The Resolution Law Group: Morgan Stanley Now Owns Smith Barney, Wells Fargo & JPMorgan Defeat Estimates, MLB All-Star Sues UBS for $7.6M, & Ray Lucia, His Firm Fined Over “Buckets of Money” Strategy

Morgan Stanley Buys Smith Barney from Citigroup
Morgan Stanley (MS) now owns Smith Barney, which it just bought from Citigroup (C) for $9.4 billion. Smith Barney’s new name is Morgan Stanley Wealth Management. Based on its new number of financial advisers, the deal makes Morgan Stanley the largest Wall Street firm and comes in the wake of Federal Reserve approval.

Wells Fargo & JPMorgan Defeat Analysts’ Estimates
JPMorgan Chase (JPM) says it experienced a 31% rise in second quarter earnings, surpassing analysts expectations it would garner $5.47 billion on $24.84 billion, and, instead generating, $6.5 billion in earnings and $25 billion of revenue. A year ago for the same period, revenue for the financial firm was at $22 billion.

Meantime, Wells Fargo (WF) is also reporting a 19% profit rise for Q2. This is its 14th quarterly profit increase in a row and 9th consecutive record report. While net income for the same period last year was at $4.6 billion, its net income second quarter for 2013 was $5.5 billion.

5-Time MLB All-Star Sues UBS for $7.6 Million
Retired fiive-time Major League Baseball All-Star Mike Sweeney is suing UBS Financial Services Inc. (UBS) and his former broker there for $7.6 million. Per the securities fraud case, broker Ralph A. Jackson III invested half of Sweeney’s portfolio, worth millions of dollars, in high-risk private placements that failed.

Sweeney contends that he was an inexperienced investor who trusted Jackson to make sure his money was being invested conservatively. He says that over a five-year period, the UBS broker put $6.85M of his portfolio in private-equity investments that were misrepresented to him as safe and suitable, as well $2.7M into other investments without his consent. Sweeney, who hit it big when he signed with the Kansas City Royals, claims he lost $4.9M.

Ray Lucia, His Firm Fined Over “Buckets of Money” Strategy
Financial adviser and nationally syndicated radio host Ray Lucia and his firm Raymond J. Lucia Cos. Inc. must pay fines for allegedly providing misleading information related to his wealth-management strategy known as “Buckets of Money.” The Securities and Exchange Commission is accusing the California adviser of causing retirees to believe that his approach would allow them to make income that was inflation-adjusted for life.

Now, an administrative-law judge has taken away Lucia’s adviser registration and fined him $50,000. His firm, which must pay $250,000, also has lost its license. Judge Cameron Elliot found that for years, Lucia misrepresented any purported back-testings’ validity in seminars about saving for retirement. The SEC contends that Lucia and the firm hardly, if at all, conducted any back-tests.

The Resolution Law Group represents institutional and individual investors that have sustained losses due to Securities Fraud.

If you feel you are the victim of Securities Fraud, please do not hesitate to email or call the The Resolution Law Group (203) 542-7275 for a confidential, no obligation consultation.

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

The Resolution Law Group: The 21st Century Glass-Steagall Act Seeks to Separate Investment and Commercial Banking Again

Senators Elizabeth Warren (D-Mass) and John McCain (R-Ariz.) have joined forces to unveil the 21st Century Glass-Steagall Act, which aims to create a definite divide between speculative activities and traditional banking. This is a modern day revision of the original Glass-Steagall legislation from the 1930’s, which placed definite limits on the types of business that regulated banks were allowed to conduct. That act was repealed 14 years ago. Then, the mergers that would form the biggest banks existing today happened. Senators Angus King (I-Maine), and Maria Cantwell (D-Wash.) also are co-sponsoring this bill.

Warren, who is spearheading the legislation, noted that the nation’s largest banks continue to take part in risky practices that could again jeopardize our economy. She said she is prepared for a tough fight, seeing as it may be hard to drum up enough support in Congress or get the Treasury Department or Federal Reserve to jump on board. If the 21st century version of Glass-Steagall becomes law, a lot of these banks might have to give up their trading operations.

Fond feelings for the 1993 Glass-Steagall Act could help build interest on this new version. The original act, unlike the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was just 37 pages long and easy to implement. It also made sure that banks that use federal deposit insurance did not get involved in volatile activities on Wall Street, including certain kinds of trading. No crisis like the one that happened in 2008 occurred while the original Glass Steagall Act was in place—although some critics don’t believe that it would have stopped that economic meltdown from happening.

