BOA’S MERRILL LYNCH PAYS ANOTHER $10 MILLION FOR FRAUD

ONE ON ONE WITH NEIL GARFIELD ONE ON ONE WITH NEIL GARFIELD

COMBO ANALYSIS TITLE AND SECURITIZATION

EDITOR’S COMMENT: Amazing how the owner of Merrill, BOA, is not mentioned in the news articles. How many times do we have to hear admissions of fraud from the investment bankers that started this thing to conclude that maybe they were not quite so honest with homeowners who signed mortgage papers, the reading of which could make anyone delirious?

Why are homeowners who assert legitimate defenses immoral and the people who commit fraud on Wall Street just businessmen who went too far?

WHEN ARE WE GOING TO GET THIS RIGHT?

Merrill Lynch Settles S.E.C. Fraud Case

By BEN PROTESS

6:24 p.m. | Updated

Merrill Lynch agreed to pay $10 million on Tuesday to settle fraud accusations by securities regulators.

The Securities and Exchange Commission had accused Merrill of fraud, saying that the firm misused private information from its customers to place trades on its own behalf and that the firm repeatedly charged its customers trading fees without their knowledge.

“The conduct here was clearly inappropriate,” Scott W. Friestad, the agency’s associate director for enforcement, said in a statement. “Investors have the right to expect that their brokers won’t misuse their order information.”

Bank of America acquired Merrill in January 2009. The S.E.C. said the conduct took place before the merger.

Merrill has since adopted “a number of policy changes,” Bill Halldin, a Bank of America spokesman, said in a statement. Mr. Halldin added that the policy changes, which include enhanced training and supervision, “address the S.E.C.’s concerns.”

The agency’s charges stem from Merrill’s equity strategy desk, which ran the firm’s proprietary trading operation from 2003 to 2005. A firm’s proprietary trading desk executes trades solely for the benefit of the firm.

Merrill’s proprietary traders received tips from colleagues on the firm’s market-making desk about confidential customer trade orders, according to the S.E.C. The proprietary traders then used the information to place trades on the firm’s behalf.

“In doing so, Merrill misused this information and acted contrary to its representations to customers,” the S.E.C. said in a statement.

The conduct does not amount to so-called front-running, because Merrill placed its own trades after executing the customers’ trades.

Merrill closed the equity strategy desk in early 2005, according to Mr. Halldin. The firm did not admit or deny any wrongdoing.

The S.E.C.’s accusations also cover undisclosed fees that Merrill charged its customers from 2002 to 2007. According to the agency, Merrill charged select wealthy customers fees based on “prices less favorable to the customer than the prices at which Merrill purchased or sold the securities.”

“Charging these undisclosed mark-ups and mark-downs was improper and contrary to Merrill’s agreements with its customers,” said Robert B. Kaplan, the co-chief of the agency’s asset management unit.

27 Responses

  1. And like I said before and all along they’re using judges’ invested financial risk as incentive and leverage to influence EVERY ruling judges make. Which combined with unconstitutional ‘judicial legislation’ = JUSTICE DENIED

  2. DyingTruth,

    Yes — but, problem is courts are not buying that pools are empty. They are starting to buy non-conveyance. Maybe – after all courts understand non-conveyance — they will start to look at entire picture. But, that is not our problem — our problem is convincing ALL courts that the foreclosure is fraudulent. Unless someone can convince authorities of empty pools — it will be difficult for individuals to convince a court.

  3. […] This post was mentioned on Twitter by Wanta Freedumb, Teri Sherwood. Teri Sherwood said: Bank of Americas MERRILL LYNCH PAYS ANOTHER $10 MILLION FOR #FRAUD: http://t.co/LWyX3W9 #Corruption […]

  4. ANONYMOUS,
    Haven’t we already covered this area? Nobody assigned Anything to the Trusts, the pools are empty. Furthermore, the originators didn’t endorse assignments of the notes to the Trusts, nor did they ever show any intention to do so. They assigned them to “[blank]” and “[blank]” can’t assign anything to anyone (let alone the Trusts) because “[blank]” doesn’t exist and neither do the obligations because they were endorsed “Pay to the order of “[blank]” without recourse”. So we are obliged to Pay No One.

  5. Homeowners’ Motto for 2011: MODIFY, BUT ALSO NULLIFY!

    Following the old adage of “Trust, But Verify” I propose a new slogan for homeowners in 2011 in response to the foreclosure crisis: Modify, But Also Nullify.”

