The Resolution Law Group: RBS Securities’ Japan Unit to Pay $50M Criminal Fine Over Libor Manipulation

A US judge has ordered Royal Bank of Scotland Group Plc’s (RBS) banking unit in Japan to pay a $50 million fine over its involvement in manipulating LIBOR. RBS Securities Japan Ltd. entered a guilty plea to wire fraud as part of its parent company’s $612 million securities settlements to resolve civil and criminal charges over the rate manipulation.

On December 31, RBS Securities Japan and the US government turned in a joint court filing stating that from at least between 2006 and 2010 some of the bank’s traders tried to move Libor in a manner that would benefit their positions. The attempted manipulation of over a hundred Yen Libor submissions was reportedly involved.

Authorities say that as a result traders profited at counterparties’ expense. The filing noted that investigations uncovered wrongful behavior involving Libor submission for the yen and another currency and that about 20 RBS traders, including four at the RBS unit in Japan were involved.

Breaking down the $612 million total that RBS and RBS Securities Japan are paying to resolve these Libor claims: $325 million is from a Commodity Futures Trading Commission action, $137 million is from a U.K. Financial Conduct Authority (FCA) action. Aside from the $50 million that the RBS unit in Japan is also paying, $100M is from RBS plc.

LIBOR
LIBOR is the main benchmark for short-term interest rates around the world. It is the reference rate for a lot of interest rate contracts, credit cards, mortgages, student loans, and other lending products for consumers. Other banks have already paid fines for also allegedly manipulating LIBOR, including Deutsche Bank (DB), JPMorgan Chase (JPM), Citigroup (C), and others. Traders at these banks are accused of manipulating LIBOR to their benefit, while making themselves appear more liquid and financially healthier than what was actual. Meantime, other parties sustained losses as a result.

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.

Advertisements

The Resolution Law Group: Deutsche Bank AG Settles Shareholder Lawsuit Over Mortgage Debt

Deutsche Bank AG (DB) has settled a securities lawsuit filed by shareholders accusing the financial institution of misrepresenting the degree of risk it could manage related to mortgage debt before the financial crisis of 2008. The deal, of which the terms have not yet been revealed, were disclosed in a filing made by the firm’s lawyers in the U.S. District Court in Manhattan.

Shareholders, including two mutual funds and the Building Trades United Pension Trust Fund of Elm Grove, claim Deutsche Bank misled them about the management of risk and the underwriting on the mortgage debt that it put together and sold. They also contend that the firm was too slow to take write-downs. They believe that this resulted in an 87% decline in the bank’s share price between May 2007 and January 2009.

They also claim that Deutsche Bank maximized its profit at risk to investors, even as it failed to appraise these customers of the risks they were taking on. When the financial markets failed, it was investors that ended up paying the price.

The securities agreement was reached in the wake of a US district judge refusing to let the shareholder lawsuit become a class action case. Judge Katherine Forrest said that there were problems with the methods and conclusions arrived at by an expert that the plaintiffs had retained.

The settlement comes right after Deutsche Bank agreed to pay $1.9 billion to the Federal Housing Finance Agency over the mortgage-backed securitiesit sold to Fannie Mae and Freddie Mac. FHFA believes that the bank and other financial firms misled the two government-sponsored mortgage companies about borrowers’ creditworthiness and the quality of loans. It also contends that the firms sold Fannie and Freddie flawed securities. (The two entities, which sold these mortgage as securities to investors, suffered huge mortgage losses when the economic crisis struck in 2008.)

Also, Deutsche Bank, along with others banks, has just agreed to settle with the European Union over interbank offered rate manipulation allegations. The banks are accused of manipulating the Yen London interbank offered rate and the Euribor. Of the $2.3B in total that is to be paid, $992 million will come from Deutsche Bank.

At The Resolution Law Group, our securities lawyers are still working with institutional and individual investors to get their money back from this tumultuous time in our economic history.

Contact our securities fraud lawyers to request your free case consultation. You may have grounds for a claim involving mortgage-backed securities, residential mortgage-backed securities, auction-rate securities, real estate investment trusts, municipal bonds, and other financial instruments. You want to work with an experienced law firm that knows how to pursue your claim and is not afraid to go after the big banks.

The Resolution Law Group: Bank of America’s Countrywide to Pay $17.3M RMBS Settlement to Massachusetts

According to Massachusetts Attorney General Martha Coakley, Countrywide Securities Corp. (CFC) will pay $17 million to settle residential mortgage backed securities claims. The settlement includes $6 million to be paid to the Commonwealth and $11.3 million to investors with the Pension Reserves Investment Management Board. Countrywide is a Bank of America (BAC) unit.

