Posts Tagged ‘Bank of America’

SEC charges Bank of America with securities laws violations

Bankk of America

Newscast Media NEW YORK—The Securities and Exchange Commission today charged
Bank of America Corporation with violating internal controls and recordkeeping
provisions of the federal securities laws after it assumed a large portfolio of
structured notes and other financial instruments as part of its acquisition of Merrill

Bank of America agreed to pay a $7.65 million penalty to settle the charges stemming
from regulatory capital overstatements that it made due to its internal accounting
control deficiencies and books and records failures. CONTINUE TO FULL STORY>>


Be the first to comment - What do you think?  Posted by Joseph Earnest - October 1, 2014 at 3:23 am

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Bank of America found guilty of mortgage fraud by jury in Manhattan

Bank of America

Newscast Media NEW YORK—A Manhattan jury found Bank of America responsible for fraud in its mortgage-related practices, in conjunction with its now-defunct Countrywide Financial Corp. affiliate.

Forbes said: “The verdict is a win for the US government as this is one of the few cases stemming from the financial crisis that it’s taken to trial.

“In a rush to feed at the trough of easy mortgage money on the eve of the financial crisis,
Bank of America purchased Countrywide, thinking it had gobbled up a cash cow. That
profit, however, was built on fraud, as the jury unanimously found,” US Attorney Preet
Bharara said in a statement.

Bank of America may or may not appeal. The bank said in a statement, “The jury’s decision concerned a single Countrywide program that lasted several months and ended before Bank of America’s acquisition of the company. We will evaluate our options for appeal.”

Bank of America’s problems aren’t over yet. The Securities and Exchange Commission is also suing the bank for “fraud” because BofA obtained money and property by means of untrue statements of material fact, and also engaged in transactions, practices and courses of business which would and did operate as a fraud and deceit upon the purchasers of such securities.

*Click here to download or read other lawsuit Bank of America faces.

One of the counts Bank of America is being charged with is failure to file a prospectus with the SEC. The prospectus is accompanied by the infamous Pooling and Servicing Agreement (PSA) the one every lawyer is afraid. No lawyer in the history of litigation of mortgage-backed securities, has been successful in producing a valid PSA or prospectus, because they don’t teach “structured financing” in law school.

Under US law, if a bank claims to own a mortgage in form of a mortgage-backed security, it has to have a prospectus that is valid and current. If it can produce the prospectus, it cannot produce the Pooling and Servicing Agreement, therefore it cannot win a case, because the mortgages are based on fraud. Think of it as a driver being stopped by police for a traffic violation and the driver cannot produce a driver’s license and proof of insurance. What do you think would happen? Here is the specific law:

15 U.S.C. §§ 77e(b)(1):

(b) Necessity of prospectus meeting requirements of section 77j of this title
“It shall be unlawful for any person, directly or indirectly—(1) to make use of any means
or instruments of transportation or communication in interstate commerce or of the
mails to carry or transmit any prospectus relating to any security with respect to which a
registration statement has been filed under this subchapter, unless such prospectus meets the requirements of section 77j of this title.

The SEC is asking for an unspecified amount of damages including injunctive relief against Bank of America, while the US government is looking to get $848 million out of BofA.

Bank of America Corp said on Thursday that it was cutting 1,200 to 1,300 mortgage jobs.


Be the first to comment - What do you think?  Posted by Joseph Earnest - October 24, 2013 at 9:56 pm

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Major arrests are imminent, in regard to global bank fraud scandals

FBI New York Division

Newscast Media HOUSTON, Texas—Every time a major event occurs across the world, and there is a deafening silence about the occurrence, it’s a signal that a brewing storm is about to do major damage. Anyone who has been following the news cycle for the past eight months is aware of all the whistle blowers who have come forward, with relevant information about fraud and misconduct in the banking industry and within corporations. No arrests are being made so far. CEOs are simply resigning.

