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.

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: Wells Fargo Reaches $591 Million Mortgage Deal with Fannie Mae

Wells Fargo & Co. (WFC) has arrived at a $591 million mortgage settlement with Fannie Mae (FNMA). The arrangement resolves claims that the banking institution sold faulty mortgages to the government run-home loan financier and covers loans that Wells Fargo originated more than four years ago.

Fannie Mae and Freddie Mac (FMCC) were taken over by the US government five years ago as they stood poised to fail due to faulty loans they bought from Wells Fargo and other banks. The two mortgage companies had bundled the mortgages with securities.

With this deal, Wells Fargo will pay $541 million in cash to Fannie Mae while the rest will be taken care of in credits from previous buy backs.

It was just a couple of months ago that Wells Fargo settled its disputes over faulty loans it sold to Freddie Mac with an $869 million mortgage buyback deal. According to Compass Point Research and Trading LLC, between 2005 and 2008, Wells Fargo sold $345 billion of mortgages to Freddie Mac. Compass says the bank sold another $126 billion to Freddie in 2009.

Also settling with Freddie Mac today is Flagstar Bank (FBC) for $10.8M over loans it sold to the mortgage company between 2000 and 2008. That agreement comes following Flagstar and Fannie Mae settling mortgage claims for $93 million over loans the former sold to the latter between January 2000 and December 31, 2008.

Fannie Mae and Freddie Mac have been trying to get banks to repurchase these trouble loans for some time now. In light of this latest settlement with Wells Fargo, Fannie Mae has reached settlements of about $6.5 billion over loan buy backs, including a $3.6 billion deal with Bank of America Corp. (BAC) and Countrywide Financial Corp. and $968 million with Citigroup (C). Earlier this month, Deutsche Bank (DB) consented to pay $1.9 billion to the Federal Housing Finance Agency over claims that it misled Freddie and Fannie about the mortgage backed securities that the latter two purchased from the bank.

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: Latest Mortgage Fraud Trend: Collusion on the Inside

victor wolf mortgage fraud case

When real estate agent John Lebron opened EZ Investments in Tampa, Fla., he may have already been planning fraud. His very first EZ Investments transaction involved selling a distressed property to his sister, then to his brother-in-law, the kind of “non-arms-length” flopping that tips authorities to collusion. Lebron lost his real estate license and his liberty in April, when he was sentenced to 26 years in prison for a string of foreclosure and short-sale frauds.

Mortgage fraud is rampant in the U.S., with distressed homeowners offering a whole new market to criminals. The recent trend in rising foreclosures led to soaring rates of foreclosure fraud. The Financial Crimes Enforcement Network, or FinCen, reports a 58 percent rise in 2012’s foreclosure-rescue fraud schemes, a rate possibly spurred by the “opportunity” created by government assistance programs.

Florida continues its run as the country’s top state for mortgage fraud investigations, coming in No. 1 on the Lexis-Nexis Mortgage Fraud Index for the fifth year. With a Mortgage Fraud Index of 805, Florida had eight times the expected number of fraud investigations in 2012. It’s closest second, Nevada, had only a little over 2½ times the expected rate. Plus, for the second year running, Florida came in first with the record number of defaults.

A newcomer to the Mortgage Fraud Top 10 also bears close watching: Ohio. Of mortgage frauds under investigation that originated only in 2012, Ohio ranks number one-indicating a recent fraud upswing in that state.

The last several years have also seen an uptick in collusion of industry professionals, resulting in an entire new index focused on collusion indicators alone. Collusion indicators, which are derived from public records, are based on factors like cohabitation, shared assets, family and business connections and other criteria, particularly relevant when a property has been transferred at a loss. Vermont ranks No. 1 in collusion indicators, with almost five times the expected number of incidents for 2012.

While FinCEN reports a 25 percent decline in Suspicious Activity Reports, or SARs, filed nationally in 2012, some analysts think the decline may be due, at least in part, to an overall decline in the housing market. According to National Association of Realtors spokesman Walter Molony, 2013 will see an estimated 11 percent increase in the housing market, creating all kinds of new opportunity for scammers.

Mortgage fraud is especially tricky, according the FBI, because scams morph with the market, always adapting to the latest trends. And although financial institutions file SARs by the thousands every month (there were 93,508 in FY 2011), it can take years after the fraud occurs before it is even discovered.
There are over a dozen common mortgage fraud schemes-application falsification, illegal flipping and flopping, short sales, equity skimming and more. The FBI and CoreLogic report that in 2010 more than $10 billion in loans originated with fraudulent application data, the most common kind of mortgage crime. Particularly brilliant hucksters manage to combine and pull off serial land and mortgage frauds that can bilk private investors and financial institutions alike out of millions. Two such alleged fraudsters were a couple living in Florida, Natalia and Victor Wolf. (CNBC’s “American Greed: The Fugitives” reports on the notorious “developers” who vanished after their investors lost millions. Victor Wolf is pictured above.)

At the end of the housing boom, the Wolfs allegedly were engaged in every known type of mortgage fraud, said Roman Groysman, an attorney representing lenders in a lawsuit against the couple. “If one could teach a course on complex mortgage fraud and match it up against the allegations against these two individuals, I think there’d be little left to cover,” he said.

“None of the lenders knew … there were other lenders,” FBI Special Agent Kurt McKenzie told CNBC. As authorities and investors began to close in on the Wolfs, the couple managed to quickly mortgage their opulent home-over and over again. There were private cash lenders, small business lenders and financial institution lenders. “By the time all was said and done,” said McKenzie, “there were at least four to five loans, mortgage loans, on [the Wolfs’] house.”

