Government probe of Standard and Poor's

Legal Business 2011/08/19 04:02   Bookmark and Share
The Justice Department is investigating whether the Standard & Poor's credit ratings agency improperly rated dozens of mortgage securities in the years leading up to the financial crisis, The New York Times reported Wednesday.

The investigation began before Standard & Poor's cut the United States' AAA credit rating this month, but it's likely to add to the political firestorm created by the downgrade, the newspaper said. Some government officials have since questioned the agency's secretive process, its credibility and the competence of its analysts, claiming to have found an error in its debt calculations.

The Times cites two people interviewed by the government and another briefed on such interviews as its sources. According to people with knowledge of the interviews, the Justice Department has been asking about instances in which the company's analysts wanted to award lower ratings on mortgage bonds but may have been overruled by other S&P business managers.

If the government finds enough evidence to support a case, it could undercut S&P's longstanding claim that its analysts act independently from business concerns. The newspaper said it was unclear whether the Justice Department investigation involves the other two major ratings agencies, Moody's and Fitch, or only S&P.

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NY man suing Facebook must explain missing items

Headline Legal News 2011/08/18 09:23   Bookmark and Share
A judge gave Facebook access to the personal email accounts of a man suing for half ownership of the social networking website and ordered him to explain why he can't produce documents its lawyers believe are evidence.

Proof that Paul Ceglia's case is a fraud has been sitting on a Chicago law firm's email server since 2004, Facebook attorney Orin Snyder told the federal judge on Wednesday.

An email that Ceglia sent to a former business associate at the firm includes a scanned version of the two-page contract he and Facebook founder Mark Zuckerberg signed, Snyder said. Unlike the one Ceglia filed, it doesn't mention Facebook, only a street-mapping database Ceglia had hired Zuckerberg to work on, he said.

"The noose is tightening around the neck of this plaintiff, and he knows it," Snyder said during a four-hour procedural hearing that had each side accusing the other of dirty tricks.

Snyder said Ceglia had artificially aged his "phony" contract with light and chemicals, backdated computer files and transferred others to portable storage devices, which he'd likely tossed into Lake Erie.

Ceglia's attorney, Jeffrey Lake, countered that Facebook had tried to "poison the jury pool" by releasing what should have been confidential documents and implied Facebook had planted damning evidence on Ceglia's computers, a statement he backed away from after the hearing.

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Court dismisses part of NM whistleblower case

Headline Legal News 2011/08/18 09:23   Bookmark and Share
Attorney General Gary King and a state agency can take charge of legal efforts to recover money for New Mexico for some investment deals allegedly influenced by political considerations, a state court ruled Wednesday.

District Judge Stephen Pfeffer also dismissed portions of a whistleblower's lawsuit involving allegations of a pay-to-play scheme in investment deals by the State Investment Council, which oversees permanent funds worth more than $15 billion. The judge's ruling allows the council and the attorney general to handle those legal claims.

The lawsuit by Frank Foy, a former chief investment officer of the state's educational pension fund, will continue on other allegations, including that the state lost money on bad investments by the Educational Retirement Board and some by the council and that politics influenced some of the pension's fund investments.

The Investment Council filed a lawsuit in May claiming that its former top manager and a financial advisory firm improperly steered New Mexico investments to political supporters of former Democratic Gov. Bill Richardson. More than a dozen other defendants were named, including third-party placement agents who earned millions of dollars in fees on investment deals.

Former State Investment Officer Gary Bland has said the allegations are "absurd" and he was not involved in any wrongdoing.

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Monster iPhone location lawsuit filed against Apple

Headline Legal News 2011/08/17 09:23   Bookmark and Share
More than 20,000 South Korean iPhone users have filed a class action lawsuit against US technology giant Apple for alleged privacy violations over the collection of location data, a law firm said.

The suit came after lawyer Kim Hyung-Suk was awarded one million won (US $950) in compensation in June, the first such payout by Apple's Korean unit, following an interim order by a court in the southeastern city of Changwon.

Kim has since led online preparations for a class action suit against Apple and its South Korean unit.

"The suit accuses Apple of breaching articles 10 and 17 of the constitution that ensure pursuit of happiness and protection of privacy, and the South Korean law on protection of location data," a spokesman for Kim's firm Miraelaw said. The suit involves 26,691 people demanding one million won each.


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EEOC sues, argues man on treatment should be hired

Lawyer Blog Post 2011/08/17 09:23   Bookmark and Share
The U.S. Equal Employment Opportunity Commission has sued a national insurance company, contending the firm violated federal law by refusing to hire a North Carolina man after he disclosed he was participating in a methadone treatment program for a drug addiction.

The suit was filed Tuesday in U.S. District Court in Raleigh against United Insurance Co. of America, said EEOC attorney Lynette Barnes.

The complaint argues the firm violated federal disability discrimination law by refusing to hire Craig Burns, 30, who applied for a job in the firm's Raleigh office in December of 2009. The firm made a conditional offer of employment to Burns the following month, depending upon his passing a drug test, the complaint said.

The test showed the presence of methadone in his system, so Burns submitted a letter to the firm from his treatment provider saying he was participating in a supervised methadone treatment program and taking legally prescribed medication as part of the treatment, the complaint said.

Upon receiving this information, United Insurance notified Barnes he was not eligible to be hired and withdrew the employment offer, the complaint said.

Barnes said the action violates the Americans With Disabilities Act, which protects employees and applicants from discrimination based on their disabilities. A recovering drug addict is covered under the act, the attorney said in an interview.

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Whitey Bulger's girlfriend pleads not guilty

Headline Legal News 2011/08/16 09:22   Bookmark and Share
The longtime girlfriend of reputed Boston crime boss James "Whitey" Bulger pleaded not guilty Thursday to helping him elude authorities during his 16 years as a fugitive.

Catherine Greig, 60, entered her plea in a brief appearance in federal court in Boston that lasted less than five minutes. She also waived a reading of the indictment.

Greig was indicted last week on a charge of conspiracy to harbor and conceal a fugitive, a crime that carries a maximum sentence of five years. Greig has been jailed since she and Bulger were captured in June in Santa Monica, Calif. Bulger has pleaded not guilty to participating in 19 murders.

Prosecutors say Greig actively helped Bulger escape capture, but her attorney says she's a subservient woman who wasn't aware of the extent of Bulger's alleged crimes when she fled with him.

On Thursday, Greig smiled at her twin sister when she entered the courtroom. She did not speak during the hearing, except to tell the judge she understood the charges against her and was ready to enter her plea.

After the hearing, Greig's attorney Kevin Reddington was asked if Greig was cooperating with authorities against Bulger.

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