Under the 21st Century Glass-Steagall Act, banks that accept deposits that are federally insured would have to concentrate on traditional lending and, once again, couldn’t get involved in high-risk securities trading. Senator McCain, who actually voted to overturn the original Glass-Steagall when he voted for the Gramm-Leach Bliley Act in 1999 is now lamenting that when key terms of the 1933 Act were repealed, the wall existing between commercial and investment banks broke down, causing “greed” and too much “risk-taking” to grow in the world of banking.

The idea of reviving the law has also gained the support of certain Wall Street old timers, including Sanford “Sandy” who created Citigroup (C) in the 1990s. He believes that getting rid of the prohibitions established by the first Glass-Steagall Act was a mistake. Last year, in a CNBC interview, Weill said that he thought that separating banking from investment banking would be a good move. Ex-Citigroup CEO John Reed even apologized for his part in growing the bank and said that firms that large should be divided up. Also, Richard Parsons, a former long-timer on Citigroup’s board, said that no only did repealing Glass-Steagall complicated the bank business but also, this played a part in allowing the financial crisis to happen. Even certain regulators, including FDIC vice chairman Thomas Hoenig, has said that banks backed by the agency should only provide “core services.”

The Resolution Law Group represents institutional and individual investors that have sustained losses due to Securities Fraud. 

If you feel you are the victim of Securities Fraud, please do not hesitate to email or call the The Resolution Law Group (203) 542-7275 for a confidential, no obligation consultation.

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

The Resolution Law Group: Citigroup Settles $3.5B MBS Lawsuit with FHFA, JPMorgan Unit Fined $4.64M, Court Won’t Dismiss USB Whistleblower’s Action, & Ex-Goldman Sachs Executive to Pay $100K Over Pay-To-Play Scam

Citigroup (C) Settle $3.5B securities lawsuit Over MBS Sold to Freddie Mac, Fannie Mae
Citigroup has settled the $3.5 billion mortgage-backed securities filed with the Federal Housing Finance Agency. The MBS were sold to Freddie Mac and Fannie Mae and both sustained resulting losses. This is the second of 18 securities fraud cases involving FHFA suing banks last year over more than $200B in MBS losses by Fannie and Freddie. The lawsuit is FHFA v. Citigroup.

J.P. Morgan International Bank Ltd. Slapped with $4.64M Fine by UK Regulator
The UK Financial Conduct Authority says that JPMorgan unit (JPM) J.P. Morgan International Bank Ltd. must pay a $4.64 million fine for controls failures and systems involving its retail investment advice and portfolio investment services. Per the agency, financial firms that don’t maintain the proper records not only put their clients at risk of getting involved inappropriate investments, but also they don’t have a way to determine whether the proper advice was given. Fortunately, investors were not harmed despite the risk exposure.

The UK regulator says the problems went on for two years. Among the problems identified: outdated files, insufficient key client data, inadequate record system, inadequate suitability reports, and insufficient communication with clients about suitability. FCA says that it wasn’t until after it identified the problems and notified the JP Morgan unit about them that the necessary modifications were made.

Whistleblower’s Retaliation Action Against UBS Securities Can Go Ahead, Says Court
A district court judge made the decision not to dismiss ex-UBS Securities LLC (UBS) senior strategist Trevor Murray’s retaliatory action against his former employer. Murray was allegedly fired after he told his managers about possible securities law violations.

He contends that he was let go because he refused to write reports about UBS’s commercial MBS that were “more favorable to the financial firm.” Murray sued, arguing that the action violated the Dodd-Frank Act’s whistleblower protection provisions. UBS then tried arguing that Murray wasn’t a whistleblower because he didn’t tell the SEC about the alleged violation, but the judge said that a whistleblower is allowed to report alleged violations to governmental authorities and persons other than the regulator.
Former Goldman Sachs VP Consents to Pay $100K Payment SEC Pay-to-Play Action
Neil M. M. Morrison, an ex-Goldman Sachs & Co. (GS) vice president, will pay $100,000 to resolve an SEC action accusing him of taking part in an alleged pay-to-play scheme involving former Massachusetts state Treasurer Timothy Cahill’s gubernatorial campaign. The Commission said that he solicited the state’s underwriting business while “engaged” in Cahill’s campaign and that his use of the financial firm’s resources and work time are considered campaign contributions. By settling, Morrison is not admitting or denying the allegations.

Meantime, Goldman will pay approximately $12 million to settle the related proceedings against it, as well as $4.5 million to Massachusetts Attorney General Martha Coakley. Even though the firm wasn’t allowed to take part in municipal underwriting business for two years after Morrison’s alleged violations, the SEC says that Goldman still took part in 30 underwriting contracts with issuers in the state and made about $7.5 million in fees.

