consultants are sandburs

Thursday, December 25, 2014

A quick note about work of a Jenner and Block attorney, NOT involved in Goliath/Hollywood/Mississippi hijinks; instead, re the Dec. 8, 2014, New Jersey report on Chris Christie's Bridgegate. [with meandering UPDATES]

Since Bridgegate at its time got much press coverage it is strange that issuance of a report did not.

It appears that formal legislative investigation found culpability below the level of most senior NY - NJ Port Authority figures and Gov. Christie.

Detail re the J/B lawyer who was retained by NJ officials, and his report, are included within three links; here, here and here.

That they could not pin anything on Christie does not remove the cloud of the questioning over what did he do, know, and engineer - if anything, regarding the GW Bridge closure.

All to be posted on that, since it is a holiday, and the links do fully carry the story.

(It seems only fair that with much coverage earlier over Bridgegate that this resulting report gain some attention. Discovery of this report was not from any media reporting link. It was from looking at the law firm's online pages while considering the Google motion to quash [and or for a TRO, etc.] the Mississippi AG's subpoena.)

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Latest reporting on "the Goliath project," here, is the TRO was denied and the matter taken under advisement by the assigned Mississippi judge for further proceedings next year (with a Feb. 13 hearing scheduled). Ars Technica has good coverage of the Mississippi filing, the state's AG Hood, and informed public reaction; e.g., here, here and here. Also related info, here and here. The latter two items suggest the Feb. 13 hearing could be mooted by burying the hatchet measures. Possibly.

UPDATE - overlawyered.com here re Goliath/Hood/MPAA, (and the site might interest readers, generally).

FURTHER UPDATE: The Gibson-Dunn lawfirm posts online an analysis its lawyers published about DPAs and NPAs (respectively Deferred Prosecution Agreements and Non-Prosecution Agreements, with the difference between the two set out in an opening footnote). The SEC, in addition to the Justice Department, has used the methodology. Also of much interest, here, that firm gives further detail, including usage by year of DPA/NPA devices, and the resultant cashflow to the government. Unclear in things, does the recovery loot go into the DoJ operating till, or into general funds?

Also, when "independent compliance monitor" arrangements are a part of DPA/NPA usage, it creates a fine cash cow for whoever, by agreement, gets the monitoring contract - something where more sunshine might help maintenance of the public's interest. In such a situation, friends can help friends. The Goliath project shows a potential for use of a DPA/NPA as a device to squeeze a firm, by third parties for unrelated purposes and ends, e.g., in Goliath matters, the MPAA with allied confederates among state AGs, wanting copyright goals met via squeezing Google over its prior pharmaceuticals NPA this decade.

Another major public interest question, is the public better served by Canadian drugs entering in price competition to the cozy arrangement Big Pharma has with Congress, whereby such competition has been quashed with participation by the FDA, on behalf of Big Pharma. Reading of that NPA that Google bought for half a billion discloses how a most questionable law was tarted up within that NPA's text as protective of the public when its result has been hiked up anti-competitive drug pricing in our treasured US of A. Strange bedfellowship at play? You decide. That particular NPA seems a bit malodorous to me, but opinions may differ. Big Pharma doubtlessly loves it. With the MPAA and Mississippi AG Hood not too far behind, everybody liking a lever.

Some reporting, readers can do their own websearching, has been that respect for Congress and the federal government is at an all time low; per surveys taken among the public from time to time; and readers may mull over whether the DPA/NPA approach should be enhancing or lowering the public's regard for those running the show. Again, it is worth noting that no person from AIG or Goldman Sachs went to jail. That is a Holder Justice Department fact.

With limited study, two other Gibson-Dunn publications online are worth a look; being online here (a 2011 DPA/NPA summary report) and here. Probably there have been annual DPA/NPA summaries published by the firm online for intervening years between 2011 and 2014. Worth noting, the 2011 summary publication does mention the Google - DoJ half-billion deal (with less focus on the amount than on aspects related to the terms of the contract, etc.).

As mentioned previously, The Grateful Dead's song, Shakedown Street, is available on YouTube. You can see that multiple postings exist. Is it a DC street, or local - or one in every state and town?

FURTHER UPDATE: Beyond conditionally excusing business firms, the SEC has entered into DPA and NPA agreements with (cooperative) individuals, those appearing to have turned to witnessing against bigger fish; see, here and here. That fits typical prosecutorial use in white collar crime situations of a let's-make-a-deal, and who-can-you-trade plea bargaining approach with lower-rung perps, so it is nothing entirely new. (The two SEC links were not found by any tedious research, but from Gibson-Dunn footnotes 4 and 5, here). Additional reading; online here, here and here.

Perhaps unrelated, but interesting, Mark Cuban; and Ocwen. One, Cuban, is owner of an NBA franchise and hence a celebrity; the other a mortgage industry firm that engaged in somewhat dubious practices. Coverage online re Cuban - here, here and here.

Re Ocwen, (most recently since they've accumulated quite a webpost trail), please read the following attempt to be representative, not exhaustive, in giving these last several below links.

This quote from "Billionaire foreclosure baron to resign, Ocwen to pay $100 million penalty,"

December 22, 2014 Ocwen Financial Corp.’s will pay a $100 million penalty and its executive chairman will resign as part of a legal settlement with the New York Department of Financial Services.

William C. Erbey, who profited from Ocwen’s business model of managing _ and often foreclosing _ on defaulted home loans, could step down by mid-January as part of a proposed consent order with New York’s financial regulator. Ocwen also will pay $50 million in restitution.

“We are pleased to have reached a comprehensive settlement with the DFS and will act promptly to comply with the terms,” said Ocwen Chief Executive Ronald Faris.

[...] Nearly one year ago, Ocwen signed a $2.1 billion settlement after a federal complaint was filed alleging misconduct by the company “resulted in premature and unauthorized foreclosures, violations of homeowners’ rights and protections, and the use of false and deceptive documents and affidavits, including robo-signing,” according to a press release from the Florida Attorney General’s Office.

[link in original] with the linked Yahoo News item stating

ATLANTA, Dec. 22, 2014 (GLOBE NEWSWIRE) -- Ocwen Financial Corporation (OCN) ("Ocwen") today announced that it has reached a comprehensive settlement with the New York Department of Financial Services ("DFS") related to the agency's recent investigation.

"We are pleased to have reached a comprehensive settlement with the DFS and will act promptly to comply with the terms," said CEO Ronald Faris. "We believe this agreement is in the best interests of our shareholders, employees, borrowers and mortgage investors. We will continue to cooperate with the DFS in the implementation of the terms of this settlement which we believe will allow Ocwen to continue to focus on what we do best -- helping homeowners."

Under the terms of the settlement, Ocwen will pay a civil monetary penalty of $100 million to the DFS by December 31, 2014, which will be used by the State of New York for housing, foreclosure relief and community redevelopment programs. The Company will also pay $50 million as restitution to current and former New York borrowers who had foreclosure actions filed against them by Ocwen between January 2009 and December 19, 2014. As previously communicated in the third quarter of 2014, Ocwen recorded a charge of $100 million to increase its legal reserves in anticipation of a potential settlement with the DFS. Ocwen will record an additional $50 million charge in its fourth quarter 2014 financial statements to reflect the final settlement amount.

After nearly 30 years of distinguished service, and as part of the settlement, founder William C. Erbey will step down from his position as Executive Chairman of Ocwen, effective January 16, 2015. Barry Wish, a current director of Ocwen, will assume the role of Non-Executive Chairman on that date.

"I am grateful to the many associates who have worked alongside me and proud of what we have accomplished," Mr. Erbey said. "I am confident about Ocwen's future under the experienced leadership of the executive team. I have worked with Ron for more than 20 years, and he is uniquely qualified to lead Ocwen going forward."

