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October 17, 2024
CFPB Sues Vocational School Lender Climb Credit, VC Backer
The Consumer Financial Protection Bureau on Thursday sued an online private student lender and its venture capital backer in New York federal court, alleging borrowers have been duped into taking out loans for coding school and other vocational programs with false claims about their educational "return-on-investment."
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October 17, 2024
Tulsa Massacre Survivors Want Accountability In DOJ Review
The federal government, in its first probe into one of the deadliest episodes of mass racial violence in the country's history that came during a period of Black affluence in an Indian Country community, is asking the public to come forward with more information that can help its review.
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October 17, 2024
Rocket Investors Eye New Cert. Bid After Post-Goldman Denial
A pension fund has asked a Michigan federal judge for another chance at class certification in a suit alleging Rocket Cos. hid its knowledge of a drop in its mortgage business, saying the new class would be "substantially narrowed" after certification was previously denied in light of a recent U.S. Supreme Court decision.
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October 17, 2024
Lender Says Denver Property Owner Defaulted On $27M Loan
A lender told a Colorado state court that it wants a Denver retail property to be placed in receivership after the owner allegedly defaulted on a $27.1 million commercial mortgage loan this month.
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October 17, 2024
Neobank Execs Want Out Of Cannabis Co.'s $127K Suit
The former directors of a defunct, cannabis industry-focused neobank are looking to kill a suit brought against them by Killa Bees Distribution LLC, a CBD company which claims in Oregon federal court that executives should be held liable for the nontraditional financial institution's failure to produce nearly $127,000 in deposits.
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October 17, 2024
Treasury Unit Says Booze Maker Violated N. Korea Sanctions
The U.S. Department of the Treasury's Office of Foreign Assets Control said Thursday that it has reached an $860,000 settlement with a Vietnam-based alcoholic beverage company over its alleged role in allowing U.S. financial institutions to process $1.1 million in payments to North Korea, violating sanctions regulations.
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October 17, 2024
Feds Arrest Man In SEC X Account Hack Touting Bitcoin ETF
An Alabama man was arrested Thursday on federal charges tied to the January hack of the U.S. Securities and Exchange Commission's X account, which caused bitcoin prices to spike after a phony post falsely touted that the agency had approved bitcoin exchange-traded products, federal authorities said.
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October 17, 2024
Ex-CEO Of Credit Union Blames Accounting Firm For Firing
The dismissed chief executive officer of a Connecticut credit union is suing the financial institution and Whittlesey PC, its accounting firm, claiming he was fired after following advice from the largest CPA group in the state on when to calendar a $1.2 million gain connected to a property sale.
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October 17, 2024
3rd Circ. Undoes Arbitration Denial In Experian Row
The Third Circuit on Thursday clarified its standard for when courts should order discovery into whether a dispute should be arbitrated, in an opinion that said a New Jersey woman had admitted she signed an arbitration agreement with an affiliate of Experian that could apply to her Fair Credit Reporting Act lawsuit.
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October 17, 2024
Restaurant Says Toast Refusing To Update Bank Info
A Boston restaurant says it's struggling to stay afloat because point-of-sale provider Toast Inc. won't update its banking information and is sitting on more than $200,000 in revenue, according to a lawsuit filed Thursday in Massachusetts state court.
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October 17, 2024
FTX Insider Cites 'Limited' Fraud Role In Bid To Avoid Prison
The former head of engineering at FTX asked a Manhattan federal judge to spare him prison time in light of his cooperation with prosecutors and what he said was a relatively "limited" role in the crypto exchange's billion-dollar fraud.
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October 16, 2024
TD Bank's $3B AML Deal Sparks Scrutiny Of Its Oversight
The long-standing, widespread compliance failures at the root of TD Bank's blockbuster $3 billion U.S. anti-money laundering settlement last week have stunned experts and brought tough punishment for the Canadian bank — but they're also raising questions about why regulators didn't act sooner.
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October 16, 2024
$3.6M Ruling Against Merchant Cash Advance Co. Reversed
An Ohio appellate court on Wednesday reversed a trial court's ruling allowing First Financial Bank to recover roughly $3.6 million from a merchant cash advance company, ruling — in a matter of first impression — that under Ohio law, a transferee of funds from a deposit account is protected from conversion claims unless collusion is involved.
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October 16, 2024
NY's Financial Regulator Releases AI Cybersecurity Guidance
New York's Department of Financial Services issued new guidance Wednesday intended to give state-regulated financial institutions an outline for protecting against cybersecurity risks posed by artificial intelligence.
