Wilmington Personal Injury Lawyer - Miscellaneous

Wells Fargo To Buy Back Auction Rate Securities in Settlement

Jean Martin — Thu, 19 Nov 2009 09:27:01 GMT

Wells Fargo has agreed to settle a lawsuit for $1.4 billion with regard to the company's auction rate securities. Wells Fargo faced this lawsuit and an investigation by the California Attorney General for improperly marketing these risky investments. As part of the settlement, Wells Fargo will buy back securities from customers and pay a fine of $1.9 million.

Auction rate securities are bonds with interest rates that reset as frequently as every day. In early 2008 when the market froze because of the mortgage crisis, these securities became worthless and many investors were unable to get out and get any money back. Wells Fargo, Bank of America, Goldman Sachs, UBS, Citigroup and Merrill Lynch have all faced claims that they aggressively marketed these highly risky securities as being safe, when they were anything but. Amidst these allegations, Wells Fargo becomes the latest of these companies to agree to repurchase these securities to settle claims with investors.

But what about investors who saw their investments tumbling and transferred their ARS to a different account before the market bottomed out? These investors transferred their accounts at a loss and still have accounds that are worthless. Are these investors entitled to any money? To which company can they make a claim?

These investors need to seek legal assistance. Many of these investors can also make claims, though the language of the settlement agreements make it appear that they are not. For instance, investors who had UBS accounts, but transferred their ARS to another account (that is now basically worthless) before the market crashed may still make a claim against UBS. Our lawyers here at Shipman & Wright have handled several of these claims and would be happy to speak with you about your legal rights.

Originally posted at InjuryBoard by Jean Martin

Toyota Locked in Intellectual Property Litigation Over Prius

Gary Shipman — Thu, 12 Nov 2009 14:42:27 GMT

The International Trade Commission is the setting for a classic "David vs. Goliath" contest between Bonita Springs, Florida based Paice, LLC and Toyota over a patent related to a key component of Toyota's "green car", the Prius. A federal court in Texas has already determined that this component belongs to Paice, setting the stage for what promises to be either a settlement (licensing deal) by Toyota of the claims made therein, or a trial that would expose Toyota to an injunction that would prohibit the continued utilization of the technology.

The intellectual property at issue is a microprocesser that combines and controls power used in hybrid cars, like Prius - electric motor; internal combustion engine; or both. Dr. Alex Severinsky obtained a patent for this technology, and founded Paice, which stands for Power Assistend Internal Combustion Engine. He presented this technology to a number of automakers, including Toyota, but no deal was made. Then along came the Prius, in 2004, using technology that Paice contends infringes upon its patent, and alleges infringement involving not only the Prius, but Toyota's Highlander and the Lexus RX400h SUV.

In December, 2005, a jury found that Toyota had, indeed, infringed upon the patent, but awarded an amount ($4.3 million) that the trial judge referred to as "low." However, that set up the ultimate leverage, namely, an injunction that would bar Toyota from making, using or selling cars in the United States for the life of the patent. As the case was marching to trial, the United States Supreme Court issued its Ebay decision, setting forth a four-factor test for the granting of an injunction. Given that Paice doesn't actually make any products, it could fall short of meeting the requisite standards set forth by the Supreme Court, and the strategy switched to a request for a royalty payment from Toyota, which the judge granted at the rate of $25 per car. An appellate court reversed, asking that the Judge justify the $25 rate, and in April, 2009, the judge issued a new ruling, setting the royalty at $98 per car. Toyota has appealled that ruling to the Federal Circuit.

Undaunted, Paice struck again, but this time in the International Trade Commission. While the ITC lacks the ability to award damages, it has the authority to grant the injunctive relief sought by Paice in the courts of the United States. Decisions by the courts (who have already concluded that Toyota infringed) are binding on the ITC. Toyota counters that, given that Paice doesn't actively conduct any continued research and development, is not a "domestic industry" and is therefore, not entitled to any ITC protection. There are two other pending cases before the ITC, involving similar issues, and the resolution of those cases could have an impact on the Toyota case. Ultimately, there must be a resolution of the differing standards for the grant of injunctive relief in the Court versus the ITC.

