Lawsuits

  • News

    RBS Trader Whose Instant Messages Clearly Show Him (Allegedly) Engaging In Libor Manipulation Not Going Down Without A Fight

    One thing that most people probably agree on is that having their instant messages, e-mails, and phone calls end up court would be cause for at least a little embarrassment. Everyone’s thrown in an emoticon they aren’t proud of, some of us have used company time to chat with significant others about undergarments, and the vast majority of workers have spent a not insignificant amount of the workday talking shit about their superiors. Of course, the humiliation gets ratcheted up a notch in the case of people who ‘haha’ (and in extreme circumstances “hahahah’) their own jokes* which, just for example, involve habitual Libor manipulation. Tan Chi Min knows what we’re talking about:

    “Nice Libor,” Tan said in an April 2, 2008, instant message with traders including Neil Danziger, who also was fired by RBS, and David Pieri. “Our six-month fixing moved the entire fixing, hahahah.”

    And while having such an exchange become public would be tremendously awkward for most, you know what’s really ‘hahaha’ about this whole thing is that 1) Tan was the one who wanted people to read the above, which was submitted as part of a 231-page affidavit earlier this month and 2) He’s trying to use it as evidence that he didn’t deserve to be fired.

    The conversations among traders at RBS and firms including Deutsche Bank AG illustrate how the risk of abuse was embedded in the process for setting Libor, the benchmark for more than $300 trillion of securities worldwide……Tan, the bank’s former Singapore-based head of delta trading for Asia, [is] suing Britain’s third-biggest lender by assets for wrongful dismissal after being fired last year for allegedly trying to manipulate the London interbank offered rate, or Libor.

    Tan, who ‘allegedly‘ tried to manipulate the London interbank offered rate, also included this conversations as part of his defense:

    “What’s the call on Libor,” Jezri Mohideen, then the bank’s head of yen products in Singapore, asked Danziger in an Aug. 21, 2007, chat.

    “Where would you like it, Libor that is,” Danziger asked, according to a transcript included in Tan’s filings.

    “Mixed feelings, but mostly I’d like it all lower so the world starts to make a little sense,” another trader responded.

    “The whole HF world will be kissing you instead of calling me if Libor move lower,” Tan said, referring to hedge funds.

    “OK, I will move the curve down 1 basis point, maybe more if I can,” Danziger replied.

    And this:

    In another conversation on March 27, 2008, Tan called for RBS to raise its Libor submission, saying an earlier lower figure the bank submitted may have cost his team 200,000 pounds.

    “We need to bump it way up high, highest among all if possible,” Tan said.

    Tan also asked for a high submission in an Aug. 20, 2007, instant message to Scott Nygaard, global head of RBS’s treasury markets in London.

    “We want high fix in 3s,” Tan said in the message. “Neil is the one setting the yen Libor in London now and for this week and next.”

    Also this:

    “It’s just amazing how Libor fixing can make you that much money or lose if opposite,” Tan said on an Aug. 19, 2007, conversation with traders at other banks, including Deutsche Bank’s Mark Wong. “It’s a cartel now in London.”

    And this philosophical one, for good measure:

    “This whole process would make banks pull out of Libor fixing,” Tan said in a May 16, 2011, chat with money markets trader Andrew Smoler. “Question is what is illegal? If making money if bank fix it to suits its own books are illegal… then no point fixing it right? Cuz there will be days when we will def make money fixing it.”

    The defense rests.

    RBS Instant Messages Show Libor Rates Skewed for Traders [Bloomberg]

    *Although actually people who do this probably don’t even have the good sense to be ashamed of themselves.

    / Sep 26, 2012 at 12:42 PM
  • PHOTOGRAPHIC EVIDENCE of private equity firms colluding to drive down deal prices.

