1999 Rainwater was closing shop (Largest assets in Texas) in the HOMEHEALTH CARE industry by the DUMPING method through FINANCE , thus NCFE and affiliates via James K Happ.
The LAST , yes LAST, Executive to go on trial in Columbus, Ohio, scheduled for December 2008. Meanwhile, the DOJ issues a statement "...end of an era..." As if the case is closed! My goodness. The CEO and ex-Executive from NCFE who came from Richard Rainwater's HCA/TN HOMECARE after dumping onto NCFE with the promise of finance.
But despite the fact that Bush increased state spending on public schools by $3 billion a year since 1995, local school property taxes continued to rise and the tax cuts were enjoyed by few Texans. (“State’s Budget Crunch Haunting Bush,” February 18, 2001)
According to the Houston Chronicle article cited above, the Texas tax cuts caused a decrease in state funds to local governments, which meant local governments had to raise property taxes to make up the difference. Further, in 1999 the state legislature decided to fund Medicaid for 23 months of the next 24, so that $110 million would be available to make the budget balance. The imbalance was passed on to the 2001 budget.
On the other hand, Richard Rainwater enjoyed a $1 million tax break. Texas billionaire Rainwater, a former co-owner of the Texas Rangers, is another Bush benefactor who has done well by investing in Bush’s political career. Rainwater was able to buy several buildings from the Texas teachers’ retirement system without bidding, at a $70 million loss to the teachers. Also, according to Bush Watch, Tom Hicks invested $9 million of UTIMCO money in one of Rainwater’s equity funds.
As Paul Krugman pointed out in his July 16 column, Bush’s record as a businessman and a governor reveal three characteristic traits. First, he likes to work in secret, as if the people have no right to know what their chief executive is doing on their behalf. Second, he freely appropriates public monies and institutions to reward his friends and reinforce his political power. And third, he is utterly indifferent to conflicts of interest.
***********
Follow the Money
The captains of several American industries did not want Al Gore to be elected president.
Clinton was bad enough, they thought. Clinton had faced down the timber industry, the automobile industry, major utilities, coal, and Big Oil itself by decreeing anti-pollution measures that cut into profits. Yes, Clinton was bad enough. But Al “Earth in the Balance” Gore promised to be even worse.
According to the Center for Responsive Politics, industry put its money on Bush, not Gore.
Monday, September 22, 2008
Friday, September 19, 2008
Did BCSI do their job regarding NCFE?
National Century Financial Enterprises
I think not...they have missed the boat on this one!
NCFE...still ongoing trial in OHIO, yet DOJ states 'end of an era'and the CEO and Key Executive James K Happ has yet to go on trial.
How could that be?
Whois James K Happ? Well, he is the ex-employee of NCFE, who came to NCFE from HCA after DUMPING their losing assets financed by NCFE.
BCSI needs to take another DEEPER LOOK!
BCSI is Publishing Lehman Brothers Bankruptcy News
Last update: 11:19 a.m. EDT Sept. 18, 2008
FAIRLESS HILLS, Pa., Sept 18, 2008 /PRNewswire via COMTEX/ -- Bankruptcy Creditors' Service, Inc., published the fourth issue of LEHMAN BROTHERS BANKRUPTCY NEWS this morning. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Lehman Brothers Holdings Inc. (Pink Sheets: LEHMQ) and its various affiliates.
"Lehman Brothers' bankruptcy has set and will set many records," Peter A. Chapman, president of Bankruptcy Creditors' Service, Inc., commented. "It's the largest chapter 11 filing in U.S. history and it promises to be the most complex. Our newsletter is designed to help creditors, counterparties, investors, competitors, their lawyers, and other parties-in-interest efficiently and affordably wade through the mountains of court documents, regulatory filings, and hours of courtroom proceedings a multi-billion dollar bankruptcy case like Lehman Brothers' generates."
Copies of the first four issues of LEHMAN BROTHERS BANKRUPTCY NEWS are available at http://bankrupt.com/lehman/ at no charge and report in detail about what's happened in the chapter 11 proceeding over the past four days.
LEHMAN BROTHERS BANKRUPTCY NEWS is distributed on a subscription basis by e-mail for $45 per issue. New issues are published as significant activity occurs (generally every 10 to 20 days) in the company's chapter 11 case. Single issues can be purchased at http://bankrupt.com/newsstand/ using a major credit card.