Originally posted at InjuryBoard by Gary Shipman

Judges Questioned when Two Young Men were Sentenced to Life in Jail with out Parole

James Moore — Wed, 11 Nov 2009 11:34:47 GMT

The Supreme Court has agreed to hear the cases of two young men who have been sentenced to life in jail with out parole. This was agreed on to see if there sentence hinders their rights to the 8th amendment. In many states judges can exercise their power to issue a life sentence to Juveniles even if their crime did not include taking the life of another person. Not only is the question of the Juveniles rights up for interpretation, but also the means in which the Judges are exercising their powers. It was said by FoxNews.com, not always the most impartial source, that “in both cases the judges ruled in large part to protect citizens from future crimes, prompting critics to say that they used their gavels to police society, and not just to administer law.” This role falls outside the responsibilities of a judge which is simple to govern the law.
It will be interesting to see the decision that is declared by the Supreme Court, and how the precedent they will be setting will affect crime rates among Juveniles.
http://www.foxnews.com/story/0,2933,573365,00.html
http://www.nytimes.com/2009/05/12/opinion/l12juvenile.html

Originally posted at InjuryBoard by James Moore

Consumer Product Safety Commission Will Finally Regulate Off-Road Recreational Vehicles

Jean Martin — Mon, 26 Oct 2009 17:08:37 GMT

Off-road recreational vehicles, also known as ROVs, have been under fire in the last several years for the number of deaths that have been associated them. ROVs have been involved in accidents resulting in more than 100 deaths since 2003, and numerous other injuries, including amputations. Now the Consumer Product Safety Commission has voted to issue mandatory rules regulating these vehicles.

(AP Photo/Recreational Off-Highway Vehicle Association)

ROVs resemble mini-jeeps and are two-passenger vehicles with a roll cage. Myself and many of my colleagues here at InjuryBoard have written about the devastating accidents that have been caused by the Yamaha Rhino ROV.

http://atlanta.injuryboard.com/defective-and-dangerous-products/the-yamaha-rhino-660-atv-continues-to-injury-conumers-.aspx?googleid=269236

http://wilmington.injuryboard.com/automobile-accidents/yamaha-rhino-atvs-unsafe.aspx?googleid=231960

http://atlanta.injuryboard.com/defective-and-dangerous-products/yamaha.aspx?googleid=268768

http://wilmington.injuryboard.com/defective-and-dangerous-products/yamaha-rhino-models-recalled-to-repair-defect-that-caused-deaths.aspx?googleid=260086

http://sandusky.injuryboard.com/wrongful-death/yamaha-rhino-atvs-under-scrutiny-for-causing-personal-injury-death.aspx?googleid=226514

This is a short step in a needed direction. Unfortunately, instead of proceeding with instituting needed regulations, the CPSC will undergo a process of soliciting comments from industry and consumers before any regulations are written. The process could take months. And action is way overdue, as currently there are no mandatory restrictions, such as age of riders, seat belts, helmets, etc., as there are for all-terrain vehicles, ATVs. Both ROVs and ATVs are dangerous vehicles and as their sales increase, so do the number of accidents and deaths.

Originally posted at InjuryBoard by Jean Martin

Borrowers On Credit Watch

Gary Shipman — Thu, 22 Oct 2009 15:28:19 GMT

Knowing when a homeowner is eligible to qualify for another mortgage is important information for them to have before making any decisions. At this point in time, some homeowners see no other option but foreclosure, bankruptcy or considering a short sale of their property. Homeowners seeing this as a last resort- the effect these actions will have on their credit is a huge concern that will unquestionably cause even more problems for them in the future. A homeowner should be aware of all options in this process, including when they’re eligible to qualify for another mortgage. This might change what they see as a last resort.

Originally posted at InjuryBoard by Gary Shipman

Why Do I Have All Of These Out-of-Network Charges For Care At An In-Network Hospital

Jean Martin — Fri, 25 Sep 2009 09:38:14 GMT

As you and your family prepare for surgery, choosing the right doctor, might end up a choice costing you more than you budgeted for. Those with health insurance normally pick doctors that are “in network” which allows them to be covered under their insurance plan. However, when the bills start arriving, these patients notice charges from “out of network” doctors, some of which the patients never meet such as anesthesiologists or radiologists. An out of network charge is common in HMO and PPO insurance plans.

The “out of network” charge, is considered a major problem with the current system of health care in the United States. Patients are receiving these bills without any prior information that they will be hit with these charges. These charges have no end in site either, as more out of network payments are cropping up in patient’s hospital bills as the increasing cost of health care is causing insurance programs to shrink coverage, increase deductibles and force less coverage for out of network physicians.

