Massachusetts’ top securities regulator accused Morgan Stanley of paying bonuses to brokers to encourage them to push loans on their wealth-management clients.

A complaint filed Monday by the secretary of the commonwealth alleges that Morgan Stanley brokers in Massachusetts and Rhode Island promoted securities-backed loans, in which clients borrow against the value of their investment portfolios, to win an internal “sales contest” that rewarded them financially.

The complaint says the program tripled new loan originations and created a conflict of interest between the brokers and their clients. It alleges that Morgan Stanley played down the risks, including that the firm could liquidate their investments to repay the loans.

Read on.

Here is the complaint. Click here.

SACRAMENTO – ‘California stands united with Illinois State Treasurer Michael Frerichs’ decision to suspend investment activity with Wells Fargo Bank.

‘From the savings and loan scandal of the 1980s to the subprime lending abuses which recently brought down the world economy, we have suffered the incredible power banks hold over every day Americans. Wells Fargo is just the most recent example of the craven abuses that can be perpetrated when a financial institution comes to serve itself rather than its customers.

‘But banks are not so powerful as to be untouchable. Until Congress and bank regulators pass sensible reforms to curtail the further fleecing of consumers, bank customers – like the states of California and Illinois – will have to fill the leadership void. And, the best way to do so is to hit Wells Fargo where it hurts – in the pocketbook.

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State Treasurer Denise Nappier will review all of Connecticut’s business relationships with Wells Fargo, as the bank is mired in scandal over bogus accounts. Wells Fargo is leading a bond sale for Connecticut next month; Nappier now says she will appoint Morgan Stanley to partner in managing that sale.

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CN) — Wells Fargo must face fraud claims over $163 million in securities that Wachovia, now owned by Wells Fargo, allegedly used as a “dumping ground” for assets it wanted off its books, a federal judge ruled.
A number of specialized investment entities sued Wells Fargo in New York after three collateralized debt obligations marketed by Wachovia Capital Markets defaulted following the 2008 financial crisis.
These entities, led by Loreley Financing No. 3, invested a total of $163 million in the CDOs, which they now claim were used as a “private dumping ground for rapidly deteriorating assets” that Wachovia wanted to get rid of.
Wells Fargo is the successor in interest to Wachovia, having purchased the bank in 2008 in an FDIC-brokered deal following Wachovia’s heavy losses in the subprime mortgage crisis.
The Second Circuit upheld the plaintiffs’ primary fraud claim last year, and Wells Fargo did not attempt to…

Ditech Financial will pay $1.4 million to the state of Massachusetts to settle charges that the company engaged in “abusive debt collection practices” by excessively calling borrowers to collect payment as well as not property notifying some borrowers of their mortgage information, the state’s attorney general announced this week.

According to the announcement from Massachusetts Attorney General Maura Healey, Ditech Financial, formerly known as Green Tree Servicing, agreed to an “assurance of discontinuance,” which requires Ditech to stop making “excessive debt collection calls” to consumers.

The order also requires Ditect to provide written notice regarding the borrowers’ right to receive detailed information about any debts that Ditech sought to collect, both of which are required by state law.

The order settles claims uncovered by an investigation by Healey’s office into Ditech’s debt collection practices in the state.

Healey’s office alleged that since 2012, Ditech “routinely violated” the state’s laws.

A quick cut of @WellsFargo CEO John Stumpf answering my questions. He doesn’t seem to know a lot about how his company is run. pic.twitter.com/Oaf6AGAjtM

— Rep. Keith Ellison (@keithellison) September 29, 2016

“Sneaky” comes to mind to describe the government and the banksters regarding two settlements between US banks and government regulators who alleged that the banks were guilty of widespread abuse of the foreclosure system that allowed banks to seize homes from defaulting borrowers. The banksters agreed to pay out more than $20 billion on Monday to resolve claims arising from the mortgage crisis.

Throughout Wells Fargo CEO John Stumpf’s rough day in front of the House Financial Services Committee, multiple representatives called for the bank to be broken up, suggesting that the megabank is simply too big to manage effectively.

But as the five-hour hearing neared its conclusion, the ranking member of the committee, Rep. Maxine Waters, D-Calif., went beyond her fellow representatives’ calls to break up Wells Fargo, stating that she is going to actually move to break up the bank.

“I’ve come to the conclusion that Wells Fargo should be broken up,” Waters said. “It’s too big to manage and I’m moving forward to break up the bank.”

According to a represenative from Waters’ office, Waters told reporters after the hearing that she plans to pursue legislation to break up the bank.

Read on.

The Los Angeles city attorney has reached a $13.5-million settlement with U.S. Bank to resolve allegations that the nation’s fifth-largest bank operated as a slumlord and allowed hundreds of foreclosed properties to deteriorate, fostering crime and blight in L.A. neighborhoods slammed by the housing crisis.

The settlement, announced Thursday, requires the Minneapolis-based firm to maintain its foreclosed properties in “accordance with all applicable laws and standards for two years.” A full-time bank employee will work with city agencies to resolve code violations of foreclosed properties across Los Angeles, the city attorney’s office said.

U.S. Bank spokesman Dana E. Ripley said the bank would be working…

The numbers at the heart of the scandal at Wells Fargo (WFC) are staggering. Over 5,300 employees were fired for creating millions of accounts without customers’ permission, under intense corporate pressure to meet high sales targets.

Zoomed out to a massive scale like this, and with lawmakers focused on finding and chewing out the higher-ups who might be responsible, it’s easy to forget this fraud ensnared actual human beings.

Yahoo Finance spoke to a few of them to get their stories about their relationships with Wells Fargo, and how they learned they had accounts created without their knowledge or permission. We also learned about what it was like to deal with credit bureaus to make sure the bogus accounts didn’t blemish their credit reports.

A surprise $30,000 line of credit

Take Micheline Maynard, a journalist and author based in Boston, one of the millions of Wells Fargo victims…