Archive

July 14, 2014

Citigroup agreed to pay $7B to resolve government claims related to the bank’s packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) which, according to the government, “contributed mightily to the financial crisis that devastated our economy in 2008.” The settlement includes a $4B civil penalty — the largest penalty to date under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). Whistleblower Insider

June 30, 2014

US Bank agreed to pay the $200M to resolve allegations it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the Federal Housing Administration (FHA) that did not meet applicable requirements. DOJ

December 22, 2015

Rome Finance Company, Inc. will pay compensation exceeding $3.7 million to settle claims that it engaged in predatory lending practices targeted at men and women in the military. Rome Finance, which did business most recently as Colfax Capital Corporation and Culver Capital, LLC, financed consumer debts exclusively to service members, typically for computers, gaming systems, and other goods and services from retailers online or at malls near military bases. Over 550 New York State service members benefited directly from this settlement and ancillary resolutions. NY

December 22, 2015

Participants in an alleged credit card “laundering” scheme have agreed to settle FTC charges that they illegally helped provide access to payment networks, thereby enabling scammers to place bogus charges on consumers’ credit cards. According to the FTC’s complaint, PayBasics, Todd Hatch and Jimmy Shin helped the defendants behind the Tax Club fraud to open and maintain merchant accounts used to process credit card payments for sales made by a number of different third-party scammers. The defendants in the Tax Club work at home scheme settled FTC charges last year. FTC

December 18, 2015

Virginia reached a settlement with MoneyKey, Inc., a Delaware-based online consumer lender, for alleged violations of the state’s consumer finance statutes and the Virginia Consumer Protection Act. MoneyKey has agreed to provide approximately $4 million to over 5,000 Virginia customers to resolve allegations that it imposed illegal charges on borrowers who received open-ended credit loans. VA

April 23, 2015

German-based Deutsche Bank AG and its UK-based subsidiary DB Group Services (UK) Limited agreed to pay more than $2.5 billion to settle US and UK allegations relating to their role in manipulating and false reporting of the London Interbank Offered Rate (LIBOR) and Euribor.  In addition to the monetary payout, DB Group Services agreed to plead guilty to wire fraud and Deutsche Bank entered into a deferred prosecution agreement to resolve wire fraud and price-fixing charges. The settlement payment consists of an $800 million CFTC penalty, a $600 million penalty payable to the New York Department of Financial Services, $344 million payable to the U.K. Financial Conduct Authority (FCA) action, and criminal penalties and disgorgement payable in an agreement with DOJ, including a $150 million fine payable by DB Group Services and a $625 million penalty payable by Deutsche Bank.  DOJ; CFTC; NY

March 19, 2015

Bank of New York Mellon agreed to pay $714 million to settle charges the bank engaged in fraud and other misconduct when providing foreign exchange (“FX”) services to its customers. As part of the settlements with the US and New York, BNYM admitted that contrary to representations to clients that it provided “best rates” and “best execution” for FX transactions, the Bank actually gave clients the worst reported interbank rates of the trading day. The charges originated in a lawsuit brought by a whistleblower under the New York False Claims Act.

February 11, 2015

Pennsylvania Attorney General Kathleen G. Kane announced Advance America will pay Pennsylvania consumers $8M in restitution as part of a settlement to resolve claims the company illegally provided payday loans, some with interest rates as high as 368 percent. PA

January 21, 2015

New York Attorney General Eric T. Schneiderman joined the SEC and the office of the Massachusetts Attorney General in announcing a settlement with Standard and Poor’s Financial Services LLC regarding false and misleading statements made by S&P in connection with its rating of certain Commercial Mortgage Backed Securities (CMBS). According to the government, from February 2011 to July 2011, S&P loosened the criteria it applied to rate eight CMBS, failed to disclose this fact to investors, and misled market participants into thinking the ratings for their investments were based on more conservative assumptions than was actually the case. Under the settlement, New York will receive $12M in penalties, Massachussetts will receive $7M in penalties, and the SEC will receive $35M in penalties as well as $7M in disgorgement and interest. The SEC also resolved two other matters related to S&P bringing the total government recovery to nearly $80M. NY

January 16, 2015

Massachusetts Attorney General Martha Coakley announced Bank of America, JP Morgan Chase Bank, Citi, and Wells Fargo Bank agreed to pay $2.7M million and undertake obligations to facilitate the repair of defective property titles, resolving claims they violated Massachusetts foreclosure law and the Massachusetts Consumer Protection Act by illegally foreclosing upon Massachusetts residents’ homes when the banks lacked the legal authority to do so. MA