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Schneiderman Intervenes in Bank of America MBS Settlement | FDL News Desk

New York Attorney General Eric Schneiderman has filed a motion to intervene in the $8.5 billion settlement between Bank of America and mortgage backed securities investors, calling the proposed settlement “unfair and inadequate,” and seeking to represent those investors who would be unrepresented at court but bound by the judgment. In addition, Schneiderman alleges “fraudulent and deceptive conduct” on the part of Bank of New York Mellon, the trustee in the case.

For background, BofA announced the settlement with investors in Countrywide mortgage backed securities back in June. Only 22 investors signed on to the settlement, but it would release BofA and its trusteee, Bank of New York Mellon, from liability on a broad range of violations of securities statutes, including the agreements made with investors, the representations and warranties contained within and overcharging of fees by BofA. This would apply to almost all Countrywide MBS. BofA promised the cash settlement (which amounts to about 3 cents on the dollar for these loans) and some changes to their servicing conduct. It was a sweetheart deal, and almost immediately, investors not part of the settlement started to object.

In the filing, Schneiderman writes that “BNYM (Bank of New York Mellon) stands to benefit from the settlement agreement and that the relief sought here appears designed to largely insulate BNYM from fiduciary duty claims arising from the settlement,” so there is no reason to believe that the trustee will act in the interests of the investors rather than in its own self-interest. Schneiderman also points out that the settlement is meager compared to the losses felt by investors on these MBS. In addition, he writes, “the purported servicing improvements are too vague and ill-defined to provide any concrete value to investors.”

Schneiderman, who had already sought documents in the settlement, cites as his rationale for intervening both New York common law interests to protect state investors, his executive authority to step in when “alleged misconduct touched many investors, many of whom are New York State residents,” and the fact that “a judgment in this proceeding may interfere with his ability to assert claims against BNYM, BoA, or Countrywide” in future cases. Indeed, with this filing, Schneiderman is making the basic claim that he has made against rushing to a settlement in the 50-state AG investigation: that he would not relinquish a liability claim against banks, servicers and trustees for their role in foreclosure fraud and securitization failures. Here’s the key section:

In addition, the Attorney General is entitled to intervene because a judgment in this proceeding may interfere with his ability to assert claims against BNYM, BoA, or Countrywide. Id. The proposed pleading in intervention submitted with the Attorney General’s motion includes counterclaims against BNYM for: (1) breach of fiduciary duty, brought in the Attorney General’s capacity as parens patriae; (2) violations of Executive Law § 63(12), which prohibits persistent fraud or illegality in the conduct of business; or (3) violations of General Business Law § 352 et seq. (the Martin Act), for fraud in connection with a securities transaction, summarized below. The Attorney General also has potential claims against Countrywide and BoA under the same or similar causes of action.

Schneiderman adds that “At this preliminary stage, the available facts surrounding the settlement suggest that the Trustee breached its fiduciary duties under New York State common law, in the course of administering the Trusts or in concluding the Settlement or both… And given that BoA negotiated the settlement with BNYM despite BNYM’s obvious conflicts of interest, BoA may be liable for aiding and abetting BNYM’s breach of fiduciary duty.”

That the Martin Act, a New York state securities law, has been invoked here is crucial. It is arguably a stronger regulation than federal securities law, because there is no need to demonstrate intent as part of the violation. Schneiderman is going right to the heart of the matter with his Martin Act claim. All of the securitization failures are alleged here:

The Trustee violated the Martin Act by misleading investors about its conduct in the Pooling and Servicing Agreements governing the Trusts (“PSAs”), which provided that the Trustee would review and ensure mortgage file integrity, alert investors to events of default, and take action where necessary to remedy breaches. To the contrary, the Trustee failed to ensure mortgage file integrity, failed to alert investors to events of default, and took no actions to remedy the disastrous collapse in value of the Trusts it was supposedly safeguarding.

Second, Countrywide and BoA face Martin Act liability because there are repeated false representations in the Governing Agreements that the quality of the mortgages sold into the Trusts would be ensured, that servicing would be conducted to ensure value for the investors, and the integrity and completeness of mortgage files would be maintained.

Finally, the Trustee aided and abetted these violations of the Martin Act by failing, to take any action to correct Countrywide’s misrepresentations, which the Trustee knew to be false or misleading and knew would be used to induce the sale of securities.

This is a major allegation. Schneiderman is saying that the game-playing with securitizations, which has been well-documented, represent violations of securities law on the part of the trustee and the originator of the loans. They knowingly sold junk to investors and violated their own agreements. And now they’re trying to whitewash it through a settlement where the bank and the trustee are colluding with one another. As Schneiderman says, “the Trustee stands to receive direct financial benefits under the Proposed Settlement.”

And here’s the real bombshell: Schneiderman alleges that Bank of New York Mellon was aware that Countrywide failed to transfer loans properly to the trust. This means they sold what amounted to non-mortgage backed securities to investors, who should then be granted the full value of these bonds back. The pooling and servicing agreements governing the loan transfers are very precise, and were violated in this case, according to the AG. As he writes:

These provisions are central to any mortgage securitization, but they are now vitally important to trust investors in light of the housing market collapse. Any action to foreclose requires proof of ownership of the mortgage. This must be demonstrated by actual possession of the note and mortgage, together with proof of any chain of assignments leading to the alleged ownership. Moreover, complete mortgage files give borrowers assurance that their properties are properly foreclosed upon. The failure to properly transfer possession of complete mortgage files has hindered numerous foreclosure proceedings and resulted in fraudulent activities including, for example, “robo-signing.” These fraudulent activities have burdened borrowers as well as the courts with flawed foreclosure proceedings.

I couldn’t have summed up foreclosure fraud better myself.

Here is the Memorandum in support of the Motion to Intervene, as well as a support document from Assistant Attorney General Amir Weinberg. And here is the pleading in the case, which makes for some interesting reading. And if you like, you can slog through this sample pooling and servicing agreement from Bank of New York Mellon, which shows you all the things they promised to do, and then neglected.

Schneiderman has really stepped up here. He is blowing the whistle on the entire whitewash of foreclosure and securitization fraud, and acting on behalf of his interests. All of these settlement efforts by other state and federal regulators should come to a screeching halt in light of this action. Because this is the kind of action that an Attorney General would not be able to take if they released claims against the big banks in a global settlement.

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Prosecutors File Motion to Drop DSK Charges

ADULTFRIENDFINDER FALSE ACCOUNT — REQUEST TO DELETE ACCOUNT “RM_TOMY44001”

August 22, 2001

Mr. Marc Bell — mbell@ffn.com
Ms. Lindsay Trivento — ltrivento@ffn.com

Dear Ms. Trivento and Mr. Bell:

A false account bearing the name “rm_tomy44001” has been created on one of your network, to wit, www.adultfriendfinder.com.

The false account was created while using (without our permission or knowledge) one of our email addresses. An attempt by our technical team to delete the account has failed, as it requires the original password.

As the account is still active, we ask FFN to forthwith delete the account. Once it is deleted, we kindly ask for a confirmation sent to lesliebrodie@gmx.com .

Thank you for the anticipated assistance and cooperation in this matter.

TLR

rm_tomy44001, do you really want to delete your Adult FriendFinder account?

rm_tomy44001, do you really want to delete your Adult FriendFinder account?

By deleting your account, you will miss out on the following benefits of Adult FriendFinder membership:

  • Find compatible romantic partners without having to spend time and money barhopping.
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Are you sure you want to completely delete your Adult FriendFinder account?

If you are experiencing difficulties with the Adult FriendFinder site, our customer service department is open for phone calls 7 days a week, 6AM-12:30AM PST. Please call Main Tel: +1 408 745 5400
Fax: +1 408 744 9370 to speak directly with a customer service representative. Otherwise, please confirm your decision below.

