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First-Quarter 2011 Mortgage Litigation Index

Mortgage Investor Lawsuits
First-Quarter 2011 Mortgage Litigation Index
Shareholder lawsuits and class actions accusing companies of inflating earnings, overstating capital position or otherwise deceiving investors in the company. Other shareholder issues.

Defendant
Plaintiff
Court
Amount
Overview
Case Title
Case Number Date Filed Link to Story
Bank of America Corp., Brian T. Moynihan na United States District Court for the Southern District of New York n/a Defendants charged with violations of SEC act by concealing from investors its use of “dollar rolling,” a practice whereby it would move MBS off its books to another entity, but agree to repurchase the MBS after reporting its quarterly financial statement na na 2/24/2011 www.mortgagedaily.com/LawsuitsInvestors033011.asp
Bank of America Corp., Brian T. Moynihan, Charles H. Noski, Kenneth D. Lewis, and Joseph L. Price Patricia Grossberg Living Trust, individually and on behalf of all other similarly situated United States District Court for the Southern District of New York n/a The class alleges that the defendants issued materially false and misleading statements regarding defendants’ business, and concealed defects in the recording of mortgages which harmed investors in Bank of America stock. Patricia Grossberg Living Trust v. Bank of America Corp. et al. 1:11-cv-01982-WHP 3/22/2011 www.mortgagedaily.com/LawsuitsInvestors033011.asp
Bank of America, NA Wright, individually and on behalf of all others similarly situated Superior Court of the State of California, County of Orange n/a The class alleges that Bank of America and Countrywide perpetrated a massive fraud that devastated the value of their homes. Wright et al. v. Bank of America et al. 30-2011-00449059-CU-MT-CXC 2/9/2011 www.mortgagedaily.com/LawsuitsForeclosures032411.asp
Catherine L. Kissick SEC United States District Court for the Eastern District of Virginia $1,500,000,000 Kissick was in charge of Colonial Bank’s Mortgage Warehouse Lending Division. It was in that capacity that she helped former Taylor Bean chairman, Lee Farkas, and treasurer, Desiree Brown, carry out a scheme involving $1.5 billion in fraudulent mortgages. Kissick recently pled guilty for her role in the fraud. SEC v. Kissick 1:11cv215LMB/JFA 3/2/2011 www.mortgagedaily.com/LawsuitsInvestors033011.asp www.mortgagedaily.com/ColonialBankPlea030211.asp
CM Capital Services LLC, formerly known as Consolidated Mortgage Company LLC Nevada’s Division of Mortgage Lending n/a $215,000 Settlement reached prior to filing a formal complaint over a variety of loan violations dating back to at least 2009. The company has agreed to refrain from misleading and inaccurate advertisements that may contain any untrue statement of material fact, to promptly respond to investor telephone calls or written communications, and to offer to resign as manager of every limited liability company that owns properties taken back from debtors through foreclosure or a deed in lieu of foreclosure. n/a n/a n/a www.mortgagedaily.com/MctCmCapital030811.asp
Countrywide Financial Corp. State of Oregon, by and through the Oregon State Treasurer and the Oregon Public Employee Retirement Board on behalf of the Oregon Public Retirement Fund Circuit Court of the State of Oregon for the County of Multnomah $1,153,000 The State of Oregon alleges that it incurred $14 million in losses to its pension and workers’ compensation funds that were caused by allegedly false statements that improperly inflated the prices of Countrywide’s stocks and bonds. Oregon v. Countrywide Fin. Corp. 1101-01141 1/26/2011 www.mortgagedaily.com/LawsuitsInvestors033011.aspwww.mortgagedaily.com/MctLawsuitCountrywide012711.asp
