Tags: Bank of America, Fannie Mae, Lawsuits, mortgages, reps & warranties
Who won the Bank of America / Fannie feud? I want the answer to be “all of us,” but I guess it isn’t. Unlike Bank of America’s multi-front battle of deviousness with MBIA, which has spawned some genuine entertainment, BofA’s battle with Fannie has been conducted almost entirely in the boring trenches of actually flinging mortgages at each other. The story so far: back in the bad old days of “January 1, 2000 to December 31, 2008,” BofA/Countrywide sold approximately $1.4 trillion of mortgages to Fannie; in recent years Fannie has been figuring out that lots of those mortgages were badly underwritten, came with false reps and warranties, etc., and so it can demand that BofA repurchase them at par. It’s tried to do so on around $11bn of loans, and BofA’s reaction has been along the lines of (1) no and (2) “we’re so mad we’re going to stop selling you more mortgages,” which somewhat surprisingly to the casual observer actually seems to have been interpreted by both sides as a threat rather than a reward.
But today Fannie and BofA announced a settlement that would resolve all of those claims, as well as almost all future claims on the $297 billion of unpaid principal that remains on those $1.4 trillion of ’00-to-’08 mortgages.
The math here is a little funny. Let’s try to parse it: Read more »
Here’s a little nugget that should make the handful of remaining Wall Street Occupiers’ heads explode: Read more »
Tags: FaceBook, Lawsuits, Netflix, Reg FD, SEC
It’s easy to make fun of the SEC for wanting to sue Netflix over a Facebook post. Netflix, Facebook, and the SEC are all a little funny, and bring them all together and you get a delightful orgy of hip-five-years-ago clumsiness. Also, like, olds, get over yourselves, everyone is on Facebook, why should I call Grandma on her birthday, or 8-K my operational stats? Social! 2.0!
And yet I’m a little sympathetic to the SEC here, mostly because I am old and afraid of Facebook. The agency notified Netflix yesterday that it’s planning to bring a civil action claiming that Netflix violated Reg FD by posting operational numbers – that Netflix viewing had exceeded 1 billion hours of Netflix June – on CEO Reed Hasting’s Facebook wall without press releasing or 8-King those numbers. Reg FD prohibits an issuer from “disclos[ing] any material nonpublic information regarding that issuer or its securities” to any investor or analyst without simultaneously disclosing that information through a “method (or combination of methods) of disclosure that is reasonably designed to provide broad, non-exclusionary distribution of the information to the public.”
So if you’re Netflix you have two ways to win this: either the information was not material, or it was disclosed publicly in compliance with Reg FD. Perhaps strangely, Netflix is taking both angles. From its response yesterday: Read more »
Tags: AIG, Hank Greenberg, Lawsuits, Maurice Greenberg
What’s good about the dismissal of Hank Greenberg’s AIG lawsuit today is that there’s all this roiling weirdness under the basic story of:
- The government seized AIG because it was garbage,
- AIG shareholder, ex-CEO, and general fanboy Hank Greenberg sued the government for destroying the valuable valuable value of his AIG stock, and
- he lost.
Duh he lost! It’s AIG, it’s become a byword for financial failure. “Don’t pull an AIG,” bankers say to each other, in my lazy imagination. You don’t need to be a lawyer to know that a lawsuit claiming that the government’s bailout stole massive value from AIG shareholders was not going to work. It didn’t! The end.
But there actually was all sorts of crazy nefarious stuff going on; your sympathies may vary but I was ever-so-slightly moved by two of Greenberg’s claims: Read more »
Tags: Bear Stearns, Credit Suisse, J.P. Morgan, just a little bit of random unwarranted optimism in the headline; sorry, Lawsuits, mortgages, RMBS, SEC
The SEC settled cases today with JPMorgan and Credit Suisse over “misleading investors in offerings of residential mortgage-backed securities” for a total of about $400 million, which the SEC plans to hand out to those misled investors. There’s been a lot of this sort of thing recently, so here’s a quick cheat sheet on who is suing whom over what mortgages:
- Everyone is suing every bank over all of their mortgages.
So fine but is that not weird? Two things to notice about big banks is that they are (1) big and (2) banks, both attributes that tend to accrue lawyers. And a thing that lawyers are supposed to do is stop stupid cowboy bankers from doing stupid illegal things. If you told me that one or two banks decided to go without lawyers for cost-cutting and/or risk-increasing reasons, I would be skeptical but perhaps willing to play along, but all of them? I am certain that JPMorgan has lawyers.1
The mystery is resolved and/or deepened if you look at most of what is being settled in these cases, which in highly schematic outline was:
- banks wanted to hose investors,
- they asked their lawyers if that was okay,
- the lawyers checked the documents and said “yes,”
- so they did.
In ever so slightly less schematic outline: Read more »
Tags: Christine Mancision, clobberings, dances...of death, Hyatt Morristown, indicated by gestures and non-verbal conduct that they wanted to dance, James Graeber, Lawsuits, weddings
Remember Christine Mancision? To recap, she’s the hedge fund investor relations lady who, back in October 2009, sued both the Hyatt Morristown and James Graeber, for an incident that took place on the evening of November 22, 2008, that incident being Graeber approaching her on the dance floor of his sister’s wedding, grabbing her arm, taking her for a spin, and then “flinging” her off to the side, causing Mancision to make a hard crash landing on her wrist, which was “bent the complete opposite way” when she stood up. Her injuries were so extensive that they required surgery, a metal plate and three screws (as well as “eight months of grueling rehabilitation”) and while she blames Graeber first and foremost, she also believes the Hyatt played a part in overserving the guy when he was, she says, “visibly intoxicated,” and therefore added “fuel to the fire” in Graeber’s dancing feet. Unfortunately for Mancision, Judge Robert Sweet has ruled that while she can go after Graeber for what happened that night, she cannot collect damages from the hotel, because there is not enough evidence to prove that the Hyatt served her dancing partner alcohol “when he was in a visibly intoxicated state” or that he was drunk at all at any point during the ceremony or reception, a conclusion he came to in part based on: Read more »
Tags: Bank of America, breakfast, canceled Wharton trips, Denny's, Lawsuits, omelettes, Paul Boudwin
And management is going to fire you without pay over it, realize they did so in error, not show any remorse and tell you to shoot HR a cover letter and résumé if you’d like the opportunity to try and get your old job back. Read more »