Greek Debt Write-Down Threatens Credit Default Swaps

The European Union announced yesterday that it had reached an agreement where banks will write down their holdings of Greek bonds by 50 percent. The EU’s effort to resolve the region’s sovereign debt probably may actually hurt confidence in the credit-default swaps market.

The chief lawyer for The International Swaps and Derivatives Association said they would not require firms that sold a net total of $3.7 billion of credit protection on Greece to pay buyers of the swaps. Politicians and central bankers had been threatened with a full default on their debt if they did not reach an agreement with banks. The agreement is considered voluntary, though ISDA General Counsel David Geen said there was “a lot of arm-twisting.” Continue reading Greek Debt Write-Down Threatens Credit Default Swaps

Former bank execs face federal charges over securities fraud scheme

A pair of former officials and a former CEO United Commercial Bank in San Francisco have been charged with securities fraud by a grand jury in San Francisco.

According to a BizJournals.com report, Ebrahim Shabudin and Thomas Yu were each charged with securities fraud by a grand jury. The Federal Bureau of Investigations and Securities and Exchange Commission charged each with several crimes related to a scheme in which the former executives failed to disclose losses at the bank by as much as $65 million in 2008. This lack of disclosure also caused the bank’s parent organization, UCBH Holdings Inc., to deceive investors on the company’s losses in 2008. Continue reading Former bank execs face federal charges over securities fraud scheme

Ramada Inn owners named in Illinois minimum wage lawsuit

Illinois’ Dept. of Labor has filed a $19,000 lawsuit against the partner owners of a Ramada Inn & Suites located in the state, accusing the company of not paying minimum wage to two employees.

According to a report at Pantagraph.com, the Dept. of Labor is seeking $19,000 in back wages and penalties from Landmark Hospitality Group LLC and its principles Davang Patel, Nadir Hussein and Patrick Baker. Landmark owns and operates a Ramada Inn & Suites hotel in Bloomington, Ill., where Samuel Sympson and Tim Carroll were allegedly hired as salaried employees.

Despite their employment status, Sympson and Carroll claim they are owed a few thousand dollars each from Landmark for unpaid work, saying their wages do not equal minimum wage. The Dept. of Labor suit seeks more than $2,400 in back pay for Sympson and another $2,000 for Carroll. The lawsuit seeks at least another $2,000 in damages and penalties for each employee. Sympson has already filed his own lawsuit against Landmark seeking back pay with two other employees at the hotel, according to the report.

Being a salaried employee is only a loophole for some employees to be exempt from minimum wage or overtime laws and with jobs being more scarce, employers are forcing many workers to endure tougher conditions, longer hours and less pay.

Defendants in life insurance investment scam receive lengthy prison sentences

The ringleaders of a life insurance settlement company were sentenced to lengthy prison terms for their role in a $100 million fraud scheme.

According to a Bloomberg report, former part-owner of A&O Resource Management Ltd. Adley Abdulwahab received a 60-year sentence in a federal prison. His partner in the scheme, former co-founder of A&O Christian Allmendinger was sentenced to 45 years in prison. They were convicted of a operating a scheme centered around life insurance policies.

Abdulwahab and Allmendinger operated the scam investment opportunity by seeking “conservative investments” from people who paid the premiums on life insurance policies of other people. The insured person would receive cash immediately while the investor would receive the death benefit when the insured person dies. An attorney representing the Dept. of Justice said the investment opportunity was a “big, fat lie.” Continue reading Defendants in life insurance investment scam receive lengthy prison sentences

AT&T employees seek three years of unpaid overtime pay

A class of 200 “front-line” managers at AT&T in Connecticut are preparing to go trial over their claims they are due overtime pay.

According to a report from The Hartford (Conn.) Courant, the lawsuit is ready to be heard in a federal courtroom in Bridgeport. The class of AT&T employees included in the lawsuit were forced to work up to 70 hours some weeks but were only paid a salary rate. An attorney representing the class of employees told a Courant reporter the employees in the lawsuit do not fit any of the exceptions to the overtime laws. Namely to that point is the inability of any of the employees filing the lawsuit to hire or fire any of their subordinates at their job. Another exemption to the overtime pay law requires an employee to manage a full subdivision of a company.

This is one of three class-action lawsuits filed against AT&T across the country making the same allegations. Continue reading AT&T employees seek three years of unpaid overtime pay