Harrasment Against The Leslie Brodie Report Escalates; False Account Created with TLR’S email at ADULTFRIENDFINDER.COM

Dear rm_tomy44001,

Your profile on Adult FriendFinder has been approved. Now, all of our members can view and respond to your profile. You’ll be connecting with tons of new and exciting people so login now to view your profile and begin viewing other member profiles.

To check out your profile and browse other member profiles go to http://adultfriendfinder.com.

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Sincerely,
The Adult FriendFinder Team

The Leslie Brodie Report states, here and now, that it has never created an account with ADULTFRIENDFINDER.COM .

Additionally, TLR has never used , and is otherwise not familiar, with the identity of “rm_tomy44001” .

First look at beaming bride Kim Kardashian just moments before she exchanges vows with Kris Humphries | Mail Online

Jamie Harley (AKA Jamie Harmon) Money Laundering Conviction Was Set Aside as Judge James Ware Grants New Trial

David Cameron takes a new break in Cornwall | Politics | guardian.co.uk

Rep. Maxine Waters: ‘The tea party can go straight to hell’

Safeguarding California’s judicial election process

Editorial

Safeguarding California’s judicial election process

The Legislature recently sent Gov. Jerry Brown a bill to modestly raise the bar for judicial write-in efforts. He should sign it.

Jason Novack of Arizona Citizens Against Photo Radar collects signatures to petition against photo radar. California AB 362 would modestly raise the bar for write-in campaigns against incumbent judges. (Andrea Bloom)

Jason Novack of Arizona Citizens Against Photo Radar collects signatures to petition against photo radar. California AB 362 would modestly raise the bar for write-in campaigns against incumbent judges. (Andrea Bloom)

August 21, 2011

In 2008, a Carson-based pastor tried to unseat six Los Angeles County Superior Court judges. He couldn’t get anyone to actually run against them, but he began a write-in campaign anyway by gathering the legally required 100 signatures, which forced the registrar of voters to make room for the six incumbents’ names on the already crowded ballot. That meant more ballot materials printed at additional taxpayer expense. The pastor, Ronald C. Tan, said he was striking a blow against abortion, gay marriage, evolution — and a lack of Filipino judges.

Last year, a man who was unhappy with a ruling against him in San Diego County Superior Court began a write-in campaign — again, by gathering the required 100 signatures — against every single judge on that court who was up for reelection. If the disgruntled litigant had persisted, even if he failed to actually get any real challengers to run, the names of 30 unopposed judges would have appeared, pointlessly, on the ballot. Registrar Deborah Seiler said that for the first time, her county would have had to present each voter with two ballot cards instead of one to make room for all the names. Taxpayers, again, would have had to foot the bill. Fortunately, the write-in effort was dropped before it got to that point.

The judicial election process in California is carefully crafted to provide a good balance between public oversight and accountability on the one hand and judicial independence on the other. The governor appoints most judges, but when vacancies go unfilled, qualified candidates can run for the job. Whether elected or appointed, judges are subject to recall, just like any other state elected official. At the end of a trial judge’s six-year term, challengers can force an election, and the name of the judge who wants to stay in office will appear on the ballot along with the other candidates. If no one files a challenge, the judge is deemed reelected, and his or her name doesn’t even go on the ballot. That’s a good thing, especially in a county the size of Los Angeles, where a third of the trial bench — between 130 and 150 judges — is up for new terms in every even-numbered year.

But judicial challengers have one more bite of the apple: They can mount write-in campaigns. They get 10 extra days after the filing deadline to target an incumbent judge. All they have to do is gather 100 signatures. The challenger’s name won’t go on the ballot — it is, after all, a write-in campaign — but the incumbent’s name will appear.

Californians should generally resist efforts to narrow their choices on election day, and should be wary of bills that make it harder to oust government officials. But judicial races are an exception. As the Los Angeles and San Diego examples show, it’s too easy for someone who isn’t running to force elections officials to fill up ballots, at substantial public expense, with the names of judges who aren’t even being challenged. The Legislature recently sent Gov. Jerry Brown a bill to modestly raise the bar for judicial (and some other) write-in efforts. He should sign it.

AB 362 by Assemblywoman Bonnie Lowenthal (D-Long Beach) would peg the signature requirement for judicial write-in elections in each county to the number of eligible voters in that county. In most counties, the requirement would remain at 100. But more signatures would be needed in larger counties: up to 600 in Los Angeles, Orange, Riverside, San Bernardino, San Diego and three Northern California counties.

In addition, the bill would require write-in candidates for judge — and for district attorney and sheriff (and several offices elected in other counties but not in Los Angeles: county auditor, county superintendent of schools, treasurer and tax collector) — to declare their eligibility for the office. That makes sense. Why should the county registrar bother expending taxpayers’ money to make ballot room for someone not legally eligible to take office?

To be eligible, judicial candidates must have been members of the state bar or served as a judge in California for the 10 years before taking office. A district attorney has to be a state bar member. A sheriff has to have particular law enforcement experience, education or certification.

Then-Gov. Arnold Schwarzenegger vetoed a similar bill last year on the grounds that it would limit the power of Californians to change their government. But that argument is off base. It would instead quite modestly limit a person’s ability to hijack the election process, at taxpayer expense, to harass a judge. Judges are and should remain subject to removal by recall and election defeat. They would remain subject to a write-in challenge. But the higher signature requirements may help dissuade people who have no intention or ability to bring forward an actual challenger from misusing the write-in option.

Copyright © 2011, Los Angeles Times

affableman at 10:09 AM August 21, 2011

Judges should be appointed, not elected.  That is if you want the best judges.

It would be nice to see a non-partison commission like the one we have now for redistricting appoint judges but outside of that then they should be appointed by the Governor with 60% approval required in the Legislature.

prosecutor at 12:19 AM August 21, 2011

Greg: I usually agree with you but I’m not going to this time.  If the judiciary could be guaranteed to have an appropriate view of it’s role in the separation of powers, I likely would agree with you. 

But you see (I may be a bit older than you) I recall the 1986 Supreme Court confirmation election, in which the voters wisely decided that three of the justices should not be confirmed for reelection.  Basically, those three had decided that they would not enforce a constitutionally valid death penalty statute, although they created a smokescreen of other excuses for that non-enforcement.  Then, during their campaign, they took your position and insisted that judicial independence was something that ought to protect them . . . i.e. that they were immune from the scrutiny of the electorate, whatever their actions. 

During my career as a prosecutor I made many appearances in the Federal courts, particularly in the Ninth Circuit.  As a result of those experiences, although I love the Constitution, I and many of my colleagues are convinced that the one major error made by the Founders was granting lifetime tenure to the Federal judiciary. 

GregMaragos at 6:52 PM August 20, 2011

Requiring judges to run for election is a bad idea that should be done away with.  They do go through a confirmation process once they are nominated.  It seems to me that the more we subject judges to the changing direction of political winds, the more “politically correct” rulings you’ll see.  This works out well if you are with the majority, but what about protecting the rights of minorities against the passions of an ill-informed, vindictive majority?

As concerns the California State Supreme Court, perhaps it would be best to do away with lifetime appointments and, instead,  enact term limits, perhaps 15 years or so, after which time a justice would be required to step down and a replacement would be nominated, subject to legislative confirmation.

Judges that are free from worrying about running for reelection/reconfirmation can more easily concentrate their thoughts and deliberations on matters concerning law, rather than achieving a desired political outcome necessary to protect one’s job.

Judges should not be the sort of creatures that survive by reading opinion polls.  They were meant to stand athwart popular opinion, when necessary, rather than bow to it. 