Since 1990, BCSI has published similar newsletters tracking billion-dollar insolvency proceedings. Currently, BCSI provides similar coverage about the restructuring proceedings involving Bear Stearns Co.'s High-Grade Structured Credit Strategies Master Fund, Ltd., and High-Grade Structured Credit Strategies Enhanced Leverage Master Fund, Ltd., Canadian ABCP Trusts, Refco, Inc., Cadence Innovation LLC, Progressive Molded Products, Inc., BHM Technologies Holdings, Inc., Delphi Corp., Plastech Engineered Products, Inc., Blue Water Automotive Systems, Inc., Dana Corp., Meridian Automotive Systems, Inc., Tower Automotive Inc., Boscov's Department Store, LLC, Mervyn's LLC, Steve & Barry's Manhattan, LLC, Kmart Corp., Linens 'n Things, Inc., Hancock Fabrics, Inc., Sharper Image Corp., Movie Gallery, Inc., Tweeter Home Entertainment Group, Inc., SemGroup L.P., Enron Corp., Calpine Corporation, Mirant Corp., Vertis Holdings, Inc., American Color Graphics, Inc., Quebecor World, Inc., Tricom, S.A., Adelphia Communications and Adelphia Business Solutions, Winstar Communications, Werner Holding Co. (DE), Inc., SIRVA, Inc., Sea Containers, Ltd., Allied Holdings, Performance Transportation Services, Frontier Airlines Holdings, Inc., ATA Airlines, Inc., Delta Air Lines, Northwest Airlines, US Airways, UAL Corporation and United Airlines, Mesaba Aviation, LandSource Communities Development LLC, Kimball Hill, Inc., TOUSA, Inc., Levitt and Sons LLC, Neumann Homes, Inc., American Home Mortgage Investment Corp., New Century Financial Corp., Delta Financial Corporation, HomeBanc Corp., Mortgage Lenders Network USA, Inc., The Education Resources Institute, Inc., Vesta Insurance Group, Inc., and its six insurance units, National Century Financial Enterprises, Greektown Holdings, LLC, Tropicana Entertainment, LLC, PRC, LLC, Wellman Inc., Propex Inc., Solutia, Inc., Exide Technologies, Bennigan's and Steak and Ale restaurants, Buffets Holdings, Inc., Interstate Bakeries Corporation, Parmalat Finanziaria, S.p.A., Bally Total Fitness Holding Corp., Saint Vincent Catholic Medical Centers, ASARCO LLC, Federal-Mogul Corporation, W.R. Grace & Co., Owens Corning, USG Corporation, the Roman Catholic Church in the United States, and the city of Vallejo, California.
Additionally, BCSI co-publishes the TROUBLED COMPANY REPORTER. The TCR provides daily news by e-mail about approximately 3,000 companies tumbling down the credit quality curve and restructuring their balance sheets and operations. Go to http://www.bankrupt.com/freetrial/ to sign-up for a 30-day free trial subscription to the TCR.
SOURCE Bankruptcy Creditors' Service, Inc.
http://bankrupt.com/lehman
Copyright (C) 2008 PR Newswire. All rights reserved
I think not...they have missed the boat on this one!
NCFE...still ongoing trial in OHIO, yet DOJ states 'end of an era'and the CEO and Key Executive James K Happ has yet to go on trial.
How could that be?
Whois James K Happ? Well, he is the ex-employee of NCFE, who came to NCFE from HCA after DUMPING their losing assets financed by NCFE.
BCSI needs to take another DEEPER LOOK!
BCSI is Publishing Lehman Brothers Bankruptcy News
Last update: 11:19 a.m. EDT Sept. 18, 2008
FAIRLESS HILLS, Pa., Sept 18, 2008 /PRNewswire via COMTEX/ -- Bankruptcy Creditors' Service, Inc., published the fourth issue of LEHMAN BROTHERS BANKRUPTCY NEWS this morning. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Lehman Brothers Holdings Inc. (Pink Sheets: LEHMQ) and its various affiliates.
"Lehman Brothers' bankruptcy has set and will set many records," Peter A. Chapman, president of Bankruptcy Creditors' Service, Inc., commented. "It's the largest chapter 11 filing in U.S. history and it promises to be the most complex. Our newsletter is designed to help creditors, counterparties, investors, competitors, their lawyers, and other parties-in-interest efficiently and affordably wade through the mountains of court documents, regulatory filings, and hours of courtroom proceedings a multi-billion dollar bankruptcy case like Lehman Brothers' generates."
Copies of the first four issues of LEHMAN BROTHERS BANKRUPTCY NEWS are available at http://bankrupt.com/lehman/ at no charge and report in detail about what's happened in the chapter 11 proceeding over the past four days.