    Nullify your mortgages (deeds of trust) during or before the “loan modification” scam process.

    http://bryllaw.blogspot.com/2011/01/homeowners-motto-for-2011-modify-but.html

  6. 18 NOTARIES TAKE THE FIFTH!! DO NOT WANT TO ANSWER.

    http://www.scribd.com/doc/47682943/NOTARIES-TAKING-THE-FIFTH-DUE-TO-FORECLOSURE-DOCUMENT-FRAUD

  7. […] be proven right before SOMETHING gets done?  Yet again a big bank, a too big to fail (TBTF) bank, gets caught redhanded and goes “Oops, you got us!”. When, oh when, is this going to change? This […]

  8. Brian Davies,
    you are doing an excellent job monitoring and disseminating pleadings in federal courts. Keep it up. Information sharing among all of us is what’s going to kill the banks (i.e., allow us to hold them accountable).

    Also, it would be good to set up a website serving as a data bank for bogus endorsements and assignments. Especially endorsements, since assignments present much easier challenges as it is.

  9. New rules for securitization going forward. But, no way to get this information on past securitizations – WHICH WE NEED..

    SEC Issues New Rules For Bundled Mortgages and Asset-Backed Securities To Increase Transparency
    Tuesday, January 25, 2011 4:04

    The Securities and Exchange Commission on January 2oth voted to adopt two sets of new rules designed to help revitalize the important asset-backed securities (ABS) market by encouraging better disclosure for investors.

    Video: Open Meeting
    Play video of SEC Chairman Schapiro discusses asset-backed securities
    Chairman Schapiro discusses asset-backed securities:

    Additional Materials

    * Final Rule: Disclosure for Asset-Backed Securities Required by Section 943 of the Dodd-Frank Wall Street Reform and Consumer Protection Act

    * Final Rule: Issuer Review of Assets in Offerings of Asset-Backed Securities

    The SEC approved one set of rules that requires issuers of asset-backed securities to disclose the history of the requests they received and repurchases they made related to their outstanding asset-backed securities.

    The Commission also approved a second set of rules that would require issuers of asset-backed securities to conduct a review of the assets underlying those securities.

    “At one time, the securitization market provided trillions of dollars of liquidity to virtually every sector of the economy. However, during the financial crisis, ABS investors suffered significant losses, causing the market for securitization to rapidly decline,” said SEC Chairman Mary L. Schapiro. “These rational measures are designed to help revitalize the important asset-backed securities market by encouraging better disclosure for investors.”

    # # #
    FACT SHEET
    Disclosure for Asset-Backed Securities Related to Representations, Warranties and Repurchase Histories
    Background

    Asset-backed securities (ABS) are created by buying and bundling loans — such as residential mortgage loans, commercial loans or student loans — and creating securities backed by those assets that are then sold to investors. In the transaction agreements that govern a securitization, ABS issuers or originators of those loans typically make “representations and warranties” about the characteristics and the quality of those loans. If a loan does not comply with the representation or warranty, an ABS issuer or lender can be required to repurchase the loan from the pool or replace it with a substitute asset.

    Since the financial crisis, many investors and other transaction parties have questioned whether the loans in the bundle meet the characteristics specified by the representations and warranties, and have been seeking to enforce repurchase provisions. The Dodd-Frank Wall Street Reform and Consumer Protection Act imposes new disclosure obligations about the representations, warranties and repurchase history so that investors may identify originators with clear underwriting deficiencies.

    Section 943 of the Dodd-Frank Act requires the Commission to prescribe regulations on the use of representations and warranties in the market for asset-backedsecurities. The final rules approved today, which were proposed in October 2010, implement Section 943.
    Requirements of the Final Rules
    Disclosure of Repurchase History on New Form ABS-15G

    The final rules require ABS issuers to file with the SEC, in tabular format, the history of the requests they received and repurchases they made relating to their outstanding ABS. The table will provide comparable disclosures so that investors may identify originators with clear underwriting deficiencies. Specifically, issuers are required to disclose the last three years of repurchase history in an initial filing on EDGAR due by Feb. 14, 2012.

    After the initial filing, the ABS issuer is required to file updated information on a quarterly basis, including:

    *

    Repurchase history for all outstanding ABS (regardless of whether the securities were offered in a transaction registered with the SEC) if the underlying transaction agreements include a covenant to repurchase or replace a pool asset.
    *

    History of all fulfilled and unfulfilled repurchase requests, including investor demands upon a trustee and pending requests.