California’s dysfunctional politicians

Jews in a Whisper

IN his novel “Deception,” Philip Roth has the American protagonist say to his British mistress: “In England, whenever I’m in a public place, a restaurant, a party, the theater, and someone happens to mention the word ‘Jew,’ I notice that the voice always drops just a little.”

She challenges him on this observation, prompting the American, a middle-aged writer, to say, yes, that’s how “you all say ‘Jew.’ Jews included.”

This prompted a memory: sitting with my mother in an Italian restaurant in the upscale London neighborhood of St. John’s Wood circa 1970 and asking her, after she had pointed to a family in the opposite corner and said they were Jewish, why her voice dropped to a whisper when she said the J word.

“I’m not whispering,” Mom said and went on cutting up her spaghetti so it would fit snugly on a fork.

But she was — in that subliminal, awkward, half-apologetic way of many English Jews. My parents were South African immigrants. Their priority was assimilation. They were not about to change their name but nor were they about to rock the boat. I never thought much about why I left the country they adopted and became an American. It happened. One thing in life leads to another. But then, a year ago, I returned.

I was at my sister’s place and a lodger of hers, seeing I had a BlackBerry, said, “Oh, you’ve got a JewBerry.” Huh? “Yeah, a JewBerry.” I asked him what he meant. “Well,” he shrugged, “BBM — BlackBerry Messenger.” I still didn’t get it. “You know, it’s free!”

Right.

None of this carried malice as far I could see. It was just flotsam carried on the tide of an old anti-Semitism. The affable, insidious English anti-Semitism that stereotypes and snubs, as in the judgment of some gent at the Athenaeum on a Jew’s promotion to the House of Lords: “Well, these people are very clever.” Or, as Jonathan Margolis noted in The Guardian, the tipsy country squire commenting on how much he likes the Jewish family who just moved into the village before adding, “Of course, everybody else hates them.”

Of course.

Jewish identity is an intricate subject and quest. In America, because I’ve criticized Israel and particularly its self-defeating expansion of settlements in the West Bank, I was, to self-styled “real Jews,” not Jewish enough, or even — join the club — a self-hating Jew. In Britain I find myself exasperated by the muted, muffled way of being a Jew. Get some pride, an inner voice says, speak up!

But it’s complicated. Britain, with its almost 300,000 Jews and more than two million Muslims, is caught in wider currents — of the Israeli-Palestinian conflict and political Islam. Traditionally, England’s genteel anti-Semitism has been more of the British establishment than the British working class, whereas anti-Muslim sentiment has been more working-class than establishment.

Now a ferocious anti-Zionism of the left — the kind that has called for academic boycotts of Israel — has joined the mix, as has some Muslim anti-Semitism. Meanwhile Islamophobia has been fanned by the rightist fabrication of the “Eurabia” specter — the fantasy of a Muslim takeover that sent Anders Breivik on his Norwegian killing spree and feeds far-right European and American bigotry.

Where then should a Jew in Britain who wants to speak up stand? Not with the Knesset members who have met in Israel with European rightists like Filip Dewinter of Belgium in the grotesque belief that they are Israel’s allies because they hate Muslims. Not with the likes of the Jewish writer Melanie Phillips, whose book “Londonistan” is a reference for the Islamophobes. Nor with those who, ignoring sinister historical echoes, propose ostracizing Israeli academics and embrace an anti-Zionism that flirts with anti-Semitism.

Perhaps a good starting point is a parallel pointed out to me by Maleiha Malik, a professor of law at King’s College London. A century ago, during the Sidney Street siege of 1911, it was the Jews of London’s East End who, cast as Bolsheviks, were said to be “alien extremists.” Winston Churchill, no less, argued in 1920 that Jews were part of a “worldwide conspiracy for the overthrow of civilization and the reconstitution of society on the basis of arrested development.”

The lesson is clear: Jews, with their history, cannot become the systematic oppressors of another people. They must be vociferous in their insistence that continued colonization of Palestinians in the West Bank will increase Israel’s isolation and ultimately its vulnerability.

That — not fanning Islamophobia — is the task before diaspora Jews. To speak up in Britain also means confronting the lingering, voice-lowering anti-Semitism. When Roth’s hero returns to New York, he finds he’s been missing something. His lover, now distant, asks what.

“Jews.”

“We’ve got some of them in England, you know.”

“Jews with force, I’m talking about. Jews with appetite. Jews without shame.”

I miss them, too.

You can follow Roger Cohen on Twitter at twitter.com/nytimescohen.

Tensions rise as Latinos feel under siege in America’s deep south | World news | The Observer

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That is exactly right,” said Andrew Turner, a lawyer with the Alabama-based Southern Poverty Law Centre. “We view it within the context of the history of the deep south. It is using the law to push out and marginalise an ethnic minority.

Candlestick Park violence echoes Bryan Stow beating

Center for Class Action Fairness’ Ted Frank Assails the Los Angeles Daily Journal (Joke Included)

Center for Class Action Fairness
Center for Class Action Fairness

Contact: My email is gmail.com, and my username is tedfrank.

Snail-mail: 1718 M St NW #236 Washington, DC 20036

A Japanese internment camp revisited

Report: DSK lawyers may claim maid wanted to be paid for sex

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Dominique Strauss-Kahn’s lawyers may argue the hotel maid accusing him of sexual assault was just miffed the frisky Frenchman didn’t pay her for oral sex, according to a published report.

Read more: http://www.nypost.com/p/news/national/dsk_eyes_ex_claim_mag_says_RxWGGhYaCKiA…

News Desk: Crown Heights, Twenty Years After the Riots : The New Yorker

New York Prosecutors To Ask Court To Dismiss Charges Against Strauss-Kahn

In Schwab Inquiry, S.E.C. Sends Signal on Disclosure

Jan. 11, 2011 Securities and Exchange Commission Charges Schwab Entities and Two Executives With Making Misleading Statements; 2011-7; Jan. 11, 2011

SEC Charges Schwab Entities and Two Executives With Making Misleading Statements

Schwab Entities to Pay More Than $118 Million to Settle SEC Charges

FOR IMMEDIATE RELEASE
2011-7

Washington, D.C., Jan. 11, 2011 — The Securities and Exchange Commission today charged Charles Schwab Investment Management (CSIM) and Charles Schwab & Co., Inc. (CS&Co.) with making misleading statements regarding the Schwab YieldPlus Fund and failing to establish, maintain and enforce policies and procedures to prevent the misuse of material, nonpublic information. The SEC also charged CSIM and Schwab Investments with deviating from the YieldPlus fund’s concentration policy without obtaining the required shareholder approval.

The SEC also filed a complaint in federal court against CSIM’s former chief investment officer for fixed income Kimon Daifotis as well as Schwab official Randall Merk, who is an executive vice president at CS&Co. and was president of CSIM and a trustee of the YieldPlus and other Schwab funds. The SEC alleges that Daifotis and Merk committed fraud and other securities law violations in connection with the offer, sale and management of the YieldPlus Fund.

CSIM and CS&Co. agreed to pay more than $118 million to settle the SEC’s charges. The SEC’s case continues against the executives.

Robert Khuzami, Director of the SEC’s Division of Enforcement said, “All financial firms and professionals — including large mutual fund providers — must be vigilant in accurately describing the risks of the products they sell to the public, especially the widely-held mutual funds that are the bread-and-butter investments of retail investors.”

Antonia Chion, Associate Director of the SEC’s Division of Enforcement, said, “Schwab marketed the fund as a cash alternative with only slightly more risk than a money market fund even though, at one point, half of the fund’s assets were invested in private-issuer, mortgage-backed and other securities with maturities and credit quality that were significantly different than investments made by money market funds.”

The YieldPlus Fund is an ultra-short bond fund that, at its peak in 2007, had $13.5 billion in assets and more than 200,000 accounts, making it the largest ultra-short bond fund in the category. The fund suffered a significant decline during the credit crisis of 2007 and 2008. Its assets fell from $13.5 billion to $1.8 billion during an eight-month period due to redemptions and declining asset values.