Reports are also being released that insurers are not paying their fair share of the bills that are being received by patients for out of network doctors. The Attorney General of New York, Andrew Cuomo, after almost a year long health care investigation, reached an agreement with one of the nation’s largest health insurers to reform their out of network billing practices.

Most Americans are choosing health care plans that allow for out of network providers, however the insurers are paying less than the total cost for these providers as they us a “usual and customary” rate, however most of these specialist doctors do not charge the normal and accepted rates, instead are much higher that “usual” physicians.

If you have been the victim of out of network billing that you were not expected, fight back and ask for answers. Don't just accept the charges. And if you don't get answers, seek legal representation to check if you are entitled to compensation and remedies for your extra payment. Many Americans are struggling with these payments and you are not alone in this battle.

Originally posted at InjuryBoard by Jean Martin

Some UBS Auction Rate Securities Holders Still Owed Money

Jean Martin — Mon, 24 Aug 2009 08:52:11 GMT

Playing poker involves a certain amount of strategy. Sure, you want to hold a royal flush, but if you can trick the other players into thinking that’s what you have, two pair can do you just as much good as the real thing. You also need to be careful about how long you stay in the game. You might be in trouble if you stick around holding nothing, but fold too soon, and you might find that your three of a kind would have won the pot. The same rule applies to investments. You need to know how long to stay in the game, when to wait out the market, and when to fold. Sometimes, you find that if you fold too soon, you miss out on substantial benefits while the other players profit.

This is similar to what happened with UBS when the Auction Rate Securities market collapsed in 2008. Many investors sold their accounts, absorbing a substantial loss, rather than lose the entirety of their investments. Auction Rate Securities are essentially bonds with long-term maturity and changing interest rates. They were marketed to investors as being just as dependable as cash, but with the added bonus of a substantial long-term interest profit.

Before the market collapsed, the investors who sold their accounts at a loss had no way of knowing that, had they stayed until their accounts were value-less, they would have benefited. Though they were trying to make a wise financial decision, they later found that other investors received full compensation after the ARS market collapsed. UBS agreed to repurchase their investors’ accounts at par after ARS auctions failed in February 2008.

While this offer was intended to help clients who had, through no fault of their own, lost the money they had been assured was secure, it only applied to current account holders. Those who had acted prior to the market failure by selling their securities were not included in the deal offered by UBS. Despite the fact that they had been given the same promises upon investment and had lost as much money as the other clients, those who had sold at a great loss were not covered by the terms of the agreement with UBS.

While the company has, so far, been granting claims brought by previous investors and refunding their losses, their good faith, like their capital, is not infinite. On August 8, 2008, following a class action lawsuit brought by investors, UBS agreed to purchase or provide liquidity for $22.1 billion of Auction Rate Securities. However, once this quota is exhausted, UBS is no longer legally bound to pay back investors or previous investors who bring claims for their money, nor will they be able to do so. Although UBS has thus far acted responsibly and reasonably to compensate its clients, the outpouring of financial justice cannot and will not last forever. Under the settlement agreement, UBS will purchase ARS at par until January 1, 2011 in the amount of $8.3 billion. This liquidation applies to private investments under $1 million. An additional $3.5 billion of tax-exempt investments will be covered by the same date. In June 2010, UBS will use the remaining $10.3 billion to purchase additional securities. Once this money is exhausted, ARS can no longer be rebought by UBS.

The lesson to be learned from this is the same as any you would learn at the poker table: timing is everything. If you are holding Auction Rate Securities or are eligible for reimbursement, you must act before time expires. Do not waste time; file your claim as soon as possible. Otherwise, you will be forced to fold and miss out on your share of the pot.

Originally posted at InjuryBoard by Jean Martin

Back to School? Minority Student Loan Borrowers Be Wary

Jean Martin — Mon, 03 Aug 2009 15:12:48 GMT

As college-bound minorities take a step toward self-improvement, lenders could be sending them two steps back.

Lenders rely on complex, and at times secret, methods of determining what rate to charge a borrower for student loans. Some lenders, including the credit giant Sallie Mae, look at the borrower’s school to find out how many of its students have defaulted on their loans—and then factor that into the equation determining a specific borrower’s interest rate. The result may be a significant increase in the interest rate and fees on a student loan based partly on what school the student chooses to attend.

One problem with the use of so-called “cohort default rates,” as the U.S. Department of Education calls the statistics it requires schools to keep, is that some racial minorities default on their loans at disproportionately high rates. One analysis of federal data found that black students “had an overall default rate that was over five times higher than white students and over nine times higher than Asian students.” Hispanic students defaulted at twice the rate of white students and at quadruple the rate of Asian students.