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October 16, 2024
Chinese AI Co. Hit With Investor Suit Over Nasdaq Compliance
China-based artificial intelligence company Xiao-I Corp. was hit with a proposed investor class action in New York federal court alleging it downplayed increasing research and development costs that it was incurring, increasing the likelihood that it would fail to comply with the Nasdaq Stock Market's minimum price requirement after going public.
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October 16, 2024
3rd Par Funding Exec Admits To Racketeering In $100M Scam
The last member of the triumvirate behind Par Funding, a cash advance company that federal prosecutors say bilked investors out of $100 million, pleaded guilty to racketeering in Pennsylvania federal court Wednesday, just weeks before he was scheduled to stand trial.
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October 16, 2024
Banks Ditch Exchange's Boycott Conspiracy Suit At 2nd Circ.
The Second Circuit on Wednesday rejected a small trading exchange's effort to revive its claims that several major banks conspired to shut it out of the credit default swap market, saying the exchange failed to plausibly allege that the banks' conduct was the result of an unlawful agreement or conspiracy.
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October 16, 2024
Lender To Pay $10M To Settle Birmingham Redlining Claims
The Consumer Financial Protection Bureau and the U.S. Department of Justice said a mortgage lender the agencies accused of redlining in Birmingham, Alabama, will pay nearly $10 million and open a loan office in a majority-Black neighborhood to resolve the claims.
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October 16, 2024
Key Bank Blocking Hunt For Apt. Co-Op's $1.3M, Towns Say
Key Bank NA should be held in contempt of court because four insurance checks totaling $1.3 million seem to have vanished from a troubled housing co-op's accounts, and the bank is preventing a receiver in charge of the 924-unit Success Village Apartments from figuring out what happened, two Connecticut municipalities have said.
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October 16, 2024
2 SDNY Terror Finance Cases Against Binance Stay Separate
Two suits claiming Binance unlawfully fostered terrorist activity, filed in the wake of the cryptocurrency platform's $4.3 billion settlement with the U.S. Department of Justice, will proceed separately in the Southern District of New York, a Manhattan federal judge said Wednesday.
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October 16, 2024
Ex-BigLaw Partner Gets 16 Months For Tax Evasion
A former partner at Husch Blackwell LLP and Dykema Gossett PLLC who pled guilty to refusing to pay taxes on millions of dollars in income was sentenced to 16 months in prison.
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October 15, 2024
CFPB Funding Shouldn't Stop Texas' Fraud Suit, Judge Says
A Houston federal magistrate judge has endorsed allowing the state of Texas to proceed with a real estate fraud suit against land developer Colony Ridge, rejecting objections tied in part to the Consumer Financial Protection Bureau's funding from Federal Reserve "earnings."
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October 15, 2024
Santander Settles Investors' Squeeze-Out Suit For $162.5M
Santander Consumer USA Holdings Inc. has agreed to shell out $162.5 million to put to rest stockholders' consolidated class action challenging a $2.5 billion minority squeeze-out merger, according to a stipulation filed Monday in Delaware's Court of Chancery.
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October 15, 2024
In Pivot, 5th Circ. Gives CFPB Extension In Exam Policy Case
The Consumer Financial Protection Bureau can take an extra two weeks to file a brief with the Fifth Circuit in its closely watched appeal of a ruling that struck down the agency's anti-bias examination policies, the circuit court has decided.
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October 15, 2024
Kirkland-Led Boeing Seeks Up To $35B Amid Labor Strike
Boeing notified regulators on Tuesday of plans to raise up to $35 billion through securities offerings and a credit agreement, guided by Kirkland & Ellis LLP, as the aviation giant seeks access to cash amid a prolonged strike and production cuts.
Expert Analysis
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Amid SEC Rule Limbo, US Cos. Subject To ESG Regs In EU
Though the U.S. Securities and Exchange Commission is facing legal challenges to its climate-disclosure rulemaking, the implementation of the Corporate Sustainability Reporting Directive in the European Union will force U.S. companies to comply with exactly the kinds of ESG disclosures that are not yet mandated in the U.S., say attorneys at Squire Patton.
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How Law Firms Can Avoid 'Collaboration Drag'
Law firm decision making can be stifled by “collaboration drag” — characterized by too many pointless meetings, too much peer feedback and too little dissent — but a few strategies can help stakeholders improve decision-making processes and build consensus, says Steve Groom at Miles Mediation.