Countrywide Financial Corp. et al. Putnam Bank U.S. District Court for the District of Connecticut n/a Securities fraud class action alleging originator did not follow underwriting guidelines, misrepresentations re: quality of loans in securitization pool Putnam Bank v. Countrywide Fin. Corp. et al. 3:11-cv-00145-JCH 1/27/2011 https://www.mortgagedaily.com/litigationmbs021811.asp
Countrywide Financial Corp., Angelo Mozilo, David A. Sambol People of the State of California, ex rel. Edmond G. Brown, Jr. United States District Court for the Central District of California $6,500,000 Mozilo and Sambol settled with the California AG. The money will be used to establish a statewide California Foreclosure Crisis Relief Fund that will provide grants to agencies that help homeowners facing foreclosure with relocation assistance and provide funds to state and local agencies to prosecute mortgage fraud. People of the State of California v. Countrywide Financial Corp. 08-cv-04861 6/24/2008 www.mortgagedaily.com/LawsuitsInvestors033011.aspwww.mortgagedaily.com/MctLawsuitCountrywide020311.asp
Countrywide Financial Corp., Angelo Mozilo, Eric P. Sieracki, David Sambol, Stanford L. Kurland, Countrywide Home Loans, Inc., Countrywide Capital V., Citigroup Global Markets, Inc., JPMorgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Wachovia Capital Markets LLC, Angelo R. Mozilo, Kathleen Brown, Henry G. Cisneros, Jeffrey M. Cunningham, Robert J. Donato, Michael E. Dougherty, Martin R. Melone, Robert T. Parry, Oscar P. Robertson, Keith P. Russell, Harley W. Snyder, David Sambol, Eric P. Sieracki, Andrew Gissenger, III, Carlos M. Garcia George Pappas, individually and on behalf of all others similarly situated, Norfolk County Retirement System, individually and on behalf of all others similarly situated, Jack McBride, individually and on behalf of all others similarly situated, Saratoga Advantage Trust, individually and on behalf of all others similarly situated, Agent Class Convertible Arbitrage Fund L.P., individually and on behalf of all others similarly situated, Barry Brahn, individually and on behalf of all others similarly situated U.S. District Court for Central District of California $624,000,000 Bank of America Corp. is facing resistance from a group of investors to a $624 million consolidated class-action settlement relating to its purchase of Countrywide Financial Corp. The lawsuits contend that Countrywide, once America’s biggest home lender, fraudulently concealed its mounting risks as it loosened lending standards to build its market share during the housing boom. In re: Countrywide Financial Corp Securities Litigation 07-cv-05295-MRP n/a www.mortgagedaily.com/MctLawsuitBoa022711.asp
Countrywide Financial Corp., Angelo R. Mozilo, David Sambol, Eric P. Sieracki, Stanford L. Kurland, Kathleen Brown, Henry G. Cisneros, Jeffrey M. Cunningham, Robert J. Donato, Michael E. Dougherty, Ben M. Enis, Edwin Heller, Gwendolyn Stewart King, Martin R. Melone, Robert T. Parry, Oscar P. Robertson, Keith P. Russell, Harley W. Snyder, KPMG LLP, Banc of American Securities LLC, JPMorgan Securities Inc., Countrywide Securities Co., Barclays Capital Inc., Deutsche Bank Securities, Inc., HSBC Securities (USA) Inc., Wells Fargo Securities LLC, Commerzbank AG, RBS Securities Inc., Morgan Stanley & Co. Inc., Citigroup Global Markets Inc., Goldman Sachs Inc., BNY Mellon Capital Markets, LLC, ABN AMRO Inc., BNP Paribas Securities LLC State Treasurer of the State of Michigan, as custodian of the Michigan Public School Employees Retirement System, State Employees’ Retirement System, Michigan State Police Retirement Systems, and Michigan Judges’ Retirement System United States District Court for the Central District of California $65,000,000 Plaintiffs allege that Countrywide became a subprime lender while telling investors that it continued to maintain stringent mortgage loan underwriting standards that differentiated it from its competition, and that defendants’ stock was artificially inflated because they made false and misleading statements. Michigan v. Countrywide Fin. Corp. et al. CV1100809-JFW (CWX) 1/26/2011 www.mortgagedaily.com/LawsuitsInvestors033011.asp
