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Financial Institution Fraud

This archive displays posts tagged as relevant to fraud by or involving financial institutions. You may also be interested in the following pages:

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September 8, 2016

SEC investigations found that St. Petersburg, Florida-based Raymond James & Associates and Milwaukee-based Robert W. Baird & Co. failed to establish policies and procedures necessary to determine the amount of commissions their clients were being charged when sub-advisers “traded away” with a broker-dealer outside the client’s wrap fee program.  As a result, the firms’ financial advisors were unable to provide information to their clients about the magnitude of these costs and failed to consider these costs when determining whether the sub-advisers or the wrap fee programs were suitable for clients.  Certain clients were not even aware that they were paying additional costs beyond the single wrap fee they paid for bundled investment services.  Raymond James will pay a $600,000 penalty to settle the charges against it.  Baird will pay a $250,000 penalty.  SEC

September 8, 2016

The CFPB fined Wells Fargo Bank, N.A. $100 million for the widespread illegal practice of secretly opening unauthorized deposit and credit card accounts.  Wells Fargo employees opened more than 200 million accounts that may not have been authorized.  In addition to the $100 million CFPB penalty, the largest the CFPB has ever imposed, Well Fargo will pay full restitution to the victims and two other penalties totaling $85 million.  CFPB

August 17, 2016

Louis Yeung, the former vice president of California wholesale tool company Eastern Tools & Equipment was sentenced to 63 months in prison and ordered to pay roughly $9.6 million in restitution for his role in a scheme to defraud East West Bank that resulted in losses of over $9 million.  Yeung admitted that he and his co-conspirators defrauded East West Bank by making material misrepresentations about Eastern Tools’ accounts receivable and its financial statements to obtain and maintain a loan with the bank.  DOJ

August 16, 2016

Pittsburgh-based national banking association PNC Bank N.A. agreed to pay $9.5 million to resolve allegations it violated the False Claims Act in connection with the issuance of loans guaranteed by the Small Business Administration (SBA).  According to the government, for numerous loans brokered by Jade Capital & Investments LLC., PNC failed to adhere to the requirements of the SBA program including demanding adequate bank and IRS tax records from the borrowers, ensuring that the borrowers had the ability to repay the loans, and failing to apply prudent lending standards.  Whistleblower Insider

August 25, 2016

The CFPB ordered First National Bank of Omaha to provide $27.75 million in relief to roughly 257,000 consumers harmed by illegal practices with credit card add-on products. The bank used deceptive marketing to lure consumers into debt cancellation add-on products and charged consumers for credit monitoring services they did not receive. First National Bank of Omaha will also pay a $4.5 million civil money penalty to the CFPB.  CFPB

August 22, 2016

The CFPB sued Wells Fargo Bank for illegal private student loan servicing practices that increased costs and unfairly penalized certain student loan borrowers.  The consent order requires Wells Fargo to pay at least $410,000 to compensate consumers for illegal late fees, improve its consumer billing and student loan payment processing practices, and pay a $3.6 million civil penalty to the CFPB.  CFPB

DOJ Catch of the Week -- PNC Bank

Posted  08/19/16
By the C|C Whistleblower Lawyer Team This week's Department of Justice "Catch of the Week" goes to PNC Bank N.A.  On Tuesday, the Pittsburgh-based national banking association agreed to pay $9.5 million to resolve allegations it violated the False Claims Act in connection with the issuance of loans guaranteed by the Small Business Administration (SBA).  See DOJ Press Release. The SBA Act allows banks to...

August 8, 2016

HSBC Finance Corporation, as successor to HSBC Auto Finance Inc., agreed to pay $434,500 to resolve allegations that it violated the Servicemembers Civil Relief Act by repossessing 75 cars owned by protected servicemembers without obtaining the necessary court orders.  DOJ

August 8, 2016

Georgia and 42 other states announced a $100 million multistate settlement with Barclays Bank PLC and Barclays Capital Inc. for fraudulent and anti-competitive conduct involving the manipulation of the London interbank offered rate, or, Libor. This is a benchmark interest rate that affects financial instruments worth trillions of dollars and has a widespread impact on global markets and consumers. Barclays has agreed to pay $100 million, of which about $93 million will be used to reimburse government and nonprofit organizations that had Libor-linked swaps and other investment contracts with Barclays and that were harmed by the activity. A multistate investigation revealed that Barclays had manipulated Libor during the financial crisis period of 2007-2008 by understating the interest rates it would need to pay to borrow money in order to avoid the appearance that Barclays was in financial difficulty and would need to pay a higher rate than some of its peers. Government entities and not-for-profit organizations were defrauded when they entered into swaps and other investment instruments with Barclays without knowing that Barclays and other banks on the U.S. dollar-Libor-setting panel were manipulating Libor and colluding with other banks to do so. GA, VA, IL

June 29, 2016

The CFPB and DOJ took joint action against BancorpSouth Bank for discriminatory mortgage lending practices that harmed African Americans and other minorities.  The complaint alleges BancorpSouth engaged in numerous discriminatory practices, including illegally redlining in Memphis; denying certain African Americans mortgage loans more often than similarly situated non-Hispanic white applicants; charging African-American customers for certain mortgage loans more than non-Hispanic white borrowers with similar loan qualifications; and implementing an explicitly discriminatory loan denial policy. The proposed consent order seeks $4 million in direct loan subsidies in minority neighborhoods in Memphis, at least $800,000 for community programs, advertising, outreach, and credit repair, $2.78 million to African-American consumers who were unlawfully denied or overcharged for loans, and a $3 million penalty.  CFPB
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