HSBC Pays $32.5 Million to Settle Claims on Faulty Foreclosures

HSBC Holdings Plc will pay $32.5 million to settle claims that it failed to follow a U.S. regulator’s orders to improve mortgage foreclosure practices that led to borrowers being harmed after the 2008 credit crisis.

The Office of the Comptroller of the Currency levied the fine after concluding that HSBC is now in compliance with the agency’s orders going back to 2011. The London-based bank was one of many big U.S. mortgage servicers that reached agreement with regulators to review problems that led to borrowers facing improper foreclosures. read more »

U.S. Supreme Court ends 18 year long False Claims Act case in favor of MWI

One of the longest running False Claims Act cases  in the history of that law came to an abrupt end today after 18 years and 136 days when the United States Supreme Court rejected the relator's petition for a writ of certiorari. Earlier, on September 19, 2016, the U.S. Department of Justice declined to file a petition for a writ of certiorari to seek Supreme Court review of an adverse decision (against the government and in favor of Moving Water Industries  by the U.S. Court of Appeals for the District of Columbia Circuit, effectively ending their pursuit of the case against MWI. On November 21, 2016 DoJ filed an opposition brief in the Supreme Court which concluded by arguing that "The [relator's] petition for a writ of certiorari should be denied". read more »

Volkswagen Executive Charged for Alleged Role in Conspiracy to Cheat U.S. Emissions Tests

Oliver Schmidt, a Volkswagen engineer, was charged in a criminal complaint unsealed today for his alleged role in a nearly decade-long conspiracy to defraud U.S. regulators and U.S. Volkswagen customers by implementing software specifically designed to cheat U.S. emissions tests in hundreds of thousands of Volkswagen “clean diesel” vehicles.

Assistant Attorney General Leslie R. Caldwell of the Criminal Division, Assistant Attorney General John C. Cruden of the Environment and Natural Resources Division and U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan made the announcement. read more »

Trip to U.S. Allowed F.B.I. to Pounce

Ill-Advised Trip to U.S. Led to Arrest of Top VW Official

When F.B.I. agents learned that a prime suspect in the Volkswagen emissions scandal was traveling to the United States, investigators knew they were on the cusp of a rare feat: the arrest of an overseas corporate executive accused of wrongdoing.

On Saturday night, agents swooped in to arrest the Volkswagen executive, Oliver Schmidt, as he prepared to depart Miami International Airport for Germany, according to two law enforcement officials familiar with the case, one of whom described the circumstances of the arrest. The officials spoke on the condition of anonymity because they were not authorized to speak publicly about the case. read more »

SEC partly rules for 'Big Short' adviser but orders bigger payment

The U.S. Securities and Exchange Commission has partially overturned a ruling finding an investment adviser featured in the best-seller "The Big Short" liable in a case stemming from the 2008-09 financial crisis, but it increased how much he owes.

The SEC on Friday partially reversed an administrative judge's 2015 decision finding that Wing Chau and his firm, Harding Advisory LLC, committed fraud in connection with two complex investment products linked to mortgages.

But the SEC took a different approach than the judge in calculating how much the parties must forfeit in ill-gotten gains, resulting in Chau and Harding being ordered to pay a combined nearly $6.8 million, up from $3.04 million. read more »

New York Proposes Rule to Ban Bad Actors Over Banking Fraud

New York would ban “bad actors” from the banking and insurance industries in the state under legislation proposed by Governor Andrew Cuomo.

The law, which would need to be approved by state legislators in Albany, would allow the superintendent of the state’s Department of Financial Services to ban individuals for “egregious conduct,” the governor’s office said on Monday.

The proposal is a response to the scandal last year at Wells Fargo & Co., in which employees created unauthorized accounts for customers in an attempt to earn bonuses based on volume sales, the governor’s office said. read more »

Under New Chairman, S.E.C. Enforcer Role Might Shrink

The announcement by President-elect Donald J. Trump that he will nominate Walter J. Clayton, a quintessential Wall Street deal lawyer, as chairman of the Securities and Exchange Commission raises questions about how securities laws will be enforced during the new administration.

As the latest “top cop” for the financial markets and securities exchanges, will he continue the aggressive approach taken after the financial crisis? Or will he pursue a lighter touch, resulting in fewer enforcement actions against corporations and the scaling back of the size of settlements in the cases that are filed? read more »

Detroit-Area Neurosurgeon Sentenced to 235 Months in Prison for Role in $2.8 Million Health Care Fraud Scheme

A Detroit-area neurosurgeon was sentenced yesterday to 235 months in prison for his role in $2.8 million health care fraud scheme in which he caused serious bodily harm to patients by performing unnecessary invasive spinal surgeries.

Sabit was a licensed neurosurgeon who owned and operated the Michigan Brain and Spine Physicians Group, which had various locations in the Eastern District of Michigan. In connection with his guilty plea, Sabit admitted that he derived significant profits by convincing patients to undergo spinal fusion surgeries with “instrumentation” (medical devices designed to stabilize and strengthen the spine) that he never performed and billed public and private healthcare benefit programs for those fraudulent services. read more »

‘Cartel’ Traders Said to Face U.S. Rigging Charges

Prosecutors are poised to charge the currency traders at the heart of one of the biggest U.S. market-rigging investigations, according to people familiar with the matter.

The imminent criminal charges are against members of ‘The Cartel’ chat group, the people said. These traders used instant messages to coordinate the rigging of foreign-exchange benchmarks by sharing confidential customer information, prosecutors have said in antitrust cases that led to guilty pleas by five banks in 2015.

The senior dealers who participated in The Cartel were Richard Usher, formerly of JPMorgan Chase & Co., Rohan Ramchandani, formerly of Citigroup Inc. and Chris Ashton, formerly global head of spot trading at Barclays Plc. Another member, Matt Gardiner, formerly of UBS Group AG, has been helping prosecutors build cases against the traders. read more »

Hagens Berman Files Amended Complaint against BlackRock Relating to the August 24, 2015 Flash Crash

Hagens Berman Sobol Shapiro LLP has filed an amended complaint against BlackRock Inc., iShares Trust and their affiliates on behalf of investors of BlackRock iShares Exchange Traded Funds (“ETFs”) who suffered losses due to price discrepancies that arose during the August 24, 2015 flash crash.

If you purchased or otherwise acquired iShares ETFs, between June 16, 2013 and August 24, 2015 (the “Class Period”) and sold them on August 24, 2015 pursuant to a market or stop-loss order, and were damaged thereby, you may contact Hagens Berman Sobol Shapiro LLP for more information about this lawsuit or a copy of the complaint by visiting. read more »

London is the hub of 'bribery in its purest form' in African mining deals

New report accuses City firm of corrupt practices across Africa.

Financial regulators in the UK are failing to stop corrupt practices in deals between a leading Wall Street hedge fund and top officials in Zimbabwe and the Democratic Republic of Congo (DRC), claims a report by an international organisation that fights corporate misconduct. read more »

Platinum Partners: Biggest Scam Since Madoff?

Mark Nordlicht, the head of New York-based hedge fund Platinum Partners, was arrested just days before the end of 2016 and charged, along with six others, with leading a fraud scheme worth about $1 billion. Now, in hindsight, analysts are looking to Platinum's recent past and are finding a number of reasons to believe that the firm engaged in suspicious or outright illegal activities for many years. In fact, the layers of fraud may run so deep that some investors are likening Nordlicht to the notorious Ponzi scheme henchman Bernie Madoff. read more »

America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

Lenders offering energy-conscious loans care little about borrowers’ creditworthiness, contractors function as loan brokers—and investors can’t get enough. read more »