With great fanfare, the President during his State of the Union, announced the formation of the Residential Mortgage-Backed Securities Working Group….My former boss at the Department of Justice, Eric Holder, knows how to fight crime. He sat for a time as a Superior Court Judge in the District of Columbia and later as US Attorney for the District of Columbia. He’s gotta know this isn’t how it’s done. You don’t send the police out four years after the crime. This is window dressing for an election year sound bite – nothing more.
Monthly Archives: January 2012
MF Global’s Missing $1.2 Billion: It’s not lost
Posted in Banks and Financial ServicesThe money was taken from MF Global’s customer accounts (traders, farmers, individuals, brokers) and used by MF Global to support their mounting trading losses in European debt. I suspect it was a frenzy of activity, but someone stole the money. Perhaps not all at once, but a few hundred million there a few hundred million here and you are at $1.2 billion.
Who stole the money? Who authorized the siphoning of funds from customer accounts to cover the proprietary trading of MF Global? Was it SenaGovernor Corzine?
Thoughts from the Sunday Paper: Mets Owners Fight on! And Perelman’s Case Goes Down in Less Than an Hour
Posted in In the CourtsAlthough I’m a friend of investors and have specifically represented thousands of them in connection with Ponzi schemes, I’ve never liked these “clawback ” cases. Yes, I see the logic. At some level, they make perfect sense.
The Shoe’s on the Other Foot: Merrill Lynch Fined $1 Million for Skirting Arbitration
Posted in Banks and Financial ServicesAs Merrill Lynch’s own actions point out, a denial of access to the courts can be maddening when you didn’t choose arbitration. In these cases (what we call adhesion contracts), the courts are more likely to offer a suitable remedy. And everyone, corporation and consumer alike, should have the opportunity to select the forum for resolving disputes.
The Consumer Financial Protection Board Finalizes Remittance Rules
Posted in Consumer ProtectionRichard Cordray is wasting no time at the Consumer Financial Protection Bureau. Forget Senate confirmation, Director Cordray has consumers to protect. With Director Cordray at the helm, the CFPB finalized its amendment to the rules governing remittances from the United States.
CompuCredit, Concepcion, and The Death of Consumer Rights
Posted in Consumer ProtectionSimply put, change is needed. Without congressional or judicial action, consumers will soon find themselves without recourse for a majority of corporate grifting. Rulings like Concepcion and CompuCredit are unacceptable for the low income family tricked into $257 of fees and just $43 of credit. It will be nearly impossible to fight a major corporation for just $257 without the help of an attorney or the cost sharing of a class suit. When class actions are stymied, consumers lose and corporations win – big – or so they think. Eventually everyone loses when the system is devoid of fairness.
Kodak’s Bankruptcy Filing Highlights the Plight of Retired Workers
Posted in Social PolicyKodak did not have a Voluntary Employees’ Beneficiary Association. Why not? Will it take federal legislation to require all companies to do something to protect retirees (a status we all hope to attain because the alternative is, well, likely far less interesting)? Perhaps.
What’s Less Than a Slap on the Wrist? FINRA’s $725,000 “Fine” of Citigroup
Posted in Banks and Financial ServicesThe Wall Street Journal reported today that FINRA has fined Citigroup a whopping $725,000 for failures to disclose investment-banking relationships. Instead of the window dressing we are getting from FINRA, investors deserve strict and swift action. Substantial sanctions send a message that rules are important and that the public takes regulation seriously. A $725,000 fine hardly sends that message.
The Volcker Rule Defended In Congress by the SEC, Federal Reserve, FDIC and CFTC: Banks Beware
Posted in Banks and Financial ServicesYesterday, regulatory heads from the SEC, Federal Reserve, FDIC, and CFTC addressed two congressional subcommittees regarding the Volcker Rule. They showed spine, commitment and solidarity towards the Rule, which should give heart to Main Street. It’s about time.
H. David Kotz Resigns as SEC’s General Counsel
Posted in Consumer ProtectionThe United States adopted the position during the Revolutionary War: An Army Inspector General was assigned to training the Continental Army and ensuring uniformity of tactics. In the three-plus centuries since, the role has expanded in the United States to just about every major governmental department. Mr. Kotz filled the role admirably at the SEC, and at a difficult time.
DOJ Finally Investigates S&P For Credit Rating Debacle
Posted in Banks and Financial ServicesYou guys bend over backwards for the Wall Street firms so that your friends over there are happy and well fed – and in return when your kids near college you move over to take a lucrative seat on the other side of the table. And so it goes.
Article: In the Wake of Concepcion and Dukes, Consumer Class Action Lawyers Must Soldier Forward By Leveraging Their Rich History and Taking Some Clues from the Whistleblower Bar
Posted in Consumer ProtectionMy new article takes a hopeful view of the future viability of the consumer class action practice. To support my confidence I draws from the practice’s long and rich history dating back to medieval England, and encourages class action practitioners to learn from the Qui Tam bar, which has enjoyed growing success as an increasing number of statutes provide whistleblowers with legal protections and financial rewards.
Tim Cook, $378 Million Dollar Man: Is he worth it?
Posted in Consumer ProtectionLet’s say the lowest-paid employee at Apple makes $38,700. Mr. Cook makes 10,000 times that amount in total compensation. It is too much to sustain.
The SEC’s “New” Position on Settlements Without Admitting or Denying Liability: According to Industry Experts “Less than Meaningless”
Posted in In the CourtsGot it? I sure don’t. I respect the SEC. I know they have a cadre of hardworking, smart people. So what beyond window dressing is this latest effort? Surely Judge Rakoff, the provocateur in this effort will not be satisfied.
The CFTC Investigates the CME for its “Regulation” of MF Global
Posted in Banks and Financial ServicesSo a dollar short and a day later, the CFTC is going to investigate the CME and its failure to–well–regulate. The CFTC is also investigating the dozen-plus largest futures brokers for similar improprieties, yet another example of regulatory bodies swinging the bat with the ball already in the catcher’s mitt.
“Director” Richard Cordray, President Obama Flexes his Muscles, and a Recessed Congress
Posted in Consumer ProtectionThe CFPB has been crippled without a head. It is a centerpiece of the much-needed Dodd-Frank legislation. Appointing Mr. Cordray will allow the CFPB to begin the work of regulating a fast moving and dynamic sector that to date has remained one step ahead of regulators.
Life Partners Holdings – A Sordid Business with Suspect Practices: The SEC Files Suit
Posted in Banks and Financial ServicesAs if the business of betting on death wasn’t already sleazy enough, the folks over at Life Partners have taken it to a whole new level. “Have you no shame, Mr. Pardo and Mr. Pelden?” It’s one thing to be in the business of profiting on the early death of others but to do that and cheat is just beyond reprehensible. I can’t see this pair being invited to the elementary school on “what my father does for a living day.”
2011 Consumer-Advocate All Americans
Posted in Person of the WeekWe at The Corporate Observer hope you had a good holiday season and wish you a happy new year. Our first blog of 2012 takes a look back at 2011 and honors those who helped further the cause of the American consumer.