According to an administrative order issued by the SEC against the Schwab entities and the SEC’s related complaints against the entities and the two executives filed in federal court in San Francisco, they failed to inform investors adequately about the risks of investing in the YieldPlus Fund. For example, they described the fund as a cash alternative that had only slightly higher risk than a money market fund. The statements were misleading because the fund was more than slightly riskier than money market funds, and the Schwab entities and Merk and Daifotis did not adequately inform investors about the differences between YieldPlus and money market funds.

The SEC found that the YieldPlus Fund deviated from its concentration policy when it invested more than 25 percent of fund assets in private-issuer mortgage-backed securities (MBS). Mutual funds and other registered investment companies are required to state certain investment policies in their SEC filings, including a policy regarding concentration of investments. Once established, a fund may not deviate from its concentration policy without shareholder approval. Schwab’s bond funds, including the YieldPlus Fund and the Total Bond Market Fund, had a policy of not concentrating more than 25 percent of assets in any one industry, including private-issuer MBS. The funds violated this policy, and the Investment Company Act, by investing approximately 50 percent of the assets of the YieldPlus Fund and more than 25 percent of the Total Bond Fund’s assets in private-issuer MBS without obtaining shareholder approval.

According to the SEC’s order and complaints, the YieldPlus Fund’s NAV began to decline and many investors redeemed their holdings as the credit crisis unfolded in mid-2007. Unlike a money market fund, few of the fund’s assets were scheduled to mature within the next several months. As a result, the fund had to sell assets in a depressed market to raise cash. While the YieldPlus Fund’s NAV declined, CSIM, CS&Co., Merk, and Daifotis held conference calls, issued written materials, and had other communications with investors that contained a number of material misstatements and omissions concerning the fund. For example, in two conference calls, Daifotis made false and misleading statements that the fund was experiencing “very, very, very slight” and “minimal” investor redemptions. In fact, Daifotis knew that YieldPlus had experienced more than $1.2 billion in redemptions during the two weeks prior to the calls, which caused YieldPlus to sell more than $2.1 billion of its securities. Similarly, Merk authored, reviewed and approved misleading statements about the fund, such as a false claim that the fund had a “short maturity structure” that “mitigated much of the price erosion” experienced by its peers.

The SEC also found that CSIM and CS&Co. did not have policies and procedures reasonably designed — given the nature of their businesses — to prevent the misuse of material, nonpublic information about the fund. For example, they did not have specific policies and procedures governing redemptions by portfolio managers who advised Schwab funds of funds, and did not have appropriate information barriers concerning nonpublic and potentially material information about the fund. As a result, several Schwab-related funds and individuals were free to redeem their own investments in YieldPlus during the fund’s decline.

Without admitting or denying the findings in the SEC’s order or the allegations in the SEC’s complaint, CSIM and CS&Co. agreed to pay a total of $118,944,996, including $52,327,149 in disgorgement of fees by CSIM, a $52,327,149 penalty against CSIM, a $5 million penalty against CS&Co., and pre-judgment interest of $9,290,698. Some of CSIM’s disgorgement may be deemed satisfied up to a maximum of $26,944,996 for payments made within the next 60 days to settle related investigations by FINRA or state securities regulators.

The SEC seeks to have payments placed in a Fair Fund for distribution to harmed investors, and the related recoveries by other regulators, such as FINRA, may be contributed to the Fair Fund. The payments and any Fair Fund are subject to approval by the U.S. District Court for the Northern District of California.

CSIM, CS&Co. and Schwab Investments also consented to an SEC order requiring them to cease and desist from committing or causing future violations of the federal securities laws. The SEC order also requires them to comply with certain undertakings, including correction of all disclosures regarding the funds’ concentration policy. In addition, the Commission censured CSIM and CS&Co., and required them to retain an independent consultant to review and make recommendations about their policies and procedures to prevent the misuse of material, nonpublic information.

In its order, the Commission found that:

  • CSIM and CS&Co. willfully violated anti-fraud provisions of the Securities Act of 1933, Sections 17(a)(2) and (3).
  • CSIM willfully violated anti-fraud provisions of the Investment Advisers Act of 1940, Section 206(4) and Rule 206(4)-8.
  • Schwab Investments willfully violated Section 13(a) of the Investment Company Act of 1940 by deviating from its concentration policy, and CSIM willfully aided and abetted and caused the violation.
  • CSIM and CS&Co. willfully aided and abetted and caused violations of the false filings provision of the Investment Company Act, Section 34(b).
  • CS&Co. violated Section 15(g) (formerly Section 15(f)) of the Securities Exchange Act of 1934, and CSIM violated Section 204A of the Advisers Act, both of which require policies and procedures that are reasonably designed, taking into consideration the nature of the entities’ businesses, to prevent the misuse of material, nonpublic information.

The SEC’s complaint against Daifotis and Merk alleges violations and aiding and abetting violations of the anti-fraud provisions of the Securities Act, Exchange Act, and Investment Advisers Act, including Section 10(b) and Rule 10b-5 of the Exchange Act, and other violations, including Sections 13(a) and 34(b) of the Investment Company Act.

Melissa Hodgman, David Mendel and Robert Cohen in the SEC’s Division of Enforcement conducted the investigation.  The SEC’s litigation against the executives will be led by David Gottesman and Frederick Block.  The SEC acknowledges the assistance of FINRA in this matter.

# # #

For more information about this enforcement action, contact:

Antonia Chion
Associate Director, SEC Division of Enforcement
(202) 551-4842

Robert A. Cohen
Assistant Director, SEC Division of Enforcement
(202) 551-4869

 

http://www.sec.gov/news/press/2011/2011-7.htm

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Modified: 01/11/2011

Missouri Lt. Governor Peter Kinder Linked to Former Penthouse Stripper Tammy Chapman | Mail Online

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The highest-ranking elected Republican in the state, and likely candidate for Governor, sought to extinguish the media brush fire that has swept the state since a picture of him with former Penthouse Pet Tammy Chapman first appeared in the Riverfront Times over a week ago.

“I met her on a trip to a club across the river that I should not have made, back something like 17 years ago,” Kinder said of Chapman.

The alleged strip club meetings ended, Chapman claims, when Kinder “became too aggressive,” and she asked him not to return.

Fast forward — Chapman tells KMOX she ran into the Lt. Governor earlier this year when she was bartending at Verlin’s Bar and Grill, which advertises its “pantsless parties,” in which waitresses are clad in underpants. Chapman says Kinder told her he was “lonely” and allegedly offered to let her live in his Brentwood condominium. Chapman claims she was not aware at the time that the condo is campaign-funded.

Dr. Tyron Reece, a 71-year-old general practitioner of the Los Angeles suburb of Inglewood has been charged in a conspiracy to smuggle prescription drugs from California to Mexico.

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Dr. Tyron Reece, a 71-year-old general practitioner of the Los Angeles suburb of Inglewood has been charged in a conspiracy to smuggle prescription drugs from California to Mexico.
Smugglers strapped pills to their bodies or hid them in engine compartments before crossing the border. Their favorite checkpoint was San Ysidro, the nation’s busiest crossing that connects San Diego and Tijuana. They usually crossed at night.

Last year Dr. Reece wrote nearly a million prescriptions for the painkiller hydrocodone.

Strauss-Kahn accuser mulls dropping case for money: report | Reuters

Meet Howard Rice’s Bernard Burk

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For 16 years Bernie Burk chaired Howard Rice’s Professional Responsibility and Risk Management Committee. He advises and defends attorneys and law firms on issues of legal ethics, conflicts of interest, fee disputes and legal malpractice, and regularly writes and lectures on these subjects.

