Pacific Investment Management Co and other investors have sued Citigroup Inc over the bank’s alleged failure to properly monitor toxic securities backed by more than $13.8 billion of mortgage loans, resulting in $2.3 billion of losses.

According to a complaint filed Tuesday night in a New York state court in Manhattan, Citigroup breached its duties as trustee for the 25 private-label trusts dating from 2004 to 2007 by ignoring “pervasive and systemic deficiencies” in how the underlying loans were underwritten or being serviced.

The investors said Citigroup looked askance at the loans’ “abysmal performance” out of fear it might “jeopardize its close business relationships” with loan servicers including Wells Fargo & Co and JPMorgan Chase & Co, or prompt them to retaliate over its own problem loans.
Read more at Reutershttp://www.reuters.com/article/2015/11/25/us-citigroup-pimco-lawsuit-idUSKBN0TE2MC20151125#Bk9vqKEToqdG55gP.99

Wiring a federal agent or informant would have been legal.

But the feds crossed the line by secretly installing microphones in at least three locations outside a California courthouse in 2009 and 2010 and eavesdropping on private conversations, says a motion. It was filed by defendants in a criminal case over claimed manipulation of foreclosure sales by real estate investors to drive down prices, reports the Recorder(sub. req.). The filing seeks to prevent the use of hundreds of hours of recorded evidence against the defendants.

With the OK of the Department of Justice and FBI lawyers, the government made the warrantless recordings with electronic bugs hidden in a planter, a wall-mounted metal sprinkler box and vehicles parked near an entrance to the San Mateo County courthouse in Redwood City, the defendants allege. This violated the defendants’ Fourth Amendment rights, says a motion to suppress (PDF) filed Friday in the…

Brad Pitt, who stars in the financial drama “The Big Short,” blasted bankers at a screening for Academy members on Monday.

Asked if banks should’ve been held more accountable for the crisis that inspired the film, Pitt sighed, “I’m as frustrated as you are . . . I think it’s horrible that no bank officials have ever been held accountable, therefore there’s no incentive to stop this behavior.”

Director Adam McKay said, “We did a screening . . . Nancy Pelosi was there . . . We talked about that. It’s the oldest scam . . . [Bankers] tell the leaders, ‘If you put us in jail, you’ll ruin the economy’ . . . I think Obama has done a lot of good things, but I think one of the big black marks on his presidency is that no one went to jail.”

Read on.

Davis v. Hoa Thi Phan (In re Tung Thanh Nguyen), 783 F.3d 759 (10th Cir. 2015) –

A chapter 7 trustee sought to avoid as a fraudulent conveyance a debtor’s transfer of real property to his sister by quit claim deed for no consideration. The bankruptcy court ruled that the debtor held only bare legal title, so the transfer could not be avoided. The bankruptcy appellate panel affirmed, and the trustee appealed to the 10^th Circuit.