    The disclosure requirements will apply to issuers of unregistered ABS, including municipal ABS. However, municipal ABS are provided an additional three-year phase-in period and will be permitted to provide their information on EMMA, the MunicipalSecurities Rulemaking Board’s centralized public database for information about municipal securities issuers and offerings.
    Disclosure of Repurchase History in Prospectuses and Ongoing Reports

    The final rules also provide investors with ready access to the most current information regarding an issuer’s repurchase history by requiring an issuer in a registered ABS offering to include — in the body of a prospectus — repurchase history for the last three years for ABS of the same asset class as thesecurities being registered. This information must be included in registered offerings in a phase-in period commencing on Feb. 14, 2012. In its ongoing reports, an issuer will be required to provide updated repurchase history for the particular, related asset pool beginning with distribution reports required to be filed on Form 10-D after Dec. 31, 2011.
    Disclosure in Any Report Accompanying a Credit Rating by an NRSRO

    As required by Section 943(1) of the Dodd-Frank Act, the final rules also require Nationally Recognized Statistical Rating Organizations (NRSROs) to provide a description of the representations, warranties and enforcement mechanisms available to investors in an ABS offering. NRSROs will be required to disclose how the representations, warranties, and enforcement mechanisms differ from those of similar ABS. NRSROs will be required to make the disclosures in any report accompanying a credit rating, including in presale reports that are distributed prior to the sale of the security. NRSROs will be required to provide this information for any report issued on or after six months after the effective date of the rules.

    * * *

    The effective date for the new rules is 60 days after their publication in the Federal Register.

  10. DT and Angry

    Yes.

    Even if you receive the note back stamped paid — does not mean it was paid where it was supposed to be paid. Also check the discharge.

    As for note —- who does the endorsement ? If was note was assigned to trust — should have all prior and intervening note endorsements showing a complete chain of endorsement from the originator to the Person endorsing to the Trustee (or in blank as PSA states) – but whether in black or endorsed to trustee — last endorsement should be by the Depositor.

  11. US TRUSTEE MOTION FOR2004 EXAM ON DEUTSCHE BANK NATIONAL TRUST AS TRUSTEE FOR FILING BOGUS PROOFS OF CLAIMS. THIS IS DONE IN THE STATE OF CONNECTICUT.

    http://www.scribd.com/doc/47659538/US-Trustee-Motion-in-CT-for-2004-Examination

  12. Great point, Dying Truth.

  13. DT
    fwiw…i received a paid off note from a 2006 refi.
    i’m going to examine it now.

  14. I had some thoughts in regard to promissory notes, the real ones (if there are any) being endorsed in “[blank] without recourse”. Seen as how it’s a negotiable instrument and all being assigned by the party entitled to transfer it, enforce it, collect on it etc.. and the intention to transfer ownership of it (being obviously apparent) to “[blank] without recourse” and not any particular party at the time that the first and only endorsement without any intended or a assignee in “[blank] without recourse”. That would mean that their endorsements were intended to have no assignees, meaning they intended “no party” (not even themselves) to be granted and left with the power of enforcing or renegotiating it, as it granted those powers, rights and claims to “[“no party”] without recourse” thereby “[“no party”]” has such authority.

    As to the possible reasons for this, the only thing I can think of (other than selling them to multiple parties) is that sooner or later people are gonna read the part of the note that says in clear terms “I promise to pay $XXX,XXX.xx for a loan which ‘I have received'” and realize that this statment is false. Because we didn’t receive any consideration in the amount stated on the face of the note and when we refinanced we never received the note back from the old lender so there’s no conclusive proof that the “new creditor” paid off the “old creditor”.

  15. $10 Million for BofA is like a penny to most of us

  16. Zoe how right you are regarding Martha Stewart.

  17. DEBTOR FILING POC FOR THE CREDITOR WHO DOES NOT FILE A POC BY 90 DAYS AFTER THE 341 HEARING. 11 USC 501C ALLOWS DEBTOR TO FILE A POC WITH A SUMMARY STATEMENT AND SUPPORTIVE DOCUMENTS. THIS MAY SAVE AND ADVERSARY WHEREBY THE FIRST NOTE IS DEEMED UNSECURED AND THE SECOND NOTE MOVES UP IN POSITION.

    http://www.scribd.com/doc/47626874/Davies-Poc-for-2nd-Note

  18. brian davies,

    The blame game!!!– heard that song before.