Countrywide Financial Corp., Countrywide Home Loans, Inc., Angelo R. Mozilo, David Sambol, Eric P. Sieracki, Stanford L. Kurland, Henry G. Cisneros, Jeffrey M. Cunningham, Robert J. Donato, Michael E. Dougherty, Ben M. Enis, Carlos M. Garcia, Edwin Heller, Gwendolyn Stewart King, Martin R. Melone, Oscar P. Robertson, Keith P. Russell, Harley W. Snyder, KPMG LLP, Banc of America Securities LLC, JPMorgan Securities Inc., Countrywide Securities Corp., Barclays Capital Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Wells Fargo Securities LLC, RBS Securities Inc., Citigroup Global Markets Inc., RBC Capital Markets Corp., ABN AMRO Inc., BNP Paribas Securities Corp. Fresno County Employees’ Retirement Association United States District Court for the Central District of California n/a Plaintiff alleges that Countrywide became a subprime lender while telling investors that it continued to maintain stringent mortgage loan underwriting standards that differentiated it from its competition, and that its stock was artificially inflated because it made false and misleading statements. Fresno County Employees’ Retirement Assoc. v. Countrywide Fin. Corp. et al. CV11-0811-PA (SHX) 1/26/2011 www.mortgagedaily.com/LawsuitsInvestors033011.asp
Countrywide Financial Corp., Countrywide Home Loans, Inc., Countrywide Home Loans Servicing LP, CWALT, Inc., CWMBS, Inc., CWABS, Inc., CWHEQ, Inc., Countrywide Securities Corp., Countrywide Capital Markets, LLC, Angelo Mozilo, David A. Sambol, Bank of America Corp., BAC Home Loans Servicing, LP, NB Holdings Corp., Stanford L. Kurland, David A. Spector, Eric P. Sieracki, N. Joshua Adler, Ranjit Kripalani, Jennifer S. Sandefur, Thomas K. McLaughlin, Thomas H. Boone, Jeffrey P. Grogin Dexia Holdings, Inc., FSA Asset Management LLC, Dexia Credit Local, New York Branch, New York Life Insurance Co., New York Life Insurance and Annuity Corp., The Mainstay Funds, Mainstay VP Series Fund, Inc., Teachers Insurance and Annuity Association of America, TIAA-CREF Life Insurance Co., TIAA Global Markets, Inc., College Retirement Equities Fund, the TIAA-CREF Funds United States District Court for the Southern District of New York n/a Plaintiffs allege that the defendants perpetrated a massive fraud in falsely representing that they adhered to conservative mortgage underwriting standards when in fact defendants only wanted to originate and securitize as many loans as possible into mortgage-backed securities to generate profits. Dexia Holding, Inc. v. Countrywide Fin. Corp. 650185/2011 1/24/2011 www.mortgagedaily.com/LawsuitsInvestors033011.aspwww.mortgagedaily.com/litigationmbs021811.asp
Desiree E. Brown SEC United States District Court for the Eastern District of Virginia $1,500,000,000 The SEC alleged that Brown, the former treasurer of Taylor, Bean & Whitacker, enabled the sale of $1.5 billion in fictitious and impaired mortgage loans from Taylor Bean to Colonial Bank. Brown pled guilty on 2/24/2011. SEC v. Brown 1:11cv192-GBL/TRJ 2/24/2011 (plea) www.mortgagedaily.com/LawsuitsInvestors033011.asp www.mortgagedaily.com/ColonialBankPlea030211.aspwww.mortgagedaily.com/TaylorBeanPlea022511.asp
Donald E. Dodge and Scott Farah SEC U.S. District Court for the District of New Hampshire n/a The SEC entered into Consent Orders with defendants. Defendants were accused of deceiving investors in a Ponzi scheme. SEC v. Dodge and Farah n/a n/a www.mortgagedaily.com/litigationcriminal022111.asp
