Banking Law

Amended SEC Complaint Accuses Stanford, CFO of Running Ponzi Scheme

The Securities and Exchange Commission has filed an amended complaint against R. Allen Stanford that alleges the Texas billionaire ran a huge Ponzi scheme and took at least $1.6 billion of investor money in personal loans. The amended complaint also accuses James Davis, the chief financial officer of Stanford’s company,…

Mar 2, 2009 12:11 PM CST

Sonnenschein Closes 11-Lawyer Office in Charlotte, N.C.

Partners at Sonnenschein Nath & Rosenthal today voted to close the Chicago-based firm’s less than two-year-old office in Charlotte, N.C. It isn’t clear how many of the 11 lawyers affected will be able to move to another firm office, according to American Lawyer. There are also eight staff members at…

Feb 27, 2009 9:50 PM CST

Feds Ignored Loan Problems at Failing IndyMac, Treasury Report Says

The federal Office of Thrift Supervision ignored inflated appraisals and lax lending standards that led to the failure of California-based IndyMac Bancorp, according to a report by the U.S. Treasury Department’s inspector general. And that failure cost the taxpayer-funded Federal Deposit Insurance Corp. $10.7 billion, writes the Los Angeles Times.…

Feb 27, 2009 1:42 AM CST

Posner Writes Book Questioning His Free-Market Views, and Keeps on Writing

Judge Richard Posner has written a new book questioning his own free-market views, but he’s finding it difficult to let go of the project. Posner, a judge with the Chicago-based 7th U.S. Circuit Court of Appeals, originally finished the manuscript Jan. 30, The Boston Globe’s Brainiac blog reports. But he…

Feb 26, 2009 4:15 PM CST

Why Didn’t SEC Move Faster in Stanford Case, Law Prof Wonders

What did the feds know about the operations of R. Allen Stanford, and when did the feds know it? That is essentially the question on the mind of law professor Peter Henning of Wayne State University. Writing in the DealBook blog of the New York Times today, he ponders parallels…

Feb 23, 2009 7:14 PM CST

Finance Giant Asks Top Law Firm to Probe Lobbying re Mortgage Regs

Freddie Mac has asked Covington & Burling to conduct an internal probe of the finance giant’s own $2 million lobbying campaign. The lobbying effort was mounted to counter a 2005 effort in Congress to enact new regulations that would have required Freddie Mac to sell a substantial amount of mortgages…

Feb 23, 2009 5:30 PM CST

Suspicious Lawyer Says He Declined Stanford Job

A skeptical lawyer with Shutts & Bowen in Miami says he turned down legal business from a Texas billionaire recently accused in an $8 billion fraud. Bowman Brown now represents clients who bought certificates of deposit from R. Allen Stanford, who has been accused in a civil complaint by the…

Feb 23, 2009 3:16 PM CST

Buyers Sue Bank: Bad Prequalification Cost Them Money, They Contend

Several buyers who say they were somehow prequalified to purchase expensive Seattle condos utilizing mortgages they couldn’t possibly afford are now suing the bank that allegedly put them in this position. By prequalifying them, JPMorgan Chase bank set the plaintiffs up to lose $175,000 in earnest money when, inevitably, they…

Feb 21, 2009 12:42 AM CST

Bank Sues Embattled N.Y. Lawyer Alleging $1.8M Mortgage Fraud

Wachovia Federal Savings Bank filed suit yesterday against a 57-year-old New York attorney, contending that he pocketed $1.8 million as part of an alleged mortgage fraud scheme concerning his deceased father’s former home in the Hamptons. George Guldi, who is a former Suffolk State Legislator, and a co-defendant allegedly misled…

Feb 20, 2009 11:29 PM CST

How Obama Hopes to Kick-Start Securitization

The Obama administration hopes to boost securitization with a program of up to $1 trillion in low-cost loans and guarantees to the hedge funds and private equity firms that buy bundled consumer and business loans. Banks have been reluctant to issue new loans because they are unable to wipe their…

Feb 20, 2009 1:04 PM CST

US Clients of UBS Mull Options as Feds Press Swiss Bank to Name More Names

Contending that a Swiss bank’s plan to name client names to U.S. regulators as part of a $780 million settlement of a criminal tax probe violates Switzerland law requiring secrecy, American depositors are mulling their options. Attorney Andreas Rued of the Rued Winkler law firm in Zurich said unnamed UBS…

Feb 19, 2009 6:53 PM CST

The Nitty Gritty of Obama’s Mortgage Rescue Plan

The Obama administration will publish rules governing its $75 billion mortgage rescue plan on March 4, the same day that most parts of the plan will take effect. Only a few parts of the plan—such as the call to allow bankruptcy judges to modify mortgages—require Congress to act, the New…

Feb 19, 2009 1:06 PM CST

Half of Homeowners Default After Big Bank Refi; Some Payments No Lower

Mortgage refinancing doesn’t always stave off a foreclosure, especially when payments remain the same, despite a lower interest rate. The New York Times offers an example: Jeffrey Mitchell saw the tax bill and insurance premiums rise on the Miami home he bought for $282,000, increasing his monthly payment from $2,200…

Feb 19, 2009 12:25 PM CST

Swiss Bank UBS Settles With US; Will Pay $780M, Name Client Names

Updated: In a clash between U.S. tax law and a longstanding international tradition of secret accounts, a Swiss bank has blinked first. Although UBS AG had resisted handing over to the feds names of American residents who are private banking clients, it has now agreed to do so, the U.S.…

Feb 19, 2009 1:31 AM CST

SEC Looked Into Stanford CDs in 2005; Why Didn’t Feds Act Sooner in $8B Case?

In 2005, the U.S. Securities and Exchange Commission sent letters to holders of certificates of deposit at Stanford International Bank of Antigua, seeking information about how the instruments had been marketed. And, as two former brokers for R. Allen Stanford contend in a lawsuit they filed in January 2008, they…

Feb 19, 2009 12:38 AM CST