But when authorities went to the mansion looking for the couple, they found empty champagne bottles. The people who lost money by trusting the Wolfs have never been able to confront them. Unconfirmed reports place the couple at large in Moscow.

Upcoming changes to regulations may — or may not — affect rates of mortgage fraud. In January 2014, the Consumer Financial Protection Bureau will enforce new mortgage regulations that emphasize loan and borrower quality. “Under the new regulations for Qualified Mortgages,” said CFPB spokesman Samuel Gilford, “certain loan features are not allowed any more, for example, balloon payments or interest-only loans or mortgages that last for over 30 years.” The new Ability-to-Pay rule says borrowers must conform to a clear standard, and lenders will have to verify and document the lender’s ability to repay. The no-doc loans of the past, says Gilford, “were much more vulnerable to fraud.”

The latest fraud-detection tools are two new indexes in the Lexis-Nexis Annual Mortgage Fraud Report, which is available for public access: a foreclosure index, added this year, and an index of potential collusion activity, which makes its second appearance this year. The two new indexes join the on-going index of verified mortgage fraud and misrepresentation.

The potential for collusion is an important new index because in recent years, data analysis shows an increase in collusion involving multiple industry professionals. (The Collusion Indicator Index reports on the factors that make collusion possible or likely; not actual collusion.) “What the industry has found,” Jennifer Butts, one author of the Lexis-Nexis report, wrote in a recent email to CNBC, “is that these indicators-properties transferred at a loss between known relatives or associates-is often an indicator of suspicious activity.”

The more indexes a state appears on, according to the report’s authors, the more “challenging” are the state’s financial prospects for the coming years. New Jersey is the only state to appear on all three indexes. Five states — Florida, Nevada, Illinois, Georgia and Ohio-appear on both the Mortgage Fraud Index and the Volume of Foreclosures Index. And New York and Delaware appeared on both the Mortgage Fraud Index and the Collusion Indicator Index.

Drilling down into the data reveals even more geographic information: For loans originating only in 2012, five “metropolitan statistical areas” represent 35 percent of all 2012 SARs.

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.

The Resolution Law Group: The housing market will continue to suffer until it is fixed by the Courts or the Legislature.

When lawyers for the City of Los Angeles filed a lawsuit against Deutsche Bank two years ago, they criticized the world’s fourth-largest bank as among the city’s worst slumlord and sought hundreds of millions of dollars in penalties and restitution.

Despite the fanfare and rhetoric when the case was brought, the city of Los Angeles just announced that it settled with Deutsche Bank for only ten million dollars and that the settlement money was not going to be paid by the bank.

Geoffrey Broderick, the senior partner of the Resolution Law Group, says “Deutsche Bank foreclosed on more than 2,000 homes in metropolitan Los Angeles between 2007 and 2011. Many homes fell into disrepair and crime increased in the neighborhoods where the foreclosures took place. “

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

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.

The Resolution Law Group: Mortgage REITs See a Slump

Real estate investment trusts that purchase mortgage debt has taken a dive after an employment report that was better than forecasted spurred speculation that the Federal Reserve will begin to make its asset purchases smaller in size. According to data, the United States added 195,000 jobs in June, even though a median forecast in a Bloomberg News survey predicted only 165,000 new jobs. Meantime, mortgage securities backed by the government experienced their largest quarterly losses in 19 years during the three months leading up to the end of June. Certain mortgage REITs even had to use money that was borrowed to amplify possible returns.

Financial firms that purchase mortgage bonds and loans have been contending with speculation that the Fed will lower its $85 billion of monthly debt purchasing as the economy begins to look like it is improving. Unfortunately, a lot of mortgage REITs did not see the recent sharp rise in interest rates. These higher rates decrease the likelihood that homeowners will refinance their mortgage rates. To reflect the upped risk of holding high duration bonds in the long-term, the securities have dropped in value. That many of the REITs did not foresee the interest rates job could be an indictor that they were unprepared and have been complacent.

Mortgage REIT Fraud
Mortgage real estate investment trusts purchase mortgage-backed securities or mortgage that exist or lend money to the owners of real estate for their mortgages. These REITs are involved in investing and owning property mortgages while revenues primarily come via interests made on mortgage loans.

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: SEC Adopts Rules to Protect Investors that Have Brokerage Firm-Held Assets

In a 3-2 vote, the SEC adopted rules to provide substantially more protections to investors who have assets held by registered broker-dealers. SEC Chairman Mary Jo White issued a statement saying she was confident the rules would give customers’ assets key “additional safeguards,” including the strengthening of audit requirements and enhanced oversight.

Under the new rules, broker-dealers would have to file reports with the Commission that are supposed to lead to greater compliance with financial responsibility rules. Brokerages have to start filing new quarterly reports with the regulator and yearly reports with the Securities Investor Protection Corporation by year’s end. Effective June 1, 2014, they will have to file yearly reports with the SEC.

These latest rules amend the Securities and Exchange Act of 1934’s Rule 17a-11 and Rule 17a-5. Per the rule amendments, a broker-dealer with custody of customers’ assets will have to file a compliance report with the Commission and work with an independent public accountant that is PCAOB-registered to put together a report based on a study of statements in the compliance report. Brokerage firms without custody of these assets need to submit an exemption report with the regulator noting its exemption from the requirements. Also, whether/not a broker-dealer has custody of clients’ assets, a firm has to let SRO or SEC staff look at the independent public accountant’s work papers if this information is needed to examine the brokerage firm and the accountant is allowed to talk about its findings with examiners.

Our securities lawyers work with investors that have sustained losses from stockbroker fraud. We have helped thousands of clients recoup their losses sustained due to the negligence or errors of their financial representatives.  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