Bankruptcy Lanigan Logo

Bankruptcy Lanigan & Lanigan, P.L.
831 W. Morse Blvd., Winter Park, Florida 32789

407-740-7379

E-Mail Eric A. Lanigan HereE-Mail Roddy B. Lanigan Here
real estate

mortgage workouts

Lawsuits by Madoff Victims, Veterans, Homeowners

Nationally, more lawsuits against banks are entering the court system as banks juggle lawsuits by Madoff victims, veterans, homeowners and others.

Banks Juggle Lawsuits by Madoff Victims, Veterans, Homeowners

Lawsuit Dropped When Morgan Stanley Insider Can’t Pay

Morgan Stanley dropped additional lawsuits against a former New York employee who used insider tips he received from a scientist to prevent losses on funds he managed.

Joseph Skowron, an ex-fund manager, was convicted in December 2013 of insider trading. To date Skowron had repaid $6.4 million of the $31 million he was ordered to pay back by a federal judge.

The suit was dropped to pursue the remainder of the funds because it was proven to be in excess of Skowron’s assets. Morgan Stanley’s lawyer said the bank decided to drop the remaining claims for breach of contract and fraud because it was pointless to try to get more when there is no more money.

Goldman Sachs Sued Over Complex Securities Product That Defrauded Investors

Goldman Sachs is facing a class action suit for its creation and selling of what plaintiffs say is a risky and complicated securities product which was sold to defraud investors, all while the bank was betting against it.

A U.S. District Judge rejected Goldman’s argument investor claims were insufficient and full of incorrect information. The judge said that the class action suit would save plaintiff’s funds and waste court resources.

A class action lawsuit lends itself to access to larger settlements.

Plaintiffs claim that Goldman created a fund that was bought in 2007 for millions, but sold for pennies on the dollar just nine months later.

In April 2011, a Senate Sub-Committee cited evidence that Goldman tried to profit at clients’ expense ahead of the financial crisis by shedding exposure to subprime mortgages.

Goldman declined comment about the fund created in late 2006 to offload subprime risk on unknowing investors and then secretly selling the collateralized debt obligations short.

The product, the judge in the case said, Collateralized Debt Obligations is so complicated that few if any people minus the creators, understand or could explain how the product works or what it does. 

The Securities and Exchange Commission has sued Goldman Sachs over mortgage-linked debt and Goldman settled a 2010 lawsuit with the SEC for $550 million admitting wrongdoing.

Rapper Scammed in Housing Ripoff by Couple Who Filed Bankruptcy

Musician Flo-Rida is alleging that he was scammed out of $170,000 by a couple he said sold him a property for $2.9 million in 2009. The couple disappeared with the down payment money and then, filed bankruptcy before the deal was closed.

Flo-Rida has filed suit against the couple who is protected by the bankruptcy from being sued.

Couple Accuses Bank of America of Reneging on Mortgage Modification

Bank of America is being accused of reneging on an agreed upon a 2010 mortgage loan modification written for a West Virginia couple.

The couple claim that medical issues caused financial hardship and that the loan they received in the 1980s on a home, went into default. The couple claims that they modified their mortgage with Bank of America and in 2012 West Virginia’s attorney general canceled the foreclosure.

The couple said that they stuck to the modification agreements made but that Bank of America wanted to cancel the modification, sign a new settlement and release any legal claims the couple had against Bank of America.

The couple said Bank of America has harassed them and breached the contract and is seeking an undisclosed amount in damages.

Wells Fargo Asks Georgia Courts to Drop Veteran’s Lawsuit

Wells Fargo has asked Marietta Georgia courts to throw out a homeless veteran’s lawsuit against them because the bank says that the foreclosure lawsuit was handled properly.

The veteran has been sleeping with his dog in a van in a Wal-Mart parking lot since the beginning of January when he was evicted. The bank said that everything was done legally.

The veteran paid thousands to attorneys who were overmatched against the many bank attorneys. The mortgage was sold but Wells Fargo continued to service the loan and had the right to foreclose when Chambers fell into default, according to the bank’s recent court filings.

Georgia law said the holder of a deed to secure debt is authorized to file a foreclosure suit and formal home sale in accordance with the terms of the deed, even if it does not also hold the note or otherwise have any beneficial interest in the debt obligation underlying the deed.

A Wells Fargo lawyer said the bank should not be a defendant in the homeless veteran’s current wrongful foreclosure suit. Chambers’ first lawsuit was filed in May 2012 and dismissed. Chambers re-filed a suit Dec. 2, 2013, according to court documents. 

Meanwhile, funds have been raised online for the veteran to fight for his home and, if he cannot regain his prior home, that the funds will go towards getting him another home.

The veteran has qualified over the past two weeks for Section 8 housing vouchers offered by the U.S. Department of Veterans Affairs through the Marietta Housing Authority.

Madoff “Winners” Withdraw from JP Morgan Chase Lawsuit

Believe it or not, there were winners in the Madoff Ponzi scam who are withdrawing from the overall $543 million fraud lawsuit against JP Morgan Chase.

The 193 plaintiffs pulled out of the lawsuit arguing they should be allowed to rely on the brokerage statements received from Madoff’s firm and should be compensated based on the amounts.

It’s an unusual scenario because critics say that Madoff falsified documents given to clients and that the courts have sided predominantly against them saying that some of the investors knew about the fraud.

However, there has been no way to know with certainty who was and who was not ripped off in the case as all client statements were deemed unreliable and likely false.

Those who were legitimately ripped off remain involved in a suit against the bank.

JP Morgan Chase has been trying to resolve all cases involving Madoff and has paid out $1.7 billion to answer criminal allegations that JP Morgan chase was involved in fraud because it ignored the warning signs that fraud was and had been occurring.

JP Morgan Chase paid $350 million in a case by the Office of the Comptroller of the Currency.

The bank also paid $325 million to settle a civil lawsuit on behalf of thousands of victims, and another $218 million to resolve two related class-action lawsuits.

Trustee and federal investigators have recovered almost $14 billion, or 82 percent of the lost principal, for victims, with billions more held in reserve until legal issues are resolved.

Madoff is serving a 150-year term in a North Carolina prison. Madoff’s brother is serving a 10-year sentence. Five other people are on trial in Manhattan federal court on charges of helping perpetuate Madoff’s scheme.

 

Previous post: Bank of America’s Multiple Lawsuits and Issues

Next post: