Justice Department Weighs In Against Wells Fargo in a Whistle-Blower Suit

Fresh woes for Wells Fargo and a victory for two of its whistle-blowers occurred late Tuesday when the Justice Department filed a friend-of-the-court brief in a lawsuit brought against the bank by two former employees, who were fired after they tried to report misdeeds they had observed to their supervisors.

The government’s filing adds heft to a long-running case that involves behavior that predates the 2008 financial crisis and the sham-accounts scandal that came to light at Wells Fargo last year.

Although the Justice Department’s filing does not opine on the whistle-blowers’ claims, it argues that an appellate court should revise the analysis it made when it dismissed the case last year. Tuesday’s filing follows a Supreme Court ruling in February that also asked the appellate court to review the matter. read more »

U.S. joins lawsuit against Los Angeles over housing for disabled

The United States has joined a lawsuit accusing the city of Los Angeles of failing to develop affordable housing for disabled people despite accepting millions of dollars of federal funds for that purpose, the Department of Justice said on Wednesday.

Los Angeles, which has about 4 million people, was accused of violating the federal False Claims Act by falsely certifying compliance with laws governing housing for people with disabilities, a precondition to receiving funds from the U.S. Department of Housing and Urban Development.

The lawsuit said some of the money went to CRA/LA, a city agency formerly called the Community Redevelopment Agency, but none of the HUD-funded multifamily housing supported by CRA/LA or other developers had enough accessible units. read more »

Ponzi Scheme Meets Ransomware for a Doubly Malicious Attack

The first message to pop up on the computer screen let the victims know they had been hacked. The second message gave them a way out.

The victim had a choice: Pay the hackers a ransom of one bitcoin, a digital currency worth roughly $2,365, in exchange for regaining access to the computer, or try to infect two new people on behalf of the attackers. If someone the victim knew fell for the bait and became infected, the attackers would consider the ransom paid and cede control of the infected computer.

The attack late last year was, according to the cybersecurity researchers who discovered what they now call the Popcorn Time ransomware, the first Ponzi scheme for one of the internet’s oldest types of cyberattacks. read more »

BofA pays Tutor Perini $37 million to resolve fraud lawsuit

Bank of America Corp has paid Tutor Perini Corp $37 million to resolve a lawsuit claiming the bank defrauded the construction company by selling it millions of dollars of auction-rate securities it knew were on the brink of collapse.

The settlement, disclosed by Tutor Perini in a filing with the U.S. Securities and Exchange Commission on Tuesday, resolves a lawsuit the Los Angeles-based company filed against the bank in 2011 in federal court in Boston. read more »

DOJ paying closer attention to compliance in foreign countries

Pharma companies operating internationally should take the time to review their anti-corruption practices, particularly in their China operations.

The U.S. Department of Justice is ramping up enforcement efforts, and 2016 “marked a record year for corruption enforcement,” law firm Sidley Austin said, noting that $6 billion in sanctions were paid globally for violations of the Foreign Corrupt Practices Act. Most of those efforts were focused on China, "which continues to be one of the riskiest places in the world to conduct business from an FCPA perspective."

Enforcement efforts included ramping up the DOJ’s Fraud Section and increasing the number of prosecutors by 50%. In addition, the FBI created three specialized squads devoted to FCPA enforcement. read more »

Ex-Morgan Stanley trader barred for hiding Venezuela bond buys

One Wall Street bank that wasn’t buying controversial Venezuelan bonds was Morgan Stanley — or so it thought.

A broker watchdog banned ex-bond trader John Batista Bocchino on Thursday for buying $190 million of the South American country’s debt, defying the bank’s own rules against it — and then trying to hide the deals. read more »