If you suspect that you are the victim of Securities Fraud, do not hesitate to email or call please contact The Resolution Law Group at (203) 542-7275 for a confidential, no obligation consultation. Our attorneys are here to help institutional investors recoup losses that are a result of a financial scam or negligence.

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

Citigroup Will Pay $730M in Bond Lawsuit Alleging It Misled Debt Investors

Pending court approval, Citigroup Inc. (C) will $730 million to resolve claims that it misled debt investors regarding its financial state during the economic crisis. The plaintiffs had purchased Citi preferred stock and bonds from 5/06 through 11/8. They are accusing Citigroup of misleading the buyers of 48 issues of its corporate bonds. Included among the plaintiffs of this bond lawsuit are the City of Philadelphia Board of Pensions and Retirement, the Louisiana Sheriffs’ Pension and Relief Fund, and the Minneapolis Firefighters’ Relief Association.

The bonds’ declined as the US mortgage market collapsed and the losses grew. According to Bloomberg.com, at one point, Citigroup’s $4 billion of 10-year notes declined to 79.7 cents on the dollar. It went on to lose over $29 billion in ‘08 and ’09.

Struggling from losses involving subprime mortgages, Citigroup ended up having to take a $45 million bailout in 2008, which it has since repaid. However, it is one of the Wall Street firms still coping with the aftermath of the financial crisis. Just last year, Citi consented to pay $590 million over a securities case filed by investors of stock contending that they too had been misled.

In ‘10, a district court judge rejected part of Citigroup’s motion to have this bond lawsuit tossed out. Claims that were dismissed involved the allegedly inadequate disclosure about auction-rate securities and part of the investors’ case involving structured investment vehicles.

Despite settling, the investment bank maintains that the allegations in this bond lawsuit are untrue. Citigroup contends that is only resolved the securities lawsuit to avoid the uncertainty and expense of having to go to court.

If you, your family, friends, neighbors or associates have been subjected to Mortgage Fraud, please contact The Resolution Law Group at (203) 542-7275 for a confidential, no obligation consultation.

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

Despite the fact that banks continue to enter into settlement agreements with the Government, banks are accused of continuing the illegal practice of robo-signing.

According to an investigation of local foreclosure affidavits conducted by Go Local, Bank of America, Ally Bank, CitiBank, Chase, and Wells Fargo are violating their current settlement agreement with the federal government by engaging in the wrongful practice of having people sign affidavits under penalty of perjury when the signers lack the personal knowledge required to sign the affidavits.

The investigation involved nearly 200 affidavits filed with the Registry of Deeds in Worcester and Essex Counties in Massachusetts, by or on behalf of Bank of America, Ally Bank, CitiBank, Chase, and Wells Fargo.

Geoffrey Broderick, the senior partner of the Resolution Law Group, says “Banks have been robo-signing deeds and affidavits for years.  This is not news.”  60 Minutes exposed the practice years ago, and banks and servicers admitted to the wrongdoing.  However, after being featured on 60 Minutes, people assumed that many lenders and servicers stopped the wrongful practice.  Mr. Broderick adds that “The fact that five of the nation’s largest banks continue to robo-sign after entering into a series of settlement agreements with the government demonstrates that the banks are not afraid of the government.  That is why The Resolution Law Group continues its fight against the banks.  Homeowners cannot expect the government to protect them from the banks.”

The Resolution Law Group continues to prosecute ground breaking litigation in Federal Court on behalf of homeowners suing lenders and servicers for, among other things, the illegal use of MERS, robo-signing, and intentionally ignoring underwriting standards and encouraging inflated appraisals.

The Resolution Law Group is currently enrolling clients into the pending lawsuit.  For further information, visit its website at www.TheResolutionLawGroup.com

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

Morgan Stanley Reports a Possible $1.7B in Mortgage-Backed Securities Losses

Morgan Stanley says it may sustain $1.7B in losses over a number of securities fraud cases related to subprime mortgage deals. Citigroup Inc.’s (C.N) Citibank is the plaintiff of the securities lawsuit over the Capmark VI CDO and STACK 2006-1 CDO deals, while there are 15 plaintiffs seeking punitive damages over Cheyne Finance, a structured investment vehicle. Morgan Stanley is also reporting losses over a mortgage-backed security deal involving MBIA Corp.

Our securities fraud attorneys would like you to contact us if you are someone who sustained financial losses in any of these MBS deals with Morgan Stanley. Here are more details about the cases:

• Morgan Stanley says the losses in the Citibank securities fraud lawsuit may be a minimum of $269M over a credit default swap on the Capmark VI CDO deal and another one on the credit default swap involving the STACK 2006-1 CDO deal.