LEHMAN BROTHERS BANKRUPTCY NEWS is distributed on a subscription basis by e-mail for $45 per issue. New issues are published as significant activity occurs (generally every 10 to 20 days) in the company's chapter 11 case. Single issues can be purchased at http://bankrupt.com/newsstand/ using a major credit card.
Since 1990, BCSI has published similar newsletters tracking billion-dollar insolvency proceedings. Currently, BCSI provides similar coverage about the restructuring proceedings involving Bear Stearns Co.'s High-Grade Structured Credit Strategies Master Fund, Ltd., and High-Grade Structured Credit Strategies Enhanced Leverage Master Fund, Ltd., Canadian ABCP Trusts, Refco, Inc., Cadence Innovation LLC, Progressive Molded Products, Inc., BHM Technologies Holdings, Inc., Delphi Corp., Plastech Engineered Products, Inc., Blue Water Automotive Systems, Inc., Dana Corp., Meridian Automotive Systems, Inc., Tower Automotive Inc., Boscov's Department Store, LLC, Mervyn's LLC, Steve & Barry's Manhattan, LLC, Kmart Corp., Linens 'n Things, Inc., Hancock Fabrics, Inc., Sharper Image Corp., Movie Gallery, Inc., Tweeter Home Entertainment Group, Inc., SemGroup L.P., Enron Corp., Calpine Corporation, Mirant Corp., Vertis Holdings, Inc., American Color Graphics, Inc., Quebecor World, Inc., Tricom, S.A., Adelphia Communications and Adelphia Business Solutions, Winstar Communications, Werner Holding Co. (DE), Inc., SIRVA, Inc., Sea Containers, Ltd., Allied Holdings, Performance Transportation Services, Frontier Airlines Holdings, Inc., ATA Airlines, Inc., Delta Air Lines, Northwest Airlines, US Airways, UAL Corporation and United Airlines, Mesaba Aviation, LandSource Communities Development LLC, Kimball Hill, Inc., TOUSA, Inc., Levitt and Sons LLC, Neumann Homes, Inc., American Home Mortgage Investment Corp., New Century Financial Corp., Delta Financial Corporation, HomeBanc Corp., Mortgage Lenders Network USA, Inc., The Education Resources Institute, Inc., Vesta Insurance Group, Inc., and its six insurance units, National Century Financial Enterprises, Greektown Holdings, LLC, Tropicana Entertainment, LLC, PRC, LLC, Wellman Inc., Propex Inc., Solutia, Inc., Exide Technologies, Bennigan's and Steak and Ale restaurants, Buffets Holdings, Inc., Interstate Bakeries Corporation, Parmalat Finanziaria, S.p.A., Bally Total Fitness Holding Corp., Saint Vincent Catholic Medical Centers, ASARCO LLC, Federal-Mogul Corporation, W.R. Grace & Co., Owens Corning, USG Corporation, the Roman Catholic Church in the United States, and the city of Vallejo, California.
Additionally, BCSI co-publishes the TROUBLED COMPANY REPORTER. The TCR provides daily news by e-mail about approximately 3,000 companies tumbling down the credit quality curve and restructuring their balance sheets and operations. Go to http://www.bankrupt.com/freetrial/ to sign-up for a 30-day free trial subscription to the TCR.
SOURCE Bankruptcy Creditors' Service, Inc.
http://bankrupt.com/lehman
Copyright (C) 2008 PR Newswire. All rights reserved
McCain wasn't found guilty of anything but bad judgment,,,
McCain wasn't found guilty of anything but bad judgment
He must think we are a nation of village idiots
Commodity Futures Modernization Act into the budget bill
Richard Rainwater...Bill Frist...Richard Scott...HEALTHCARE is involved in this Financial Crisis also, big time..Look at the ongoing NCFE trial in Colubus Ohio Federal Prosectors claimtobe bigger than Enron!
Look at the DUMPING that transpired wiht the LOSING assets of HCA/TN Inc.located in TEXAS! Oh, and let us not forget Rainwater's Wife, Darla Moore, the QUEEN of Bankruptcy dubbed by FORTUNE magazine.
Remember, Rainwater was GWBush's ex-partner with the Texas Rangers.
From the Huff Post:
Conservative Republicans always want the government to stay out of business and avoid regulation as long as they are making lots of money. When their greed, however, gets them into a fix, they are the first to cry out for rules and laws and taxpayer money to bail out their businesses. Obviously, Republicans are socialists. The Bush administration has decided to socialize the debt of the big Wall Street Firms. Taxpayers didn't get to enjoy any of the big money profits on the phony financial instruments like derivatives or bundled sub-prime
...