The Leslie Brodie Report Launches Limited Journalistic Inquiry Into Matters Relating to the Charles Schwab Firm and Hugo Quackenbush Intimate Relationship with Ms.Shanel Stasz (Part 3)

Hugo Quackenbush  was an employee of the Schwab firm, a securities broker. He was a longtime friend of the firm’s founder, Charles Schwab.

From 1997 to 2000, Hugo Quackenbush and Shanel Ann Stasz had an intimate relationship. 

In May 2000 Shanel Stasz and Hugo Quackenbush entered  into a
settlement agreement.  Almost immediately, the parties began to disagree
about compliance with its terms, and Quackenbush initiated arbitration
proceedings to enforce the confidentiality clause of the agreement.  The
arbitrator issued an interim restraining order in November 2000.

In July 2001, Stasz executed a series of estate planning documents, including the Alta Loma Ultra Trust  dated July 10, 2001 (“Trust), a Private Annuity Agreement, and a quitclaim deed conveying her condominium located at West Hollywood, California (“Property”) to the Trust. 

The deed was recorded in November 2001. In September 2002 Quackenbush obtained a judgment against Stasz for approximately $1.5 million, confirming the arbitrator’s award.  That judgment was later determined nondischargeable by the bankruptcy court.
On 1 July 2005 Quackenbush sued Stasz  and  Carl E. Lovell, Jr., trustee of the Trust, in Los Angeles County Superior Court, seeking to set aside as fraudulent Stasz’s 2001 conveyance of the Property to the Trust.  

Stasz filed a chapter 7 petition on  13 October 2005.  The fraudulent conveyance action was removed to  the  bankruptcy court, and thechapter 7 trustee, Rosendo Gonzalez (“Trustee”), substituted as plaintiff.

Stasz received a discharge on March 6, 2007.  Gonzalez has spent the past five years endeavoring to collect and reduce to money the property of the estate.  His efforts have faced stiff opposition by Stasz.  Judge Ahart has made rulings as disputes between Gonzalez, Stasz, and other interested or affected parties have arisen during the administration of the case.  Gonzales ultimately submitted a final report as
trustee to the United States trustee.  In conjunction therewith, Gonzales and each of his
professionals, over Stasz’s objection, sought final allowance of the fees incurred and costs advanced on behalf of the estate. 

After Hugo Quackenbush has been embarrassed before his colleagues at work, one of whom (Charles Schwab) is a lifelong personal friend and has suffered personal humiliation, emotional anguish and anxiety in his personal and professional life, he passed away in 2007.

Subsequent to the death of Hugo Quackenbush,  Shanel Stasz filed an action alleging multiple causes of action on her claim to entitlement of property from the estate of Quackenbush. (SHANEL STASZ  v. MICHAEL EISENBERG)

On October 20, 2010, Stasz filed and served a Motion: (1) for Disqualification and/or
Recusal of Judge Alan M. Ahart; (2) to Set Aside All Rulings, Orders and Judgments in All
Proceedings in this Bankruptcy Case; (3) and for Disgorgement of All Funds and Fees Received by the Trustee and/or his Counsel or Accountant (“recusal motion”), together with a notice setting the matter for hearing on November 10, 2010.  Stasz’s motion sought not only a recusal of Judge Ahart, but an order setting aside all rulings, orders, and judgments entered in the bankruptcy case and related adversary proceedings and a disgorgement of all fees and expenses received by Gonzalez and his professionals.  

Gonzalez filed written opposition to the recusal motion on October 28, 2010, together with objections to Stasz’s declaration and request for judicial notice in support of the motion.  On November 3, 2010, Stasz filed Debtor’s Reply to Chapter 7 Trustee’s Opposition to Objection to Evidence; Trustee’s Objection to Debtor’s Request for Judicial Notice, and Debtor’s Motion: (1) for Disqualification and/or Recusal of Judge Alan M. Ahart; (2) to Set Aside All Rulings, Orders and Judgments in All Proceedings in this Bankruptcy Case; and (3) for Disgorgement of All Funds and Fees Received by the Trustee.

After a hearing on December 28, 2010, Stasz’s recusal motion was denied

The Leslie Brodie Report Launches Limited Journalistic Inquiry Into Matters Relating to the Charles Schwab Firm and Hugo Quackenbush Intimate Relationship with Ms.Shanel Stasz (Part 2)

Quackenbush  was an employee of the Schwab firm, a securities broker. He was a longtime friend of the firm’s founder, Charles Schwab.

From 1997 to 2000, Stasz and Quackenbush had an intimate relationship.   It came to a bitter end.  Quackenbush and Stasz decided to settle their disputes. Quackenbush was represented by counsel in negotiating a written settlement agreement. Stasz, who has a law degree, was also represented by counsel of her choosing. Several drafts of the agreement were exchanged. Effective May 1, 2000, Stasz and Quackenbush entered into a “Confidential Settlement Agreement and General Release” (settlement agreement or agreement).

After Hugo Quackenbush has been embarrassed before his colleagues at work, one of whom (Charles Schwab) is a lifelong personal friend and has suffered personal humiliation, emotional anguish and anxiety in his personal and professional life, he passed away in 2007.

Subsequent to the death of Hugo Quackenbush,  Shanel Stasz filed an action alleging multiple causes of action on her claim to entitlement of property from the estate of Quackenbush. (SHANEL STASZ  v. MICHAEL EISENBERG)

Defendants filed a motion to dismiss on the ground that costs and fees had not been paid by Stasz.  The suit was dismissed, and the order of dismissal was upheld  by an appealate court in 2010.

The Leslie Brodie Report Launches Limited Journalistic Inquiry Into Matters Relating to the Charles Schwab Firm and Hugo Quackenbush Intimate Relationship with Ms.Shanel Stasz (Part 1)

Quackenbush (who passed away in 2007) was an employee of the Schwab firm, a securities broker. He was a longtime friend of the firm’s founder, Charles Schwab.

From 1997 to 2000, Stasz and Quackenbush had an intimate relationship.   It came to a bitter end.

In 2000, he filed an action in San Francisco County Superior Court and obtained a temporary restraining order against her (Quackenbush v. Stasz (Super. Ct. S.F. City and County, 2000, No. FL 036974)).

She threatened to file a countersuit and embarrass Quackenbush by making public statements about him, Charles Schwab, and the Schwab firm. Stasz claimed to have found embarrassing information while going through Quackenbush’s personal papers and effects.(presumably, violations of SEC rules and regulations)

She intended to disclose that information generally to the public and also in connection with the pending and contemplated litigation.

Quackenbush and Stasz decided to settle their disputes. Quackenbush was represented by counsel in negotiating a written settlement agreement. Stasz, who has a law degree, was also represented by counsel of her choosing. Several drafts of the agreement were exchanged. Effective May 1, 2000, Stasz and Quackenbush entered into a “Confidential Settlement Agreement and General Release” (settlement agreement or agreement).

The settlement agreement obligated both parties to keep confidential the existence and terms of the agreement and the nature of their disputes. Stasz agreed to make no statement to any third person about Quackenbush, Charles Schwab, the Schwab firm, or the firm’s officers or directors, except that she could refer to the Schwab firm in nondisparaging terms.

Similarly, Quackenbush agreed to make no statement to any third person about Stasz. Both parties were allowed to state to others that they had been in a relationship together, had disagreements, and parted ways. Neither party was to contact or communicate directly with the other in any way, including by telephone, in person, or in writing. The parties were allowed to contact one another through counsel.

Under the agreement, Quackenbush was to pay Stasz $ 3,175,000, secured by a deed of trust on an apartment building he owned. An initial payment of $ 2.5 million was due when Stasz vacated an apartment in that building. Additional payments of $ 225,000 were to be made on the first, second, and third anniversaries of the agreement’s effective date, provided Stasz complied with all of the provisions of the agreement.