According to the Daily Mail, for example, it has been alleged that the world’s largest banks have been fraudulently fixing interest rates around the world for at least the past decade, if not for a much longer period of time. The fraud was uncovered when Barclay’s Bank in London was discovered to have been submitting false figures to the LIBOR to improve their trading position. By manipulating the LIBOR, by raising or lowering it, banks allegedly could make their balance sheets appear healthier than they were, while consumers and members of the public apparently paid the shortfall.

Some news outlets have reported CEO resignations, yet only these CEOs know how deep the fraud runs, and sooner or later arrests will be made. I will give a few examples in this below:

Wall Street Journal reported the resignation of Barclays CEO here.

USA Today reported Omnicare resignation in this article.

Business Week - Libor scandal results in first CEO resignation.

These are just a few of over 300 resignations by CEOs that have happened since the beginning of the year, that we have heard of. Many are quietly changing their professions and moving to Third World countries to escape any prosecution.

Already, there are sixteen (16) banks that are under investigation, and every industry insider with connections to these banks is nervous. Here is Houston, people are familiar with the Enron scandals and Stanford Financial. They all started out the same way, but eventually arrests were made and the culprits were prosecuted. The sixteen banks being investigated on a global scale in regard to fraud are: Bank of America, Lloyds, Credit Suisse, UBS, LLOYDS Bank Limited, Rabobank, RBC (Royal Bank of Canada), HSBC, Deutsche Bank, CITI, Royal Bank of Scotland, Bank of Tokyo-Mitsubishi, Norinchuckin, Barclays, JP Morgan, and West LB. The details are here on Yahoo Finance.

Most people will look at the list and shrug it off because society has been jaded by corruption of the politicians and that judicial system, and seem to have lost faith in the justice system. However, there is a younger generation, mostly Generation-X, that is unrelenting in fighting injustices. This is the generation that is fearless, because they saw how complacent their predecessors were, and want to make a difference. They are not image-conscious or worried about building a reputation, because they don’t have one. When they were younger, the games they played weren’t regular games…they were edgy. They skateboarded on rails instead of flat surfaces; they did air flips with their bikes instead of riding on bike trails; they went rock climbing, instead of taking photos of the rocks; they even invented a whole new sport called “X-Games” named after their generation.

This generation (x) did not grow up on social networks, they were out there meeting people and making friends the old fashioned way. They knew how to communicate their ideas, share stories about the latest stunts they had discovered, and now they are grown men and women. When they told their parents they wanted to be professional skateboarders or bike riders, their parents said: “Learn a trade.” To find a trade they did, and now they are in their thirties and forties. These are the ones investigating behind the scenes and uncovering the corruption in society. These warriors have never lost their childhood fearlessness exhibited in the outdoor games they invented.

They work for the SEC, the FBI, the judicial system, the media, the military, local law enforcement. They are computer programmers, researchers, but most of all…they are patriots. They will not sit on their hands and watch society decay. These people who were once told riding bikes or skateboards could never make a difference in society, are now the ones filing lawsuits on behalf of the United States government. Charging fraudsters for their fraudulent schemes, on behalf of the SEC. They are conducting fearless investigative journalism, to expose the hidden truth. They are the SWAT Team and FBI agents who break down doors.

Some may currently be unemployed, but the fire within them is still ablaze, and cannot be extinguished. These young men aren’t worried about “fitting in” nor do their female counterparts suffer from a “Diva complex”, because they know they’ll never fit in, since they are trail blazers and not followers. They believe in letting the chips fall where they may. They are the stones that builders once rejected as worthless, but have turned out to be the most important stones in correcting a corrupt society.

If you think the fraudulent corporate perpetrators will never face justice, take a look at this list of fraudsters who committed fraud on a global scale and thought they would get away with it. Don’t be fooled by the silence before the storm, it’s only a matter of time.


2 comments - What do you think?  Posted by Joseph Earnest - August 9, 2012 at 12:04 am

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Class action mortgage suit settled for $315M by Bank of America

Bank of America

Newscast Media HOUSTON, Texas — Bank of America agreed to settle a class action lawsuit brought against it by investors for $315 million. The class action lawsuit was led by the Public Employees’ Retirement System of Mississippi pension fund. The fund claimed that the investments were backed by poor quality mortgages written by subprime lenders Countrywide Financial Corp., First Franklin Financial, and IndyMac Bancorp, a bank that failed in 2008.