Donald E. Dodge, Scott Farah United States U.S. District Court for the District of New Hampshire $33,000,000 Dodge received a six-year sentence for operating an unlicensed loan servicing company, C L and M Inc., which serviced all loans brokered through Financial Resources Mortgage Inc., owned by Scott Farah, who also pleaded guilty. United States v. Scott Farah and Donald Dodge 1:10-CR-44-PD-01/02, LR021837 April-10 www.mortgagedaily.com/litigationcriminal022111.asp
EMC Mortgage Corp. Bear Stearns Mortgage Funding Trust 2007-AR2 by Wells Fargo N.A. Delaware Chancery Court, Wilmington n/a Trustee of securitization trust sues EMC seeking documentation regarding loans sold into securitization pool. Bear Stearns Mortgage Funding Trust 2007-AR2 by Wells Fargo N.A. v. EMC Mortgage Corp. CA6132 n/a www.mortgagedaily.com/litigationmbs021811.asp
Frederick Darren Berg United States United States District Court Western District of Washington at Seattle $100,000,000 Defendant, founder of the failed Meridian Mortgage investment funds, has been charged with money laundering and nine counts of wire fraud for defrauding investors out of more than $100 million dollars between 2003 and 2010. Defendant has pled not-guilty U.S. v. Berg CR10-310JUR 10/13/2010 www.mortgagedaily.com/MctMeridian011611.asp
G. Kennedy Thompson, Thomas J. Wurtz, Donald K. Truslow, Robert K. Steel, Wachovia Corporation, Wells Fargo & Company (as successor-in-interest to Wachovia Corporation), and KPMG, LLP Robert E. Browne, III, Shelby V.T. Clark, Jeanne F. Clark, John H. Loughridge, Jr., Elford Hamilton Morgan, Jane Smith Morgan, and Norwood Robinson General Court of Justice of North Carolina, Superior Court Division n/a A judge dismissed this shareholder lawsuit against Wachovia Corp., and certain of is officers, in which the plaintiffs claimed they were misled by management during the bank’s collapse in 2008. The court agreed with the defendants that North Carolina does not permit direct shareholder claims for losses resulting solely from a drop in stock value and that the plaintiffs’ injury was felt equally by all Wachovia shareholders. The court also ruled that the plaintiffs did not offer viable claims of negligence, misrepresentation or breach of corporate duties. Robert E. Browne, III et al. v. G. Kennedy Thompson et al. 09-CVS-8588 10/1/2009 www.mortgagedaily.com/MctLawsuitWachovia022511.asp
Goldman Sachs & Co. ACA Financial Guaranty Corporation New York State Supreme Court $120,000,000 ACA Financial Guaranty Corp. filed a civil lawsuit alleging that Goldman Sachs committed fraud by helping a major client, Paulson & Co., rig a billion dollar deal by allowing the firm to pack securities backed by highly risky mortgages in 2007 as the housing market was beginning to collapse. ACA Financial Guaranty Corp. v. Goldman Sachs & Co. Index No. 650027/2011 1/6/2011 www.mortgagedaily.com/MctLawsuitGoldman010711.asp
J.P. Morgan Securities, LLC, Moody’s Corp., The McGraw-Hill Companies, Inc., Fitch, Inc., Federal Home Loan Bank of Pittsburgh Court of Common Pleas of Allegheny County n/a Fraudulent misrepresentation claims against rating agencies survive motion to dismiss. Stipulation giving the defendants until Jan. 28 to file answers was filed. Federal Home Loan Bank of Pittsburgh v. JPMorgan Securities, LLC et al. GD-09-016892 11/29/2010 www.mortgagedaily.com/litigationmbs021811.asp
