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Banking
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July 29, 2024
9th Circ. Partly Revives BofA Customers' ATM Fee Suit
The Ninth Circuit on Monday partially reinstated a proposed class action alleging Bank of America charged out-of-network fees for balance inquiries customers said they didn't know they authorized on ATMs, finding customers can be charged under their contract only if it's clear they sought the information and initiated the transaction.
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July 29, 2024
CFPB Cites Thomas In New Bid To Transfer Late Fee Rule Suit
The Consumer Financial Protection Bureau on Monday took another whack at getting an industry-backed legal challenge to its $8 credit card late fee rule transferred from Texas federal court to Washington, D.C., this time drawing on U.S. Supreme Court Justice Clarence Thomas for a little rhetorical help.
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July 29, 2024
8th Circ. Urged To Ax FDIC's Multiple NSF Fee Guidance
Minnesota state bankers have urged the Eighth Circuit to uphold their challenge to Federal Deposit Insurance Corp. guidance conscribing the use of non-sufficient funds fees, arguing a Minnesota federal judge was wrong to reject their case as premature.
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July 29, 2024
Wells Fargo Can't Escape Investors' Sham Diverse Hiring Suit
A California federal judge refused to throw out a proposed securities class action against Wells Fargo alleging it conducted sham interviews to meet diversity targets that triggered a stock drop when the truth came to light, finding Monday that the investors had plausibly alleged the bank's ill-will.
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July 29, 2024
Ky. Tower Sale Laundering Case Should Proceed, Judge Told
A Florida magistrate judge has recommended denying a bid by two Miami businessmen to toss litigation filed by the U.S. government looking to seize about $9.1 million from the sale of a Kentucky office tower over alleged ties to a Ukrainian money laundering scheme.
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July 29, 2024
BofA, Citi Among Banks In $80M Deal To End Bond-Rig Suit
Units of Bank of America, Citigroup and other banking giants have agreed to pay $80 million to settle investor claims accusing them of conspiring to fix European government bond prices.
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July 29, 2024
CFPB Says Lease-To-Own Co. Acima Misled Vulnerable Users
Lease-to-own fintech company Acima had customers paying more than twice the retail price of home goods by deceptively locking them into high-cost "virtual rent-to-own" financing plans, the Consumer Financial Protection Bureau alleged in a new lawsuit filed Friday in Utah federal court.
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July 29, 2024
BofA Mortgage Loan Officers Get Conditional Cert. In OT Suit
A group of mortgage loan officers who accused Bank of America of misclassifying the employees as overtime-exempt has cinched conditional collective certification, with a North Carolina federal judge rejecting the bank's arguments that their job duties were too different to merit certification.
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July 29, 2024
MoneyGram Opposes CFPB, NY's 'Futile' Bid To Bolster Case
MoneyGram told a New York federal judge that the state and federal regulators' bid to update their complaint against the remittance service is a "bad faith attempt" to "salvage" a case that should either be transferred to MoneyGram's home district of Texas or tossed entirely.
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July 29, 2024
Wells Fargo Accused Of Race Bias By Bangladeshi Director
A Bangladeshi man who worked as a director for Wells Fargo until he was fired last year is suing the bank for race discrimination and retaliation, saying his manager was "openly uncomfortable" with his ethnicity and was brazen in her mistreatment of him as a result.
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July 29, 2024
Mich. AG Drops Remaining Case Against Carhartt Heiress Atty
Prosecutors will not retry a Michigan attorney they claim stole from his wealthy client, the late Carhartt company heiress Gretchen Valade, and have agreed to toss similar embezzlement charges in a separate case.
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July 29, 2024
White Collar Update: 4 Developments To Watch
White-collar lawyers are on the lookout for U.S. Department of Justice actions targeting artificial intelligence "snake oil," aggressive pandemic-relief fraud prosecutions, and carrots for corporations and whistleblowers who expose misconduct. Here's a look at some key developments to watch in the second half of 2024.
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July 29, 2024
Teller Pens Deal With Wells Fargo In AML Whistleblower Case
Wells Fargo has reached a settlement in principle with a former teller who claimed she was fired after raising concerns about the bank's "streamlined" account opening process that allowed customers to open accounts if they'd failed anti-money laundering screenings previously.
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July 26, 2024
Ex-Wells Fargo Director Wins $22M Verdict In ADA Trial
A North Carolina federal jury Friday determined Wells Fargo must pay a former managing director $22.1 million after he accused the bank of failing to reasonably accommodate him for a paralyzed colon and bladder, and subsequently laid him off to avoid dealing with his disability, according to his attorney.
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July 26, 2024
Apple Commits To White House Guidelines For Responsible AI
Apple Inc. has signed onto the Biden administration's voluntary guidelines for "responsible" artificial intelligence innovation, joining the likes of Amazon.com Inc., Google LLC, Microsoft Corp. and a dozen other leading tech companies, the White House announced Friday.
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July 26, 2024
State Street Inks $7.5M Deal Over Russia Sanctions Violations
Financial services giant State Street has agreed to pay nearly $7.5 million to resolve apparent violations by its investment management solution subsidiary Charles River Systems Inc. of Obama-era sanctions targeting Russian actions against Ukraine, the U.S. Department of the Treasury announced Friday.
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July 26, 2024
SEC Sues Banker And Ex-Prosecutor Alleging $1.6M Fraud
A Georgia banker fraudulently bilked approximately $1.6 million from unsuspecting investors for "furs and furniture" and other expenses while a former Florida prosecutor ignored several red flags when holding on to the investments, the U.S. Securities and Exchange Commission told a Georgia federal court.
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July 26, 2024
FTX's Ryan Salame Asks To Delay Prison After Dog Attack
Former FTX executive Ryan Salame on Friday asked a New York federal judge to delay his prison surrender date because he was recently mauled by a German shepherd and must undergo "urgent and necessary medical treatment and surgery."
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July 26, 2024
Franklin Says DOJ, SEC Probing Western Asset Management
Western Asset Management, a global fixed-income manager, is facing parallel investigations from the U.S. Department of Justice and the U.S. Securities and Exchange Commission over some of its past trade allocations, its parent Franklin Resources Inc. said Friday.
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July 26, 2024
Banco Popular Inks $1.5M Deal In Overdraft Fee Fight
The bank formerly known as Banco Popular North America has agreed to pay $1.5 million to customers who claim the bank hit them with unfair overdraft fees and suspend the challenged fees for five years as part of a proposed settlement to resolve their class action.
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July 26, 2024
One Prosecutor's Quest To Carve Up Crypto's 'Pig Butchers'
A Silicon Valley-based prosecutor who's made it her mission to fight what are known as pig butchering cryptocurrency scams says it is time to start taking a closer look at the role financial institutions and social platforms should play in identifying and blocking bad actors.
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July 26, 2024
Chancery Questions $3.5M Atty Fee For Failed Proxy Battle
An activist shareholder that launched a failed proxy contest at First Foundation Inc. struggled to convince a Delaware Chancery Court judge Friday that the settlement it reached with the Texas-based bank was worth a $3.5 million attorney fee.
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July 26, 2024
Feds Say Insurer Forced Auto Coverage On Borrowers
The federal government has sued National General Holdings Corp. and its subsidiaries under the Financial Institutions Reform, Recovery and Enforcement Act alleging the corporation spent a decade forcing its insurance on drivers whose vehicles were financed through Wells Fargo, despite borrowers already being insured through other companies.
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July 26, 2024
Fed Closes Loop On Now-Shuttered Crypto Bank Silvergate
The Federal Reserve said Friday that it has concluded an enforcement action requiring Silvergate Bank to close out its operations safely and smoothly, tying up a loose thread from the California-based crypto bank's move to shut itself down after tanking last year.
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July 26, 2024
Bad Online Security Botched $800K Home Sale, Suit Says
A five-attorney Connecticut law firm's "archaic" email and computer systems allowed hackers to infiltrate an approximately $800,000 home sale and divert cash to fake accounts, a new federal lawsuit against Hastings Cohan & Walsh LLP and one of its attorneys alleges.
Expert Analysis
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Deciphering SEC Disgorgement 4 Years After Liu
Since the U.S. Supreme Court’s 2020 decision in Liu v. U.S. Securities and Exchange Commission to preserve SEC disgorgement with limits, courts have continued to rule largely in the agency’s favor, but a recent circuit split over the National Defense Authorization Act's import may create hurdles for the SEC, say attorneys at Ropes & Gray.
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Updates To CFTC Large Trader Report Rules Leave Questions
The U.S. Commodity Futures Trading Commission's updated large trader position reporting rules for futures and options is a much-needed change that modernizes a rule that had gone largely untouched since the 1980s, but the updates leave important questions unanswered, say Katherine Cooper and Maggie DePoy at BCLP.