The settlement still has to be approved by U.S. District Judge Jed Rakoff something that could prove difficult since the settlement includes no admission of guilt from Bank of America.

During the housing boom, several mortgages were sold on the secondary market as Mortgage-Backed Securities (MBS) and were bundled into pools and sold as derivatives to investors across the world. What investor did not know was that most of the MBS, were never mortgage-backed because the Trusts that presided over the securities were defunct, or the mortgages were non-qualifying for the Real Estate Mortgage Investment Conduit (REMIC) Trusts. For a mortgage to be a qualified mortgage, it cannot be in default, nor can it have a lawsuit on it. It has to be a performing loan. It also has to be transferred into the Trust on the startup day of the Trust. REMICs are governed by IRS Tax code 860A-860G.

IRS Tax Code Section 860G(a)(3)(A)(i):

“A mortgage loan is not a qualified mortgage unless it is transferred to the REMIC Trust on the startup day in exchange for regular or residual interests in the REMIC”.

IRS Tax Code Section 860F(1):

“To file as a REMIC, and in order to avoid one hundred percent (100%) taxation by the IRS an MBS REMIC could not engage in any prohibited action.”

If mortgages were never transferred into the Trusts, then the investors purchased bogus securities that never existed to begin with. Most defunct Trusts filed Forms 15-D with the Securities and Exchange Commission, notifying all parties of their Termination of Registration and suspension of their Duty to File Reports under the Securities and Exchange Act of 1934 (15 U.S.C.A. §§ 77a et seq., 78a et seq.).

Because it would have been almost impossible for Bank of America to prove that it owned the MBS and that the Trusts were actually functional, they decided to settle rather than fight the investors. On the other hand, even if they could prove that the Trusts existed but the mortgages were “non-performing” they would be in violation of the tax code because only “qualified mortgages” are permitted to be transferred, or they would have engaged in “prohibited action”. So on both sides of the argument BofA would have lost.

A proficient lawyer, Pro Se or Sui Juris, should be able to argue both sides of any argument with cold, hard logic, supported by legal debate.


4 comments - What do you think?  Posted by Joseph Earnest - December 7, 2011 at 12:16 am

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Federal Judge approves $410million Settlement for Bank of America

Bank of America

Newscast Media HOUSTON, Texas –U.S. District Judge James Lawrence King on Monday finally approved a $410 million settlement in a class-action lawsuit affecting more than 13 million Bank of America customers who had debit card overdrafts during the past decade. The judge deemed the settlement amount reasonable even though it drew criticism from some customers because they would only receive a fraction of what they paid in overdraft fees. The fees were usually $35 per occurrence.

The lawsuit claimed that Bank of America processed its debit card transactions in the order of highest to lowest dollar amount so it could maximize the overdraft fees customers paid. An overdraft occurs when the account doesn’t have enough money in it to cover a debit card transaction. Similar lawsuits have been filed against more than 30 other banks.

The overdraft fees affected anyone who had a Bank of America consumer checking and/or savings account that could be accessed with a Bank of America debit card, anytime between January 1, 2001 and May 24, 2011, and was charged one or more overdraft fees as a result of Bank of America’s practice of posting debit card transactions from highest to lowest dollar amount.

“If you are included in the Settlement Class and entitled to receive a cash benefit, you do not need to do anything to get a payment or account credit. You will automatically receive a payment or account credit,” Bank of America posted on its Web site.

Settlement Website:


Be the first to comment - What do you think?  Posted by Joseph Earnest - November 8, 2011 at 9:55 pm

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Supreme court stops home foreclosure dead in its tracks

Foreclosure fraud

Newscast Media –The Massachusetts Supreme Court has ruled against two of the biggest mortgage lenders, and has canceled their foreclosures, backing a lower court ruling made in 2009, saying that the two foreclosures were invalid since banks did not prove that they owned them at the time. The ruling against US Bancorp and Wells Fargo in a case that has been widely watched, and the ramifications will certainly have a ripple effect across the nation. Bank shares fell sharply after the ruling dragging the wider market down.