The result could be a vicious cycle. Schools with high cohort default rates tend to serve disproportionately large minority and low-income populations. Students who attend those schools, in turn, may be charged higher interest rates. The practice, highlighted in 2007 by New York Attorney General Andrew Cuomo, prompted Sens. Patty Murray, D-Wash., and Christopher Dodd, D-Conn., to introduce legislation last summer that would have barred such a practice. It didn’t pass, and there is no sign that the credit industry has renounced the method. Congress did, however, order a study of the effect that such practices have on the cost of private student loans.

Practices that have a disparate impact on minorities may violate the Equal Credit Opportunity Act, a federal law designed to protect minorities from lending practices that treat minority groups unequally in credit markets.

The problem may be especially acute at schools such as community colleges that have elected not to participate in federal loan programs. Lower income and minority students are more likely to be among the more than 1 million students attending such schools. Student loans are accordingly much less accessible by racial minorities than by whites. Minorities must rely more heavily on expensive private loans and are at the mercy of a lender’s fuzzy math.

The stakes for minorities trying to navigate the already tumultuous waters of today’s recession are only going up. Defaults among low-income and minority students may rise as a growing number of new college students will be from their ranks because of demographic shifts and their efforts to boost their competitiveness in tight job markets.

The question is how long minorities will be charged more for their education simply because the schools they choose to attend serve more people who look like they do.

*This blog was written by our summer law clerk Cory Reiss, a rising 3L at Wake Forest University School of Law*

Originally posted at InjuryBoard by Jean Martin

States May Enforce Their Anti-Discrimination and Consumer Protection Laws Against National Banks

Jean Martin — Mon, 13 Jul 2009 17:32:32 GMT

Recently a state’s right to enforce its anti discrimination and fair lending practice laws on federal banks was challenged. In a five to four decision, the Supreme Court of the United States upheld states' rights in this regard by striking down a regulation by the chief federal regulator of national banks involving antidiscrimination, fair lending, and a state’s right to enforce these laws.

State laws are not normally enforced by the federal government, and this decision shows the importance of state power and influence on the issues that affect them. The federal government, thus far, has not been enforcing these laws which help combat discrimination and racism in the banking and economic industries. That the federal government has not worked with the states up to this point is quite telling.

Although this ruling provides some interesting questions as to the individual roles that the states and federal government play, and the separation of the two, it is ultimately the best decision for the nation. Fair lending and anti discrimination have become a corner stone of our economy and our society. That the federal government did not feel compelled to consider state laws regarding this is troubling given that the root of the issue is the civil and individual rights of all those that the ruling benefits. Anti discrimination and fair lending laws are vital to whom they protect. It is our duty as a nation to ensure that the rights of every citizen are protected at a state and a national level.

Originally posted at InjuryBoard by Jean Martin

Is Your Race Causing Higher Fees or Interest Rates for Your Loans?

Jean Martin — Tue, 23 Jun 2009 10:17:23 GMT

Today our nation uses credit for a wide array of necessities. Housing, transportation, and even education are funded through credit, making this investment one of paramount importance to the citizens of our country. With this investment, also comes the protection of the Equal Credit Opportunity Act (or ECOA), as enforced by the Federal Trade Commission (FTC). The ECOA ensures that no one is discriminated against on the basis of race, color, religion, national origin, sex, marital status, age, or the fact that someone is on public assistance.

Of course, there are some limitations imposed on applications for credit, and the terms of the credit. The legal guidelines for credit applications are income, expenses, debts, and credit history, among others, as these are considerations that can legally be determinative of your credit “worthiness.”

Here are some quick guidelines that you should consider when applying for credit. Creditors MAY NOT:

- reject your application or discourage you from application based on race, color, religion, national origin, sex, marital status, age, or if you are on public assistance

- consider any of the above qualifications in regards to application status

- impose different terms or conditions based on the above qualifications

- ask if you plan on having children

If you believe that you have been discriminated against, it is your right to take action. You may take the following steps:

- complain to the creditor directly

- contact the office of your state attorney general

- consider suing the creditor in federal district court

- report the violations to the appropriate government agency (a creditor MUST give you the name of someone to contact)

Say educated, and stay informed. It’s your future and your rights.

Originally posted at InjuryBoard by Jean Martin