FedUpUSA

Archive for the ‘Lawsuit’ Category

WASHINGTON — Bank regulators got a sense Thursday of how their lives will be slightly different now that Elizabeth Warren sits on a Senate committee overseeing their agencies.

At her first Banking, Housing and Urban Affairs Committee hearing, Warren questioned top regulators from the alphabet soup that is the nation’s financial regulatory structure: the FDIC, SEC, OCC, CFPB, CFTC, Fed and Treasury.

The Democratic senator from Massachusetts had a straightforward question for them: When was the last time you took a Wall Street bank to trial? It was a harder question than it seemed. – Huffington Post

Discussion (registration required to post)

Fraudclosure Fail | ROMAN PINO vs THE BANK OF NEW YORK – Florida Supreme Court: We Can’t Stop the Fraud

Homeowners Lose in Landmark Foreclosure Decision

From the PB POST…

A Florida Supreme Court ruling involving a Greenacres foreclosure allows banks to get away with fraud, as long as they voluntarily dismiss the case, attorneys said today.

The case, Roman Pino v. the Bank of New York, was the first significant foreclosure complaint heard by the high court since the state’s legendary housing collapse.

At issue was whether a bank can escape punishment for filing flawed or fraudulent documents in a case by voluntarily dismissing it. A voluntary dismissal allows the bank to refile at a later date.

Royal Palm Beach-based foreclosure defense attorney Tom Ice, who represented Pino, had challenged a document created by the former Law Offices of David J. Stern and sought to question employees about its veracity. On the eve of those depositions, the bank moved to dismiss the case, blocking the court’s ability to address any sanctions.

“I would say the Supreme Court has spoken loud and clear that it doesn’t care about litigants that abuse the court system and that fraud is OK,” Ice said about the ruling. “There are no ramifications if you get caught defrauding the court. Just take a voluntary dismissal and start over.”

The case was unusual because the Supreme Court decided to pass judgment on the case even after Ice had negotiated a settlement with the bank that allowed his client to keep his house.

Florida law professors said the case, which was heard by the Supreme Court in May, was significant because it speaks to the integrity of Florida’s judiciary.

The 4th District Court of Appeal had previously agreed that a voluntary dismissal couldn’t be reversed, but said it wanted the high court to weigh in because “many, many mortgage foreclosures appear tainted with suspect documents.”

Banks warned of a “widespread financial crisis” if the Supreme Court rules in favor of Pino.

They argued banks will cut back on awarding home loans and be discouraged from filing legitimate claims if, when they find a paperwork error, they can’t voluntarily dismiss the case, correct the error and refile.

“With large numbers of defaulted loans in their portfolios, members of the Mortgage Bankers Association and Florida Bankers Association no doubt occasionally will make clerical errors, lose promissory notes, or discover other deficiencies in their foreclosure complaints that mandate correction in the interest of fairness,” the brief states.

Ice made headlines with the Pino case in 2010 when he was featured in a national magazine article about Florida’s so-called “foreclosure mills” and the discovery of allegedly fraudulent documents.

The robo-signing scandal was just breaking at the time, Florida’s foreclosure “rocket dockets” were full speed ahead, and David J. Stern’s Plantation-based firm was a foreclosure empire handling more than 100,000 cases statewide. It has since closed after losing most of its clients in the wake of the scandal.

Lenders halted home repossessions to revamp and rework cases. Beginning last year, foreclosures ramped up again.

“The banks won again, and like everything else in this state, we missed the chance to just say ‘stop,’” said St. Petersburg defense attorney Matt Weidner about the Pino ruling. “This is the final piece, we have legalized bank fraud and we now have a court system, an entire judicial system, that supports fraud.”

CONCLUSION FROM THE FL SUPREME COURT OPINION

Based on the above, we answer the certified question in the negative. We hold that when a defendant alleges fraud on the court as a basis for seeking to set aside a plaintiff’s voluntary dismissal, the trial court has jurisdiction to reinstate the dismissed action only when the fraud, if proven, resulted in the plaintiff securing affirmative relief to the detriment of the defendant and, upon obtaining that relief, voluntarily dismissing the case to prevent the trial court from remedying the effects of the fraudulent conduct. Any affirmative relief the plaintiff obtained against the defendant as a result of the fraudulent conduct would clearly have an adverse impact on the defendant, thereby entitling the defendant to seek relief to set aside the voluntary dismissal pursuant to Florida Rule of Civil Procedure 1.540(b)(3).

In this case, because BNY Mellon did not obtain affirmative relief before taking the voluntary dismissal, the trial court did not have jurisdiction to reinstate the dismissed foreclosure action for the purpose of dismissing the action with prejudice. We also conclude that the trial court did not have the inherent authority to strike the notice of voluntary dismissal. Because Pino sought no other available sanctions, and the case has since been resolved between the parties, we need not reach the question of whether the trial court should be able to award monetary sanctions under the circumstances of this case. We therefore approve the result reached by the Fourth District affirming the trial court’s denial of Pino’s motion.

