Hagens Berman Blog

Whistleblower News: Fate of Consumer Financial Protection Bureau, Wells Fargo Whistleblower Lawsuit Revived, Habib Bank to pay $225M

by HB Whistleblower Legal Team

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What Is the Fate of the Consumer Financial Protection Bureau?

Ever since the Consumer Financial Protection Bureau was created, in 2010, certain Republicans in Washington have been fixated on shutting it down, or at least dramatically reducing its power. The agency had too much autonomy, they argued, and was part of a regulatory system that was discouraging banks from lending money, which in turn was inhibiting economic growth. The target of much of their criticism was the agency’s director, the former Ohio Attorney General Richard Cordray. Amid speculation that Cordray might leave his post a few months early to pursue a run for governor in his home state, the C.F.P.B.’s antagonists could soon have their wish.

Those same Republican critics may be in a position to choose the next director of the C.F.P.B., who could deliver on their dream of diminishing the agency. Incredibly, according to the Los Angeles Times, President Trump may be poised to appoint his Wall Street–friendly Treasury Secretary, Steven Mnuchin, as the bureau’s interim head. These are disheartening developments for anyone concerned about the integrity of the financial system. read more »

Wells Fargo Whistleblower Lawsuit Is Revived by U.S. Appeals Court

Wells Fargo & Co faces a new legal worry after a federal appeals court on Thursday revived a whistleblower lawsuit by two former employees who said they were fired for trying to report misconduct by lenders that the bank later absorbed.

The 2nd U.S. Circuit Court of Appeals in Manhattan ordered a federal district judge to revisit the case, which concerned behavior predating the 2008 financial crisis and recent scandals concerning Wells Fargo's own practices, after the Supreme Court made it easier for some whistleblowers to sue.

"We look forward to stating our legal position with the district court," Wells Fargo spokeswoman Elise Wilkinson said.

Robert Kraus, a former Wachovia Corp controller, and Paul Bishop, a former World Savings Bank mortgage salesman, had accused their employers of hiding mortgage improprieties and billions of dollars of losses.

Pakistan's Habib Bank to pay $225 million New York fine for compliance failures

The New York State Department of Financial Services said on Thursday Pakistan’s Habib Bank has agreed to pay $225 million to settle an enforcement action brought against the bank for failing to comply with laws designed to combat illicit money transfers.

The DFS said in a legal filing last month that it was seeking to fine the bank, Pakistan’s biggest lender, up to $630 million for “grave” compliance failures relating to anti-money laundering and sanctions rules at its only U.S. branch.

The regulator said the bank, known as HBL, agreed to pay just over a third of that sum as part of a broader settlement under which it will shutter its New York branch subject to conditions. read more »

Estate Of Diana Mariani-Stepan To Receive $2.249 Million In Whistleblower Case

The estate of the late Diana Mariani-Stepan, former Los Alamos County assistant manager and Indigent Healthcare administrator, will receive $2.249 million following an agreement reached in a case involving alleged violations of the False Claims Act.

According to the Department of Justice, CHRISTUS St. Vincent Regional Medical Center and its partner CHRISTUS Health have agreed to resolve allegations they made illegal donations to county governments, which were used to fund the state share of Medicaid payments to the hospital. Under the settlement agreement, the two entities have agreed to pay $12.24 million plus interest and because she was the whistleblower in the case, Mariani-Stepan’s estate will receive $2.249 million as her share of the recovery in the case.

The allegations were originally brought in a lawsuit filed by Mariani-Stepan, who died Dec. 4, 2016, under the qui tam provisions of the False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery. read more »