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Banking Compliance Takeaways From Joint Agency Statement
Federal bank regulatory agencies’ recent joint statement warning of risks associated with third-party fintech deposit services spotlights a fundamental problem that may arise with bank deposit products that are made through increasingly complex customer relationships, says Tom Witherspoon at Stinson.
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Opinion
Litigation Funding Disclosure Key To Open, Impartial Process
Blanket investor and funding agreement disclosures should be required in all civil cases where the investor has a financial interest in the outcome in order to address issues ranging from potential conflicts of interest to national security concerns, says Bob Goodlatte, former U.S. House Representative for Virginia.
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Regulators Are Revamping Use Of Bank Service Company Act
Excerpt from Practical Guidance
Though the Bank Service Company Act was written six decades ago, banks and service providers should be alert to the evolving ways financial regulators are using the law as a tool for scrutinizing bank-fintech partnerships and third-party service providers that could put consumers at risk, say James Bergin and Paul Lim at Arnold & Porter.
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Managing Credit Card Rewards Programs Amid Scrutiny
Renewed New York and federal interest in consumer protection issues associated with credit card rewards programs presages future regulatory enforcement and attention from plaintiffs attorneys, so issuers should focus on certain categories of consumer complaints and some compliance ambiguities, say Rich Zukowsky and Ella Beres at Davis Wright.
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Whistleblowers Must Note 5 Key Differences Of DOJ Program
The U.S. Department of Justice’s recently unveiled whistleblower awards program diverges in key ways from similar programs at other agencies, and individuals must weigh these differences and look first to programs with stronger, proven protections before blowing the whistle, say Stephen Kohn and Geoff Schweller at Kohn Kohn.
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What NFL Draft Picks Have In Common With Lateral Law Hires
Nearly half of law firm lateral hires leave within a few years — a failure rate that is strikingly similar to the performance of NFL quarterbacks drafted in the first round — in part because evaluators focus too heavily on quantifiable metrics and not enough on a prospect's character traits, says Howard Rosenberg at Baretz+Brunelle.
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CrowdStrike Incident Highlights Third-Party Risk For Banks
The global business disruptions caused by CrowdStrike's faulty software update last month serves as a reminder that banks should assess operational and compliance risks associated with third-party service providers and create resiliency plans extending down to fourth- and fifth-level providers, says Craig Landrum at Jones Walker.
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Open Questions 3 Years After 2nd Circ.'s Fugitive Ruling
The Second Circuit’s 2021 decision in U.S. v. Bescond, holding that a French resident indicted abroad did not meet the legal definition of a fugitive, deepened a circuit split on the fugitive disentitlement doctrine, and courts continue to grapple with the doctrine’s reach and applicability, say attorneys at Lankler Siffert.
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Replacing The Stigma Of Menopause With Law Firm Support
A large proportion of the workforce is forced to pull the brakes on their career aspirations because of the taboo surrounding menopause and a lack of consistent support, but law firms can initiate the cultural shift needed by formulating thoughtful workplace policies, says Barbara Hamilton-Bruce at Simmons & Simmons.
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Crypto Regs Could See A Reset Under The Next President
Donald Trump has taken a permissive policy stance favoring crypto, while Kamala Harris has been silent on the issue, but no matter who wins the presidential election, we may see a more lenient regulatory climate toward the digital currency than from the Biden administration, says Liam Murphy at McKool Smith.
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Planning Law Firm Content Calendars: What, When, Where
During the slower month of August, law firms should begin working on their 2025 content calendars, planning out a content creation and distribution framework that aligns with the firm’s objectives and maintains audience engagement throughout the year, says Jessica Kaplan at Legally Penned.
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Key Concerns To Confront In FDIC Brokered Deposit Proposal
Banks and fintech companies should note several fundamental issues with the Federal Deposit Insurance Corp.'s recent proposal to widen how it classifies brokered deposits, an attempt to limit prudential risk that could expose the industry and underbanked consumers who rely on bank-fintech apps to widespread unintended consequences, say attorneys at Gibson Dunn.
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4 Steps To Address New Sanctions Time Bar Extension
Recent guidance from the Office of Foreign Assets Control clarifies details of the newly extended statute of limitations for civil and criminal enforcement of U.S. sanctions law, so compliance teams should implement key updates, including to lookback periods and recordkeeping policies, say attorneys at Freshfields.