Stasz moved out of the apartment, and Quackenbush paid her $ 2.5 million. In the months that followed, Stasz contacted Quackenbush directly by telephone on several occasions. During some of the calls, Stasz said that, unless Quackenbush gave her more money, she would make statements to third parties that would embarrass him, his colleagues, and the Schwab firm. She also sent letters to the Schwab firm, discussing Quackenbush and the settlement agreement.

Shortly after commencing arbitration, Quackenbush filed an application with the AAA, seeking an interim restraining order against Stasz to stop her from committing further violations of the settlement agreement. The AAA [121 Cal.App.4th 426] appointed a retired superior court judge to serve as arbitrator and hear the application. While the application was pending, Stasz sent Quackenbush’s counsel a letter in which she threatened to file suit unless she was paid $ 50 million. A copy of a draft complaint was attached to the letter.

Stasz stipulated to the entry of an interim restraining order, which was issued on November 30, 2000. Over Stasz’s objection, the arbitrator made findings in issuing the order, concluding that the claims asserted in Stasz’s draft complaint had to be resolved through arbitration, not in court, and that some of the allegations, if made public, would violate the confidentiality provisions of the settlement agreement. The order directed Stasz to comply with the noncontact and confidentiality terms of the agreement.

On or about November 27, 2000, Stasz filed an action in Los Angeles County Superior Court (Stasz v. Quackenbush (Super. Ct. L.A. County, 2000, No. BS066549)) (Stasz I), challenging the validity of the arbitration provision in the settlement agreement. She brought a motion to “excise” the arbitration provision, asserting that it was unconscionable. By order dated January 17, 2001, the superior court, Judge Ronald Cappai presiding, denied the motion, finding that “the arbitration clause in the parties’ agreement [was] not … unconscionable, and [was] fully enforceable.” Stasz appealed. We affirmed the order in a nonpublished opinion (Stasz v. Quackenbush (Nov. 19, 2002, B147388)).

On June 25, 2001, Stasz filed a second action against Quackenbush (Stasz v. Quackenbush (Super. Ct. L.A. County, 2000, No. BC252954)) (Stasz II), alleging causes of action for invasion of privacy, breach of fiduciary duty, intentional infliction of emotional distress, fraud, and deceit. Stasz also sought injunctive relief. The complaint alleged that Quackenbush had contacted Stasz directly, asking her to modify the settlement agreement in certain respects, and that, when she refused, he threatened to embarrass her by publicly disclosing private information about her. The complaint was based on the same claims that had appeared in Stasz’s draft complaint–claims that, under the arbitrator’s interim restraining order, were to be pursued through arbitration, not in court.

On August 10, 2001, Quackenbush filed a motion to compel arbitration in Stasz II, relying on the arbitration provision in the settlement agreement. Stasz filed opposition papers. By order dated October 12, 2001, the trial court, Judge Marvin M. Lager presiding, granted the motion and stayed the action pending the outcome of arbitration.

In December 2001, Stasz filed an ex parte application in the trial court, seeking to stay the arbitration proceedings until the resolution of her appeal [121 Cal.App.4th 427] in Stasz I, which challenged the validity of the arbitration provision. The trial court denied the application. In June 2002, Stasz sought another stay on the same basis, failing again. Stasz also sought a stay from the arbitrator, who denied it.

 

On January 18, 2002, Stasz filed a third lawsuit (Stasz v. Schwab (Super. Ct. L.A. County, 2002, No. BC266691)) (Stasz III), alleging causes of action against, among others, Quackenbush’s attorneys, Charles Schwab, the Schwab firm, and the AAA. In the first cause of action, Stasz alleged that Quackenbush’s attorneys had committed fraud by using vague and ambiguous terms in negotiating and drafting the settlement agreement and, with the exception of one attorney, by pursuing an arbitration claim against her. In a cause of action denominated “tortious interference,” Stasz alleged that Quackenbush’s attorneys had interfered with her rights under the settlement agreement by filing vexatious litigation against her. In a cause of action for conspiracy to commit fraud, she asserted that all defendants had engaged in various wrongful acts in connection with the drafting of the settlement agreement and the handling of the arbitration proceedings. For example, she alleged that the AAA was biased against her and should have stayed the arbitration proceedings while she pursued an appeal in Stasz I In the final cause of action, for intentional infliction of emotional distress, the complaint alleged that defendants had engaged in outrageous conduct in causing Quackenbush to breach the settlement agreement.

 

Meet the Late Hugo Quackenbush — Charles Schwab Executive

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Hugo Quackenbush, was a longtime executive at Charles Schwab Corp. and one of the Financial District’s best-known personalities, has died in San Francisco at age 69 in 2007.

Mr. Quackenbush was a boyhood friend of Schwab namesake founder Yoloan Charles Schwab.

Mr. Quackenbush played a key role in promoting the company’s image as an advocate for individual investors.

Aviator Amy inspires new arts festival to reach for the sky – Art – Yorkshire Post

Art? We know what we like… – The Arts – Yorkshire Post

Racial Disparity in NIH grants: Science study finds white nearly twice as likely to receive funding than blacks

Corporate chicanery, government secrecy, and corruption in football: This week’s top MuckReads from ProPublica. – By Braden Goyette – Slate Magazine

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Sorry Miss China you’re just too Chinese… Eastern beauty shows Western promise in her bid to become Miss Universe | Mail Online

Lawyer for hotel maid suing DSK for sexual assault ‘offered to halt criminal case if civil settlement was reached’ | Mail Online

Longtime Lawyer’s Letter re Judge’s ‘Half-Baked Findings’ Results in Historic En Banc Hearing – News – ABA Journal

Longtime lawyer Kevin Gleason apparently saw red when a South Florida bankruptcy judge published an opinion earlier this year that called an argument Gleason made on behalf of a client “frivolous, absurd, and is not warranted by existing law.”

In response, Gleason, 54, fired off a letter to U.S. Bankruptcy Judge John Olson. “It is sad when a man of your intellectual ability cannot get it right,” the letter said, “when your own record does not support your half-baked findings,”

That letter has now resulted in a historic session in which Gleason appeared today before all seven bankruptcy judges for Broward, Miami-Dade and Palm Beach counties, to address what they called “the unprofessional and disrespectful tone” of his letter. It was the first such en banc hearing in the history of the jurisdiction, the South Florida Sun-Sentinel reports.

Gleason and Olson had clashed several times previously, and court records show that the judge had called Olson “negligent” and suggested that clients should sue him, the newspaper reports.

Gleason apologized profusely, especially to Olson, and offered to do pro bono work in atonement during today’s hearing. However, he also blamed the judge’s remarks for putting his firm “in shutdown mode” and told the group of judges, at one point, “I just don’t know how many times I’m supposed to take a punch.”

The bankruptcy judge panel plans to issue an opinion at a later date.

Earlier coverage:

ABAJournal.com: “Lawyer Accuses Judge of ‘Half-Baked Findings’ in Scathing Response to Sanctions Threat”

State sues lawyers who, it says, defrauded troubled homeowners

Calabasas Law Firm Sued by State for Alleged Fraud – Calabasas, CA Patch

A Calabasas law firm accused of bilking close to 2,500 distressed homeowners facing foreclosure was raided by the Department of Justice and other state authorities on Wednesday.

Nineteen DOJ agents helped seize computers, client files and 16 bank accounts from the offices of Kramer & Kaslow. The firm is being sued by State Attorney General Kamala Harris and the State Bar of California.

Harris alleges the firm fraudulently took money from clients in a so-called “mass joinder lawsuit” scam involving two other law firms and 14 other defendants that are named in the lawsuit.

