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Insurers’ Antitrust Exemption in Crosshairs Again as Part of Potential Health Care Overhaul

Just when you thought the health insurance legal and regulatory landscape couldn’t get any more interesting, along comes the Competitive Health Insurance Reform Act of 2017 (the Act). The Act removes a longstanding antitrust exemption and places health insurers back under federal antitrust scrutiny. The House recently passed the Act overwhelmingly (416 – 7), and … Continue Reading

Every Rose Has Its Thorn: No D&O Coverage For Bad Loans To Flower Company, Fifth Circuit Says

In a recent decision, the Fifth Circuit ruled in favor of Markel American Insurance Company in a D&O liability coverage dispute centering on the application of the policy’s “Creditor Exclusion.” The panel affirmed a lower court’s holding that the exclusion precluded coverage for claims brought by lenders of the insured. Markel Am. Ins. Co. v. … Continue Reading

Brexit means Brexit…Really?

On 23 June 2016, 51.8% of voters in the UK voted in a referendum to leave the European Union. However, the process for formally leaving has been a journey into the unknown, leading to short term volatility in the financial markets and longer term uncertainty for businesses as they move into unchartered territory. Whilst many … Continue Reading

The SEC’s $200 Million Fraud Case Against Patriarch’s Tilton May Be Largest Case Ever Handled by an Administrative Law Judge

Lynn Tilton, the founder of private equity firm Patriarch Partners, LLC, and so-called “Diva of Distressed,” is embattled in what is expected to be the largest and possibly the most contentious SEC in-house trial to date. The trial, which commenced on October 24, 2016 and is expected to last approximately three weeks, is taking place … Continue Reading

Royal Bank of Scotland to Pay $1.1 Billion for Role in 2008 Financial Crisis

The Royal Bank of Scotland (RBS) has agreed to pay the National Credit Union Administration (NCUA) $1.1 billion to settle claims over the sale of allegedly “toxic” mortgage-backed securities to corporate credit unions that later failed, the administration announced last Tuesday. The settlement will resolve claims against RBS in federal actions in California and Kansas … Continue Reading

Class Action Against Wells Fargo Alleges that 5000 Employees Who Did Not Meet Cross-Selling Quotas Were Wrongfully Terminated

On September 22, 2016, two former employees filed a class action complaint against Wells Fargo in the Superior Court of California, Los Angeles, contending that Wells Fargo implemented a fraudulent scheme to increase its stock price by aggressively pushing employees to open new accounts to increase their “cross-sell numbers” while the bank did not have … Continue Reading

$185 Million: A High Price for Wells Fargo’s “Cross-Selling” Practices

Last week, the Consumer Financial Protection Bureau (CFPB) imposed its largest penalty ever against Wells Fargo Bank, N.A. for violations of the Consumer Financial Protection Act (CFPA). The bank agreed to pay a $100 million fine to the CFPB’s Civil Penalty Fund, a $35 million penalty to the Office of the Comptroller of the Currency, … Continue Reading

A Recent Decision in the Southern District of New York Puts Mutual Funds’ Immunity to Securities Class Actions at Risk

Until recently, a drop in a mutual fund company’s net asset value (NAV) has been the test used by the Southern District of New York (SDNY) to determine if plaintiffs have pled a plausible theory of loss causation in a securities class action.   Per SEC regulations, the price of a mutual fund’s shares is calculated … Continue Reading

Barclays Settles Libor Rate Manipulation Claims for $100 Million

It was recently announced that Barclays has agreed to pay $100 million in exchange for the dismissal of claims pursued against it by several dozen states alleging that it manipulated Libor and other benchmark interest rates between 2005 and 2009 to conceal financial issues. As part of the settlement terms, Barclays is not required to … Continue Reading

OCC Announces Additional Mortgage Restrictions on Several Banks Stemming from 2011 Agreement

Six banks who previously agreed in 2011 to make numerous changes and improvements to their mortgage origination and servicing practices following credit-crisis-era-related accusations of improper administrative and foreclosure practices, now face new restrictions for their continued failure to comply with the protections and procedures implemented at that time. The banks at issue include JPMorgan Chase, … Continue Reading

$11.6 Million Returned to Consumers by CFPB Examiners in Administrative Settlements

