U.S. Bank Must Face Restitution Claims in Peregrine Lawsuit - Judge.

Posted by BankInfo on Thu, Nov 20 2014 02:05 pm

U.S. Bank taken legal action against by the government in 2012 for supposedly aiding a substantial scams at brokerage Peregrine Financial, must face claims for almost $36 million in restitution to Peregrine's victims, a government judge in Iowa ruled.

Court Linda Reade on Wednesday rejected the bank's argument that restitution should be sought from the person that committed the fraud, Peregrine founder Russell Wasendorf Sr., & not from the Bank.

US Bank, component of Minneapolis-based US Bancorp, was sued in 2013 by the U.S. Commodity Futures Trading Commission (CFTC) for apparently allowing Wasendorf treat an account set up for Peregrine client funds like his ‘Personal Piggy Bank.’

The lawsuit was the government's very first against a bank linked to the collapse of Peregrine and also a nearly two-decade-long fraud at the futures brokerage. Wasendorf began estimated a 50-year sentence in 2012 after begging guilty to embezzling greater than $215 million from hundreds of customers. The CFTC has estimated the bank's supposed misconduct triggered nearly $36 million in losses.

Teri Charest, a spokesperson for US Bank, said the bank did nothing incorrect and also would certainly defend itself vigorously.

‘We did not recognize about the Peregrine Ponzi plan and also in fact we were a sufferer of the very same scheme,’ she said. A spokesman for the CFTC decreased to comment. In her order, Reade also ruled that US Bank could not leave the CFTC's lawsuit based upon its argument that the compensation failed to identify the fraud.

In court filings, the bank had actually argued that the CFTC had ‘Unclean Hands’ in the situation due to the fact that it discovered warning signs during a 1999 audit and took no activity against Peregrine.

‘Although the 1999 CFTC audit should have led the CFTC to monitor Wasendorf's tasks much more very closely,' its failure to sense the scams needs to not prevent it from pursing an enforcement action, Reade said.

The order began motions by both sides for a judgment in their favor as an issue of law before the case goes to trial. The case is set for trial early following year.

While limiting U.S. Bank's defense, Reade ruled that other issues, such as whether the bank acted in bad belief, are best left to a jury.

The case is U.S. Asset Futures Trading Commission v US Bank, U.S. District Court, Northern District of Iowa, No 13-cv-2041.

Three Reasons to Purchase and also Hold the Bank of Nova Scotia Forever.

Posted by BankInfo on Wed, Nov 19 2014 04:36 pm

Growing global macro: Economic and Geopolitical uncertainty, paired with boosted market volatility has brought the focus securely back on investing fundamentals. This could not be truer when surveying the economic landscape in Canada. While the U.S. Economic situation is firing on all cylinders, weaker oil prices & decreasing commodity demand from Asia are hurting Canada's economy.

The key investing fundamentals, which in time will almost guarantee success, are identifying companies with effortlessly recognized businesses, steady yet ever-growing earnings, wide economic moats & strong long-term growth prospects. Companies having these characteristics, have the ability to proceed rewarding shareholders year in, year out via consistently increasing dividends.

One Canadian company that stands out for every one of these reasons is the Bank of Nova Scotia; its definitive strengths could be distilled into 3 key points.

First and foremost as Canada's 3rd biggest bank by assets, its business is virtually difficult for a competitor to replicate.

This is for a range of factors, however key are the steep barriers to access with banking being a heavily regulated industry which needs significant resources in order to commence procedures.

Bank of Nova Scotia has built an excellent operational footprint, which covers over 55 countries with significant global operations in the Caribbean, Colombia, and Peru. It has also striven to scale up its consumer lending business, where it trailed the other 4 leading Banks, in addition to its insurance and also wealth management operations, giving it an impressive varied financial services profile.

Each of these features endow Bank of Nova Scotia with a wide multifaceted economic moat, protecting its affordable benefit, raveling revenues, & giving it with some impressive growth prospects.