The alleged scam began with the law firms sending deceptive mailers throughout the country to homeowners informing them that they were plaintiffs in a “national litigation settlement” against their lenders, according to a DOJ press release.

Harris said in the release that the law firms urged homeowners in California and 17 other states to pay up to $10,000 to join the class action lawsuit, but in reality attorneys treated plaintiffs’ cases separately.

Clients were frequently unable to receive answers to questions, a DOJ release read. The firms raised millions of dollars from their clients, according to the DOJ.

“Some consumers lost their homes shortly after paying the retainer fees demanded by defendants,” Harris said.

Kramer & Kaslow promised clients interest rates as low as 2 percent, principal reduction or elimination and financial damages in some cases, according to the lawsuit.

Those named in the suit are being charged with fraudulent and unfair business practices, unlawfully splitting legal fees with non-attorneys, and failing to register with the DOJ as a telephonic seller, according to the lawsuit.

Four attorneys are named in the lawsuit. Harris dubbed law firm owner Philip Kramer “the ringleader,” according to City News Service.

Kramer & Kaslow’s voicemail has been replaced with a new message from the California Bar Association that states clients’ files have been confiscated and how they can go about retrieving their documents.

City News Service reported that the firm could face tens of millions of dollars in fines, penalties and and restitution.

If you were a victim of this scam and a client of Kramer & Kaslow, please call a hotline set up by the California State Bar at 213-765-1672.

Check out the accompanying documents to view the lawsuit as well as a consumer alert about the scam.

City News Service was used in compiling this report.

Brother of Amber Alert Suspect Retracts Bizarre… | Gather

BBC News – Phone hacking: Police officer arrested over leaks

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AFP: Prince William and Catherine visit riot-hit Birmingham

Prince William and Catherine visit riot-hit Birmingham

(AFP) – 3 hours ago 

LONDON — Britain’s Prince William and his wife Catherine on Friday visited the Birmingham neighbourhood where three men were killed during the riots which rocked England last week.

The Duke and Duchess of Cambridge met the parents of the three men, who were of South Asian descent, who were killed when they were mown down by a car in the ethnically mixed Winson Green area of the city.

They also chatted to local residents at a community centre in Winson Green just a short distance from the spot where the men were killed on August 10 as they tried to protect shops and homes from looters.

The three victims — Haroon Jahan, 21, and brothers Shazad Ali, 30, and Abdul Musavir, 31 — were buried on Thursday after open-air funeral prayers attended by more than 20,000 mourners.

Tariq Jahan, the father of the youngest victim, emerged as a heroic figure as he defused growing tensions, making an impassioned plea to a group of angry men from the South Asian community who wanted to seek revenge.

The visit of William, the second in line to the throne, and his new wife to Birmingham is the third consecutive day of visits by the royal family to areas affected by the violence and looting last week.

His brother Prince Harry met emergency service workers in Manchester, northwest England, on Thursday and their father Prince Charles toured areas of London on Wednesday, including Tottenham where the violence began.

Copyright © 2011 AFP. All rights reserved. More »

BBC News – Analysis: Are courts acting out of character?

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S.F. Litigator Accused of Rape Has Active Employment Practice

Robert Michael Hoffman, a San Francisco plaintiff attorney jailed this month for allegedly sexually assaulting and beating several women, appears to run a bustling solo practice.

Attorneys who have worked opposite Hoffman say the sometimes intimidating litigator has focused on employment class action cases in recent years, along with his specialty in sex discrimination and harassment work. Court records show Hoffman or his firm, Hoffman Employment Lawyers, filed dozens of wrongful discharge and termination, employment, and fair labor standards actions against major corporations, including Federal Express, General Nutrition Corp., Wells Fargo Bank, and Red Robin International. He settled a class action against Warehouse Demo Services Inc. earlier this year for $3.3 million pending final court approval.

Hoffman, who is listed on the State Bar of California website as Michael Robert Hoffman, is being held in S.F. County Jail on $3 million bail, the San Francisco Chronicle reported Thursday.

The allegations include rape, sexual battery, forced oral sex and false imprisonment.

Hoffman’s attorney, Stuart Hanlon, said the women had come to Hoffman’s Van Ness Avenue apartment in response to advertisements for dominant-submissive sex. “These women voluntarily came to his house for sexual activity and it happened,” Hanlon said. “It’ll be determined [at trial] whether they actually said no in a way he understood. … There will be videos of some of these women having sex with him.”

Attorneys familiar with the 50-year-old Hoffman describe him as a tall man with an occasionally explosive personality. “He’s large and aggressive and rough in his interactions,” said one San Francisco lawyer who’s been opposing counsel in at least one employment case.

Another defense lawyer said Hoffman can be very charming. “He also can just become extremely angry in a very short period of time, then he goes back to being very charming,” the lawyer said.

Hoffman also gets some compliments for his legal work. “He’s an intelligent guy with some strategic sense,” said one defense attorney. One opposing counsel said Hoffman has some good cases and has recently notched big settlements. “He doesn’t browbeat people into settling,” one attorney who’s worked opposite Hoffman said.

Attorneys interviewed for this story said they were surprised at the allegations against Hoffman. The nature of them will likely damage his practice, lawyers note. “Regardless of whether he’s ultimately vindicated or not, I would expect this would have a significant impact on his ability to keep practicing law,” one said.

Hoffman earned his J.D. from Golden Gate University School of Law 20 years ago.

Despite his recent successes he appears to have had some financial troubles. Public records show that the IRS and other creditors have taken out liens against him in recent years.

Hanlon said he had knocked Hoffman’s bail down from $5 million to $3 million. He said Hoffman didn’t have the assets to post such a high amount. He added that it’s been a difficult??time for his client. “His legal career is on the ropes and his clients are upset, his children are devastated.”

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Handing Out Condom-Stuffed Acorns Does Not Rise to Judicial Misconduct – Law Blog – WSJ

By Nathan Koppel

unadulterated acorns

Pennsylvania state judge Isaac Stoltzfus landed in hot water earlier this year for an unusual reason: handing out hollowed-out acorns stuffed with condoms to two women.

The magistrate judge, who happens to be based in Intercourse, Pennsylvania, was attending a continuing education seminar last year when he encountered the women outside a state building as he was picking up acorns from the ground, according to this article in Lancaster Online. (HT: ABA Journal.)

The judge joked with the women and then reached into a bag and gave them each two acorns, which he previously had hollowed out and stuffed with condoms, Lancaster Online reports.

The episode resulted in a judicial misconduct complaint by the state’s Judicial Conduct Board, which alleged that Stoltzfus, who has been on the bench for 20 years, had brought “disrepute” to the bench.

According to the complaint, Stoltzfus told the women that the acorns “make a nice afternoon snack, try them. I’ll be here tomorrow, let me know what you think,” Lancaster Online reports

Stoltzfus, however, has been cleared of the misconduct charges.

The Pennsylvania Court of Judicial Discipline ruled that the incident did not rise to the level of an ethics violation.

Still, the court concluded that the judge had demonstrated a lack of good judgment that should not be repeated.

“We must say . . .his preoccupation with acorns is mystifying,” the court said in its ruling. “It is not funny, and we strongly disapprove.”

A spokeswoman for Stoltzfus told the Law Blog that the judge would not comment about the matter.

Starbucks pays $75k to dwarf Elsa Sallard fired from barista job | Mail Online

State of Montana Objection to Settlement in Fogel v Farmers BC300142 (Los Angeles Superior Court; Hon. William Highberger)

11-8-19 State of Montana Limited Objection to Motion for Final Approval.pdf Download this file

State of Montana Files an Objection to Proposed Settlement in Fogel vs. Farmers

The Leslie Brodie Report (TLR) is carefully following  developments relating to the case of Benjamin Fogel vs. Farmers Group, Inc. currently pending before the Los Angeles Superior Court.  We will provide coverage and post updates as they become available.

