Americas




Mortgage Fraud Lawsuit in Crackdown on Lenders
Consumer Protection, Financial Integrity

Reuters reports that US prosecutors have filed a lawsuit against Allied Home Mortgage Capital Corporation for “reckless lending” and misrepresentations to the US government that its loans qualified for federal insurance. As a result, the Department of Housing and Urban Development has reportedly lost US$834 million in insurance claims and thousands of homeowners have been forced out of their homes.
Reuters: U.S. sues Allied Home Mortgage for lending fraud (1 November 2011)
(Source: Reuters)


Bankrupt Brokerage Investigated Over US$600 Million Missing Customer Money
Consumer Protection, Financial Integrity, Records Management

The New York Times (NY Times) reports that the Federal Bureau of Investigation has joined the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and CME group exchange in investigating bankrupt brokerage MF Global’s loss of US$600 million of customer funds. On 31 October 2011 the company reportedly disclosed to regulators that it had failed to segregate clients’ accounts, breaking fundamental Wall Street rules and triggering MF Global’s bankruptcy. Regulators are reportedly investigating whether the company used customer money to satisfy trading partner’s demand for increased capital flow in its last days of operation. As yet, the missing money has not been located and MF Global has failed to account for it, according to the NY Times.
NY Times: Federal Inquiry of MF Global Escalates (1 November 2011)

Related media and news items:
SEC-CFTC Statement on MF Global (31 October 2011)
The Telegraph: US regulators have been monitoring MF Global for months (2 November 2011)
(Source: NY Times; SEC; The Telegraph)


Push for Condom Use in Adult Entertainment
Employment and Workplace Issues, Health, Safety and Environment

The Los Angeles Times reports that the Los Angeles-based AIDS Healthcare Foundation has proposed a referendum to require condom use by any adult film production in the city, amid plans to strengthen the application of California’s occupational health and safety regulations for blood-borne pathogen exposure to apply specifically to the adult film industry. Existing regulations reportedly require “barrier protection” for workers exposed to infectious blood-borne pathogens, but are largely directed at hospitals and nursing homes. Whilst the current laws “technically apply” to the adult industry, a revision would see “regulation specifically tailored to the adult film industry”, according to The Los Angeles Times.

The adult film industry is reportedly opposed to the measures, arguing that the proposed rules would threaten the industry’s livelihood and undermine its self regulation. Free Speech Coalition executive director Diana Duke reportedly argued that producers would go “underground” to avoid the regulation, sidestepping the industry’s current self-regulation which requires performers to undergo monthly HIV tests. Public health officials have reportedly responded by saying that testing is no substitute for prevention, citing a 2004 incident in which a performer who had been tested monthly exposed 14 female performers to the virus.
The Los Angeles Times: Regulators on collision course with porn industry over condoms (2 November 2011)
(Source: The Los Angeles Times)


Military Service to be Protected From Unfair Business Practices
Business Ethics and Corporate Culture, Consumer Protection

The Los Angeles Times reports that the US government has established a military affairs office at the recently opened Consumer Financial Protection Bureau (CFPB) to protect young and financially inexperienced military personnel from unscrupulous business practices. Head of the new CFPB military affairs office, Holly Petraeus, reportedly said that military personnel were a target for unethical business practices because “they have an absolutely guaranteed paycheck; it comes in twice a month, and they’re not going to quit or be laid off”.
The Los Angeles Times: Consumer agency will fight to defend service members’ pocketbooks (2 November 2011)
(Source: The Los Angeles Times)


Metals Dealer Charged with Fraud
Business Ethics and Corporate Culture, Consumer Protection

ABC News reports that the Santa Monica City Attorney’s office has charged metals dealer Goldline with 19 counts of theft by false pretences, false advertising, and conspiracy. A statement from the consumer affairs division of the Santa Monica City Attorney’s office alleges that Goldline “runs a bait and switch operation in which customers, seeking to invest in gold bullion, are switched to highly overpriced coins by using false and misleading claims”, according to ABC News. Goldline executive vice president Brian Crumbaker reportedly said that the company will “vigorously contest the allegations”.
ABC News: Goldline: We’ll Fight Fraud Charges (2 November 2011)
(Source: ABC News)