Posts Tagged ‘ Week Adjourned ’

Week Adjourned: 6.11.11

June 13th, 2011. By LucyC

Top Class Actions

Never mind what’s in your wallet…Capital One could be more concerned with what’s left in theirs soon, as it seems they may have been doing a little corporate pick pocketing… it’s very popular these days. A lawsuit seeking class action status was just filed alleging Capital One (NYSE:COF) misrepresented its “Transfer Balance Program” program, resulting in higher-than-expected interest rates for consumers.

The case, filed June 9, 2011, in the United States District Court for the Eastern District of Michigan, alleges that Capital One deceived cardholders by claiming that a cash advance obtained through the company’s transfer balance program would include a 0 percent Annual Percentage Rate (“APR”) for one year. The company also allegedly promised that credit balances on regular monthly purchases (“purchase balances”) would incur no interest as long as the balance was paid within 25 days.

However, according to the complaint, cardholders who took advantage of the transfer balance program were charged interest rates exceeding 13 percent on their purchase balances, even if the balance was paid on time, because payments were applied to the transfer balance rather than to the purchase balance.

The lawsuit alleges that Capital One’s actions constitute a breach of contract and the duty of good faith and fair dealing, in addition to violations of the Virginia Consumer Protection Act and the Michigan Consumer Protection Act. The case also argues that Capital One received unjust enrichment through the alleged scheme.

Ah yes, unjust enrichment…that old chestnut. Seems it never grows old.

Top Settlements

One for the Madoff Meter… While we’re on the subject of things financial—a settlement was recently reached between a group of investors and HSBC Holdings PLC, with Europe’s largest bank agreeing to pay $62.5 million to the investors, who allegedly lost money in association with a Madoff securities fraud.

It seems that the investors had placed funds with Ireland-based Thema International Fund Plc, the assets of which were held with Bernard L. Madoff LLC, according to a statement by HSBC. Bloomberg reports “Thema Fund, a so-called Madoff feeder fund, was controlled by Bank Medici AG. Bank Medici with its founder Sonja Kohn is part of a $59 billion suit by the trustee liquidating Madoff’s firm.” This has to be one of the worst trustee jobs in history, I would think.

Reportedly, Thema was one of several funds placed in the custodianship of HSBC units, which subsequently funnelled monies to Madoff. The settlement is pending court approval.

A statement issued by HSBC stated that the settlement “shall in no way be construed” as an admission of fault. HSBC still faces other Madoff-related lawsuits in other countries including Germany, and Luxembourg. It’s the never ending story. 

And it’s a victory for the Ladies. A federal judge in Washington has approved a $32 million settlement of a class action brought against Wells Fargo Advisors by a group of women who alleged gender discrimination.

Reportedly, some 3000 female financial advisors make up the class. The suit was filed in 2009 by three female financial advisors who worked at Wachovia Securities. According to a report in the Wall Street Journal the women claimed that compared with their male counterparts, female advisors were provided fewer business opportunities by the company. The women also claimed that female advisors were at a disadvantage in other ways, specifically with respect to career advancement, work assignments and distribution of accounts.

The class covers all women who were employed as financial advisors by Wachovia or Wells Fargo at any time between March 17, 2003, and January 25, 2011, which is the date a preliminary approval was reached. The class also covers women who were employed by Wells Fargo Investments LLC and women who were employed as advisors by Prudential Securities Inc. or A.G. Edwards & Sons Inc. as of the dates those companies merged with Wachovia. I wonder who’s next?

OK. That’s it for this week. See you at the Bar.

Tags: Capital One, Gender Discrimination, HSBC, HSBC Holdings, Transfer Balances, Week Adjourned, Wells Fargo
Posted in Emerging Issues, Week Adjourned | 8038No Comments »Week+Adjourned%3A+6.11.112011-06-13+15%3A23%3A42LucyC

Week Adjourned: 4.1.11

April 1st, 2011. By LucyC

Top Class Actions

Rosetta Stone getting a lesson in securities litigation? The manufacturer of learning software—and apparent sure-fire way to win the girl (see ad above), got hit with a securities lawsuit this week, over allegations that they’re not playing straight, so to speak. The suit, which has not yet been certified, was filed on behalf of purchasers of the common stock of Rosetta Stone, Inc. (“Rosetta Stone” or the “Company”) (NYSE: RST) between February 25, 2010 and March 1, 2011, inclusive (the “Class Period”).

The specific allegations? Violations of federal securities laws—such as the free and lower-priced competitive product offerings, not a temporary reduction in advertising, was having a material adverse effect on the Company’s Class Period revenues, particularly U.S. consumer revenues; and that the favorable sales booking numbers Rosetta Stone reported during the Class Period was the result of key retail partners maintaining inventory of the Company’s products well above historic levels; and—oh yes—there’s more—that Rosetta Stone’s reported sales bookings and revenues during the Class Period were the product of manipulation.

However, on February 28, Rosetta Stone announced fourth quarter revenue of $74.3 million, a 5% decrease from the prior year, net income on a GAAP basis of $5.0 million, a decrease of 60% from the 2009 fourth quarter. On this news, RS’s shares fell $1.77 to $13.19 per share. Let’s hope it’s not just the shareholders who get an education from this.