• The financial firm is reporting that it may possibly incur $983 million in damages over the Cheyne deal.

• At least $223M may have been lost on an insurance contract with MBIA Corp. over a mortgage-backed security deal.

Morgan Stanley’s loss forecast doesn’t include interest, legal fees, costs, and other ancillary items. There are also other securities lawsuits involving Morgan Stanley, including:

• Allstate’s complaint over investment losses related to residential mortgage-backed securities. The insurer, who purchased over $104 million in MBS from the financial firm and its affiliates, claims that financial firm misrepresented the quality of the mortgages while claiming it had performed due diligence on the loans and mortgage originators. Many of these originators have since closed office or filed for bankruptcy and they are the defendants in government investigations/securities lawsuits.

• MBIA is suing Morgan Stanley over claims that the financial firm made misrepresentations regarding the underwriting standards of bonds that it would go on to insure. The underwriting standards are for securities based on about 5,000 subordinate-lien residential mortgages. The bond insurer claims it has already paid out tens of millions of dollars in claims that were never reimbursed.

Mortgage-Backed Securities
These debt obligations represent claims to the cash flow from mortgage loan pools. Mortgage companies, banks, and other originators put together these pools by a private, governmental, or quasi-governmental entity, which then issues securities representing claims on principal and interest payments that borrowers made on the pool’s loans. This process is called securitization. Types of MBS include pass-through participation certificates, collateralized mortgage obligations, or mortgage derivatives.

If you are an investor who suffered financial losses from investing in mortgage-backed securities, you may have reason to file a securities case against the financial firm that handled your MBS. Our stockbroker fraud lawyers have helped thousands of clients recoup their losses.  Your initial case evaluation with The Resolution Law Group is free. Our Mortgage-Backed Securities law firm represents investors throughout the US, as well as those abroad with claims against financial firms based here.

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

Stock Broker Fraud Blog Bank of America Subpoenaed by Massachusetts Over Bryn Mawr CLO II Ltd. and LCM VII Ltd. CLOs that Cost Investors $150 Million

Massachusetts securities regulator William Galvin is subpoenaing Bank of America Corp.over two collateralized loan obligations that led to investors to lose $150 million. Galvin is trying to determine whether the financial firm knew it was overvaluing the portfolios’ assets so it could remove the loans from its books.

The state is looking to obtain records and documents from Banc of America Securities LLC related to two CLOs—Bryn Mawr CLO II Ltd. and LCM VII Ltd—that were sold in 2007. (Merrill Lynch and Bank of America Securities joined forces in 2008 when they were merged in an acquisition).

It was in 2006 that Bank of America had about $400 million of commercial loans from small banks. The following year, loans were put together as securities packages that were bought by investors.

Galvin has been taking a hard look at the way banks structured and sold debt products—especially mortgage-backed securities—leading up to the 2008 economic collapse. Galvin says his office is also interested in taking a closer look at other entities.

Massachusetts’ subpoena on Friday comes a day after Bank of America, Citigroup Inc., Wells Fargo & Co., JP Morgan Chase & Co., and Ally Financial Inc. agreed to settle for $25 billion allegations accusing them of engaging in abusive mortgage practices. The agreement was reached with federal agencies and 49 states (not Oklahoma) and is considered the largest federal-state settlement ever. All five banks will also pay the Federal Reserve $766.5 million in penalties.

The deal resolves allegations that the banks robo-signed thousands of foreclosure documents without properly reviewing the paperwork, engaged in deceptive practices when offering loan modifications, did not offer other options prior to closing on borrowers who had mortgages that were federally insured, and submitted improper documents in bankruptcy court.

Also as part of this securities settlement, Bank of America will pay $1 billion to settle a separate probe into allegations that it and its Countrywide Financial unit engaged in wrongful and fraudulent conduct. The $25B settlement is designed to provide mortgage relief and give $2,000 to about 750,000 borrowers whose homes ended up foreclosing after home values dropped 33% from what they were worth in 2006.

Per other terms of the settlement, the bank is to provide $17 billion in loan modification and principal reduction to delinquent borrowers whose homes are at risk of foreclosure. $3 billion is included for borrowers that are up-to-date on mortgage payments but cannot refinance because they owe more than what their home is worth. The banks have also agreed to new servicing standards.

If you, your family, friends, neighbors or associates have been subjected to Bank Fraud, please contact our securities law firm at (203) 542-7275 for a confidential, no obligation consultation.

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud