Banking Law

Recipients of TARP Bailout Funds Could Be Targeted in Criminal Cases

The Troubled Asset Relief Program has only been in effect a few months. But already it is the subject of potential criminal probes, as a special inspector general also announced what amounts to a rewrite of TARP rules requiring recipients of bailout funds to certify, under penalty of law, that…

Feb 6, 2009 1:32 AM CST

Pressure Grows for Bipartisan Probe of Regulatory Lapses Behind Financial Crisis

In response to calls for action from outraged constituents, there is growing bipartisan support among rank-and-file members of Congress for a full-scale investigation of the regulatory lapses that allowed an economic debacle perhaps second only to the Great Depression of the 1930s to sweep through the country. Many are now…

Feb 5, 2009 2:26 AM CST

Lenders Wary of TARP Regs Even Before Plan for $500K Pay Cap

Some financial institutions fearful of restrictions on federal bailout money are backing out of the Troubled Asset Relief Program or deciding not to apply. Lawyers spoke to the American Lawyer about how banks are responding to TARP provisions before news broke that President Barack Obama plans to cap annual pay…

Feb 4, 2009 3:20 PM CST

Alleged $50B Madoff Fraud is Keeping a Lot of Law Firms Busy

More than 30 law firms around the world are representing an estimated 3 million alleged victims of the claimed $50 billion Ponzi scheme that Bernard Madoff is accused of running as a purported hedge fund. “Our calculations are that at least 3 million people were affected by the Madoff affair,…

Feb 3, 2009 8:39 PM CST

Big Save

ABA helps convince FDIC to extend banking protections to IOLTAs

Feb 2, 2009 1:10 AM CST

Spanish Bank Seeks Settlement With Its Customers in Madoff-Related Case

Sued by private banking clients who contend the Banco Santander SA was grossly negligent in investing their money in an alleged $50 billion Ponzi scheme of which Bernard Madoff is accused of being the architect, the Spanish bank is reportedly seeking to settle with its customers. The proposed deal, which…

Jan 29, 2009 12:03 AM CST

UBS Probe Puts 300 Americans, Maybe Many More, in IRS Sights

As a major Swiss bank is squeezed between the secrecy law of its own country and a threatened U.S. prosecution for helping American citizens hide their assets, the government reportedly is getting ready to launch criminal tax evasion cases against 300 American clients of UBS. But the roster of tax…

Jan 27, 2009 6:35 PM CST

Associates Find Opportunities in Shift to Bankruptcy Work

Many law firms are killing two birds with one stone by shifting associates to bankruptcy work. The moves help firms bulk up in a practice area during economic times in which bankruptcies are expected to provide more work, the New York Times reports. And they provide opportunities for associates who…

Jan 26, 2009 2:33 PM CST

Banks Avoided Federal Action by Switching to State Oversight

Banks seeking to avoid complying with federal regulatory actions often have an easy solution—they can switch to state supervision. At least 30 banks facing regulatory action since 2000 have opted for that solution, according to a Washington Post investigation. As a result, they avoid compliance with ordered changes to improve…

Jan 22, 2009 5:45 PM CST

Mortgage Meltdown Results in ‘Tranche Warfare’

A default on debt tied to Boston’s John Hancock Tower highlights the kind of legal fights that will likely break out among investors who have varying rights to repayment after property foreclosures. When mortgages are pooled and securitized, the investors purchase bonds that are grouped by payment priority known as…

Jan 21, 2009 1:52 PM CST

Homeowner ‘Cramdown’ Legislation Opposed By Obama

If they go bankrupt, real estate investors who don’t live in the homes they purchase can ask a judge to reduce the principal balances on their mortgage loans. But homeowners don’t have the same “cramdown” right concerning their primary residence, under recent bankruptcy reform legislation. Unless the lender voluntarily agrees…

Jan 20, 2009 8:46 PM CST

Jenner’s Chair, Anton Valukas, to Probe Lehman Bros. as New Examiner

The chairman of the Chicago-based Jenner & Block law firm has been nominated to serve as the court-appointed examiner in the record-breaking Lehman Brothers bankruptcy in progress in federal court in Manhattan. As examiner, Anton Valukas will have “the power to investigate a wide range of issues, including asset transfers…

Jan 20, 2009 8:24 PM CST

Investors in $32.6M Ponzi Scheme Win Only Camaraderie; Bank Not Liable

As in Bernard Madoff’s alleged $50 billion Ponzi scheme, Bradford Bleidt stole $32.6 million by persuading those with social ties to give him money to “invest.” In Bleidt’s case, his victims were fellow Masons in the Boston area who typically had saved money for years while working at blue-collar jobs.…

Jan 20, 2009 7:19 PM CST

For Many Law Firms, It’s ‘Eat or Be Eaten’

Law firm consolidation is beginning to resemble a game of Pac-Man. “For many high-end lawyers, as for the companies and banks they represent, these are times to eat or be eaten,” reports Business Week. Carrying the gastronomical comparison further, the magazine notes that Sonnenschein Nath & Rosenthal recently “gobbled up…

Jan 20, 2009 4:25 PM CST

Lenders Gave Thacher One Week to Complete Sonnenschein Deal

Lawyers at Thacher Proffitt & Wood were talking about a possible merger or other combination with Sonnenschein Nath & Rosenthal when their lenders gave them an ultimatum. Citigroup and Wachovia were threatening to declare Thacher in default of its loan agreement because of an exodus of several partners in 2008…

Jan 20, 2009 4:02 PM CST