BB&T Resolves FHA Mortgage Insurance Lawsuit for $83M

Joining some of the major regional banks, BB&T Corporation BBT announced the resolution of certain legacy mortgage related matters with the U.S. Department of Justice (DOJ). The company has agreed to pay $83 million to settle allegations of violating the False Claims Act. read more »

 

 

Glaxo to Pay $20 Million to Settle U.S. Bribery Case in China

GlaxoSmithKline will pay $20 million to settle civil charges that it disguised bribes to foreign officials in China as legitimate travel, entertainment and marketing expenses, United States regulators said on Friday.

The pharmaceutical company agreed to settle the case with the Securities and Exchange Commission without admitting or denying wrongdoing.

In a statement, the company said it had cooperated with the S.E.C. and had received credit for taking steps to improve its operations, such as changing how sales representatives are paid and stopping the practice of paying health care professionals to speak to doctors about the company’s products. read more »

Illinois suspends business with Wells Fargo

Wells Fargo is losing another big business customer: the state of Illinois.

Illinois Treasurer Michael Frerichs said Monday that his office is suspending its annual $30 billion in investment activity with Wells Fargo Co. for at least one year. The office oversees more than $1 trillion in annual investment activity, Frerichs says, and Wells Fargo stands to lose "millions of dollars" in investment fees from the action. read more »

Och-Ziff May Face Consequences Beyond Fine in Bribery Case

Defendants often point to the collateral consequences of a prosecution and civil enforcement action when arguing that they should not be punished too severely. The settlement by the hedge fund Och-Ziff Capital Management and its founder, Daniel S. Och, for paying bribes to obtain natural resource deals in Africa tests how much they will endure beyond the settlement’s fines and disgorged profits. read more »

Morgan Stanley charged with running unethical sales contests: regulator

Morgan Stanley was charged with "dishonest and unethical conduct" by Massachusetts' top securities regulator on Monday for having pushed its brokers to sell loans to their clients.

Secretary of the Commonwealth William Galvin alleges that the bank ran high-pressured sales contests in Massachusetts and Rhode Island where brokers could earn thousands of dollars for selling so-called "securities based loans." (SBLs)

The contests, designed to boost business, were officially prohibited by Morgan Stanley but turned out to be lucrative for the bank with the pace of loan origination tripling and adding $24 million in new loan balances, Galvin said.

The charges against Morgan Stanley come one month after Wells Fargo was fined for fraudulently opening accounts and illustrate how large banks are facing increasing scrutiny over their sales practices. read more »

Cantor Fitzgerald affiliate pays $22.5 mln to end U.S. gambling probe

An affiliate of financial services firm Cantor Fitzgerald has agreed to pay $22.5 million to resolve investigations into its past involvement with illegal gambling and money laundering schemes, U.S. authorities said on Monday.

Federal prosecutors in Brooklyn said CG Technology LP had agreed to pay $16.5 million and enter into a non-prosecution agreement, three years after a former executive pleaded guilty to conspiring to participate in an illegal gambling business.

The U.S. Treasury Department's Financial Crimes Enforcement Network separately announced a $12 million civil penalty against CG Technology, $6 million of which will be covered by the company's criminal fine and forfeiture. read more »

The Supreme Court Will Hear Its First Insider-Trading Case in 20 Years

Wall Street figures accused of insider trading are keeping a close eye on a U.S. Supreme Court appeal by a Chicago grocery wholesaler trying to overturn his conviction for buying stock based on information leaked by a relative.

The justices will consider their first insider-trading case since 1997 on Wednesday when they hear Bassam Yacoub Salman’s case. It tests whether someone can be sent to prison for making trades when the insider who provided the tip wasn’t looking to make any money.

A victory for the government would be a boost for prosecutors and the Securities and Exchange Commission, restoring some of the legal leverage they lost in 2014 when a federal appeals court in Manhattan set new requirements for insider-trading convictions. read more »

Utah-Based Lenders Agree to Pay Nearly $10 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage Lending

Primary Residential Mortgage Inc. (PRMI) and SecurityNational Mortgage Company (SecurityNational) have agreed to pay the United States $5 million and $4.25 million, respectively, to resolve separate allegations that they violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today.  Both lenders are headquartered in Salt Lake City, Utah. read more »

 

 

Geico Says Medical Device Co. Bribed Docs In RICO Suit

Analgesic Healthcare Inc. violated the Anti-Kickback Statute and Racketeer Influenced and Corrupt Organizations Act by paying medical professionals to prescribe its electrical stimulation devices — used for pain management — to car accident victims at inflated prices, Geico alleged Friday in Massachusetts federal court.

AHI's “excessive and unconscionable” prices for its so-called TENS units are between 1,200 and 3,900 percent higher than what other retailers charge, but physicians, physical therapists and chiropractors prescribe them because AHI provides a $200 kickback, the insurer alleges. Since 2010, AHI has charged Geico more than $1.1 million, leading to Geico paying about $598,000, Geico said. read more »