SAN FRANCISCO - A California federal judge on April 18 granted a motion filed by an investment advising company to dismiss claims for fraud and violation of California's unfair competition law (UCL) asserted by a technical services company and a wealth management company in relation to an underlying service agreement, finding that the claims lacked the required facts to support the allegations (SVGRP LLC, et al. v. Sowell Financial Services, LLC, et al., No.5:16-cv-07302, N.D. Calif., 2017 U.S. Dist. LEXIS 59271).
BATON ROUGE, La. - The owner and chief financial officer of a health care company were sentenced June 3 by a federal judge in Louisiana to 36 months and 44 months in prison, respectively, for their roles in a $1 million fraud scheme (United States of America v. Sedric C. Blakes, et al., No. 15-cr-16, M.D. La.).
NEWARK, N.J. - A New Jersey federal judge on June 2 granted a bank's motion to dismiss an amended complaint filed against it in relation to a mortgage on a property, finding that a borrower failed to state a claim on which relief could be granted (Ruben Martinez v. Capital One Financial Corp., No. 15-266, D. N.J.; 2016 U.S. Dist. LEXIS 71708).
ALBANY, N.Y. - In a securities fraud action filed by employees, a New York federal judge on March 7 allowed certain testimony from defense experts on fiduciary duty standards and when the employer should have disclosed a financial investment offer (Clifford P. Beede, et al. v. Stiefel Laboratories, Inc. and Charles W. Stiefel, No. 13-120, N.D. N.Y.; 2016 U.S. Dist. LEXIS 28304).
WASHINGTON, D.C. - Morgan Stanley will pay $3.2 billion to settle claims with the U.S. Department of Justice and other members of President Barack Obama's Financial Fraud Enforcement Task Force's RMBS Working Group over its marketing, sale and issuance of residential mortgage-backed securities (RMBS), according to press releases and settlement agreements released Feb. 11 by the Justice Department and the state attorneys general of New York and Illinois.
CINCINNATI - A mortgage owner failed to obtain sufficient expert testimony on handwriting to support his claim that a 2004 loan was fraudulently generated and, thus, his mortgage lenders are liable for the fraud, an Ohio federal magistrate judge held Jan. 6, recommending that summary judgment be granted to the lenders because there are no genuine issues of material fact (Kalemba Balimunkwe v. Bank of America, N.A., as successor to First Franklin Financial Corp., et al., No. 14-327, S.D. Ohio; 2016 U.S. Dist. LEXIS 981).
HONOLULU - A Hawaii federal judge on Nov. 25 adopted a magistrate judge's recommendation to grant an insured's motion to remand his lawsuit seeking a declaration as to errors and omissions insurance coverage for underlying claims including breach of fiduciary duty, negligence, fraud and unjust enrichment (Daniel T.M. Choy d/b/a Corinthians Financial Planners and Corinthians Realty v. Continental Casualty Co., et al., No. 15-00281, D. Hawaii; 2015 U.S. Dist. LEXIS 159538).
RIVERSIDE, Calif. - Dismissal of an insurance breach of contract and bad faith lawsuit is proper because the insureds violated the fraud and misrepresentation provisions of their automobile insurance policy, a federal judge in California ruled Sept. 24 (Ali Almazni, et al. v. United Financial Casualty Co., et al., No. 14-0975, C.D. Calif.; 2015 U.S. Dist. LEXIS 129562).
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Aug. 4 affirmed a lower federal court's ruling that there is no coverage for two underlying lawsuits alleging that an insured committed negligence and fraud with respect to its provision of professional services pertaining to tax documents (Financial Strategy Group PLC v. Continental Casualty Company, No. 14-6296, 6th Cir.).
WASHINGTON, D.C. - McGraw Hill Financial Inc. and its subsidiary, Standard & Poor's Financial Services LLC (S&P Financial), announced on Feb. 3 that they will pay a combined $1.5 billion to settle actions brought by the U.S. Department of Justice, the attorneys general of 19 states and the District of Columbia and a California state employee pension fund regarding ratings issued and surveilled by S&P Financial's business unit for certain mortgage-backed securities in violation of state and federal laws.
NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on Nov. 21 affirmed the dismissal of a man's lawsuit claiming that the U.S. Department of Justice and U.S. Attorney's Office for the Southern District of Mississippi violated the Right to Financial Privacy Act (RFPA) when issuing subpoenas to financial institutions as part of their health care fraud investigation, holding that the man's claims were barred by the three-year statute of limitations (Frank B. McCune Jr. v. U.S. Department of Justice, et al., No. 14-60145, 5th Cir.; 2014 U.S. App. LEXIS 22146).
ST. PAUL, Minn. - Because a computer systems fraud was the overriding cause of a bank insured's loss, the insured is entitled to summary judgment on its claim for breach of contract and the insurer owes coverage under a financial institution bond for the insured's loss arising from a fraudulent wire transfer, a Minnesota judge ruled Sept. 29 (State Bank of Bellingham v. BancInsure Inc., et al., No. 13-cv-0900, D. Minn.; 2014 U.S. Dist. LEXIS 136849).
NEW YORK - A New York federal judge on July 30 ordered Bank of America Corp., as successor to Countrywide Financial Corp. and Countrywide Home Loans, and a former Countrywide officer to pay $1.3 billion in damages in connection with Countrywide's residential mortgage lending business and a scheme to defraud Fannie Mae and Freddie Mac (United States of America, ex rel. Edward O'Donnell v. Countrywide Home Loans Inc., No. 12-cv-1422, S.D. N.Y.).
CHICAGO - The U.S. Commodities Futures Trading Commission (CFTC) on April 16 filed a brief in the U.S. District Court for the Northern District of Illinois seeking a $645 million penalty against bankrupt Peregrine Financial Group Inc. for what it calls "blatant fraud" related to when Peregrine's leader misappropriated in excess of $210 million customer funds and made false statements to the CFTC (U.S. Commodities Futures Trading Commission v. Peregrine Financial Group Inc., et al., No. 12-05383, N.D. Ill.).
SCRANTON, Pa. - An insurance company failed to assert a fraud claim against insurance producers based upon a refusal to pay under a producers agreement for a settlement the insurer paid that occurred due to the producers' error, a Pennsylvania federal judge ruled March 5, dismissing the claim based upon the "gist of the action" doctrine (United Financial Casualty Co. v. A.M. Skier Agency Inc., et al., No. 13-1291, M.D. Pa.; 2014 U.S. Dist. LEXIS 29111).
CHICAGO - US Bank N.A. on Feb. 13 filed a brief in the U.S. District Court for the Northern District of Illinois supporting its motion to dismiss a lawsuit brought by a commodities broker that alleges that the bank was complicit in the fraud perpetrated by bankrupt Peregrine Financial Group Inc., which misappropriated $ 200 million in investment funds that were to remain segregated for individual customers (Fintec Group Inc. v. US Bank NA, No. 13-08076, N.D. Ill.).
CHICAGO - US Bank N.A. on Feb. 13 filed a brief in the U.S. District Court for the Northern District of Illinois supporting its motion to dismiss a lawsuit brought by a commodities broker that alleges that the bank was complicit in the fraud perpetrated by bankrupt Peregrine Financial Group Inc., which misappropriated $200 million in investment funds that were to remain segregated for individual customers (Fintec Group Inc. v. US Bank NA, No. 13-08076, N.D. Ill.).
CHICAGO - Fintec Group Inc., a commodities broker that did business with bankrupt Peregrine Financial Group Inc., on Nov. 11 filed a putative class action against US Bank NA in the U.S. District Court for the Northern District of Illinois, alleging that it was complicit in the fraud perpetrated by Peregrine, which misappropriated $200 million in customer-segregated funds (Fintec Group Inc. v. US Bank NA, No. 13-08076, N.D. Ill.).
NEW YORK - A federal jury on Oct. 23 found Bank of America Corp., as successor to Countrywide Financial Corp., and a former Countrywide employee guilty of engaging in a scheme to defraud Fannie Mae and Freddie Mac in connection with Countrywide's residential mortgage lending business, according to a statement released by the U.S. Attorney for the Southern District of New York Preet Bharara (United States of America v. Bank of America Corp., et al., No. 12-1422, S.D. N.Y.).