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SEC applies Admin. Procedure as one-two punch to UBS bank fraud
by Joseph Earnest May 3, 2012
Newscast Media WASHINGTON, D.C.—The Securities and Exchange Commission has charged UBS Financial Services Inc. of Puerto Rico and two executives with making misleading statements to investors and concealing material information regarding securities. However, this approach is very unique that the SEC is taking. It bypasses the courts by the use Administrative Procedure Act, and directly charges the banks and executives involved with securities fraud, and even imposes a fine.
This is very powerful because the majority of judges in federal courts do not understand securities; attorneys also do not know how to defend such cases because they do not learn about securities laws in law school, so rather than risk losing a case based on a technicality or a judge's unwillingness to address fraud committed by banks, the SEC is charging them directly and writing orders very much like a judge would do. This out-of-court approach will help investors and beneficiaries of fraudulently-created trusts resolve cases in which mortgage-backed securities are involved.
Just like a judge can issue an injunction, the SEC's version is to issue a cease and desist from violating the Securities Act of 1933. Which means if a bank defrauds investors in regard to the existence of Trusts that don't exist, and they bring it to the awareness of the SEC rather than the courts, they can receive relief for the fraud. Homeowners whose mortgages were put in defunct trusts secured by their deeds of trusts, benefit from such an order because it prohibits the banks and their agents from ever receiving any financial gain relating to such trusts. This way, homeowners are quietly winning injunctions against the big banks, without having to deal with the courts or when ruled against by the courts.
In this particular case of UBS in PR, the SEC used the Administrative Procedure to resolve the case. Here is exactly what the SEC said in its order:
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in UBS PR's Offer.
Accordingly, pursuant to Section 8A of the Securities Act, and Sections 15(b) and 21C of the Exchange Act, it is hereby ORDERED that:
A. UBS PR cease and desist from committing or causing any violations and any future violations of Sections 17(a) of the Securities Act, Sections 10(b) and 15(c) of the Exchange Act, and Rule 10b-5 of the Exchange Act.
B. UBS PR shall, within 14 days of the entry of this Order, pay disgorgement of $11,500,000.00, prejudgment interest of $1,109,739.94, and a civil money penalty of $14,000,000.00 to the Securities and Exchange Commission.
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When a bank violates Section 17 of the Securities Act of 1933, it means there was fraud involved in the sale or acquring of securities. As I have said before in previous articles, almost 100 percent of the Trusts banks claim to be Trustees over do not exist, so the mortgage-backed securities are not mortgage backed. Banks like Deutsche Bank, Option One, Wells Fargo and many others that claim to hold mortgages for Trust XYZ on behalf of Certificate holders would be in violation of Section 17(a)(2) if the Trusts in which those alleged mortgage-backed securities they claim to own do not exist.
Violation of Section 17(a)(1) and 17(a)(2) of the Securities Act of 1933
Section 17 – Anti-Fraud Authority
Section 17(a) provides one of the central sources of anti-fraud authority for law enforcement. In most securities actions you will see Section 17(a) used as a basis for jurisdiction (along with Section 10(b) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder).
"It shall be unlawful for any person in the offer or sale of any securities or any security-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act [15 USCS § 78c note]) by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly (1) to employ any device, scheme, or artifice to defraud, or (2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading."
So when the SEC issues a cease and desist to a bank from committing or causing any violations and any future violations of Sections 17 of the Securities Act of 1933, it is an equivalent of a permanent injunction to enjoin(stop) the bank from claiming any property rights to the related trust as highlighted in Section 17(a)(2) above.
Unfortunately not too many homeowners or even their attorneys are familiar with SEC rules, to be able to benefit from the rulings that are happening in regard to fraud. Only the savvy homeowners are the ones benefiting from such rulings, and when a "clear title" is filed, the bank, in accordance to the SEC order, cannot attempt to claim ownership over a property tainted with fraud, or else it will be in violation of the SEC order. This is something the media is forbidden to report, because the large corporations own the corporate media, and do not want an awakening to occur. You may read or download the UBS cease and desist order here. (pop-up)
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