    News

    Buyout Lawsuit May Be Tripped Up By Skeletons Of Previous Buyout Lawsuits

    If you’re Blackstone or KKR, are you on balance pleased or not pleased that Bain Capital’s favorite son is running for president? On the one hand, millions more people now think that they know what “private equity” is – and that they don’t like it – than did a year ago, and that loosely coagulated […]

    / Sep 12, 2012 at 6:38 PM
  • vikrampanditshades

    News

    Citi Pays $590mm To Settle Lawsuit Over Not Selling Crappy Mortgage Bonds

    Citi settled a CDO case for $590 million today, and if you are following along at home you’ll note that that is more than 2x as much as it settled its last CDO case for. There are a number of reasons for that but a big one is: in this case, Citi is in trouble […]

    / Aug 29, 2012 at 6:31 PM
  • It's quite hard to get a visual for "Libor," so Bob Diamond's puzzled face is a useful metonymy and I will probably use it for all past and future Libor-related matters though eventually everyone will forget who he was. See also: the cows.

    News

    Not Everything Is Libor

    It’s been a while since we checked in with the infinity thrillion dollars of Libor lawsuits, but the Journal has a good roundup today and, yeah, eep, this is sort of interesting: Firms facing the biggest potential payouts, according to Morgan Stanley, based on the financial business they do rather than their assumed culpability, include […]

    / Aug 27, 2012 at 2:02 PM
  • Not that I want to presume, and you can really never know how any other being experiences the world, especially not from a single photograph, but: this cow seems to have a nice life.

    News

    S&P Has A Perfectly Good Explanation For Rating Deals “Structured By Cows,” Which A Lucky Federal Jury Will Get To Hear

    If someone builds structured credit securities out of some dodgy stuff, and someone else rates those securities AAA for no particularly good reason, and someone else sells those securities to you without reading the offering memo, and you buy those securities without any due diligence since you figure that the structurer and rater and broker […]

    / Aug 20, 2012 at 2:32 PM
  • John Stumpf hasn't read the PPM either. But who could resist that face?

    News

    Wells Fargo Is A Little Sorry That It Sold Securities It Knew Nothing About

    Don’t do this: One particular municipal entity had been a customer of Wells Fargo, or a predecessor, since at least 1988. This customer’s investment objectives were safety of principal and income. … Wells Fargo’s internal records for the customer’s account specifically stated that the account should not invest in MBS. In addition, applicable state law […]

    / Aug 14, 2012 at 5:02 PM
  • News

    Woman Whose Ex-Hedge Fund Husband Demanded A Cut Of Her Shoes Just Rubbing It In His Face At This Point

    Back in June, hedge fund manager Daniel Shak sued his ex-wife, Beth, over assets he claimed she’d hid during the couple’s divorce. Said assets were Beth’s shoes, which Daniel alleged were kept in a “secret room” and were worth approximately $1 million, 35 percent of which he wanted. It was a bit unclear as to why he was going after the footwear collection three years after the two split (though using the proceeds to relaunch his fund was a possibility) but the heart wants what the heart wants. Anyway, today brings just a couple follow-ups on the Shaks, both of which are slightly more exciting for Beth than Dan.

    1. He won’t see a single pair of Loubs.

    A civil suit brought by poker professional Dan Shak against his ex-wife, fellow poker pro Beth Shak, regarding her extensive shoe collection was dismissed in a court in New York after Mr. Shak advised his attorneys that he didn’t want to pursue the issue any further…the opening arguments apparently doomed the case in the eyes of the male Shak. Ms. Shak testified to Judge Daniele that her shoe fetish grew as a response to repeated denials of emotional attention from Mr. Shak. “I would not call these shoes a collection, I would call them a sickness at a particular point in my life,” Beth Shak testified to Judge Daniele as she recounted how Dan Shak would refuse her attempts at romantic encounters, according to the Post.

    “I tried to get him to go to therapy with me, but it just didn’t work,” the Post quotes Ms. Shak as testifying. “I was so unhappy with my marriage that all I did was shop. There was nothing to our relationship…he and I had nothing.” Further into her testimony to the court, Ms. Shak stated that not only did Mr. Shak know about the shoes but even signed off on all the bills as they came before him. After a break following Ms. Shak’s testimony, Mr. Shak apparently had a change of heart regarding the lawsuit. His attorneys informed Judge Daniele that their client wanted to withdraw the case, which Judge Daniele quickly granted. Looking square at Mr. Shak as she dismissed the case, Judge Daniele is quoted by the Post as stating, “Well, thanks for wasting everybody’s time.”