James R. Appleton, Bruce J. Bartells, Carole H. Beswick, Larry F. Jacinto, Ronald J. Jeffrey, William A. Mccalmon, Patrick J. Meyer, Thomas O. Vessey, Stanley C. Weisser, Douglas F. Welebir, John Lang, Clifford N. Schoonover and Does 1-5. FDIC U.S. District Court for the Central District of California, Los Angeles $26,800,000 This lawsuit filed by the FDIC alleges that former executives and directors of 1st Centennial, a failed California bank, blatantly disregarded prudent lending principals on commercial real estate loans, causing the FDIC to have to pay depositors $163 million after 1st Centennial failed in January 2009. FDIC v. James R. Appleton et al. CV11-00476 1/14/2011 www.mortgagedaily.com/MctLawsuitFdic012711.asp
JPMorgan Chase Bank, N.A. et al Allstate Bank, et al. Supreme Court of the State of New York $700,000,000 Investor sues alleging various misrepresentations regarding quality of loans in securitization pool, failure to follow underwriting guidelines. Claims of fraud, negligent misrepresentation, Sec. 11, 12(a) of Securities Act, and successor liability. Allstate Bank et al. v. JPMorgan Chase Bank et al. n/a 2/16/2011 www.mortgagedaily.com/litigationmbs021811.asp
Kerry Killinger, Stephen J. Rotella, David C. Schneider, Linda C. Killinger, Esther T. Rotella FDIC United States District Court for the Western District of Washington n/a FDIC alleges that Killinger put Washington Mutual Bank’s viability at risk in order to line his pockets with nearly $100 million in compensation. The FDIC sued defendants for negligence, gross negligence, and breaches of fiduciary duty. FDIC v. Killinger, et al. 2:2011cv00459 3/16/2011 www.mortgagedaily.com/LawsuitsInvestors033011.aspwww.mortgagedaily.com/MctLawsuitFdicWamu031811.asp
Lender Processing Services and Lee A. Kennedy International Brotherhood of Electrical Workers Local 164 Pension Fund, derivatively on behalf of LPS The Delaware Court of Chancery n/a Plaintiff seeks recovery on behalf of LPS for alleged violations of fiduciary duties and breaches of good faith in connection with LPS’s default operations. Int’l Brotherhood of Elec. Workers Local 164 Pension Fund v. Lender Processing Services, et al. n/a 3/23/2010 www.mortgagedaily.com/LawsuitsInvestors033011.asp
Lender Processing Services, Inc., Jeffrey S. Carbiener, Lee A. Kennedy and Francis K. Chan Southwest Ohio District Council of Carpenters, individually and on behalf of all others similarly situated United States District Court for the Middle District of Florida n/a Plaintiffs filed this class action seeking damages for alleged violations of federal securities laws. Plaintiffs allege that LPS fraudulently inflated its stock price by executing numerous false documents, and engaging in improper and deceptive foreclosure-related activities, including robo-signing. S.W. Ohio District Council of Carpenters v. Lender Servicing Processing et al. 3:3011cv00033 1/10/2011 www.mortgagedaily.com/LawsuitsInvestors033011.asp
Lynda Steel United States of America n/a $1,000,000 41-month sentence for fraud: falsely claiming she was a certified public accountant, investors lost money. n/a n/a 2/11/2011 www.mortgagedaily.com/litigationcriminal022111.asp
MBIA Inc., MBIA Insurance Corporations and MBIA Insurance Corp. of Illinois ABN AMRO Bank N.V., Barclays Bank PLC, BNP Paribas, Calyon, Canadian Imperial Bank of Commerce, Citibank, NA, HSBC Bank USA, NA, JPMorgan Chase Bank, NA, KBC Investments Cayman Islands V Ltd., Merrill Lynch International, Bank of America, NA, Morgan Stanley Capital Services, Inc., Natixis, Natixis Financial Products Inc., Cooperative Centrale Raifefise-Boerenleenbank BA, Royal Bank of Canada, Royal Bank of Scotland PLC, SMBC Capital Markets Ltd., Societe Generale, UBS AG, Wachovia Bank, NA Supreme Court of New York, County of New York; Appellate Division of the Supreme Court of New York, First Dept. n/a Plaintiffs challenged MBIA’s restructuring plan that segregated MBIA’s policies covering mortgage and other structured securities from the firm’s municipal bond obligations, which would be insured by a new subsidiary. Policy holders sued MBIA and co-defendants alleging that defendants’ restructuring resulted in MBIA (policy issuer) undercapitalized and thus unable to honor policies it issued backing structured finance investments. Appellate Court reversed dismissal, reinstating the case. ABN AMRO Bank NV et al. v. MBIA, Inc. et al. 601475-2009 5/13/2009 www.mortgagedaily.com/LawsuitsInvestors033011.aspwww.mortgagedaily.com/litigationmbs021811.asp
