Another Slap on the Wrist for Bad Bank Wells Fargo

wrist slap
Wow, Wells Fargo is guilty of pushing well qualified home owners into subprime loans and ripping them off.

Wells Fargo Financial, the lender’s consumer- finance unit, pushed customers who may have been eligible for prime interest rates into loans carrying higher rates intended for riskier borrowers, the Fed said today in a statement announcing the settlement. Separately, sales personnel used false documents to make it appear borrowers qualified for loans when their incomes made them ineligible.

The Financial unit was of course shut down when their evil doings started to be exposed. Who is taking the rap? Not Wells Fargo executives, nope, 16 of the fired employees will be banned from the banking business. The guy who oversaw this operation, Mark Oman? He gets to retire.

This measly $75 million dollar fine is being touted as a record. Worse, harmed homeowners might have to be compensated up to $10,000! Wow! $10k when you've lost your home, awesome! That might pay for the moving van.

Credit slips is warning victims to watch out for settlement papers, getting them to sign their right to sue away for the paltry sum of $7000.

As far as I could tell the agreement does not provide for consumers to release claims in exchange for these paltry sums, but advocates would be well advised to review settlement notices with affected consumers carefully.

SEC Expands Shareholders vote power

The SEC has voted to allow shareholders more power to elect corporate board members.

The SEC’s rule would allow shareholders who own 3 percent of a company’s voting stock to nominate board members. To prevent short-term investors from swooping in to shake up a company, shareholders must own their stock for three years before proposing candidates. Shareholders must own their stock outright and cannot use borrowed shares to count toward the 3 percent threshold.

This is amazing the SEC vote was 3-2, considering who owns 3% of one company stock? There is a nonbinding vote on executive pay:

Also under the new law, shareholders will be able to weigh in on pay packages for top executives. Nonbinding votes on executive pay will be held at least once every three years.

The Wall Street Journal:

The "proxy access" rule, which passed the commission on a 3-2 vote, would require companies to print the names of shareholder board nominees directly on corporate ballots if certain conditions are met.

Another Major Ripoff, Another Slap on the Wrist Fine - Countrywide Settles for $108 million

It's no wonder we get fraud, abuse of customers, ripoffs as standard fare by corporations.

Countrywide agrees to pay a $108 million fine for excessive fees on home loans, one of the biggest fines by the FTC.

When homeowners fell behind on their payments and were in default on their loans, Countrywide ordered property inspections, lawn mowing, and other services meant to protect the lender’s interest in the property, according to the FTC complaint. But rather than simply hire third-party vendors to perform the services, Countrywide created subsidiaries to hire the vendors. The subsidiaries marked up the price of the services charged by the vendors – often by 100% or more – and Countrywide then charged the homeowners the marked-up fees. The complaint alleges that the company’s strategy was to increase profits from default-related service fees in bad economic times. As a result, even as the mortgage market collapsed and more homeowners fell into delinquency, Countrywide earned substantial profits by funneling default-related services through subsidiaries that it created solely to generate revenue.

Countrywide is now owned by Bank of America. In 2008, Countrywide held a mortgage portfolio valued at $1.4 trillion.

Countrywide even tried to skirt bankruptcy law and make broke homeowners, now out of a house, pay even more fees after the fact.

SEC will Halt Trading on some S&P Stocks which drop 10% in 5 minutes

The SEC is supposedly trying to rein in Flash Trading with a new rule, calling it circuit breakers. Below the SEC press release:

Washington, D.C., May 18, 2010 — The Securities and Exchange Commission announced that in response to the market disruption of May 6, the national securities exchanges and the Financial Industry Regulatory Authority (FINRA) are filing proposed rules today under which they would pause trading in certain individual stocks if the price moves 10 percent or more in a five-minute period.

The SEC is seeking comment on the proposed rules.

The markets are proposing these rules in consultation with FINRA and staff of the SEC to provide for uniform market-wide standards for individual securities in the S&P 500® Index that experience a rapid price movement.

These rules reflect a consensus that was achieved among the exchanges and FINRA after SEC Chairman Mary Schapiro convened a meeting of exchange leaders and FINRA at the SEC early last week. That meeting took place within days after the market dropped significantly and after approximately 30 S&P 500 Index stocks fell at least 10 percent in a five-minute period.

Make This Go Away! Goldman Sachs to Settle SEC Fraud Civil Case

The New York Post is reporting Goldman is going to settle:

It's almost a certainty that there will be a settlement," said a source.

As another person put it, the SEC has an "unlimited supply of ammunition" in the form of e-mails and records that it could release, and Goldman officials would like to avoid having those documents fired back at them the way they were on Tuesday.

During the Financial Meltdown, Where Were the Regulators? Jerkin' Off?


I've debated about posting this because it is such easy pickins'. But considering Bill Black's testimony yesterday, a cheap, sleazy shot (pun intended), sounds like a good idea.

SEC staffers watched porn as economy crashed:

The SEC's inspector general conducted 33 probes of employees looking at explicit images in the past five years, according to a memo obtained by The Associated Press.

The memo says 31 of those probes occurred in the 2 1/2 years since the financial system teetered and nearly crashed.

ABC News:

Here Comes Barofsky

Neil Barofsky, SIGTARP, the TARP inspector general, is gunnin' for Wall Street. So reports Reuters:

The special inspector general for the government's bailout program said he would probe whether securities sold by Goldman Sachs Group Inc (GS.N) led to losses at AIG and if the American taxpayer was a victim of fraud.

Gets better:

Barofsky said he is in touch with the SEC and will possibly coordinate with the Department of Justice "to see if there are cases of fraud and if AIG and as a result, the American taxpayers, were victims of similar types of fraud."

Barofsky made the comments in response to questions from the ranking Republican on the Senate Finance Committee, Charles Grassley, at a hearing examining the TARP.