    2. She’s going into the shoe business!

    Now that that the suit is over, Shak, who has an image of a pair of Louboutons tattooed just below her waist, is concentrating one what’s next — the launch her own line of shoes.

    Dan Shak Drops Lawsuit Against Beth Shak Following Opening Arguments [PND]
    Sexy Singles 2012: Beth Shak [Philly]

    / Aug 7, 2012 at 3:55 PM
  • Sometimes the literal approach is the best. Other times it's not but we use it anyway.

    News

    Whistleblower Law Firm Finds Some Prospects

    So there’s a law firm called Labaton Sucharow and a big chunk of their business model is: (1) read newspaper, (2) see bank did bad thing, (3) sue bank. This is a great business model because banks just cannot resist doing bad things and courts just cannot resist taking piles of money from shareholders of […]

    / Jul 10, 2012 at 3:26 PM
  • News

    Banks Defend Against Libor Lawsuits By Asking “Libor? Who Uses Libor, Anyway?”

    It’s no surprise that more Liborneriness is coming to a bank near you; with Barclays and UBS already pretty much having admitted wide-ranging Libor manipulation and Deutsche Bank seeming to be next up for a roasting. Maybe some people will go to jail, and certainly some more banks will pay fines, but also certainly those […]

    / Jul 6, 2012 at 6:05 PM
  • News

    Phil Falcone’s Alleged Piggish Behavior Made Him Some Enemies

    If you knew nothing about Phil Falcone but what you read in the SEC’s assortment of complaints against him today, you would probably conclude that he’s kind of a dick. The loan thing, of course – Falcone borrowed $113mm from Harbinger at the same time he was preventing investors from withdrawing their money – but […]

    / Jun 27, 2012 at 4:30 PM
  • News

    Securities And Exchange Commission Makes Good On Promise To Sue Phil Falcone

    And as promised, Falcone will be fighting the charges. He wants to “borrow” $113 million from his clients that’s his business and nobody else’s. The defense rests! [Earlier]

    / Jun 27, 2012 at 2:42 PM
  • M&A

    Carl Icahn Is Unimpressed With Goldman’s Efforts To Fight Off Carl Icahn

    And so he’s not paying them on principle, the principle being I suppose “don’t fuck with Carl Icahn”: Carl Icahn says he isn’t paying a bill from Goldman Sachs Group Inc., on principle. … “These guys were hired to keep me from buying the company at $30 and they failed,” Mr. Icahn said in an […]

    / Jun 22, 2012 at 3:57 PM
  • News

    Nasdaq Officials Would Just Like To Point Out That Anyone Who Lost Money As A Result Of The Exchange’s Incompetence Have Little To No Legal Recourse

    Oh you can try a lawsuit but, historically speaking, it won’t do shit.

    Nasdaq is sending a message to firms weighing lawsuits related to trading losses in Facebook’s initial public offering: winning won’t be easy. The exchange operator believes it is protected by its contracts with members and by its unusual legal status, which is rooted in its dual role as a regulatory body as well as a business that makes money running markets. Exchange officials in recent weeks have pointed out to analysts that Nasdaq has never been successfully sued over a trading error. “When you look at member agreements that people sign, it’s quite explicit that they’re bound by that accommodation policy,” Robert Greifeld, Nasdaq’s chief executive, said last week at a Sandler O’Neill + Partners conference, referring to legal agreements capping the exchange’s payouts linked to system problems…Banks and brokers have estimated they lost hundreds of millions of dollars due to technical problems during Facebook’s May 18 debut.

    The glitches forced Nasdaq to delay Facebook’s opening, and left trades involving millions of shares unconfirmed for hours. Amid the chaos, traders were forced to guess their positions and place additional orders based on those estimates. When Nasdaq delivered the results of the trading Friday afternoon, many firms were caught off guard and scrambled to reposition.

    According to Greifeld, the last guy who tried to get his money back “trades on the pink sheets now” but take your best shot.

