Bank of America fails to end U.S. mortgage fraud lawsuit as trial nears (Reuters)
The U.S. government lawsuit accusing Bank of America Corp (NYSE:BAC) of fraudulently selling toxic mortgage loans to Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) appears on track to go to trial next month after a judge rejected the bank’s bid to dismiss the case. In an order made public on Tuesday, U.S. District Judge Jed Rakoff in Manhattan said there are “genuine factual disputes” involving at least one of the government’s theories to warrant letting the case continue against the second-largest U.S. bank. He said he will explain his reasons in due course. Rakoff’s order clears the way for the case to proceed toward trial, which is scheduled for September 23.
JP Morgan told to pay Blavatnik $50m in damages (BBC News)
JPMorgan Chase & Co. (NYSE:JPM) has been ordered to pay Russian billionaire Leonard Blavatnik $50m after losing a claim for damages. Mr Blavatnik brought the claim against the investment bank after suffering losses following the collapse of the US subprime mortgage market. New York judge Melvin Schweitzer ruled that JP Morgan breached its contract with Mr Blavatnik’s investment fund. But he rejected a claim for negligence because at the time the investments were considered “reasonable”.
Wells Fargo sets hiring goal of 5,000 workers (San Antonio Business Journal)
Wells Fargo & Co (NYSE:WFC) will hire between 5,200 and 5,500 people nationwide in the company’s brokerage, private banking and retirement businesses. Most of the new hires will serve to fill vacancies created by attribution. Separately, Wells Fargo officials said the company will cut 2,323 mortgage-related jobs. However, none of those positions were in San Antonio.
Bank of America Corp (BAC), American International Group Inc (AIG): What Fairholme Fund’s Reopening Means for These Stocks (Insider Monkey)
Fairholme saw a huge defection of investors from its fund in 2011, when it posted abominable performance due to big bets on financial stocks that turned out to be short-term losers. Bank of America Corp (NYSE:BAC) ended up needing to ask Warren Buffett for a big infusion of capital, while insurance giant American International Group Inc (NYSE:AIG) took longer than expected to get its own asset sales and corporate restructuring done. Even though the fund rebounded sharply last year, its investors still withdrew billions of dollars, making its closure seem somewhat unnecessary. But what the closure did suggest was that Bruce Berkowitz no longer saw Bank of America Corp (NYSE:BAC) and American International Group Inc as a compelling source of strong future investment returns.
Former JPMorgan Trader arrested (USFinancePost)
A former trader for JPMorgan Chase & Co. (NYSE:JPM) that had been wanted by the United States was arrested in Madrid on Tuesday, according to Spanish police. Javier Martin-Artajo, 49, was wanted for allegedly falsifying bank documents in order to cover up a $6 billion loss in trading. Authorities issued a statement that said he turned himself in to police after he was located and asked to turn himself in. Earlier in August, U.S. prosecutors filed charges against Martin-Artajo and Julien Grout, another former trader for the company. The two have been accused of marking up the market value of an investment portfolio in order to conceal the true value, which was plummeting. Eventually, the portfolio incurred JPMorgan Chase & Co. (NYSE:JPM) a $6 billion loss.