Coakley’s office was the first in the US to start probing and pursuing Wall Street securitization firms for their involvement in the subprime mortgage crisis. Other RMBS settlements Massachusetts has reached include: $34M from JPMorgan Chase & Co. (JPM), $36M from Barclays Bank (ADR), $52 million from Royal Bank of Scotland (RBS), $102 million from Morgan Stanley (MS), and $60 million from Goldman Sachs. (GS).

Meantime, a federal judge is expected to rule soon on how much Bank of America will pay in a securities fraud verdict related to the faulty mortgages that Countrywide sold investors. A jury had found the bank and ex-Countrywide executive Rebecca Mairone liable for defrauding Freddie Mac and Fannie Mae via the sale of loans through that banking unit. The US government wants Bank of America to pay $863.6 million in damages. Mairone denies any wrongdoing.

The case focused on “High Speed Swim Lane,” a mortgage lending process that rewarded employees for the volume of loans produced rather than the quality. Checkpoints that should have made sure the loans were solid were eliminated.

In other recent Countrywide news, a federal judge has given final approval to Bank of America’s $500 million settlement with investors who say the unit misled them, which is why they even invested in high-risk mortgage debt. A number of investors, including union and public pension funds, said they were given offering documents about home loans backing the securities that they purchased and that the content of this paperwork was misleading. They contend that a lot of securities came with high credit ratings that ended up falling to “junk status” as conditions in the market deteriorated.

This payout is the biggest thus far to resolve federal class action securities litigation involving mortgage-backed securities. The second largest was the $315 million reached with Merrill Lynch (MER), which is also a Bank of America unit. That agreement was approved in 2012.

Also, Bank of America was recently named the defendant in a lawsuit filed by the California city of Los Angeles over allegedly discriminatory lending practices that the plaintiff says played a part in causing foreclosures. LA is also suing Citigroup (C) and Wells Fargo (WFC).

The city says that Bank of America offered “predatory” loan terms that led to discrimination against minority borrowers. This resulted in foreclosures that caused the City’s property-tax revenues to decline. BofA, Wells Fargo, and Citibank have said that the claims are baseless.

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.

The Resolution Law Group: Three Ex-GE Bankers Convicted of Municipal Bond Bid Rigging Are Set Free

In a 2-1 ruling, the U.S. Circuit Court of Appeals in New York panel has decided that three ex-General Electric Co. bankers charged with conspiring to bilk cities in a muni bond bid rigging scam can go free because the US government waited too long to prosecute them. Reversing last year’s convictions of Dominick Carollo, Steven Goldberg, and Peter Grimm, the court dismissed the criminal case against them and ordered that they be released from prison.

According to prosecutors, the three men worked with guaranteed investment contracts that allowed municipalities to make interest on money made from bond sales until they wanted to spend on local projects. The government believes that between August 1999 and May 2004 Carollo, Goldberg, and Grimm gave three brokers, including UBS PaineWebber, kickbacks to win actions for the contracts even if it meant the bank would make interest payments that were artificially low.

A federal jury convicted the former GE bankers of defrauding the country and conspiracy to commit wire fraud. They appealed, appealed, contending that the indictment on July 27, 2010 exceeded the statute of limitations, which is six years for conspiracy to bilk the US via tax law violations and five years for conspiracy. The government disagreed, arguing that the limitations’ statute went on as long as GE was paying rates that were not competitive.

Meantime, GE on Friday consented to settle for $18.25M a class action securities case over municipal bond fixing. The plaintiffs accused the company of rigging municipal bond bids. GE is among the financial firms and lenders accused of working together to rig prices for municipal derivatives. Investors say that the price fixing of the bonds violated antitrust laws and caused them to get lower interest rates.

GE had previously settled similar securities claims made by state attorneys general for $30 million, Three years ago it settled for $70 million municipal bond rigging allegations made by the US Justice Department.

If you are a municipal bond investor who suffered financial losses you think may be due to securities fraud, contact our municipal bond fraud law firm today. http://www.theresolutionlawgroup.com

 

The Resolution Law Group: RBS Securities Inc. Settles SEC’s Subprime RMBS Lawsuit for $150M

RBS Securities Inc., which is a Royal Bank of Scotland PLC. Subsidiary (RBS), has agreed to pay $150 million to settle Securities and Exchange Commission allegations that it misled investors in a $2.2 billion subprime residential mortgage-backed security offering in 2007. The money will be used to pay back investors who were harmed.

The SEC claims the RBS said that the loans backing the offering “generally” satisfied underwriting guidelines even though close to 30% of them actually were so far off from meeting them that they should not have been part of the offering. As lead underwriters, RBS (then known as Greenwich Capital Markets,) had only (and briefly) looked at a small percentage of the loans while receiving $4.4 million as the transaction’s lead underwriter.

SEC Division Enforcement co-director George Cannellos said that inadequate due diligence by RBS was involved. The Commissions also says that because RBS was in a hurry to meet a deadline established by the seller, the firm misled investors about not just the quality of the loans but also regarding their chances for repayment.