Ocwen has also agreed to non-monetary provisions relating to New York borrower assistance measures, a monitor-led oversight of Ocwen's operations, interactions with related parties and certain corporate governance measures. MSR acquisitions will be subject to Ocwen meeting specified benchmarks as well as DFS approval.

A summary of the settlement terms is below.

Settlement Summary of Monetary Provisions

Ocwen will pay a civil monetary penalty of $100 million to the DFS by December 31, 2014, which will be used by the State of New York for housing, foreclosure relief and community redevelopment programs.
Ocwen will also pay $50 million as restitution to current and former New York borrowers in the form of $10,000 to each borrower whose home was foreclosed upon by Ocwen between January 2009 and December 19, 2014, with the balance distributed equally among borrowers who had foreclosure actions filed, but not completed, by Ocwen between January 2009 and December 19, 2014.

Settlement Summary of Non-Monetary Provisions

Borrower Assistance

Beginning 60 days after December 19, 2014, and for two years, Ocwen will:

Provide upon request by a New York borrower a complete loan file at no cost to the borrower;
Provide every New York borrower who is denied a loan modification, short sale or deed-in-lieu of foreclosure with a detailed explanation of how this determination was reached;
Provide one free credit report per year, at Ocwen's expense, to any New York borrower on request if Ocwen made a negative report to any credit agency from January 1, 2010, and Ocwen will make staff available for borrowers to inquire about their credit reporting, dedicating resources necessary to investigate such inquiries and correct any errors.

Operations Monitor

The DFS will appoint an independent Operations Monitor to review and assess the adequacy and effectiveness of Ocwen's operations. The Operations Monitor's term will extend for two years from its engagement, and the DFS may extend the engagement another 12 months at its sole discretion.
The Operations Monitor will recommend and oversee implementation of corrections and establish progress benchmarks when it identifies weaknesses.
The Operations Monitor will report periodically on its findings and progress. The currently existing monitor will remain in place for at least three months and then for a short transitional period to facilitate an effective transition to the Operations Monitor.

Related Companies

The Operations Monitor will review and approve Ocwen's benchmark pricing and performance studies semi-annually with respect to all fees or expenses charged to New York borrowers by any related party.
Ocwen will not share any common officers or employees with any related party and will not share risk, internal audit or vendor oversight functions with any related party.
Any Ocwen employee, officer or director owning more than $200,000 equity ownership in any related party will be recused from negotiating or voting to approve a transaction with the related party in which the employee, officer or director has such equity ownership, or any transaction that indirectly benefits such related party, if the transaction involves $120,000 or more in revenue or expense.

Corporate Governance

Ocwen will add two independent directors who will be appointed after consultation with the Monitor and who will not own equity in any related party.
As of January 16, 2015, Bill Erbey will step down as an officer and director of Ocwen, as well as from the boards of Ocwen's related companies.
The Operations Monitor will review Ocwen's current committees of the Board of Directors and will consult with the Board relating to the committees. This will include determining which decisions should be committed to independent directors' oversight, such as approval of transactions with related parties, transactions to acquire mortgage servicing rights, sub-servicing rights or otherwise to increase the number of serviced loans and new relationships with third-party vendors.
The Board will work closely with the Operations Monitor to identify operations issues and ensure that they are addressed. The Board will consult with the Operations Monitor to determine whether any member of senior management should be terminated or whether additional officers should be retained to achieve the goals of complying with this Consent Order.

MSR Purchases

Ocwen may acquire MSRs upon (a) meeting benchmarks specified by the Operations Monitor relating to Ocwen's onboarding process for newly acquired MSRs and its ability to adequately service newly acquired MSRs and its existing loan portfolio, and (b) the DFS's approval, not to be unreasonably withheld.
These benchmarks will address the compliance plan, a plan to resolve record-keeping and borrower communication issues, the reasonableness of fees and expenses in the servicing operations, development of risk controls for the onboarding process and development of a written onboarding plan assessing potential risks and deficiencies in the onboarding process.