The decision is among the earliest to address the validity of foreclosures done without proper documentation – so-called robo-loans because they were carried out by people who were unqualified and who often did not check a single line in the paperwork.

After the robo-loan scandal was exposed last year some lenders, including Bank of America, JP Morgan Chase and Ally Financial temporarily stopped seizing homes. Analysts believe this latest court action will further affect the foreclosure process in the US.

Marty Mosby, an analyst at Guggenheim Securities said: “A ruling like this will slow down the foreclosure process. They’re going to have to be really precise and get everything in order. It doesn’t leave a lot of wiggle room.”

The case also applies retrospectively to people who have already been foreclosed. Glenn Russell, a lawyer for one of the couples in the case said: “I’m ecstatic. The fact the decision applies retroactively could mean thousands of homeowners can seek recovery for homes wrongfully foreclosed upon.”

Wells Fargo and US Bancorp lacked the authority to foreclose after having “failed to make the required showing that they were the holders of the mortgages at the time of foreclosure,” wrote Justice Ralph Gants for the Massachusetts court.

Justice Robert Cordy said the banks had displayed “utter carelessness” in documenting their right to own the properties. Courts in other US states are considering similar cases, and all 50 state attorneys general are examining whether lenders are forcing people out of their homes improperly. Wells Fargo had no immediate comment on the decision. US Bancorp spokesman Steve Dale said the decision has no financial impact on the bank. But leading bank shares were affected by the case.

Wells Fargo shares closed down 2.02%, US Bancorp shares were down 0.6, Bank of America was down 1.32% while JP Morgan fell 1.89%. Analysts said the decision may also threaten banks’ ability to package mortgages into securities, and may raise the specter that loans transferred improperly will need to be bought back.


1 comment - What do you think?  Posted by Joseph Earnest - January 8, 2011 at 1:38 am

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Federal Reserve Finally Confesses As To Where The Money Went

Newscast Media NEW YORk, NY– The Federal Reserve, a privately held business, finally revealed details Wednesday of trillions of dollars in emergency aid it provided to U.S. and foreign banks during the financial crisis. Perhaps not wanting WikiLeaks to make these revelations, the Fed released the data in the form of more than 21,000 transactions.

The private banks that control the FED are: Rothschild Bank of London, Warburg Bank of Hamburg, Rothschild Bank of Berlin, Lehman Brothers of New York, Lazard Brothers of Paris, Kuhn Loeb Bank of New York, Israel Moses Seif Banks of Italy, Goldman, Sachs of New York, Warburg Bank of Amsterdam and Chase Manhattan Bank of New York.

The released documents show that the most loan and other aid for U.S. institutions over time went to Citigroup ($2.2 trillion), followed by Merrill Lynch ($2.1 trillion), Morgan Stanley ($2 trillion), Bank of America ($1.1 trillion), Bear Stearns ($960 billion), Goldman Sachs ($620 billion), JPMorgan Chase ($260 billion) and Wells Fargo ($150 billion).

Merrill Lynch was later acquired by Bank of America, while Bear Stearns collapsed and was sold to JPMorgan.

Among the largest foreign bank recipients were Bank of England, Swiss National Bank, Barclays and Bank of Japan.

The Fed also detailed the $1.25 trillion in mortgage securities it bought from Fannie Mae and Freddie Mac to help drive down mortgage rates, ease credit and provide some support to the crippled housing market.

Additional non-banking companies in the U.S. used the Fed’s lending programs, too, the documents show. Motorcycle maker Harley-Davidson Inc. borrowed $2.3 billion, Caterpillar Inc. $733 million and McDonald’s $203 million.Two other recipients were the California State Teachers Retirement System and the City of Bristol (Conn.) General City Retirement Fund.