Top Settlements

$17 million for workplace asbestos exposure. Sounds nice—but maybe not so much. As big Read the rest of this entry »

Tags: Asbestos, Asbestos Mesothelioma, National City Bank, PNC Bank, Rosetta Stone, Week Adjourned
Posted in Week Adjourned | 7437No Comments »Week+Adjourned%3A+4.1.112011-04-01+21%3A50%3A15LucyC

Week Adjourned: 2.4.11

February 4th, 2011. By LucyC

Top Class Actions

Phantom of the iPhone. Do you have a phantom AT&T account? It seems for every new technological gadget that requires connectivity—there’s an opportunity to take advantage. Most recently, AT&T Mobility got hit with a potential class action lawsuit over allegations associated with iPhone and iPad accounts. The suit claims that “AT&T’s bills systematically overstate the amount of data used on each data transaction involving an iPhone or iPad account.” And, the suit alleges that AT&T bills customers on data transactions even when customers have disabled their phones. Doesn’t a transaction require more than one party?—one party in the know?

The named plaintiff, Patrick Hendricks, claims that AT&T’s overbilling “was discovered by an independent consulting firm retained by plaintiff’s counsel, which conducted a two-month study of AT&T’s billion practices for data usage, and found that AT&T systematically overstated web server traffic by 7 percent to 14 percent, and in some instances by over 300 percent. So, for example, if an iPhone user downloads a 50 KB website, AT&T’s bill would typically overstated the traffic as 53.5 KB (a 7 percent overcharge) to as high as 150 KB (a 300 percent overcharge),” the complaint states.

Here’s the kicker—Hendricks also alleges that “Not only does AT&T systematically overbill for every data transaction, it also bills for phantom data traffic when there is no actual data usage initiated by the customer. This was discovered by the same independent consulting firm, which purchased an iPhone from an AT&T store, immediately disabled all push notifications and location services, confirmed that no email account was configured on the phone, closed all applications, and let the phone sit untouched for 10 days. During this 10-day period, AT&T billed the test account for 35 Read the rest of this entry »

Tags: ATT, Avandia, AXA Rosenberg Group, GlaxoSmithKline, GSK, iPad, iPhone, Securities Fraud, Week Adjourned
Posted in Week Adjourned | 67382 Comments »Week+Adjourned%3A+2.4.112011-02-04+22%3A36%3A13LucyC

Week Adjourned: 11.12.10

November 12th, 2010. By LucyC

Top Class Actions

More Foreclosure Fraud. It seems that between Chinese drywall and questionable foreclosures, Florida homeowners just can’t catch a break. A class action lawsuit was filed this week on behalf of tens of thousands of homeowners in the Sunshine State, who have allegedly been suffered as a result of GMAC’s use of fraudulent affidavits and other documents in foreclosure proceedings.

It seems that GMAC employees admitted in sworn testimony to signing whatever was put in front of them in foreclosure cases, regardless of the accuracy of those documents, without personal knowledge of the truth of what they are signing, without reviewing the underlying documents to determine whether the documents are accurate, and often not even in the presence of a notary.

Geoffrey Huber, one of the plaintiffs, said he discovered a “robo-signed” affidavit had been filed in foreclosure proceedings on the house he owns in Florida. “I don’t know how they thought they legally could get away with this.” Maybe because very few people ever check the fine print? Seems like a good time to start.

The Complaint alleges that the defects in virtually every foreclosure case filed in the last several years are not mere “technicalities,” nor just “sloppy paperwork.” Indeed, one of the lead plaintiffs in this case alleges that he was not actually in default at the time GMAC initiated foreclosure proceedings.

The lawsuit is seeking damages based on claims GMAC’s actions violated the homeowners’ Read the rest of this entry »

Tags: Asbestos, Asbestos Mesothelioma, Florida, Foreclosure Mills, Foreclosures, GMAC, Wal-Mart, Week Adjourned
Posted in Week Adjourned | 5711No Comments »Week+Adjourned%3A+11.12.102010-11-12+20%3A42%3A12LucyC

Week Adjourned: 9.24.10

September 24th, 2010. By LucyC

Top Class Actions

Don’t Put that Mortgage in Reverse. If there’s any possible way to make a buck off consumers, you better believe the banks will figure it out. It seems there’s just no end to the stuff they get up to. Case in point, a Seattle mortgage lender, The Seattle Mortgage Co, a unit of Seattle Bank, is being sued in California over alleged illegal lending practices.

Here’s the deal, the suit focuses on fees paid to brokers and charges levelled against borrowers in reverse mortgage transactions.

FYI—a reverse mortgage, also known as a home equity conversion mortgage, is available only to people over the age of 62 years, and is heavily regulated by the department of Housing and Urban Development (HUD)—but maybe not heavily enough.

While it is the intent of the regulation to ensure that mortgage brokers provide their customers with the best financial advice based on the customer’s needs, it is possible that the brokers may have been influenced by the fees they receive from the banks selling the loan products. In other words, it may have been in the brokers’ and bank’s best interests for your grandmother to take out a reverse mortgage—but not necessarily hers.

The class is estimated to affect as many as 7,800 seniors, and if the court finds in favor of the plaintiffs, reimbursement of costs and damages may total as much as $56 million, the lead attorney representing the plaintiffs has said. And that’s just one state. Similar practices may be going in on other states… but that remains to be seen.