The Resolution Law Group: Groupon Loses Dismissal Bid Over IPO Securities Fraud Case

A district court judge has ordered Groupon Inc. to face a securities lawsuit filed against it accusing the deal-of-the-day coupon company of misleading investors regarding its financial state right before its IPO in 2011. The Illinois-based company had sought to have the securities fraud case brought by investor Michael Carter Cohn, dismissed. Cohn wants his claim to get class action securities status.

The investor claims that Groupon committed securities lawsuit and used refund accounting that was not allowed to spike revenues in a prospectus related to its initial public offerings, as well as in filings with the Securities and Exchange Commission. According to U.S. District Judge Charles Norgle in Chicago, the claims “present plausible violations.” Norgle also turned down requests by Morgan Stanley (MS) and Goldman Sachs (GS), and Credit Suisse (CS) to throw out the claims against them. These banks arranged the public offering.

On March 30, 2012—not long after opening at $28 in Nasdaq stock exchange trading on November 4, 2011—Groupon reported a “material weakness” in its financial controls, as well as first reported quarterly sales as a company that was now publicly traded were not as high as stated earlier because of high refunds received by merchants. This lowered revenue during 2011’s last quarter to $492 million—that’s a $14.3 million difference. The company’s shares by November 13, 2012 hit $2.63 dollars.

Judge Norgle has yet to decide on whether Cohn can pursue his securities case for a class. Cohn did not purchase his shares straight from the IPO.

At The Resolution Law Group, our securities fraud lawyers represent institutional investors and individual investors wishing to pursue their investment losses from negligent parties. You can call us today to ask for your free case assessment.

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The Resolution Law Group: NCUA Sues Morgan Stanley, JPMorgan, UBS, & Other Banks Over $2.7B in Allegedly Fraudulent RMBS Sales to Credit Unions

The National Credit Union Administration has filed residential mortgage-backed securities lawsuits against JPMorgan (JPM), Morgan Stanley (MS), UBS (UBS), Royal Bank of Scotland Group (RBS), Barclays (BARC), and Credit Suisse (CS) accusing the financial firms of selling $2.7 billion of these fraudulent securities to the credit unions. The Members United Corporate Federal Credit Union and Southwest Corporate Federal Credit Union paid over $416 million for the RMBS in the case against Morgan Stanley and $1.9 billion from the other defendants. One of the credit unions contends that Wachovia (WB), Goldman Sachs (GS), Ally Securities and Wells Fargo (WFC) also defrauded it.

According to the NCUA’s RMBS fraud lawsuits, the investment banks issued misrepresentations related to the underwriting and sale of the securities. Offering documents allegedly contained false statements or omitted facts that were material. The government regulator is accusing the originators of systematically ignoring underlying guidelines in offering documents, which made the mortgage-backed securities’ risks higher than what was presented.

The MBS fraud lawsuits make claims under state and federal securities laws. Whatever is recovered will go toward the Temporary Corporate Credit Union Stabilization Fund.

Already, NCUA has settled RMBS fraud lawsuits against Bank of America (BAC), Citibank (C), Deutsche Bank (DB), and HSBC for more than $335 million.

Contact The resolution Law Group. Our institutional investor fraud law firm to find out whether you have grounds for securities case. Your RMBS fraud case consultation is free.

The Resolution Law Group: Goldman Sachs Appeals Vacating of Securities Award, Non-Customers of Brokerage Firm Can’t Compel Arbitration, & Three Governors Named To FINRA Board

Goldman Sachs Wants Third Circuit To Look at Vacated Arbitration Award
Goldman Sachs (GS)wants the U.S. Court of Appeals for the Third Circuit to look at a decision by a lower court to vacate a FINRA securities award issued by a panel member that included arbitrator Demetrio Timban, who was indicted on criminal matters and suspended. The securities case is Goldman Sachs & Co. v. Athena Venture Partners LP and involves an investor accusing the firm of making misrepresentations. The U.S. District Court for the Eastern District of Pennsylvania remanded the award, which favored the financial firm.

The district court said FINRA didn’t give the parties three arbitrators who were qualified and said the respondent’s rights were prejudiced. Judge J. Curtis Joyner said that therefore, a “final and definite award” was not issued. Following the scandal involving Timban, FINRA said it now would perform yearly background checks of arbitrators and other reviews before they are given a case.

District Court Says Buyers Who Are Not Broker-Dealer’s “Customers” Cannot Compel Arbitration
A district court has preliminarily enjoined an arbitration proceeding involving real estate investments. In Orchard Sec. LLC v. Pavel, the U.S. District Court for the District of Utah said that buyers were not a managing brokerage firm’s “customers” and did not have the right to compel arbitration under the SRO’s rules. The court also said that as the plaintiff firm Orchard Securities clearly demonstrated that its chances of success on its claim’s merits.