  19. Texas case where tro was approved and $5,000 attorney fees awarded. The attorney obtained a writ for the money from Chase.

    http://www.scribd.com/Texas-Court-Issues-Tro-and-Gives-5-000-Attorney-Fees-Attorney-Get-Writ-Against-Chase/d/47625807

    As you know, my client prevailed against Chase Bank and was awarded substantial attorney fees. The judgment is now a “Writ of Execution”. The EP County Sheriff’s Office is attempting to execute the writ.

    However, as you may expect, now the finger pointing begins in full: The substitute trustee, Beverly Mitrisin, who acted as “local representative” and actually conducted the court eviction hearing now blames one law firm; that law firm now points the finger at another law firm. It goes on and on.

    Meanwhile, I am told that the EP Sheriff’s Office has advised a high level officer of Chase Bank that if by tomorrow it has not received a reply about payment on the writ, they intend to start seizing bank furniture, computers, equipment,etc.

    I am proud that my client has had the intestinal fortitude to continue through the stress and anxiety all of this has caused her, her family and her business. The monumental determination to continue has been admirable, to say the least.

    Richard A. Roman, Esq.
    Former Judge of the 346th District Court

    As you know, my client prevailed against Chase Bank and was awarded substantial attorney fees. The judgment is now a “Writ of Execution”. The EP County Sheriff’s Office is attempting to execute the writ.

    However, as you may expect, now the finger pointing begins in full: The substitute trustee, Beverly Mitrisin, who acted as “local representative” and actually conducted the court eviction hearing now blames one law firm; that law firm now points the finger at another law firm. It goes on and on.

    Meanwhile, I am told that the EP Sheriff’s Office has advised a high level officer of Chase Bank that if by tomorrow it has not received a reply about payment on the writ, they intend to start seizing bank furniture, computers, equipment,etc.

    Question: How can I get these encouraging developments publicity? This is the first West Texas case that I know of where the defendant prevailed that also displays the callousness and egregious nature of how these banks handle foreclosure/ evictions… especially when they lose.

    I am proud that my client has had the intestinal fortitude to continue through the stress and anxiety all of this has caused her, her family and her business. The monumental determination to continue has been admirable, to say the least.
    Richard A. Roman, Esq.
    Former Judge of the 346th District Court

  20. Louise
    facts or a scandal wont matter because there is no one WHO will prosecute the laws. WE ARE WITHOUT A REPRESENTATIVE GOVERNMENT .period!

  21. I want to know when it became legal to take other people’s money without telling them and get away with it? The corruption continues to get worse. Our regulators are all in bed with the banks. We need this scandal to get worse, much worse. It needs to be the headlines on all the blogs, media, newspapers, cable stations, You Tube, pod casts and anything else you can think of. Somehow, the media is sneaking around in here, too. Not enough coverage of the entire fraud related to banks, Federal Reserve, Wall Street, stock market, Regulators, federal agencies, etc. You all realize that the military is in on this as well. They are backed by large munitions-manufacturing corporations that are fleecing the American people as well through illegal, corrupt wars. Burmese8@yahoo.com

  22. $10 mil???? Nickel dime stuff to BoA

    SEC fishing for minnows rather than whales

  23. Prior to BAPCPA, we dealt with this problem with a Chapter 20. Discharge the couple’s personal liability for as much debt as possible in Chapter 7, then file an immediate Chapter 13 to address the issues that made 13 attractive in the first place. Not possible after 2005, where no discharge is available in a subsequent Chapter 13 until four years have passed.
    Enter Judge Janice Karlin and the Werts case from Kansas ( . Judge Karlin reasoned that a joint case filed by a married couple is really two cases, jointly administered. Since the couple did not have to file a joint case, and a joint case could be deconsolidated, therefore, the Werts’ joint case was really two cases. Each debtor could have debts up to the §109(e) limit. Voila, debt limit issues vanquished.

  24. How BOGUS! A measly pittance of 10M for FRAUD. The best bought-and-paid-for “justice” money can buy.

  25. I don’t see too much relevance in this article pertaining to the fraud committed against the borrowers. Merill Lynch made trades based on information about other trades, and also charged excessive fees to some of its customers. As difficult as it is to raise even obvious questions about standing, title, real party in interest and ownership of the instruments, attempting to make or help a case with tangents like the ones in the article would seem impossible.

    Just my two cents.

  26. drop in the bucket

  27. I can imagine what Martha Stewart is thinking these days.

    Sickening to think $10M is all this massive fraud is worth to the SEC.

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