Of the $150 million that RBS will pay, $80.3 million is disgorgement, $25.2 million is prejudgment interest, and $48.2 million is a civil penalty.

The Resolution Law Group’s RMBS fraud lawyers are here to help investors get back their losses. Unfortunately, many investors lost money in different types of mortgage-backed securities during the economic crisis. Often the investments were recommended by stockbrokers and financial advisers even if they were unsuitable for the client or when not enough proper due diligence was conducted to make sure the investment was a wise one. Contact The Resolution Law Group today.

The Resolution Law Group: JPMorgan and the DOJ Finalize Their $13 Billion Settlement

After months of back-and-forth, the US Justice Department and JPMorgan Chase (JPM) have agreed to a $13 billion settlement. The historic deal concludes several of lawsuits and probes over failed mortgage bonds that were issued prior to the economic crisis. It also is the largest combination of damages and fines to be obtained by the federal government in a civil case with just one company. JPMorgan had initially wanted to pay just $3 billion.

The $13 billion deal is the largest crackdown this government had made against Wall Street over questionable mortgage practices. US Attorney General H. Eric Holder and other lead DOJ officials were involved in the settlement talks with JPMorgan CEO Jamie Dimon and other senior officials.

The settlement is over billions of dollars in residential mortgage backed securities involving not just the firm but also its Washington Mutual (WAMUQ) and Bear Stearns (BSC) outfits. The government claims that the RMBS were based on mortgages that were not as solid as what they were advertised to be.

As part of the agreement, JPMorgan acknowledged a statement of facts that delineated its wrongdoing and retracted its demand that prosecutors stop a related criminal probe directed at the bank. Also, the firm for the most part forfeited getting back some of the settlement from the Federal Deposit Insurance Corporation.

Of the $13 billion, $9 billion will pay state and federal civil lawsuit claims over residential mortgage-backed securities including:

• $2 million as a civil penalty to the DOJ
• $1.4 billion to resolve the National Credit Union Administration’s state and federal claims
• $4 billion for Federal Housing Finance Agency claims
• $515 million over Federal Deposit Insurance Corp. claims
• Almost $20 million resolves Delaware claims
• Almost $300 million is for California claims
• Almost $614 million resolves NY state claims
• $100 million is for Illinois claims
• $34 million settles claims made by Massachusetts

The rest of the settlement in the amount of $4 billion will be in the form of programs to help homeowners that suffered harm. JPMorgan says it would pay up to $1.7 billion to write down principal amounts of loans it held in which the borrower owes a sum greater than the value of the property.

Meantime, $300 million to $500 million will go to forbearance, which involves the restructuring of certain mortgages to lower monthly payments. The final $2 billion will go to a number of measures, including absorbing whatever principal is still owed on properties that haven’t foreclosed but were already vacated, as well as to new mortgage originators for certain income borrowers. JPMorgan might even use some of this money to pay for anti-blight work in beleaguered neighborhoods.

The Resolution Law Group represents institutional investors and high net worth individual investors wishing to recoup their RMBS fraud losses. Contact our securities lawyers today.

AIG Settles Ex-Executive’s $274M Lawsuit Over Alleged Failure to Pay Him During 2008 Economic Crisis

American Insurance Group (AIG) and one of its ex-executives, Kevin Fitzpatrick, have reached a settlement deal over his $274 million lawsuit against the insurer. Fitzpatrick, the former president of the AIG Global Real Estate Investment Corp. unit, claims that his then-employer would not pay him during the 2008 economic crisis. The insurer’s refusal to pay occurred not long after the US government said yes to the first part of what would turn into a $182 billion bailout.

Fitzpatrick, who worked for AIG for 22 years, said that AIG breached agreements it had with him and entities under his control. He claims the agreements entitled him to a share of profits made on the insurer’s real estate investments but that on October 2008 AIG stopped paying him and others who were entitled to profit distributions. Fitzpatrick then quit.

Fitzpatrick sued in 2009, claiming that AIG owed him $274 million and that he wanted interest and punitive damages, which is right around the time that the insurer was trying to get past public disapproval over $165 million in bonuses that were paid to employees in the AIG Financial Products unit. That is the group that handled the complex financial instruments that led to its huge losses.

AIG denied wrongdoing and said that Fitzpatrick was paid what he was owed. The insurer contended that Fitzpatrick actually was fired and that he stole data that was confidential and belonged to the company.

In other AIG-related news, a district court judge just threw out a shareholder lawsuit accusing Bank of America (BAC) of not telling them that the insurer was planning to sue the bank with a $10 billion fraud lawsuit. AIG accused Bank of America of misrepresenting the quality of more than $28 million of MBSs that AIG bought from the latter and its Countrywide and Merrill Lynch (MER) units.

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.