Margaret and Michael Pavel had filed an arbitration proceeding with FINRA contending that they had securities claims involving their purchase of tenant-in-common interests, including a New York offering that Orchard Securities LLC managed as a brokerage firm. Orchard Securities contended that it could not be made to arbitrate because there was no arbitration agreement or facts showing that the Pavels were its customers and therefore could compel arbitration. The NY offering had been recommended by a registered rep. with Direct Capital, which was a third-party broker-dealer enlisted by Orchard Securities.

Three Governors Are Elected to SRO’s Board, Four Are Reappointed
FINRA says that its members have elected two industry governors: Robert Keenan, who is St. Bernard Financial Services CEO, and James D. Weddle, who is Edward Jones’s managing partner. Keenan was elected small firm governor, while Weddle will be his large firm counterpart. Shelly Lazarus, who is an ex- Ogilvy & Mather chairman and CEO, was named a public governor.

Four other governors received reappointments to the board, which oversees FINRA. The board is comprised of 22 people—10 industry governors and 11 public ones. FINRA’s CEO also has a seat.

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

Bank of America, JPMorgan Chase Among Banks Sued by Danish Pension Funds in Credit Default Swaps Lawsuit

In U.S. District Court for the Northern District of Illinois, Danish pension funds (and their investment manager) Unipension Fondsmaeglerselskab, MP Pension-Pensionskassen for Magistre & Psykologer, Arkitekternes Pensionskasse, and Pensionskassen for Jordbrugsakademikere & Dyrlaeger are suing 12 banks accusing them of conspiring to take charge of access and pricing in the credit derivatives markets. They are claiming antitrust violations while contending that the defendants acted unreasonably to hold back competitors in the credit default swapsmarket.

The funds believe that the harm suffered by investors as a result was “tens of billions of dollars” worth. They want monetary damages and injunctive relief.

According to the Danish pension funds’ credit default swapscase, the defendants inflated profits by taking control of intellectual property rights in the CDS market, blocking would-be exchanges’ entry, and limiting client access to credit-default-swaps prices, and

This securities case comes four years after the US Justice Department acknowledged that it had begun an investigation into possible anticompetitive activities involving credit derivatives clearing, and trading (a probe that is ongoing) and just a few months after the Sheet Metal Workers Local No. 33 Cleveland District Pension Plan sued the banks, Markit, and ISDA also for allegedly taking control of the CDS market, which it says resulted in customers being overcharged some $7 billion annually. The plaintiff contends that there may be billions of dollars in damages and it wants treble damages. Last month, it was the European Commission’s turn to claim that 13 banks, ISDA, and Markit worked together to stop CDSs from being able to trade on open exchanges.

If you think you may have been the victim of securities fraud involving credit default swaps, please do not hesitate to email or call the The Resolution Law Group (203) 542-7275 for a confidential, no obligation consultation.

There are over a dozen defendants in the Danish pension funds’ CDS fraud case including:

J.P. Morgan Chase & Co. (JPM)
Citigroup Inc. (C)
Morgan Stanley (MS)
Bank of America Corp. (BAC)
Credit Suisse Group AG (CS)
Deutsche Bank AG (DB)
UBS AG (UBS)
• Royal Bank of Scotland Group PLC (RBS)
Goldman Sachs Group Inc. (GS)
Markit Group Ltd, a financial data provider
• International Swaps and Derivatives Association (ISDA)

The Resolution Law Group: “It was a billion dollar fraud to feed Wall Street greed,” claimed Matthew Martens, a top lawyer for the S.E.C. in his opening statement to the jury.

The trial of Fabrice Tourre, otherwise known as “Fabulous Fab,” has started in Federal Court in New York. The Securities and Exchange Commission alleges that Fabulous Fab, who used to work for Goldman Sachs, secretly worked with a powerful hedge fund to engineer a mortgage investment that was doomed to fail.

“It was a billion dollar fraud to feed Wall Street greed,” claimed Matthew Martens, a top lawyer for the S.E.C. in his opening statement to the jury.

Geoffrey Broderick, the senior partner of the Resolution Law Group, says “while the trial against a former employee of Goldman Sachs is a step in the right direction, this is still only a civil case, and no one has gone to jail for the criminal conduct that occurred.”

Mr. Broderick adds that “The housing market will continue to suffer until it is fixed by the Courts or the Legislature. Somebody has to fix the problem. That is why The Resolution Law Group continues its fight for homeowners. Homeowners cannot expect the problem to fix itself.”