While affirming the decision of the Fourth District, we also understand the concerns of those who discuss the multiple abuses that can occur from fraudulent pleadings being filed with the trial courts in this state. While rule 1.420(a)(1) has well served the litigants and courts of this state, we request the Civil Procedure Rules Committee review this concern and make a recommendation to this Court regarding whether (a) explicit sanction authority should be provided to a trial court pursuant to rule 1.110(b), even after a case is voluntarily dismissed, (b) rule 1.420(a)(1) should be amended to expressly allow the trial court to retain jurisdiction to rule on any pending sanction motions that seek monetary sanctions for abuses committed by either party during the litigation process, or to allow the trial court explicit authority to include attorney’s fees in any award to a party when the dismissed action is reinstated, or (c) to adopt a rule similar to Federal Rule 11 to provide explicit authority for the trial court to impose sanctions.

It is so ordered.

LEWIS, QUINCE, LABARGA, and PERRY, JJ., concur.
POLSTON, C.J., and CANADY, J., concur in result only.

Florida Supreme Court Oral Arguments
(A MUST VIEW)

sc11-697 by

Zero Hedge

I’ll get the obvious out of the way first and then turn in future columns to the aspects of the Department of Justice’s (DOJ) civil suit against Bank of America (B of A)/Countrywide that are vital to understand but are more subtle. The obvious issue arises from the facts that the DOJ alleges that its investigation has found. The complaint and the DOJ press release state that elite financial criminals committed tens of thousands of “brazen” frauds targeting U.S. government funds. We are on the hook for all the resultant losses because Fannie and Freddie were systemically dangerous institutions (SDIs) that the Bush administration concluded had to have their creditors bailed out to prevent a far graver global systemic crisis.

The DOJ alleges that the fraud persisted for years, that senior officers were warned that the lending program they designed would cause endemic fraud, that the senior officers knew that B of A was selling billions of dollars of fraudulent loans to Fannie and Freddie by making false representations, that B of A’s senior leadership consciously covered up the information that the loans were commonly fraudulent, that the senior leadership created perverse bonus systems for their junior (non-professional employees with the expectation, desire, and actual knowledge that doing so led to the origination (and sale to Fannie and Freddie) of endemically fraudulent loans, and that even when Fannie and Freddie confronted B of A with its violations of its representations and warranties B of A refused to honor it contractual obligation to repurchase the fraudulent loans. DOJ alleges that the frauds persisted for years and continued after B of A purchased Countrywide. The obvious question (not asked by the AP, WSJ, and NYT articles about the lawsuit in the version on line last Wednesday night) is: why the DOJ has refused to bring a criminal prosecution of the senior officers who led this “brazen” fraud?

The only slightly less obvious question (again, not asked by any of the three articles) is: if the DOJ is going to bring only a civil complaint, why did it fail to include the culpable senior executives in that civil lawsuit? It does not appear that the reporters asked the DOJ either of these questions. Our top reporters are so used to DOJ abdicating its responsibility to prosecute elite frauds that they approach the newest example of elite impunity from criminal sanction as not worthy of discussion or even note. The obvious has become unfathomable to our elite media.

William K. Black – Capitalism Without Failure

It’s going to be illuminating to see whether the government appeals the big ruling on judges’ pay that was handed down last week at Washington. The case is called Beer v. United States. The Sun has written about it here and the editor of the Sun here. The plaintiffs are Judge Peter Beer and a rainbow coalition of some of the most distinguished judges on the federal bench. They have just won a ruling that prohibits Congress from suspending a system of automatic pay increases designed to protect their honors from inflation.

The United States Court of Appeals for the Federal Circuit, sitting en banc, handed down the ruling on Friday. The ruling hasn’t received much coverage in the press, though — at least in our view — it’s one of the most important cases of our time. The reason is that it has to do not only with the question of need for Congress to keep its promises and the need to attract a first class judiciary but also the question of constitutional money.

The judges turn out to be a special case because it is unconstitutional ever to diminish their pay. This is American bedrock that was laid down by the Founders because of the British tyrant George III. The king made judges dependent “on his Will alone, for the tenure of their offices, and the amount and payment of their salaries,” as America’s revolutionaries put it in the Declaration of Independence. So it was written into the United States Constitution that the compensation of judges “shall not be diminished during their Continuance in Office.”

In Beer, the judges sued under that clause after Congress suspended automatic pay increases it had established to protect their honors from inflation. What the appeals court just ruled is that Congress, in suspending the automatic pay increases, diminished the judges pay, particularly because when Congress legislated the automatic pay increases, it also established limits on the outside income judges are permitted to earn.

More broadly, at least by our lights, the ruling says, in effect, that the legal tender laws don’t apply to judges’ salaries. That is, the court is suggesting that, at least in the case of judges, 100,000 dollar bills will not suffice in 2012 for a contract to pay $100,000 that was entered into in, say, 2000. The Appeals Court packed its opinion with some prime language from the founding era.

