The Federal Housing Finance Agency (FHFA) has filed a more than $1B residential mortgage-backed securities (RMBS) fraud lawsuit against Wells Fargo (WFC) on behalf of Freddie Mac. The government-owned mortgage company had invested in over $1B in RMBSs backed by NovaStar loans prior to the 2008 financial crisis. NovaStar, once…
The US Securities and Exchange Commission (SEC) has filed civil charges against Talimco LLC, a registered investment adviser (RIA), and its former COO Grant Gardner Rogers. The regulator is accusing them both of rigging a commercial real estate auction it held for one client to benefit another client, defrauding the…
Shareholders Can Proceed with $13B CDO Fraud Case Against Goldman Sachs A US district court judge has given Goldman Sachs (GS) shareholders the right to move forward with their $13B collateralized debt obligation fraud lawsuit accusing the bank of not disclosing certain conflicts of interest. Judge Paul A. Crotty…
Walter A. Morales III, a money manager who for years worked with high net worth individual investors and pension funds, is now barred from the securities industry. Morales resolved the US Securities and Exchange Commission’s 2012 civil lawsuit accusing him and his Commonwealth Advisors of fraud and mismanagement this week.…
The 2nd U.S. Circuit Court of Appeals in Manhattan has decided that the shareholder lawsuit brought against Goldman Sachs (GS) for its high-risk subprime securities leading up to the 2008 financial crisis cannot move forward as a class action securities fraud case. The court said that a lower court judge…
The New York State Supreme Court has ruled that the $45M institutional investor fraud case against Patriarch Partners and owner Lynn Tilton may proceed. The financier had sought to have the fraud charges against her dropped. The plaintiff is Norddeutsche Landesbank Girozentrale. The German bank, known as Nord/LG, invested in…
Moody’s Corp. (MCO) will pay nearly $864M to settle allegations about the way that credit ratings agency rated high-risk mortgage securities, including residential mortgage-backed securities (RMBSs) and collateralized debt obligations (CDOs), leading up to the 2008 financial crisis. The settlement was reached between Moody’s Corporation, Moody’s Analytics Inc., and Moodys’…
Ex-Visium Fund Manager on Trial for Bond Fraud Jury selection is scheduled to begin this week in the criminal trial against Stefan Lumiere, an ex-Visium Asset Management LP portfolio manager. Lumiere, who managed the Visium Credit Opportunities Fund, is accused of falsely inflating the value of securities in a fund…
Goldman Sachs Group Inc. (GS) has arrived at a settlement with ACA Financial Guaranty Corp. The bond insurer’s securities fraud lawsuit accuses the investment bank of fraudulently persuading it to guarantee payments on the , a collateralized debt obligation, prior to the financial crisis. ACA Financial Guaranty claims that Goldman and hedge…
According to a letter written by prosecutors to Moody’s (MCO), the U.S. Department of Justice intends to sue the credit rating agency and its Moody’s Investors Services unit over valuations that the latter assigned to mortgage-backed securities leading up to the 2008 financial crisis. The MBS fraud case is expected…