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financial crisis 10 articles

Prospect Settles Mortgage Fraud Allegations

Prospect Mortgage LLC on Monday agreed to pay the U.S. more than $4 million to resolve allegations that it approved mortgage loans for federal insurance that failed to meet Federal Housing Administration (FHA) standards. The settlement is the latest deal resulting from a federal crackdown on banks and mortgage companies that allegedly contributed to the financial crisis of 2008-2009. Federal prosecutors said the July 3 deal settles a False Claims Act lawsuit the U.S. government brought against Prospect Mortgage. According to the announcement, the California-based lender participated as a direct endorsement lender (DEL) in the Federal Housing Authority’s insurance program. ... Read More

Top whistleblower advises ‘talk to a lawyer’

A securities lawyer whose whistleblower case against J.P. Morgan led to the largest-ever settlement between the U.S. government and another entity told Financial News that it’s essential for any potential whistleblower to consult with a lawyer before doing anything. Alayne Fleischman, whose allegations that her former employer knowingly sold faulty mortgage investments that ultimately contributed to the 2008 financial crisis, is considered one of the most successful whistleblowers in the world. Rolling Stone described her as “J.P. Morgan’s worst nightmare” when her case against J.P. Morgan led to the record settlement, costing the financial giant $13 billion. Between 2006 and 2008, ... Read More

Whistleblower gets $300,000 award for providing tips to SEC

The Securities and Exchange Commission (SEC) has awarded a whistleblower $300,000 for exposing wrongdoing within a securities company. According to the SEC’s Office of the Whistleblower, the employee had audit and compliance functions within the company. The employee reported the misconduct to company supervisors repeatedly, but they failed to take appropriate action to correct the situation. The award is the first the SEC has given to a whistleblower with an audit and compliance role within a company. It comes amid a national debate on whether employees whose jobs involve monitoring company activity for regulatory and legal compliance should be permitted ... Read More

SEC announces record $30 million whistleblower reward

The U.S. Securities and Exchange Commission (SEC) said Monday that it will pay a whistleblower more than $30 million for providing the agency with original information that was key in helping secure a successful enforcement action and recovery. The award is the largest ever the SEC has paid to a foreign whistleblower and is the fourth award the regulator has paid to a whistleblower in a foreign country, demonstrating the international reach of the SEC’s Office of the Whistleblower since it opened in July 2010. “This whistleblower came to us with information about an ongoing fraud that would have been ... Read More

U.S. Attorney General Holder calls for better whistleblower rewards in financial industry

Whistleblowers who help expose fraud and other misconduct in the financial world could earn bigger rewards in the future in exchange for the efforts, if U.S, Attorney General Eric Holder has his way. Threats brewing in the financial industry today have come to resemble some of the dubious greed-driven behaviors that devastated the U.S. economy in 2008 despite the government’s efforts to prevent a similar catastrophe from recurring in the coming years. “We are already witnessing a troubling return to some of the very same profit-driven risk-taking that contributed to the 2008 collapse,” Mr. Holder said in a speech Wednesday ... Read More

Dodd-Frank whistleblower provisions don’t protect overseas whistleblowers, appeals court says

The anti-retaliation provisions of the Dodd-Frank Act do not protect whistleblowers outside the United States, a federal appeals court ruled last week, upholding the decision of a lower court that struck down a lawsuit filed by a Taiwanese national against Siemens AG. Liu Meng-Lin, a former compliance officer at Siemens China, sought the whistleblower protections afforded by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibit companies from retaliating against employees who call out fraud and other wrongdoing to federal regulators. Mr. Liu alleged that he was fired after he took his concerns over an alleged kickback ... Read More

Whistleblower receives nearly $70 million for exposing JPMorgan mortgage fraud

N.Y., N.Y. — A whistleblower who was instrumental in recovering $614 million for federal mortgage loan programs from JP Morgan Chase & Co. will receive $63.9 million as his share, according to a Reuters report. Louisiana resident Keith Edwards sued JP Morgan on behalf of the U.S. government in January 2013 under the qui tam or “whistleblower” provisions of the U.S. False Claims Act. Mr. Edwards worked for the banking giant from 2003 to 2008 as an assistant vice president. His responsibilities involved supervising a government insuring unit of the company. Mr. Edwards alleged that JP Morgan defrauded the government ... Read More

JPMorgan settles whistleblower’s allegations of mortgage fraud for $614 million

JPMorgan Chase & Co has agreed to pay the U.S. $614 million to resolve more False Claims Act allegations that it defrauded federal agencies by knowingly originating and underwriting substandard mortgage loans that failed to comply with federal insurance requirements, the Justice Department said on Tuesday. The settlement began with a whistleblower, Keith Edwards, who sued JPMorgan in January 2013 under the False Claims Act, an anti-fraud law that allows individuals to sue government contractors, suppliers, and other entities for defrauding taxpayers. In exchange, whistleblowers receive a percentage of the recovery in successfully argued cases. According to court documents, JPMorgan, ... Read More

JPMorgan, U.S. reach record $13-billion settlement over mortgage and securities fraud

The U.S. Justice Department announced Tuesday that it reached a record $13-billion agreement with JPMorgan Chase to resolve allegations that it knowingly sold faulty mortgage investments that contributed to the 2008 financial crisis. The settlement is the largest settlement between the U.S. government and a single entity in history, the Justice Department said, and the largest sum ever paid by an American company. As part of the settlement, JPMorgan admitted it made serious misrepresentations to the public, including the investing public, about its numerous mortgage-backed securities transactions. The resolution also requires JPMorgan to provide$4 billion in relief, included in the ... Read More

New SEC whistleblower office receiving better financial fraud tip-offs, Commissioner says

So far, so good was the message behind Securities and Exchange Commissioner Luis Aguilar’s assessment of the agency’s new whistleblower program, designed in response to the 2008 financial crisis to curb widespread financial fraud. Speaking to a panel of enforcement officials Thursday, Mr. Aguilar said that the SEC’s whistleblower office, established by the Dodd-Frank Act in 2010, has received nearly 3,000 tips from the U.S. and 45 foreign countries. But it’s not just the quantity of information pouring into the whistleblower office, it’s the quality as well. Mr. Aguilar said the incentives to report fraud and other wrongdoing have made ... Read More