In a report released on June 23, 2015, the Consumer Financial Protection Bureau (CFPB) highlighted its successful efforts in returning approximately $11.6 million to consumers in the first quarter of 2015 in connection with improper handling of accounts by mortgage servicers, debt collection agencies, student loan servicing firms and credit reporting companies. Specifically, from January … Continue Reading

Senate Committee Issues Proposed Revamp to Dodd-Frank

Richard Shelby, the head of the Senate Banking Committee, released a bill to overhaul aspects of the Dodd-Frank Act, which would serve to loosen regulatory requirements on certain banks. The bill could aid regional banks with assets of less than $500 billion from certain oversight provisions enacted under Dodd-Frank. The bill proposes establishing a council … Continue Reading

2nd Circuit Affirms SEC’s Decision to Deny Retroactive Dodd-Frank Whistleblowing Award

On March 11, 2015, the U. S. District Court for the Second Circuit refused to overturn the SEC’s decision to deny a Dodd-Frank whistleblower award to Larry Stryker because he provided information prior to the ratification of Dodd-Frank’s whistleblowing rules.  Stryker was a whistleblower against Advanced Technologies Group, Ltd.  The Second Circuit agreed that Dodd-Frank’s … Continue Reading

US House Passes Dodd-Frank Amendments to Financial Rules

On January 14, 2015, the House of Representatives passed a bill in a 271-154 vote, amending Dodd-Frank’s financial laws to lift certain banking regulations. Specifically, the legislation would delay by two years the deadline for financial institutions to sell off collateralized loan obligations. It also creates exemptions for certain private equity firms to register with the SEC. Further, … Continue Reading

Fed Enacts Two-Year Delay for Imposing Volcker Rule

On December 18, 2014, the Federal Reserve decided to delay implementing the Volcker Rule until July 2017.  This rule requires banks to divest any investments in their own private-equity or venture-capital funds in an attempt to avoid banks gambling with their own liquidity.  Banks lobbied for the two-year postponement, arguing that the current deadline would … Continue Reading

Qualified Residential Mortgage Provision Not Part of Dodd-Frank Regulations

After three years, regulators are nearing the finalization of the mortgage market standards arising from the Dodd-Frank Act. As it currently stands, the adopted rules would be more relaxed than those originally proposed. Specifically, the qualified residential mortgage provision, which would require borrowers to make a 20 percent down payment of the loan, or banks would keep … Continue Reading

House Bill Allows Fed to Set Separate Standards for Systematically Important Insurance Companies

The U.S. House of Representatives has passed a bill that would allow the Federal Reserve (the Fed) to develop capital standards specific to insurance companies that have been deemed systematically important under Dodd-Frank. Under the bill, the Fed would not have to apply the same standards set forth for systematically important banks or lenders to insurance … Continue Reading

Dodd-Frank Mortgage-Lending Regulation Nears Completion

The Senate Banking Committee recently announced that it plans to complete Dodd-Frank legislation intended to regulate mortgage-lending standards by the end of 2014.  The rules were originally proposed in 2011 and required the input of six agencies to standardize the regulations, including the Fed, the Federal Deposit Insurance Corporation and the SEC. As initially proposed, … Continue Reading

SEC Outlines New Guidelines for Asset-Backed Securities Offerings

The SEC has unanimously decided to impose new disclosure rules and controls on issuers of asset-backed securities. New rules will also affect ratings agencies, whose lofty ratings helped propel sales of mortgage-backed securities prior to the financial crisis. Specifically, the SEC approved new requirements for all issuers of asset-backed securities, whether comprised of mortgages, auto loans … Continue Reading

Dodd-Frank Anti-Retaliation Provision Does Not Extend to Extraterritorial Whistleblowers

The Second Circuit Court of Appeals recently announced that whistleblowers who are noncitizens working for a foreign company are not afforded protection by the anti-retaliation provision of the Dodd-Frank Act. In Liu v. Siemens, No. 13-4385-cv, __ F.3d __ (2d Cir. Aug. 14, 2014), the plaintiff filed a lawsuit against Siemens AG for violating Dodd-Frank’s … Continue Reading

Paradigm Capital Management Faces Dodd-Frank Anti-Retaliation Charges From SEC

The Securities and Exchange Commission (SEC) has, for the first time, charged a financial firm with violating the anti-retaliation provisions in the Dodd-Frank financial reforms.  Paradigm Capital Management, and its owner, Candace King Weir, have agreed to pay $2.2 million to the SEC in connection with the firm’s demotion of a head trader who previously … Continue Reading