KeNo's Housing and Economic Portal: Wednesday October 20 Housing and Economic stories

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It’s Not Nice to Mess With J.R. - (www.nytimes.com) WHEN he played the oil tycoon J. R. Ewing Jr., in “Dallas,” the long-running, ’80s-era nighttime soap opera, Larry Hagman didn’t get mad at his adversaries. He got even. Last week, Mr. Hagman, 79, got even once again. This time it was against his broker. A securities arbitration panel awarded Mr. Hagman and his wife Maj, 82, a big victory against Citigroup, which had overseen some of the couple’s investment accounts. The three arbitrators who heard the case ordered Citigroup to pay the Hagmans $1.1 million in compensatory damages — slightly less than the $1.345 million they had requested — as well as $439,000 in legal fees. But the kicker was the punitive damages award in the case, which accused Citigroup’s brokerage unit, Smith Barney, of fraud, breach of fiduciary duty and failure to supervise the broker overseeing the Hagmans’ funds. The panel ordered Citigroup to pay $10 million to charities chosen by Mr. Hagman.

"CHiPs" star Larry Wilcox ("Jon") to plead guilty to stock manipulation. - (www.businessinsider.com) The former 'CHiPs' star could face up to five years in prison in the stock manipulation case. Larry Wilcox, the former "CHiPs" TV star accused by federal regulators of securities fraud, has agreed to plead guilty to criminal charges in the stock manipulation case. Wilcox, 63, could face five years in prison on one count of conspiracy to commit securities fraud under a plea bargain reached with the U.S. attorney's office in Miami on July 2 and released publicly this week. The Justice Department filed criminal charges against Wilcox and nine other penny stock promoters on Thursday in Miami at the same time that the Securities and Exchange Commission filed civil securities fraud charges. The government agencies allege that the promoters agreed to pay kickbacks to investors in classic pump-and-dump schemes: The cooperating investors would buy shares of the promoters' thinly traded penny stocks with the goal of driving up the prices in the hope of luring other investors into the shares.

Government had been warned for months about troubles in mortgage servicer industry - (www.washingtonpost.com) Consumer advocates and lawyers warned federal officials in recent years that the U.S. foreclosure system was designed to seize people's homes as fast as possible, often without regard to the rights of homeowners. In recent days, amid reports that major lenders have used improper procedures and fraudulent paperwork to seize properties, some Obama administration officials have acknowledged they had been aware of flaws in how the mortgage industry pursues foreclosures. But the officials said they could take only limited action to address the danger. In part, this was because they wanted lenders' help carrying out federal programs to modify mortgages that had fallen into default or were poised to do so. New concerns about improper practices - such as those involving faked documents or "robo-signers" who signed tens of thousands of documents without reviewing them - have prompted the mortgage servicing arms of the country's largest banks to freeze millions of foreclosures. As momentum builds for a national moratorium, the administration has begun assessing the potential impact, examining the threat it could pose for the ailing housing market and the wider financial system.

Officials in 40 States Said to Consider Joint Foreclosure Probe - (www.bloomberg.com) Attorneys general in about 40 states may announce by next week a joint investigation into potentially faulty foreclosures at the largest banks and mortgage firms, according to a person with direct knowledge of the matter. State attorneys general led by Iowa’s Tom Miller are in talks that may lead to the announcement of a coordinated probe as soon as Oct. 12, said the person, who asked not to be named because an agreement wasn’t completed. The number of states may change because several are deciding whether to join, the person said. New Mexico Attorney General Gary King said yesterday in a statement that his office will join a multi-state effort. Lawyers representing the banks expect a widening investigation, according to Patrick McManemin, a partner at Patton Boggs LLP, a Washington-based law firm that represents banks, loan servicers and financial institutions. Bank of America Corp., the biggest U.S. lender, yesterday extended a freeze on foreclosures to all 50 states.

FDIC prepares to sue more than 50 bank officials to recover $1 billion in losses - (www.washingtonpost.com) The Federal Deposit Insurance Corp. has authorized lawsuits against more than 50 executives at failed banks across the country in an attempt to recover more than $1 billion of the agency's losses during the credit crisis. More than 50 bank officers and directors were negligent, committed fraud or otherwise breached their duties and are, therefore, legally liable, the FDIC concluded after lengthy investigations into the first wave of bank failures. The FDIC, which insures bank deposits, has lost more than $75 billion in nearly 300 bank failures since 2008, and officials view the lawsuits against the responsible parties in part as a means to recoup some of the losses. Similar efforts after the lending failures in the 1980s, which were aimed at the involved officials, attorneys, accountants and securities brokers, recovered more than $5 billion.