monday.
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May 15, 2012
IKB Sues BofA Over $250M In Soured RMBS Sales
Germany's IKB Deutsche Industriebank AG hit Bank of America Corp. with a pair of lawsuits in New York state court on Monday, accusing BofA of fraudulently selling more than $250 million worth of risky residential mortgage-backed securities.
Expert Analysis
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Co-Lending Agreements: Commercial RE Secured Loans
Co-lending arrangements have long been used by commercial real estate lenders looking to spread risk, increase spreads, improve returns, free up capital and gain other advantages from utilizing participations, syndications, A/B loans and other co-lending vehicles. Practioners should keep in mind a few key considerations when crafting current co-lending agreements, says Hilary Metra Gevondyan of DLA Piper.
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Pottage V. FSA — A Welcome Decision For UK Bank Execs
The recent U.K. Upper Tribunal decision in Pottage v. Financial Services Authority makes clear that senior managers working in business and risk management functions are expected to act reasonably on the timing of reviews and the appropriate responses to business issues — and should not be held personally culpable in the absence of clear evidence to the contrary, say attorneys with Skadden Arps Slate Meagher & Flom LLP.
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TARP Auctions: Considerations For PE Fund Managers
A private fund planning to purchase Troubled Asset Relief Program preferred stock auctioned by the U.S. Treasury should keep in mind the regulatory implications of owning equity in a bank holding company, say Edwin del Hierro and Julie Kunetka of Kirkland & Ellis LLP.
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Circuit Split? Mirant Vs. Adelphia
The Fifth Circuit decision in In re Mirant Corp. appears to be in direct conflict with Adelphia Recovery Trust v. Bank of America NA, but a closer analysis reveals that the two decisions are reconcilable. Unfortunately, the court in Mirant adopted legal conclusions without much analysis — or any mention of the analysis provided by Adelphia — making the status of this area of law unclear, says Vincent Roldan of Vandenberg & Feliu LLP.
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The Latest FCPA Target: Private Fund Advisers
The U.S. Securities and Exchange Commission's Foreign Corrupt Practices Act case against a former Morgan Stanley executive — the first FCPA case involving a private fund investment adviser — reemphasizes to investment firms the importance of establishing effective anti-corruption internal controls in protecting both the entity and individual personnel from such enforcement, say attorneys with Ropes & Gray LLP.
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REO To Rental: A New Paradigm For The US Housing Sector
The prospect for an extended period of high levels of home loan delinquencies, foreclosure proceedings and real estate owned is causing regulators, mortgage lenders and investors to re-examine traditional approaches to handling REO. This is generating increased interest in an interim strategy of a transition from single family REO to rental uses of such properties, say attorneys with Dechert LLP.
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A Post-Morrison Standard For 'Domestic Transactions'
In the recent case of Absolute Activist Value Master Fund Ltd. v. Ficeto, the Second Circuit Court of Appeals for the first time addressed the ambiguity created by Morrison’s off-market transactions prong, announcing a standard for “domestic transactions” that combined the tests proposed by the Eleventh Circuit and the Southern District of New York, say attorneys with Mayer Brown LLP.
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Where Rubber Hits Road: Examples Of Alternative Fees
Creating new approaches to fee agreements is something to embrace rather than fear — and when structured and managed correctly, it can be financially advantageous. Take, for example, fixed-fee arrangements, result-based billing and portfolio billing, say Bill Rudnick and Keith Maziarek of DLA Piper.
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UDAAP May Interfere With 'Ability-To-Repay' Under TILA
The variety of approaches different jurisdictions have taken to a lender’s obligation to consider repayment ability highlights the lack of clarity surrounding the Dodd-Frank Act’s unfair, deceptive, or abusive act or practice provisions. The UDAAP confusion continues to overshadow the progress that the Consumer Financial Protection Bureau has sought to achieve in other areas, say Martin Bishop and Michael Lawrence of Foley & Lardner LLP.
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Lessons From Review Of UK Banks' Anti-Bribery Systems
Although the U.K. Financial Services Authority's recent review of anti-bribery and corruption systems at investment banks was critical of the investment banks’ systems in a number of respects, the FSA has provided valuable pointers for all financial firms — not just investment banks, say Karolos Seeger, Matthew Getz and Warren Balakrishnan of Debevoise & Plimpton LLP.