Saturday, March 7, 2015

Morgan Stanley Agrees to $2.6 Billion Mortgage Settlement

from bloomberg


by Michael J Moore David McLaughlin


Morgan Stanley


(Bloomberg) -- Morgan Stanley agreed to pay $2.6 billion to settle probes into its creation and sale of residential mortgage-backed securities, as the U.S. Department of Justice holds another large Wall Street firm to account for the 2008 financial crisis.
The firm increased legal reserves related to mortgage matters by about $2.8 billion, cutting 2014 income from continuing operations by $2.7 billion, or $1.35 a share, Morgan Stanley said Wednesday in an annual regulatory filing. It’s the fourth time in the past five quarters that the New York-based bank reduced earnings in the weeks after announcing them.
JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. -- the three biggest U.S. banks -- previously settled with federal and state authorities over the probes, agreeing to pay a total of more than $35 billion in cash and consumer relief. Goldman Sachs Group Inc. disclosed this week that it received a letter from the U.S. Attorney’s Office in Sacramento, saying a civil lawsuit may be brought against the firm.
Patrick Rodenbush, a Justice Department spokesman, declined to immediately comment about the settlement.
The agreement follows other regulatory actions against Morgan Stanley over similar allegations. The firm last year agreed to pay $1.25 billion after the Federal Housing Finance Agency accused it of selling faulty mortgage-backed securities to Fannie Mae and Freddie Mac.
In July, Morgan Stanley reached a $275 million settlement with the Securities and Exchange Commission over claims it understated the number of delinquent loans backing subprime mortgage securities.
To contact the reporters on this story: Michael J. Moore in New York atmmoore55@bloomberg.net; David McLaughlin in Washington atdmclaughlin9@bloomberg.net
To contact the editors responsible for this story: Peter Eichenbaum atpeichenbaum@bloomberg.net; Sara Forden at sforden@bloomberg.net David Scheer

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Thursday, March 5, 2015

Federal appeals court urges crackdown on sexual misconduct by police

from latimes
By contact the reporter

Suit over Glendale officer's affair with defendant's wife dismissed

A federal appeals court called on police departments Thursday to investigate and discipline officers who engage in sexual misconduct with crime victims and others involved in investigations.
The U.S. 9th Circuit Court of Appeals made the exhortation in the dismissal of a lawsuit against the city of Glendale by a man who said he was wrongly prosecuted because his wife had an affair with the Glendale police officer who arrested him.
The court condemned the officer's conduct, but said it did not affect the decision to arrest and prosecute the man. The decision upheld a lower court's ruling dismissing the lawsuit.
"This is not the first case we have had in recent months in which a police officer in Los Angeles County has engaged in similar conduct with a woman involved in a case which the officer was assigned to investigate," Judge Stephen Reinhardt wrote for the three-member panel.
Glendale fired Officer Michael Lizarraga after learning of the affair. Lizarraga had arrested Robert Yousefian, a lawyer, in 2007 for hitting his father-in-law with a glass candle holder. Yousefian alleged that he acted in self-defense after the elderly man whacked him with his cane.
Yousefian's wife provided evidence against her husband and then engaged in an affair with the arresting officer, the court said.
Yousefian was eventually acquitted of assault and elder abuse charges.
"We would urge municipalities and other employers of law enforcement officers to ensure that conduct like Lizarraga's is neither permitted in the course of officers' official duties nor condoned thereafter," Reinhardt wrote.
In December, the court upheld the dismissal of a similar case in which a West Covina police officer had an affair with an alleged rape victim. The court said the officer, Tyler Kennedy, also wrote a book that recommended lying to women to get them to consent to sex.
The police chief did not fire Kennedy as a sex crimes investigator because his book did not mention he was a police officer and he wrote it on his own time, the court said.
A West Covina police spokeswoman said Kennedy no longer worked for the department and referred questions to an assistant city manager. The official declined to comment about the officer's departure.
In Thursday's ruling, the court called the Glendale officer's behavior "reprehensible."
"Such conduct by police officers puts in jeopardy the integrity of legitimate prosecutions and jeopardizes defendants' right to a fair trial," Reinhardt wrote.
Mark Geragos, who represented Yousefian, called the ruling "symptomatic of what is going on in the 9th Circuit."
"They see all this bad conduct by cops and prosecutors, and they are tired of it," said Geragos, who plans to appeal. "The way to curb this is hit them civilly and let the juries decide."
Twitter: @mauradolan
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