“[N] othing can contribute more to the independence of the judges than a fixed provision for their support,” the Court quoted Alexander Hamilton as writing in 79 Federalist. It noted that at the constitutional convention at Philadelphia, where the Founders sat that summer in 1787, James Madison urged that variations in the value of money could be “guarded agst. by taking for a standard wheat or some other thing of permanent value.”

Madison’s wheat gambit was rejected, the court noted, and Founders did not tie judges pay to “any commodity.” Quoth the United States Court of Appeals for the Federal Circuit: “The framers instead acknowledged that ‘fluctuations in the value of money, and in the state of society, rendered a fixed rate of compensation [for judges] in the Constitution inadmissible.’” It was quoting 79 Federalist again. It noted that the constitutional convention voiced concerns “to protect judicial compensation against economic fluctuation.”

It turns out, though, that the historical record is clear what the Founders thought dollars were. They used the word “dollars” twice in the Constitution. By a dollar they meant 371 and ¼ grains of pure silver or a 15th as many grains of gold. That’s the way Congress defined a dollar in law under the Articles of Confederation and the way Congress defined it in law in the first Coinage Act of the constitutional era.

The idea that a dollar could be worth a different number of grains of silver or gold at the end of a contract than it meant at the beginning of a contract would have horrified George Washington and nearly all of the other Founders (Benjamin Franklin, a printer, had a vested interest in paper money). So would the idea that the dollar would be permitted to decline over a decade to but a sixth of the number of grains of gold at which it was valued at the start of a decade. That is what has just happened in America.

The court deciding Beer didn’t get into legal tender per se. But the legal tender question is the elephant in the courtroom, so to speak. If a dollar can’t be diminished for judges — that is, if the legal tender laws are not good enough for judges — why should they be good enough for the rest of us? If they are not good enough for the contract between the government and judges, why should they be good enough for contracts between private parties?

Or, to put it another way, the rest of us folk might as well beamici as the courts start to grapple with constitutional money. The diminishment of their salaries has driven the federal judges nearly to distraction, and understandably so, precisely because they are honest men and women. The chief justices — most recently Chief Justices Roberts and Rehnquist — have been warning about it for decades. The Great Scalia issued an impassioned warning about the problem here in New York just the other day.

We don’t know whether the Supreme Court will be asked to hear an appeal of Beer. If it is asked, it may decline. But if the nine are asked to take a final look at the case, the question for them to start thinking about is less the promises of Congress — although breaking such a promise is enough of a diminishment for us — and more about the meaning of money. The fact is that Americans are just as upset about the harm being done to them by fiat money as the judges are.

The New York Sun

Link to full Opinion: Beer v. United States

But remember folks, Nobody committed any crimes (according to Gary Johnson, Obama and, I suspect, Mitt(ens) Romney.)

Last week, in response to an Overstock.com motion to unseal certain documents, the banks’ lawyers, apparently accidentally, filed an unredacted version of Overstock’s motion as an exhibit in their declaration of opposition to that motion. In doing so, they inadvertently entered into the public record a sort of greatest-hits selection of the very material they’ve been fighting for years to keep sealed.

For the un-initiated in this issue, Overstock went after virtually everyone in the big banking world, particularly Goldman, when their stock was shorted into the dirt.  Their allegation was that the firm (and others) were counterfeiting their shares by selling short shares they never owned and couldn’t locate for a borrow.  In effect they were representing more shares in the market than existed, which is exactly identical to counterfeiting them in terms of economic impact, exactly as if you ran off some extra $100 bills on your office copier.

But what shows up here?  Hubris and utter contempt for the law.

“Fuck the compliance area – procedures, schmecedures,” chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales.

Uh huh.

And against this backdrop we’re supposed to expect that these very same banksters give a damn about the effective counterfeiting of United States currency that takes place when they emit unbacked credit, especially when the latter isn’t considered an offense (but ought to be) while the former is and they thumb their noses at the regulations?

I repeat:

None — absolutely none — of the contenders in our Presidential contest will talk about this.  Yet this issue — the counterfeiting of financial assets, some unlawfully and some “legal”, are how they fleece you, the common man, intentionally disadvantaging you as an individual and enriching themselves.

I will not support and in fact will and do actively oppose and will attempt to insure the defeat of any and all political candidates for a federal office who refuse to address this issue head on and deal with it, irrespective of party affiliation.  I take this position because as a Libertarian I have signed the Libertarian oath which states:

I do not believe in the initiation of force to achieve political or social goals.

That includes fraud, and counterfeiting in all of its forms, whether recognized as felonious or not, is fraud.

Period.

We will not find solutions to our economic mess until we face what has been done and what is being done today, honestly examining the procedures and actions of these individuals and firms, stopping the abuses and holding the malefactors to account.