Merrill Lynch & Co., Inc., Stanley E. O’Neil and Jeffrey N. Edwards Thomas P. DeNapoli United States District Court for the Southern District of New York $4,250,000 Merrill Lynch settled with the New York State Common Retirement Fund after the plaintiff sued Merrill Lynch for allegedly concealing the plaintiff’s true exposure to subprime mortgage risk. DiNapoli v. Merrill Lynch & Co., et al. 1:2010-cv-05562 7/22/2010 www.mortgagedaily.com/LawsuitsInvestors033011.asp
Michael Lee Wilson Santa Barbera District Attorney n/a $14,000,000 Individual pled guilty to 20 counts of fraud in relation to Ponzi scheme involving mortgages. n/a n/a n/a www.mortgagedaily.com/litigationcriminal022111.asp
Michael W. Perry, A. Scott Keys, S. Blair Abernathy Securities and Exchange Commission U.S. District Court for the Central District of California n/a Securities fraud and reporting violations brought against former Indymac CEO and CFO alleging false/misleading financial disclosures that hid IndyMac’s financial condition as it was collapsing due to exposure to housing market collapse. SEC v. Perry cv11-01309 2/11/2011 www.mortgagedaily.com/lawsuitindymac021111.asp
Mili Group Inc. U.S. Department of Labor na $247,900 Defendants allegedly misused retirement plan assets for their own benefit, in violation of the Employee Retirement Income Security Act. Solis v. Do. 5:10-cv-03823-HRL 8/26/2010 www.mortgagedaily.com/LitigationEmployment122810.asp
Nomura Asset Acceptance Corp. Plumbers Union No. 12 Pension Fund U.S. Court of Appeals for the First Circuit n/a 1st Circuit reversed dismissal of class action suit filed on behalf of RMBS investors, finding plaintiffs had standing to proceed with respect to two of eight securitization trusts originally included in the suit. Plumbers’ Union Local No. 12 Pension Fund v. Nomura Asset Acceptance Corp. 08-cv-10446 1/20/2011 www.mortgagedaily.com/litigationmbs021811.asp
Radius Capital Corp., Robert A. Digiorgio SEC U.S. District Court for the Middle District of Florida n/a Radius Capital Corp. and its owner are being sued by the SEC over mortgage-backed securities it issued. The SEC has alleged that Radius told investors that the loans backing the securities were government-insured. Many of the loans, however, were not government-insured and many would not even qualify. SEC v. Radius Capital Corp. et al. 2:2011cv00116 3/7/2011 www.mortgagedaily.com/LawsuitRadius030811.asp
Raymond Bowman United States United States District Court for the Eastern District of Virginia $1,500,000,000 SEC alleges that Bowman, the former president of Taylor Bean, allegedly enabled the sale of $1.5 billion in fictitious and impaired mortgage loans from Taylor, Bean & Whitacker Mortgage Corp., Colonial’s biggest customer, to Colonial Bank. Bowman has pled guilty. SEC v. Bowman 1:11-cr-00118-LMB 3/14/2011 www.mortgagedaily.com/PleaTaylorBean031411.asp
Residential Capital LLC, Royal Bank of Scotland Group, PLC New Jersey Carpenters Health Fund, New Jersey Carpenters Vacation Fund and Boilermaker Blacksmith National Pension Trust U.S. District Court for the Southern District of New York n/a Denial of class certification to group of investors in mortgage backed securities New Jersey Carpenters Health Fund, et al. v. Residential Capital, LLC, et al. 08 CV 8781; 08 CV 5093 1/18/2011 www.mortgagedaily.com/litigationmbs021811.asp
