by Brian Mahany
It’s been a half decade from the dark days of the 2007-2008 financial crisis. Since then, most banks have paid back their TARP monies, government regulators have subjected banks to numerous “stress tests” to insure they are financially stable and Congress passed dozens of new laws to better regulate banks. There is even a brand new agency charged with regulating banks, the Consumer Financial Protection Bureau. So everything is fine now, right?
Wrong. It’s worse than ever.
Notwithstanding all the reforms and new regulations, big banks are still behaving badly. Recently we reported on the record $1.9 billion settlement extracted from HSBC after the British banking giant was accused of helping Mexican drug cartels and terrorists launder money. If that isn’t enough, many of the other big banks were recently found to have been manipulating the LIBOR rate, the benchmark for determining interest rates on many loans. And JPMorgan Chase has been accused of misleading financial statements after suffering a $6 billion trading loss.
The American public understands, even if regulators do not. According to a recent Gallup poll, about 20% of Americans say they have confidence in big banks. That number mirrors estimates from the SEC.
The banking system is broken. The question is how long the big banks can limp along before they collapse and potentially take down the entire economy with them. In prior years, institutional investors were willing to give banks the benefit of the doubt but today, fewer and fewer investors have confidence in both the banking system and the nations biggest banks, the so-called “too big to fail, too big to jail.”
More and more investors are filing private lawsuits against big banks for misleading financial statements and other sleights of hand. Businesses and individual are filing a record number of claims against lenders too.
Homeowners have filed thousands of suits against banks for robo-signing, fraudulent foreclosure practices, forged documents and peddling toxic debt – debt they created. Businesses are filing suits for a wide range of claims.
We have also seen a dramatic increase in whistleblowers; men and women within the industry who are tired of turning a blind eye toward banking abuses. Nowhere has this been more true than in the home lending industry. From illegal shadow branches to improper net branch activities, former and current employees are stepping up and reporting fraud.
If the fraud impacts a government program or loan guaranty or involves federally insured mortgages, whistleblowers may be entitled to receive up to 30% of what the government collects. With some claims in the billions, the potential cash awards for whistleblowers under the False Claims Act or SEC and IRS programs is huge.
Our team of fraud lawyers litigates cases against banks and other lenders. We also represent whistleblowers – currently our firm represents the whistleblower in the largest false claims action in the United States against a lender; HUD’s $2.4 billion suit against Allied Home Mortgage.
There are lots of good lawyers in this country but few that specialize in lender liability and bank fraud cases and even fewer willing to protect the rights of whistleblowers. For more information, contact attorney Brian Mahany at or by telephone at (direct). All inquiries are protected by the attorney client privilege and kept in strict confidence.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and coming soon San Francisco, California. Fraud recovery available in many jurisdictions.
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