Links in “Fines, Penalties, Suits, and Settlements”
- NCUA Files Suit Against the Heavy Hitters
Citing the failure of five credit unions due to investments in flawed mortgage-backed securities, NCUA files suit against Morgan Stanley, Barclays, Goldman Sachs, Wachovia and Ally (then RFS), JP Morgan/Bear Stearns, Credit Suisse, Royal Bank of Scotland and UBS. NCUA has led the charge in recoveries against securities firm. In other related news, NCUA sues various firms for LIBOR manipulation. See http://www.ncua.gov/News/Pages/NW20130923Libor.aspx. [9/24]
- FinCEN’s New Elite Enforcement Division Assesses First BSA/AML Penalty, and It’s Big
The $37.5 million penalty to TD Bank is on top of the $600 million paid in restitution and the $15 million in SEC Fines. The latest penalty focuses on BSA/AML issues associated with failures to heed alerts and file Suspicious Activity Reports (SARs) related to the $1.2 billion Ponzi scheme by Scott Rothstein. The fine is first civil money penalty assessed by FinCENâs new elite Enforcement Division "who target the exploitation of the financial system by illicit actors" focusing on "compromised financial institutions and their officers, managers, and employees; compromised jurisdictions; and third party money launderers who facilitate financial crime." [9/24]
- Another Day, Another Penalty: JPMC for ID Theft Product
The $60 million penalty along with referenced $300 million restitution focuses on an identity theft product that failed to deliver on all full benefits. The UDAAP principle in play merits review. [9/20]
- Fraud Nets Bank Executive 17-Year Sentence
Former EVP and senior loan officer of the since-failed Bank of the Commonwealth gets 17 years for conspiracy to commit bank fraud; among his misdeeds was taking out loans on properties to make payments on other past due loans to prevent them from appearing on the bank's past due loan reports. [9/18]
- Pace of FDIC Lawsuits Against Directors and Officers Increases
FDIC has filed at least 32 lawsuits against directors and officers, exceeding the rate of new filings compared to any equivalent period in the previous three years. [9/18]
- Breaking Down JP Morgan’s $4 Billion Regulatory Compliance Clean-up
Chickens come home to roost after JP Morgan Chase ignores regulatory compliance issues for too long. [9/16]
- Fraud Scheme Nets Indiana Man Big Sentence and Fine
Five years in prison and a $7 million fine for man convicted of falsifying financial documents to secure loans from Indiana banks ranging from $30K to $3.8 million. [9/16]
- Existence of Policy Barring FDIC From Suing Officers and Directors of 1- or 2-rated Banks Questioned
A newspaper story quotes an FDIC spokesperson citing a 1992 policy that bars the agency from suing officers and directors of banks rated two or better on the agency's CAMELS scale; these bank attorneys are unaware of the existence of such a policy. [9/10]
- A Cautionary Tale about Transferring Social Security Benefits
$18.6 million Wallingford Municipal FCU in Connecticut is facing a $63,000 statutory theft claim, $41,000 in punitive damages and $96,000 in attorneysâ fees as a result of transferring a $14,000 Social Security disability benefit check deposit to a defaulted loan balance; the CU is appealing the decision. [9/6]
- Donât Mess with the Little Guys!
$2 million SMHA Federal Credit Union is suing its sponsor, the Stark Metropolitan Housing Authority, for breach of contract, claiming that the agency failed to pay annual subsidies, wrongfully attempted to recover a $2 million grant the agency previously provided to the credit union, and interfered with a merger between the credit union and another credit union; the sponsor has recently come under fire for allegedly misusing public housing operating and capital funds. [9/4]