    Nasdaq Claims Strong Defense [WSJ]
    Related: UBS Not Sweating The Small Stuff

    / Jun 14, 2012 at 4:03 PM
  • M&A, News

    CVR Energy Shareholders Surprised To Find Carl Icahn Acting Like A Corporate Raider

    If you want to buy a company you can do it in one of two ways: you can negotiate a merger with the board, put it to a shareholder vote, and if you get above 50% then all the other shareholders are basically forced into the deal and you pay the merger price. Or you […]

    / Jun 7, 2012 at 12:51 PM
  • News

    Donald Trump Offers How-To-Guide Re: Dealing With Disgruntled Employees Turned Whistleblowers

    Got an unhappy employee (or former employee) on your hands who’s decided to channel his or her anger by penning an Op-Ed in a major publication detailing egregious acts being committed at your firm and/or going to the Feds with allegations of fraud? Not sure how to handle the fallout? Why not take a page from Donald Trump’s playabook? He found himself in a similar situation with regard to Sheena Monnin, a first-year Miss Pennsylvania who “resigned her crown” over the weekend, claiming that the Miss USA pageant is “rigged.” Here’s how Don dealt with the matter and how anyone thinking about taking a more hands-on approach to dealing with disgruntled employees might too:

    Threaten to sue.

    “We’re going to bring a lawsuit against this girl,” Trump, who co-owns the Miss Universe Organization with NBCUniversal, told NBC’s “Today” show co-anchor Ann Curry on a phone interview; he used similar language in a phoner with George Stephanopoulos on ABC’s “Good Morning America.”

    Note that you’ve already conducted a thorough investigation into the employee’s claims and that your internal probe has revealed them to be baseless.

    Monnin announced Tuesday on her Facebook page she was turning in her tiara after she: “Witnessed another contestant who said she saw the list of the Top 5 BEFORE THE SHOW EVER STARTED proceed to call out in order who the Top 5 were before they were announced on stage. Apparently the morning of June 3rd she saw a folder lying open to a page that said ‘FINAL SHOW Telecast, June 3, 2012′ and she saw the places for Top 5 already filled in.” “They’ve done an investigation,” Trump said today. “I just found out about it — they just reported to me about five minutes ago. The person that supposedly showed the list totally denies that that ever took place.”

    Suggest, by saying outright, that the outburst can chalked up to the fact that this person didn’t receive the promotion she thought she deserved. Make it clear that she was not partner material. Sixth-year VP material at best.

    Asked his first impression of Monnin, Trump said, “I saw her there. My impressions were she didn’t have a chance of being in the Top 15 — not even close. And all this is, is a girl who went there, lost, wasn’t in the 15, and she’s angry at the pageant system. Later, he added, “I never felt she had a chance. And all this is is buyer’s remorse.”

    Donald Trump says he’ll sue ex-Miss Pennsylvania over her claims of Miss USA fraud [WaPo]

    / Jun 6, 2012 at 3:08 PM
  • News

    Number Of People Suing Facebook Approaching Number Of People On Facebook

    It did not take long for plaintiffs’ lawyers to realize that there was good money to be made by complaining about the Facebook IPO – there are at least two class actions against the company and underwriters so far, not to mention other class-action lawsuits against NASDAQ for screwing up trades. The securities-fraud lawsuits are […]

    / May 23, 2012 at 4:30 PM
  • News

    Former S&P Analyst Has Some Things He’d Like To Get Off His Chest

    Yesterday we talked a bit about this lawsuit bubbling around where some investors are suing Moody’s and S&P for doing a not so great job rating some asset-backed SIVs called Cheyne and Rhinebridge. I said then that the rating agencies were probably pretty keen to avoid going to trial for negligence, because, well Because … […]

    / May 9, 2012 at 5:15 PM
  • News

    Ratings Agencies Can Be Sued As Long As They Lie To Few Enough People

    One thing that looks pretty certain is that lawsuits over crisis-era structured credit products will be around for the rest of our natural lives, burbling around in courts and every now and again surfacing in a Reuters article with a bunch of nine-digit numbers and acronyms of defunct German banks. This is comforting, in a […]

    / May 8, 2012 at 5:30 PM

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