This morning I attended a Breakfast with Congressman Barney Frank sponsored by the New England Council in Massachusetts. I was excited to attend this breakfast to get a play by play as to how the financial reform was going. I have to say my initial fears of further regulation in yet another industry were put at bay, for the moment. I appreciated how Mr. Frank began his talk by giving some assurance that regulation was being initiated not with a socialist fervor but as recognizing that the financial industry is a private sector. The public sector is only being called on to create rules to deal with a present crisis.
Mr. Frank proceeded to discuss the historical regulatory creations as they have appeared in the past to deal with financial issues such as the Securities and Exchange Act of 1933 which dealt with the crash of 1929. He did not suggest that the repeal of the Glass-Steagall Act necessarily spawned this present financial crisis. However, he suggested that the present financial reform is meant to tackle non-financial, non-depository and non-regulated institutions. In light of the heavy regulation in the financial and insurance industry, Mr. Frank further suggested that the credit default swap, a form of an insurance product and a hedge, was not regulated and was based on a notional almost mystical value.
What the reforms are attempting to tackle are the products that have grown out of an industry that is continuously growing in sophistication. Mr. Frank mentioned that the means became the end which was only to make money, instead of the means leading to the end. He also suggested that the new reforms would abolish the requirement that credit ratings be obtained as required in the past and that buyers will have the right to sue a credit rating agency.
I think the government may be on the right track. We may never be quite sure how we got into the current crisis but we can try to prevent them from being repeated and wait for the next.
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In a May 11 announcement, the Securities and Exchange Commission (SEC) stated it had charged two South Florida men for engaging in the unlawful selling of securities. The SEC alleges that Boca Raton, Fla. residents Leonard J. Adams and Peter G. Grabler participated in numerous secondary offerings in order to profit illicitly. Although neither admitted nor denied the allegations, Adams and Grabler agreed to pay a combined total of over $1.5 million to settle the SEC’s charges.
As the United States slowly recovers from the mortgage crisis and ensuing economic downturn, the fact remains that thousands of homeowners all across America are still facing the threat of foreclosure. Given the current state of the economy, the possibility of missing just one mortgage payment can sometimes be the tipping point that pushes a homeowner closer to the brink of foreclosure. Despite a seemingly dismal outlook, mortgage modification and foreclosure defense are just two of the tools available to help struggling homeowners protect themselves against foreclosure.
The Financial Industry Regulatory Authority (FINRA) has permanently barred Michael J. DiMare, of Ponte Vedra Beach, Fla., from the securities industry for “misappropriating over $1.9 million in client funds.” In its news release on the settlement, FINRA stated that Dimare, formerly a registered representative, hid his financial scheme by making false statements and submitting falsified account statements to his customers.
In response to the housing crisis gripping the nation, the Obama administration implemented the Home Affordable Modification Program (HAMP) to stem the growing number of foreclosures in the United States. HAMP is a part of the government’s comprehensive Making Home Affordable initiative to help homeowners who are struggling to make their mortgage payments, or homeowners who are facing foreclosure.
As the nation slowly recovers from one of the worst recessions in recent history, millions of homeowners throughout the United States continue to struggle with their monthly mortgage payments. Many hardworking and responsible homeowners who have fallen victim to the unhealthy economy in addition to the mortgage crisis are facing the threat of foreclosure as well. Although the situation may seem dire, a successful mortgage modification can yield a bevy of positive results, including the possibility of avoiding foreclosure in addition to helping a homeowner keep his or her home equity.
As millions of American homeowners continue to deal with a struggling economy and a poor housing market, more and more of these individuals and families now have to contend with another problem: a breakdown in communication between banks that service mortgages. Not only does this miscommunication bring frustration, it can also lead to mistaken or even premature foreclosure in spite of a pending mortgage modification application.
U.S. District Judge Richard Kyle sentenced Minnesota businessman Tom Petters to 50 years in prison for orchestrating a Ponzi scheme estimated at $3.7 billion. Counted among the victims of his scheme were missionaries, pastors and retirees. The sentence comes after a jury found Petters guilty on 20 counts of money laundering, wire fraud, conspiracy and mail fraud in December.
The DOJ takes cyber crimes seriously, as Albert Gonzalez has found out. U.S. District Court Judge Douglas P. Woodlock sentenced Gonzalez to 20 years and one day in prison for two conspiracy counts in connection with his efforts to help gain access to the payment card networks of numerous nationwide retailers. The judge also ordered Gonzalez to pay a fine of $25,000 as well as serve a three year supervised release upon completion of his prison term.