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Regulators Expected to Penalize JPMorgan Over Lehman Collapse - (www.reuters.com) When Lehman Brothers collapsed at the height of the financial crisis, JPMorgan Chase was at the center of the storm. The bank was a major lender to the firm, which filed the biggest bankruptcy in United States history…. The Commodity Futures Trading Commission filed a civil case against JPMorgan on Wednesday, the first federal enforcement case to stem from Lehman’s downfall. The bank settled the Lehman matter and agreed to pay a fine of approximately $20 million. The Lehman action stems from the questionable treatment of customer money — an issue that has been at the forefront of the recent outcry over MF Global. JPMorgan was also intimately involved in the final days of that brokerage firm. The trading commission accused JPMorgan of overextending credit to Lehman for roughly two years leading up to its bankruptcy in 2008. JPMorgan extended the credit using an inaccurate evaluation of Lehman’s worth, improperly counting Lehman’s customer money as belonging to the firm. Under federal law, firms are not allowed to use customer money to secure or extend credit.
Rajoy Says Spain in ‘Extreme Difficulty’ as Bond Demand Drops - (www.bloomberg.com) Prime Minister Mariano Rajoy said Spain’s situation is one of “extreme difficulty” and signaled that his budget cuts are less painful than a bailout would be, as demand for the nation’s debt slumped at an auction. “Spain is facing an economic situation of extreme difficulty, I repeat, of extreme difficulty, and anyone who doesn’t understand that is fooling themselves,” Rajoy told a meeting of his People’s Party today in the southern coastal city of Malaga. Rajoy raised the threat of an international bailout for the second time this week as he sought to defend the deepest austeritymoves in at least three decades. While “no one likes” the budget presented last week, he said “the alternative is infinitely worse.” Spain sold 2.59 billion euros ($3.4 billion) of bonds today, just above the minimum amount it planned for the auction and below the 3.5 billion-euro maximum target. The average yield on the bonds due in October 2016, which act as the five-year benchmark, rose to 4.319 percent from 3.376 percent at last month’s sale. Secondary-market yields rose to 4.48 percent.
Tax Receipts Buoy State-Local Government Employment Trend - (www.bloomberg.com) The city of Mesa, Arizona, fired 125 employees in 2009 as tax collections dropped amid a housing slump and a recession. Now, it is filling vacancies, training a class of police recruits for the first time in three years, and Mayor Scott Smith says he’s confident “revenue levels are going to stabilize.” As the Phoenix suburb’s experience shows, the worst may be near an end for city and state governments, and their recovery could in turn give a lift to the U.S. economy. After four years of shuttering fire houses, cutting school budgets and firing teachers and police, these governments are starting to steady as tax revenues rebound. Public employment at all levels declined by just 7,000 in the first two months of this year, well down from the 22,000 monthly average in 2011, according to Labor Department data.
Former Mrs. Pakistan used her striking appearance to scam California families - (www.mercurynews.com) But the same physical assets that snared Hasnain that top title also helped her lure South Bay homeowners into a loan modification scam she and her husband, Jawad, operated from 2008 through October 2010, prosecutor Victor Chen contends. "She was really pretty," said Korina Diaz, a Gilroy waitress who lost her ranch after paying the couple $11,500 to lower her mortgage payments. "She wore a skirt suit, high heels, nylons -- like a real good-looking professional lady." Saman's striking appearance was crucial, Chen said, because the couple didn't know their victims and had to make a good first impression. They attracted homeowners by word-of-mouth and through fliers passed out at ethnic supermarkets after the housing market tanked, according to Chen. Now the Santa Clara County deputy district attorney has charged them with ripping off 17 people -- just a fraction of the 80 to 100 families he says they defrauded. The Hasnains each face 19 felony counts of conspiracy to commit grand theft in the loan-modification scheme, and Jawad has been charged with nine additional counts of felony grand theft for allegedly enticing victims from 2006 through July 2010 into investing in a fraudulent 10-unit condominium development in Fremont.
12 Underwater Homeowners Share Their Devastating Stories - (www.businessinsider.com) Some of the 11.1 million homeowners with negative equity have started sharing their stories on a Tumblr called America Underwater. "There's so much shame where people feel like they've been tricked and feel like their banks have mistreated them," said Ian Kim, director of campaigns for the economic justice group behind the blog. "But putting a face on the housing crisis was very necessary." Kim has found a common thread in these stories: homeowners who played by the rules "got tricked by the banks," and banks were reluctant to throw them a lifeline, even when they were clearly struggling to make their mortgage payments. "These are paying customers who got their hours cut back at work, and who called to ask the bank to work with them so they could pay on time," Kim said. "Over and over, I'd hear about banks giving customers the runaround, losing paperwork, saying one thing and doing another. It's a form of torture that's disempowering."
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