Second, while financial services can suffer throughout financial downturns with demand for credit history declining and defaults increasing, Bank of Nova Scotia's geographically diversified portfolio of products and services mitigates this threat.

Its diversified geographical footprint, which sees it running Colombia's 5th largest bank and also Peru's 3rd largest, reduces its dependence on the domestic economic situation. It additionally endows it with some strong growth leads with both of those economic situations amongst the fastest increasing in Latin America. For 2015, Colombia's GDP is expected to expand by 4.5 percent while Peru's will broaden 6 percent, as compared to Canada's 2.5 percent.

A lot more impressively, Bank of Nova Scotia monitors the state of its operations so as to continually improve efficiencies across its business and actively manage credit exposure, further enhancing earnings.

Finally & the real factor for holding Bank of Nova Scotia, is its long history of continually paying continuously increasing dividends.

The bank has paid a reward dividend since 1892 and also hiked its reward for the last 4 consecutive years, offering it an outstanding dividend yield of 3.8 percent coupled with a lasting payment ratio of 45 percent. Such a conventional payout ratio coupled with the bank's wide economic moat & solid growth leads bodes well for additional returns treks.

More remarkably is throughout the international financial dilemma, Bank of Nova Scotia maintained its reward leaving it untouched each time when most of banks, insurance policies firms & various other financial institutions globally were reducing theirs or ending them completely. This serves to infuse confidence in the bank's ability to continue paying dividends together with its conventional technique to increasing its business and managing risk.

Every one of the characteristics should amass the attention of investors and also make Bank of Nova Scotia a key buy & hold forever stock for any long-lasting stock portfolio.

Executives to Testify on Bank’s Commodities Holdings.

Posted by BankInfo on Wed, Nov 19 2014 04:31 pm

Executives of 3 major banks are planned to undertake questioning by a Senate panel this week on bank ownership of physical products such as oil, natural gas and aluminum & the impact those holdings have on customers, industry & commodities markets.

Jacques Gabillon, head of Goldman Sachs' (GS) global commodities principal investment group, Simon Greenshields, global co-head of commodities at Morgan Stanley (MS), & John Anderson, co-head of global commodities at JPMorgan Chase (JPM) are slated to testify at the 2-day hearing of the US Senate Permanent Subcommittee on Investigation.

Various other scheduled witnesses include 2 government regulatory authorities, in addition to representatives of Metro International Trade Services, a global warehouse facility operator, Harbor Aluminum Intelligence Unit, a company involved in aluminum industry analysis & outlook, and also Novelis, a leader in folded aluminum products.

‘Over the last 5 years, our largest Bank’s & their holding business have become deeply associated with a vast array of physical commodity activities in ways that position risks to the United State financial system, U.S. commodity markets, UNITED STATE Businesses and also families that use commodities & U.S. taxpayers,’ said Sen. Carl Levin, D-Mich., who chairs the subcommittee.

The goal, he included, ‘is to provide facts that have been missing out on from public debate about the nature and extent of bank involvement with physical commodities and also the impact & repercussions of that involvement.’

Citing recent increases in bank ownership and trading in commodities, Sen. John McCain, R-Ariz., the panel's ranking minority member, said the Thursday-Friday hearing would certainly clarify ‘The Extent to which this involvement is appropriate for banks to engage in.’

Adhering to a two-year Us senate examination, the hearing marks the most up to date in a series of procedures in which the subcommittee focused an at-times unflattering light on Wall Street methods, such as the so-called London Whale trading episode that roiled financial markets and cost JPMorgan $6.2 billion in losses.

After other investigations, subcommittee members have additionally questioned execs of tech huge Apple (AAPL) and also construction equipment maker Caterpillar (FELINE) & various other UNITED STATE firms about overseas strategies the companies used off to decrease their corporate tax bills.

This week's proceeding is expected to be the last chaired by Levin, who did not seek a new term throughout the midterm congressional elections, which culminated earlier this month with the GOP winning control of the senate.

Why The Bank of Nova Scotia Is Set to Outperform TD Bank.

Posted by BankInfo on Tue, Nov 18 2014 03:05 pm

Over the previous year, shares of The Bank of Nova Scotia (TSX: BNS)(NYSE: BNS) have not done especially well. During that time, they are up not 6.5 percent, Easily the worst of any large 5 bank Leading the pack is Toronto-Dominion Bank, whose shares are up over 18 percent in the past year.

But there are reasons to believe that following year will certainly be a different story. Below are 3 reasons why.

1. The worst performing Bank.

Over the past 15 years, you could have employed a very simple technique, & make outsized returns by doing so. All you needed to do was purchase the bank stock that had performed worst the previous year. If you had done this, you would certainly have smoothly beat the S&P/ TSX Capped Financials Index.

The reason is really very simple - in the Canadian banking sector, investors tend to overreact to short-term trends. And in the longer term, the bank’s normally revert to the mean. As an example, probably the best time to get Toronto Dominion wanted a devastating year in 2002. Ever since, the shares have outperformed handsomely.

So if history is duplicating itself, then now could be a best time to buy Bank of Nova Scotia.

2. Emerging markets vs. U.S.A.

In 2014 has actually not been a kind one to emerging markets stocks. As a result, Bank of Nova Scotia's emerging markets direct exposure has not assisted its share price. As a matter of fact the shares were down 8 percent in January alone.

However the Bank’s exposure to arising markets is limited to strong, increasing economic situations like Mexico, Colombia, Peru, and also Chile. So it's rather unfair that the shares were penalized by an emerging markets sell-off. At the same time, Toronto Dominion is heavily exposed to the united state market, which is far more affordable and also much less profitable.

So arguably, Bank of Nova Scotia's biggest strength is perceived as its best weakness.

3. Price.

Thanks to Bank of Nova Scotia's delayed stock price, you can now pick up the shares for a good bargain.

To illustrate, the shares trade at simply 11.6 times profits. Remember, this is a company that earns virtually fifty percent of its income in high-growth worldwide markets. You'll have a bumpy ride finding various other stocks with such growth prospects trading so cheaply.

Meanwhile, TD trades at 14 times earnings. Granted, there are reasons to such as TD - it has a fantastic track record, is arguably the lowest-risk Bank, and ought to profit from an eventual recovery in the US.

Yet provided where each of these companies are, Bank of Nova Scotia should possibly be much more expensive than TD. Until that's the case, you're far better off buying Bank of Nova Scotia.

U.S. Leading Court to Hear Bank of America Cases on 2nd Mortgages.

Posted by BankInfo on Tue, Nov 18 2014 03:02 pm

The U.S. Supreme Court agreed on Monday to listen to 2 cases brought by Bank of America Corp questioning whether a 2nd home mortgage on an ‘Underwater’ home - one with a mortgage balance surpassing its present value - can be nullified during bankruptcy.

Both cases the justices consented to hear come from Florida, where many home owners have struggled to pay their home loans following the current housing situation.

The residents in the 2 cases, David Caulkett & Edelmiro Toledo-Cardona, both won before the local charms court that oversees Florida.

The 11th U.S. Circuit Court of Appeals ruled that homeowners in Chapter Seven bankruptcy could void - or in bankruptcy terms ‘Strip Off’ - a 2nd home mortgage when the debt owed to the owner of the 1st home mortgage is greater than the property's present value.

That means the  lender loses its capacity to foreclose on the property also if its value increases.

Bank of America, which is the 2nd home loan owner in both cases, said in court papers that the approach taken by the 11th Circuit is different than various other appeals courts around the country. The bank says that potentially thousands of cases pending in lower courts might be affected by just how the Supreme Court regulations.

A decision is due by the end of June.

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