Tag Archive | "allegations"

Bank of America Pays $8.5 Billion Mortgage Settlement

Bank of America has agreed to pay $8.5 billion to resolve claims that the financial and insurance company sold mortgage-backed securities that are of low-quality before the collapse of the housing market.

The deal came after a group of investors insisted that the North Carolina-based company repurchase $47 billion worth of mortgages that the Countrywide unit sold in bonds. The agreement between parties was announced Wednesday morning.

The investors argued that Countrywide, which was bought by Bank of America for $4 billion in 2008, expanded itself at the investor’s price by servicing bad loans and continuing servicing fees. Bank of America has denied such allegations.

The mortgage settlement would reduce future uncertainty in the banking industry and resolve the issues caused by their acquisition of Countrywide, said Brian Moynihan, chief executive officer of Bank of America, on Wednesday.

The settlement, which covers 530 trusts with $424 billion principal balance, is subject to the approval of the court.

According to Keith Horowitz, a Citi analyst, the settlement that is equivalent to only 2% of the original principal balance, eliminates one of the biggest risks of investors for Bank of America.

Also, the settlement puts Bank of America to a second-quarter loss between $8.6 billion and $9.1 billion. The bank is expected to release a quarterly loss between $3.2 billion and $3.7 billion, not including the settlement and other charges.

The Bank of America Corp had a 4 percent increase in shares to $11.30 before the market opened. The investors are glad that the bank can place huge uncertainty behind it.

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Pastor’s Sexual Abuse Lawsuit Resolved

A sexual abuse case filed by four young men against the pastor of their church in Atlanta has been “resolved,” said their attorney on Thursday.

Attorney B.J. Bernstein, the lawyer who represented the young men, did not give details of the said settlement between the two parties. Moreover, Pastor Eddie Long and his church – New Birth Missionary Baptist Church in Georgia – did not comment on the news.

Bernstein’s office released a statement saying that the neither the plaintiffs, nor Attorney Bernstein will make comment on the case.

Pastor Long already denied that allegations September of 2010, saying that he has never used his status as a church leader to coerce the young men (in their late teens) to have sex or any relationship with him.

According to the lawsuit, however, Long follows a trend of selecting and isolating a group of young men (all of which are members of their church) and use his authority as a church leader to force them in to having sex with him.

Long’s church started only with 300 members in 1987. Membership, however, increased to at least 25,000 today. When the lawsuit was first filed, the pastor told his church that his battle is akin to David’s situation when he fought Goliath.

The church has a global network of businesses and ministries. It is set inside a campus at the east of Atlanta. They also hosted the funeral of Coretta Scott King, a civil rights leader, in 2006.

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Cisco Suspected to have Helped China in Tracking Falun Gong Followers

A number of Falun Gong spiritual followers have filed a lawsuit against Cisco while accusing them of helping the Chinese government track down, identify, and persecute their members. Cisco allegedly built specialized computer software that tracked their online activities.

Cisco responded to the lawsuit by denying the allegations and said they only sold China standard networking equipment. Furthermore, the company insisted that they did not provide the foreign government any special or customized technology.

The lawsuit was filed a week ago in San Francisco by the Human Rights Law Foundation based in Washington. The foundation worked hand-in-hand with several lawyers who represent the Falun Gong members who either live in China or in the US.

Cisco is the number one seller of computer networking devices all over the world. They also sell a variety of equipment in China.

The lawsuit filed against the company says that Cisco knowingly helped China design and operate a surveillance and censorship network called the “Golden Shield”. The Golden Shield is a system that Chinese security officials to track down and identify members of all banned groups in China, Faun Gong included. The captured members are allegedly subjected to human rights abuse such as torture and extrajudicial killing.

Cisco is firm in denying any linkage to the Chinese government. They said that the company builds tools which allow free exchange of information following global standards. In addition, they said that they sell in China the exact same merchandise they do here in the United States and all other countries.

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