Be the first to comment - What do you think?  Posted by Joseph Earnest - December 2, 2010 at 1:01 am

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Bank of America hit with class action foreclosure lawsuit

Bank of America class action suit

Newscast Media — Bank of America has been hit with a class action on behalf of homeowners seeking damages for alleged disregard of foreclosure process rules. The suit, filed Wednesday in federal court in Newark, N.J., accuses Bank of America and two subsidiaries, LaSalle Bank and BAC Home Loans Servicing, of “an undisciplined rush to seize homes” through “pervasive and willful disregard of knowledge, facts and statutes.”

Bank of America has filed foreclosure proceedings on many mortgages in New Jersey without holding the necessary rights as the mortgagee or assignee at the time of foreclosure, the suit says.

“Many thousands of foreclosures are plainly void under statute and settled New Jersey case law. Many borrowers never obtain statutorily required notices, and many foreclosure suits are filed entirely based in inaccurate recitations concerning ownership of the mortgage, the note, or the assignment,” the suit says.

The putative class in the suit, Beals v. Bank of America, N.A., 10-cv-05427, consists of all named defendants in pending New Jersey foreclosure actions initiated by Bank of America or its affiliates. The complaint includes counts of common-law fraud, breach of the covenant of good faith and fair dealing and violations of the New Jersey Fair Foreclosure Act and Consumer Fraud Act. The plaintiffs cite a recent, well-publicized admission by a Bank of America official in a Massachusetts foreclosure case that she signed thousands of foreclosure complaints without reviewing them.

They also say the fact that the bank and its affiliates, by imposing a moratorium on foreclosures from Oct. 8 to Oct. 18 while reviewing their procedures, “have admitted that in all of their foreclosure cases, they, as a moving party, prosecute their claims with a complete disregard of whether or not they have met their burden.”

The plaintiffs claim they are entitled to compensation for emotional distress, damage to their credit scores and time lost from work for attorney meetings and foreclosure proceedings.

They also seek punitive damages and attorney fees as well as declaratory and injunctive relief dismissing the foreclosures of class members, with prejudice, declaring the mortgages and promissory notes of class members void and unenforceable` and rescinding or reforming the mortgages and promissory notes to conform to plaintiffs’ reasonable expectations.

The suit was brought by Lawrence Friscia, head of a Newark firm that counsels distressed homeowners, and his associate, Jonathan Minkove, who say they’ve found that Bank of America regularly negotiates binding agreements to modify mortgage terms and then fails to honor the terms.

The seven named plaintiffs are all New Jersey residents in danger of foreclosure, among them Jose Grullon of Passaic, N.J., whose binding arbitration agreement ending his foreclosure was ignored by Bank of America, and Tanya Beals of Roselle, N.J., who received a mortgage modification but was nonetheless found in default by Bank of America when she made mortgage payments at her new, reduced rate.

“There’s a difference in the fact pattern [among individual cases] but there’s pattern and a practice of blatant disregard for process,” says Minkove. “Any lawyer who’s worth his salt will tell you process matters.”

And when judges call them to case management conferences in their foreclosure cases, outside counsel for Bank of America regularly fail to show up, says Friscia. Worse still, New Jersey’s judges don’t seem to be bothered by such behavior, he says.

“There’s a shocking deference given to Bank of America on the part of the judicial system,” Friscia says.

In the firm’s negotiations on behalf of homeowners, the bank doesn’t bargain in ood faith, says Minkove. For example, the legal department will tell them to speak to the loss mitigation department, which will order them to send in send in documentation. They comply, but bank officials “regularly say they never received it. Therefore, part of what prompted us to action is [the realization that] this is a systemic problem. The left hand doesn’t speak to the right hand,” Minkove says.

A Bank of America spokesman in New York, T.J. Crawford, referred a reporter’s inquiry about the suit to other spokespersons in California, who did not respond to telephone and e-mail messages.

The case has been assigned to District Judge Katharine Sweeney Hayden.