Webcast and Conference call

The Company will host a webcast and conference call on Monday, December 22, 2014 at 5 p.m. ET, to discuss the terms of the settlement with the New York Department of Financial Services.

The conference call will be webcast live over the internet from the Company's website at www.Ocwen.com. Click on the "Shareholder Relations" section. A replay of the conference call will be available via the website approximately two hours after the conclusion of the call and will remain available for approximately 30 days. The conference call will also be accessible by dialing 877-407-4018 (domestic) and 1-201-689-8471 (international). A telephonic replay of the conference call will be available through January 5, 2015, by dialing 877-870-5176 (domestic) and 1-858-384-5517 (international) and entering the passcode 13598198.

About Ocwen Financial Corporation

Ocwen Financial Corporation is a financial services holding company which, through its subsidiaries, is engaged in the servicing and origination of mortgage loans. Ocwen is headquartered in Atlanta, Ga., and has additional offices and operations in California; Florida; Iowa; New Jersey; Pennsylvania; Texas; the United States Virgin Islands; Washington, D.C.; India; Philippines; and Uruguay. Utilizing proprietary technology, global infrastructure, and world-class training and processes, we provide solutions that help homeowners and make our clients' loans worth more. Additional information is available at www.Ocwen.com.

That latter link will reach this most recent Ocwen press release.

It appears this is another non-prosecution situation; i.e., nobody at Ocwen is reportedly set to be subjected to criminal prosecution at risk of going to jail.

Additional and parallel Ocwen coverage, here, here, here, here and a most interesting nakedcapitalism.com post, here.

While the agreement is helpful to distressed New York home mortgage families; it is hoped that disadvantaged Minnesotans suffering wrongs at the hands of Ocwen will be given due attention, leading to relief, per complaint to Minnesota's Attorney General and/or suitable administative agencies such as the Department of Commerce, or others. Knowing of at least one asserted case of Ocwen misconduct in Minnesota, I believe it is not an isolated event, but that, instead, other Minnesotans might well be suffering wrongs at the hands of Ocwen, (or have grounds to claim so); and to the extent any such claims have merit, they would deserve government attention aimed at securing citizen relief.

The instance of complaint of which I am aware appears to have met a degree of agency incredulity; as in, "They can't really be doing all of that claimed stuff so brazenly and aggressively;" while the above links suggest they can.

Moreover, the extensively quoted relief measures in New York appear to form a helpful roadmap for any Minnesota administrative proceedings involving Ocwen to mirror, or expand.

MORE: This item link relates to an item from the same website that was cited above; and it in turn references this, and a letter online here.

The Street, here. The administrative agency's press release (including contact information), online here. [UPDATE - There is an online Ocwen press release apparently acknowledging a need to remediate previous error/harm due to backdating of Ocwen correspondence with mortgagors.]

YET MORE - FOR MY REPUBLICAN FRIENDS: They may love Cato Institute, despite stuff out of there that should trigger an investigation by the MEN IN BLACK:

Had the dispute proceeded to trial, it’s unlikely a judge would have ordered Mr. Erbey’s ouster. But large businesses today facing charges from financial regulators seldom dare insist on their right to a day in court – the risks of going to trial are just too high, as law professor Brandon Garrett and commenter James Copland explained at a recent Cato panel discussion on Garrett’s book Too Big to Jail: How Prosecutors Compromise with Corporations. Until that calculus changes, they will be at the mercy of whatever arbitrary if not vengeful terms regulators may insist on.

[link omitted]. From all I have read, that "... it's unlikely ... right to a day in court ..." business written by this author, Walter Olson, is like saying it is unlikely a bear shits in the woods, (but dare not insist on a day in court over whether and where it shits).

Get Real.

Cato would be flat-out embarrassed to see his name abused by such an idiot.

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