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

The Resolution Law Group: Both Sides Rest in Ex-Goldman Sachs Bond Trader Fabrice Tourre’s Trial For Alleged Mortgage-Backed Securities Fraud

In federal court, both the Securities and Exchange Commission and former Goldman Sachs Group (GS) vice president Fabrice Tourre have both rested their case in the civil trial against the bond trader. Tourre is accused of MBS fraud for his alleged involvement in a failed $1 billion investment connected to the collapse of the housing market. After the SEC finished presenting its evidence, U.S. District Judge Katherine Forrest turned down Tourre’s bid to have the securities case against him thrown out. He denies wrongdoing and says that his career is in now in shambles.

According to the regulator, Tourre purposely misled participants in the Abacus 2007-AC about the involvement of John Paulson’s hedge fund Paulson and Co. The Commission contends that Tourre concealed that Paulson helped select the portfolio of the subprime MBS underlying Abacus—a $2 billion offering linked to synthetic collateralized debt obligations. The latter then shorted the deal by betting it would fail.

The SEC’s complaint points to Tourre as primarily responsible for the CDO, which it says says he devised and prepped marketing collateral for and was in direct contact with investors. The regulator believes that by failing to disclose Paulson’s role, Tourre broke the law. They also contend that instead the bond trader instead told customers that as an Abacus investor, Paulson’s hedge fund expected the securities to go up.

Tourre also is accused of misleading ACA Capital Holdings, which Goldman retained to supervise the deal, about Paulson’s role. ACA would go on to invest in Abacus and insure it.

When the mortgage securities underlying the Abacus became toxic, its investors lost $1 billion. Meantime, the short positions by Paulson made about the same.

Testifying on his own behalf at the civil trial, Tourre told jurors that after the SEC filed its securities fraud case against him in 2010, for over a year Goldman Sachs made him take a leave of absence but kept paying his $738,000 base salary. In 2007, Tourre said, his salary and bonus was $1.7 million, which was tied to profits he made for the firm.

Goldman has already paid $550 million to settle SEC charges against it over the ABACUS 2007-AC1 debacle. The Commission accused the financial firm of misleading investors about the subprime mortgage product.

As part of settling, the financial firm admitted that its marketing materials for the subprime product had incomplete data and it made a mistake when stating that ACA chose the reference portfolio without revealing Paulson’s part in the selection process or that the latter’s interests were counter to that of the collateralized debt obligation investors.

Unfortunately, when the housing market failed, a lot investors that placed their money in subprime mortgage products suffered huge losses, many of which were a result of broker misconduct, fraud, misrepresentations, omissions, and other wrongdoing. At The Resolution Law Group, our mortgage-backed securities lawyers have been helping institutional and individual investors recoup these losses.

If you feel you are the victim of Mortgage 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: Major financial crisis trial kicks off in New York

Trial of Ex-Goldman Sachs trader Fabrice Tourre begins

Fabrice Tourre, a former Goldman Sachs mortgage trader, leaves federal court after the first day of a lawsuit being brought against him by the Securities and Exchange Commission.

NEW YORK — He’s either a duplicitous Wall Streeter, or just a scapegoat who never lied to investors.

A jury of four men and five women will decide whether Fabrice Tourre, the ex-Goldman Sachs trader dubbed “Fabulous Fab,” defrauded investors in the lead-up to the financial crisis.

Tourre’s civil securities fraud trial — considered the highest-profile case stemming from the crisis — got underway in a federal court New York on Monday.

The U.S. Securities and Exchange Commission claims Tourre secretly worked with a powerful hedge fund to engineer a mortgage investment doomed to fail.

“It was a billion-dollar fraud to feed Wall Street greed,” said Matthew Martens, a top SEC attorney, in his opening statement.

Tourre’s former employer, the giant investment bank Goldman Sachs, settled parallel claims against the firm for $550 million in 2010.

Pamela Chepiga, Tourre’s lawyer, said her client was merely a scapegoat.

The other large sophisticated, institutional investors involved in the deal knew the hedge fund’s role, and that it was shorting, or betting against, the investment, Chepiga said.

“Fabrice Tourre never lied to anyone,” Chepiga said.

The SEC says hedge fund Paulson & Co. made $1 billion when the investment — tied to subprime residential mortgages — tumbled at the expense of other investors.

The SEC again highlighted Tourre’s colorful emails, one of which infamously described Goldman clients buying the investment as “widows and orphans.”

But Chepiga questioned one email’s role in the case, saying it was merely a late-night personal email taken out of context.

“It’s an old-fashioned love letter to his girlfriend,” she said.

Martens said Goldman actually lost money in the ill-fated deal — but not on purpose. The New York-based bank could not find enough investors to buy the complex investment, known as a collateralized debt obligation, or CDO.

“Sometimes you get tripped up on your own fraud,” Martens said.

The trial is expected to last three weeks and include testimony from Tourre himself.

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