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Risks And Promises Of AI In The Financial Services Industry
Generative artificial intelligence has immense potential to revolutionize the financial services industry, but firms considering its use should first prepare to show their customers and the increasingly divided international regulatory community that they can manage the risks inherent to the new technology, say attorneys at Gibson Dunn.
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Playing The Odds: Criminal Charges Related To Sports Betting
In light of recent sports betting scandals involving MLB player Shohei Ohtani and NBA player Jontay Porter, institutions and individuals involved in athletics should be aware of and prepared to address the legal issues, including potential criminal charges, that sports gambling may bring to their door, say attorneys at Steptoe.
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Series
Playing Chess Makes Me A Better Lawyer
There are many ways that chess skills translate directly into lawyer skills, but for me, the bigger career lessons go beyond the direct parallels — playing chess has shown me the value of seeing gradual improvement in and focusing deep concentration on a nonwork endeavor, says attorney Steven Fink.
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Beware Shifting Provisions In Middle-Market Loan Documents
In recent years, many credit facility provisions previously considered to be market standard have been negotiated, often turning in favor of borrowers, demanding renewed diligence from workout officers and restructuring counsel operating in the middle market, say attorneys at Crowell & Moring.
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How SEC Could Tackle AI Regulations On Brokers, Advisers
The U.S. Securities and Exchange Commission held an open meeting of its Investor Advisory Committee on June 6 to review the use of artificial intelligence in investment decision making, showing that regulators are being careful not to stifle innovation or implement rules that will quickly be made irrelevant after their passage, says Brian Korn at Manatt Phelps.
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Litigation Inspiration: Attys Can Be Heroic Like Olympians
Although litigation won’t earn anyone an Olympic medal in Paris this summer, it can be worthy of the same lasting honor if attorneys exercise focused restraint — seeking both their clients’ interests and those of the court — instead of merely pursuing every advantage short of sanctionable conduct, says Bennett Rawicki at Hilgers Graben.
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What To Know As CFPB Late Fee Rule Hangs In Limbo
Though the Consumer Financial Protection Bureau's final credit card late fee rule faces an uncertain future due to litigation involving injunctions, emergency petitions and now a venue dispute, card issuers must understand how to navigate the interim period and what to do if the rule takes effect, say attorneys at Steptoe.
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Lean Into The 'Great Restoration' To Retain Legal Talent
As the “great resignation,” in which employees voluntarily left their jobs in droves, has largely dissipated, legal employers should now work toward the idea of a “great restoration,” adopting strategies to effectively hire, onboard and retain top legal talent, says Molly McGrath at Hiring & Empowering Solutions.
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Unlocking Blockchain Opportunities Amid Legal Uncertainty
Dozens of laws and legal precedents will come into the fore as Web3, metaverse and non-fungible tokens gain momentum, so organizations need to design their programs with a broader view of potential exposures — and opportunities, say Teresa Goody Guillén and Robert Musiala at BakerHostetler and Steve McNew at FTI Consulting.
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The Uncertain Scope Of The First Financial Fair Access Laws
With Florida and Tennessee soon to roll out laws banning financial institutions from making decisions based on customer traits like political affiliation, national financial services providers should consider how broadly worded “fair access” laws from these and other conservative-leaning states may place new obligations on their business operations, say attorneys at Sullivan & Cromwell.
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Debate Over CFPB Definition Of Credit Is Just Beginning
The Consumer Financial Protection Bureau has recently worked to expand the meaning of credit, so anyone operating on the edges of the credit markets, or even those who assumed they were safely outside the scope of this regulatory perimeter, should pay close attention as legal challenges to broad interpretations of the definition unfold, says John Coleman at Orrick.
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Key Takeaways From 2024 Accountants' Liability Conference
At the recent annual Accountants' Liability Conference, regulators provided important commentary on new Public Company Accounting Oversight Board rulemaking and standard-setting initiatives, and emphasized regulatory priorities ranging from the tone at the top to alternative practice structures, say attorneys at Arnold & Porter.
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A Closer Look At Feds' Proposed Banker Compensation Rule
A recently proposed rule to limit financial institutions' ability to award incentive-based compensation for risk-taking may progress through the rulemaking process slowly due to the sheer number of regulators collaborating on the rule and the number of issues under consideration, say attorneys at Troutman Pepper.