We have recently learned, the State of Montana filed has filed a formal objection to the settlement with the Los Angleles Superior Court.

 

For continuous updates, please visit:

http://lesliebrodie.blog.co.uk/2011/08/18/benjamin-fogel-vs-farmers-group-inc…

State Bar of Wisconsin | InsideTrack | Executive Committee takes up Keller at August meeting

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Under Keller v. State Bar of California, 496 U.S. 1 (1990), the State Bar cannot use compulsory dues of objecting members for activities that are not reasonably related to regulating the legal profession or improving the quality of legal services. The board approves an annual reduction of amount for members who object to certain bar expenditures as identified by the Executive Committee. The amount is approved by the Board of Governors using financial statements and activities for the State Bar’s most recently audited fiscal year. Therefore, FY 11 (July 2010 – June 2011) is used to calculate the amount of rebate available to objecting attorneys for the FY 13 fiscal year.

Have you ever had sex with Rick Perry?”

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Have you ever had sex with Rick Perry?” blares the ad, placed by Morrow in this week’s Austin Chronicle. “Are you a stripper, an escort, or just a ‘young hottie’ impressed by an arrogant, entitled governor of Texas? Contact CASH, and we will help you publicize your direct dealings with a Christian-buzzwords-spouting, ‘family values’ hypocrite and fraud.

Supreme Court of California Uphold Court of Appeal Decision Casting Doubt on on Ability of Howard Rice Candy Falk & Rabkin’s Sean SeLegue to Be Impartial Based on His Failure to Disclose the Nature of his Legal Practice.

*TLR urges the readers to exercise caution and not jump to conclusions regarding misconduct by Sean SeLegue. The Court of Appeal decision is predicated on how circumstances “appear” rather than real and actual bias on the part of Howard Rice’s Sean SeLegue.

A unanimous California Supreme Court declined to review a California First District Court of Appeal ruling that threw out an attorney fee arbitration award, according to an article appearing in today’s Metropolitan News Enterprise. See http://www.metnews.com/articles/2011/conf081811.htm

At issue was whether Sean SeLegue of Howard Rice Candy Falk & Rabkin — acting as an arbitrator – should have disclosed that he practices in the field of attorney-client fee disputes.

As was previously reported by The Leslie Brodie Report, ( http://tinyurl.com/doubtsoverseanselegue ), the California’s First District Court of Appeal ruled that the failure of SeLegue to disclose at the time of an arbitration (in which he served as arbitrator) that he generally defended attorneys and law firms in cases involving professional responsibility, and that he was actively representing a firm in a case before the California Supreme Court in a dispute over legal fees, created sufficient doubt as to SeLegue’s impartiality in his role as an arbitrator.

In a decision issued on October 12, 2010 in Benjamin, Weill & Mazer v. Kors (2010) 189 Cal.App.4th 126, Presiding Justice Anthony Kline expressed concern that the lack of full disclosure on the part of SeLegue, coupled with his business relationships with large law firms, might create unease regarding the possibility that SeLegue’s impartiality may be compromised by economic considerations in wishing to maintain a stream of “steady customers” – a reference to the law firms SeLegue normally represents in fee disputes.


Mr Sean SeLegue, director of Howard Rice’s litigation department and the firm’s Attorney Liability and Appellate Practice Groups. According to SeLegue’s profile, “Attorneys who face charges of misconduct – whether in a civil case for malpractice or malicious prosecution, in a disciplinary investigation by the State Bar or in a motion to disqualify – often turn to Mr. SeLegue and his colleagues in the Attorney Liability Group.” Recently, SeLegue as well as Jerome Falk, Shaudy Danaye-Elmi, and Noah Rosenthal represented Cameron and Tyler Winklevoss in their bid to rescind a prior settlement agreement the Winklevosses had entered into with Facebook. (Photo: Courtesy of Facebook)

Specifically, after a fee dispute erupted between Benjamin, Weill & Mazer and Dr. Kors, a firm client, the matter was referred to the Bar Association of San Francisco for mandatory arbitration. The arbitration panel, which included Sean SeLegue, issued a ruling in favor of the firm and against Dr. Kors.

A Superior Court judge adopted the ruling and issued a judgment against Kors, who promptly appealed.

In a written opinion, Kline found that SeLegue failure to inform the parties that he regularly represents law firms in fee disputes against clients and SeLegue’s involvement in such a case created “a doubt that the arbitrator would be able to be impartial.”

Specifically, the Court wrote:

“Kors is not seeking disclosure of all matters that might make her prefer a different arbitrator or asking us to depart from the standard of an objective person. Her contention is simply that an objective person could reasonably question the impartiality of an arbitrator in a dispute over legal fees who, at the time of the arbitration, was engaged generally in the defense of attorneys and law firms in cases involving professional responsibility and was actively representing a law firm in a case before the California Supreme Court involving a dispute over legal fees.”

“For the foregoing reasons, we conclude that upon his appointment SeLegue had a duty to timely disclose to the parties the nature of his legal practice, including the fact that he was then representing a law firm engaged in a fee dispute with a former client.”

According to SeLegue, “The reason people agree to binding arbitration in the first place is it’s cheaper, quicker, and more private. It’s only fair to enforce it,” he stated to the Civil Justice Blog.

The appellate court decision made no mention of the fact that Sean SeLegue and Noah Rosenthal of Howard Rice, as well as Diane Karpman and JoAnne Earls Robbins of Karpman & Associates, are all members of the Association of Discipline Defense Counsel.

According to the Association of Discipline Defense Counsel’s website, SeLegue practice area include: State Bar Defense, Ethics Advice, Expert Testimony, Civil Litigation Defense, Disqualification Motions, Appeals. JoAnne Earls Robbins’s practice area include: State Bar Discipline and Ethics Consultations. Click here to view a copy of the decision:
http://www.courtinfo.ca.gov/opinions/documents/A125732.PDF

For earlier stories involving Howard Rice Candy Falk & Rabkin, please visit:

http://tinyurl.com/doubtsoverjeromefalk

http://tinyurl.com/doubtsoverdougwinthrop

http://tinyurl.com/doubtsoverdougwinthrop1

http://tinyurl.com/doubtsoverdougwinthrop2

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  • Yet Another Unlicensed Contractor Debacle 2017/07/10
    This story is late in publishing because the AOC (ahem, the judicial council) spent months drawing out our requests for information on a simple inquiry they should have been able to deliver on the same day it was received because what scant information they did provide was readily available to them. But they dragged out […]
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  • Another Clifford Ham boondoggle in San Diego 2017/04/19
    More false promises of tunnels reaching out from jails to courthouses. Don’t say we didn’t tell you so because we’ve stated many times that ALL tunnel promises are false promises made to win local support of the projects and penciled out upon approval. What we find most disturbing is that Clifford Ham has a track […]
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  • Writing our obit is a bit premature… 2017/04/06
    Welcome to 2017! Yeah, we know, a bit of time has passed since we’ve been hyperactive here. We’ve been a bit busy frying other fish.  If you consider yourself a progressive, you’ve already read and possibly even recognized our work elsewhere. We will be continuing those projects and check in here as not to neglect […]
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  • Welcome to the first business day of our reinvigorated 10 year run! 2017/01/02
    Thanks to the sheer incompetence of Judicial Council staff leadership, we’re going to be spending the next ten years nipping at their heels. Last week, the San Francisco trial court ruled that the Jacobs entities maintained their contractors license and that the 22.7 million that the Judicial Council should have been able to recover is […]
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  • Working for the Judicial Council and a pattern of racketeering activity 2016/10/31
    The Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act or simply RICO, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization. The RICO Act focuses specifically on racketeering, and it allows […]
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