Banco Popular de Puerto Rico

Receiving Wide Coverage ...More Mortgage Woes for B of A? Bank of America has disclosed that the Justice Department intends to file civil charges against the bank over claims it mishandled "one or two jumbo prime securitizations." The Securities and Exchange Commission is also weighing civil charges related to how B of A brokerage house Merrill Lynch handled its securities and the New York Attorney General's office is recommending action against Merrill Lynch over residential mortgage-backed securities. The Journal calls the disclosures "the latest sign that banks' battle to contain the high cost of the financial crisis continues to escalate, despite a five-year slog of lawsuits, losses and profit-sapping regulations." New York Times, Financial Times

Receiving Wide Coverage ...Fabulous Fab Continued: On a summer Monday when many Wall Streeters and journalists alike are pondering the sand between their toes, enough personnel remain on duty to produce a hefty dose of news on Goldman Sachs (GS) and its former trader, Fabrice "Fabulous Fab" Tourre. This morning's installments include one from the Wall Street Journal concluding that Tourre and his former employer have been inextricably linked for a while longer by a federal jury's decision last Thursday to find Tourre guilty in a civil case of aiding and abetting Goldman in duping investors. That case involved the now infamous Abacus 2007-AC1 subprime mortgage investment deal. One reason Wall Street firms have been so insistent over the years on "neither admitting nor denying" wrongdoing during settlement negotiations with the government is that fessing up provides smoking-gun evidence to those greedy class action and securities lawyers looking to file suits on the feds' coattails. (Goldman itself agreed in 2010 to a record $550 million civil settlement over Abacus but got off without admitting anyone had even jaywalked.) In Tourre's case, a victory might have helped Goldman prevail in other Abacus-related lawsuits, but now it must await a decision by its former trader over whether to appeal the verdict, the Journal says. Meanwhile, the firm intends to continue covering his hefty legal bills, the paper adds, citing "people familiar with the matter." Bloomberg characterizes the Securities and Exchange Commission's victory over Tourre in the civil trial as a "shot in the arm" that will help the agency "turn the page on years of criticism that it isn't holding Wall Street to account." The win also adds heft to pledges by newly installed SEC Chairman Mary Jo White to reinvigorate the agency, seek more onerous settlements in some cases, go to trial if necessary--and push Congress for a 27% larger budget. "The SEC needed at least one scalp from the financial crisis, or they were going to face a lot of heat from Congress," Adam Pritchard, a former SEC attorney who teaches law at the University of Michigan, told Bloomberg. However Congress reacts, certain hard-to-please members of the public may be more in sympathy with Naked Capitalism's Monday morning take: CEOs doing the perp walk was what the public wanted to see. Instead, six years later, we have one young guy at Goldman who will disgorge some income and be barred from working in the industry (for how long yet to be determined). This is so far short of what needed to happen that it's pathetic to see the SEC high-fiving over its win." Wall Street Journal, Bloomberg

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