Charles Toutant
New Jersey Law Journal


56 comments - What do you think?  Posted by Joseph Earnest - October 27, 2010 at 10:22 pm

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Foreclosure probe launched in 50 states

Home mortgages

Newscast Media WASHINGTON — A joint investigation has been launched by officials in 50 states and the District of Columbia into allegations that mortgage companies mishandled documents and broke laws in foreclosing on hundreds of thousands of homeowners.

The states’ attorneys general and bank regulators will examine whether mortgage company employees made false statements or prepared documents improperly. The investigations are being led by Attorneys general in response to a nationwide scandal that’s called into question the accuracy and legitimacy of documents that lenders relied on to evict people from the homes.

The allegations raise the possibility that foreclosure proceedings nationwide could be subject to legal challenge. Some foreclosures could be overturned. More than 2.5 million homes have been lost to foreclosure since the recession started in December 2007, according to RealtyTrac Inc.

“This is not simply about a glitch in paperwork,” said Iowa Attorney General Tom Miller, who is leading the probe. “It’s also about some companies violating the law and many people losing their homes.”

Ally Financial Inc.’s GMAC Mortgage Unit, Bank of America and JPMorgan Chase & Co. already have halted some questionable foreclosures. Other banks, including Citigroup Inc. and Wells Fargo & Co. have not stopped processing foreclosures, saying they did nothing wrong.

In a joint statement, the officials said they would review evidence that legal documents were signed by mortgage company employees who “did not have personal knowledge of the facts asserted in the documents. They also said that many of those documents appear to have been signed without a notary public witnessing that signature — a violation of most state laws.

“What we have seen are not mere technicalities,” said Ohio Attorney General Richard Cordray. “This is about the private property rights of homeowners facing foreclosure and the integrity of our court system, which cannot enter judgments based on fraudulent evidence.”

3 comments - What do you think?  Posted by Joseph Earnest - October 14, 2010 at 12:06 am

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Countrywide customers to receive settlement for ID theft


Newscast Media — LOUISVILLE, Ky. — Millions of customers left at high risk for identity theft and security breach will receive a settlement from Countrywide Financial Corp. that has received final approval from a federal judge.

According to the settlement, Bank of America which now owns Countrywide will provide free credit monitoring for up to 17 million people whose financial information was exposed. That group includes anyone who obtained a mortgage and anyone who used Countrywide to service a mortgage before July 1, 2008. Victims who can prove that they lost something of value and that the theft emanated for the Countywide breach, could be reimbursed up to $50,000 for each time their identity was stolen.

U.S. District Judge Thomas B. Russell of Paducah, who oversaw more than three-dozen lawsuits related to the security breach, granted class-action status to the lawsuit and gave final approval of the settlement Monday.

Russell wrote in his 21-page ruling that the settlement provides immediate relief for possible identity theft victims — relief that would likely have been delayed as appeals wound through the courts.

“This settlement provides safeguards that would not otherwise be available to millions of people, at a time when such measures are needed most,” Russell wrote.

Shirley Norton, a spokeswoman for Bank of America, said the company denies all allegations of wrongdoing or liability in the case.

“We settled because we believe it is in the bank’s best interest to settle the suit and avoid the additional expense and uncertainty of further litigation,” Norton said.

Plaintiffs attorneys will receive $3.5 million in fees for their work. Attorneys for the plaintiffs say Countrywide Financial had all their clients’ financial information including mortgage information, credit card, and Social Security numbers and birth dates.

The lawsuits stem from the arrest of Rene Rebollo Jr., of Pasadena, Calif., a former senior analyst for Countrywide, and Wahid Siddiqi, of Thousand Oaks, Calif. Federal investigators said Rebollo used a flash drive to download data from about 20,000 customers a week for two years from 2006 through August 2008.

Rebollo then sold the information to Siddiqi for $500 and earned a combined $50,000, federal investigators said. Siddiqi pleaded guilty in 2009 to 10 counts of fraud and admitted to selling the information to third parties, including an undercover FBI agent.

Countrywide has said that it worked closely with the FBI and federal investigators and that the security breach does not appear to have resulted in anyone’s identities being stolen.

2 comments - What do you think?  Posted by Joseph Earnest - August 23, 2010 at 7:57 pm

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