Richard S. Fuld, Jr. et al California Public Employees’ Retirement System U.S. District Court for the Northern District of California $700,000,000 Calpers sued Lehman Bros. executives and underwriters alleging they hid the company’s exposure to toxic mortgage securities. Calpers purchased Lehman stock and debt and was harmed when Lehman collapsed. California Public Employees’ Retirement System v. Richard S. Fuld, Jr. et al. 11-cv-0562 n/a www.mortgagedaily.com/litigationmbs021811.asp
Ronnie Sheppard South Carolina South Carolina Supreme Court $278,000,000 Former CEO of Homegold Financial sentenced to 20 years in prison for securities fraud. Supreme Court denied appeal to reduce sentence. n/a n/a n/a www.mortgagedaily.com/litigationcriminal022111.asp
Royal Bank of Scotland Massachusetts Pension Reserves Investment Management Board and Public Employees Retirement System of Mississippi, individually and on behalf of all others similarly situated United States District Court for the Southern District of New York n/a Plaintiffs allege that they suffered massive losses in shareholder value as a result of a series of write-downs that occurred at RBS due to RBS’s substantial holdings in subprime and other mortgage related assets. In re Royal Bank of Scotland Group PLC Securities Litigation 1:09-cv-00300-DAB 7/15/2009 www.mortgagedaily.com/LawsuitsInvestors033011.asp
Sheila Kilborn-Jones Idaho Department of Finance, Idaho AG’s Office, United States et al. Idaho – Fourth District $1,200,000 Defendant, a former mortgage broker associated with Vitruvian Investments and a fund manager with the Vitruvian Investment Group, pleaded guilty and was sentenced to four years in jail after admitting to using at least $220,000 of her clients’ funds for her personal use. Defendant was ordered to pay $1.2 million in restitution. n/a n/a n/a www.mortgagedaily.com/litigationcriminal022111.asp
Teresa A. Kelly SEC United States District Court for the Eastern District of Virginia $1,500,000,000 SEC alleges that Kelly, a former operations supervisor of Colonial Bank, enabled the sale of $1.5 billion in fictitious and impaired mortgage loans from Taylor, Bean & Whitacker Mortgage Corp., Colonial’s biggest customer, to Colonial Bank. SEC v. Kelly 1:11cv268LMB/TRJ 3/16/2011 www.mortgagedaily.com/LawsuitsInvestors033011.asp
Thuan Nhan Du, Cindi Gayle Kelly, James Duncan Riverside County District Attorney Riverside Superior Court n/a Two defendants accused of fraudulent mortgage investment scheme sentenced. n/a n/a n/a www.mortgagedaily.com/litigationcriminal022111.asp
Wachovia Corporation, Wells Fargo & Company, G. Kenney Thompson, Donald K. Truslow, Thomas J. Wurtz, Benjamin P. Jenkins, III, Robert K. Steel, and Doe Defendants 1 through 25 Cameron M. Harris, Dorothy W. Harris, Gary Harris, individually and on behalf of all others similarly situated General Court of Justice of North Carolina, Superior Court Division n/a A judge dismissed this shareholder lawsuit against Wachovia Corp., and certain of its officers, in which the plaintiffs claimed they were misled by management during the bank’s collapse in 2008. The court agreed with the defendants that North Carolina does not permit direct shareholder claims for losses resulting solely from a drop in stock value and that the plaintiffs’ injury was felt equally by all Wachovia shareholders. The court also ruled that the plaintiffs did not offer viable claims of negligence, misrepresentation or breach of corporate duties. Harris v. Wachovia Corporation 09 CVS 25270 10/1/2009 www.mortgagedaily.com/MctLawsuitWachovia022511.asp
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