That's pretty easy to answer, too. His name is Phil Gramm. A few days after the Supreme Court made George W. Bush president in 2000, Gramm stuck something called the Commodity Futures Modernization Act into the budget bill. Nobody knew that the Texas senator was slipping America a 262 page poison pill. The Gramm Guts America Act was designed to keep regulators from controlling new financial tools described as credit "swaps." These are instruments like sub-prime mortgages bundled up and sold as securities. Under the Gramm law, neither the SEC nor the Commodities Futures Trading Commission (CFTC) were able to examine financial institutions like hedge funds or investment banks to guarantee they had the assets necessary to cover losses they were guaranteeing.
This isn't small beer we are talking about here. The market for these fancy financial instruments they don't expect us little people to understand is estimated at $60 trillion annually, which amounts to almost four times the entire US stock market.
And Senator Phil Gramm wanted it completely unregulated. So did Alan Greenspan, who supported the legislation and is now running around to the talk shows jabbering about the horror of it all. Before the highly paid lobbyists were done slinging their gold card guts about the halls of congress, every one from hedge funds to banks were playing with fire for fun and profit.
Gramm didn't just make a fairy tale world for Wall Street, though. He included in his bill a provision that prevented the regulation of energy trading markets, which led us to the Enron collapse. There was no collapse of the house of Gramm, however, because his wife Wendy, who once headed up the Commodities Futures Trading Commission, took a job on the Enron board that provided almost $2 million to their household kitty. And why not? Wendy got a CFTC rule passed that kept the federal government from regulating energy futures contracts at Enron.
If John McCain gets elected and chooses Phil Gramm as his Treasury Secretary, which many politico types see as likely, they will be able to talk about the good old days when Gramm was in congress and McCain was in the senate and they were in the midst of the Savings and Loan crisis.
The S and L scandal, which may look precious when compared to our present cascade of problems, isn't hard to understand, either. But it is impossible to take John McCain seriously on our current financial Armageddon since he was dabbling in the historic collapse of 747 S&Ls that occurred during Ronald Reagan's era. In the early 80s under the Republican president, congress deregulated the savings and loan industry in much the same way that Gramm made sure there were no laws hindering our current financial malefactors on Wall Street. S&Ls simply lobbied until they had less regulation and then began making rampant, unsound investments.
The guy who was going the wildest with financial freedom was Charles Keating, who headed up Lincoln Savings and Loan of California. Because the S&L industry had managed to get congress to increase FDIC insurance from $40,000 to $100,000 on deposits, the irresponsible investing of people like Keating began to put taxpayer insurance funds at great risk of loss. Keating placed money in junk bonds and questionable real estate projects and because so many other S&Ls started acting the same way the Federal Home Loan Bank Board (FHLBB) began to push for a regulation that limited these dangerous speculative "direct" investments to 10% of an S&L's assets.
And Keating didn't like it; he called on a private economist named Alan Greenspan, who promptly produced a study saying that there was no danger in "direct" investments.
But that didn't convince the FHLBB and as further scrutiny showed Lincoln Savings and Loan was making even more historically bad investment decisions, a federal investigation was launched.
So Keating called his home state senator John McCain.
McCain and four other US senators (known to history as the Keating Five) met with Edwin Gray, then chairman of the FHLBB. McCain had been hesitant to attend but had reportedly been called a "wimp" behind his back by Keating. The message to the FHLBB and Gray from the Keating Five was to lay off Lincoln and cool the investigation. Gray and the FHLBB did not relent but Lincoln stayed in business until 1989 when it collapsed with the rest of the S&L industry. The life savings of more than 20,000 elderly investors disappeared with the failure of Lincoln. Keating went to prison for five years.
Charles Keating was John McCain's pal. They met in 1981 and Keating dumped $112,000 in the McCain campaign bank accounts between '82 and '87. A year before McCain met with the FHLBB regulators, his wife Cindy and her father, according to newspaper reports at the time, invested about $360,000 in one of Keating's shopping centers. The Arizona Republic reported McCain and his wife and their babysitter took nine trips on Keating's private jet to the Bahamas to stay at the S&L liar's decadent Cat Cay resort. The senator didn't pay Keating back for the plane rides until years later when he was under investigation.
McCain wasn't found guilty of anything but bad judgment, which is an historic understatement. Republicans, who led deregulation of the S&L industry, delayed the bailout until after the 1988 election to make sure George H. W. won the White House. The cost to taxpayers for helping these 747 bad actors in the S&L industry was finally estimated at $1.4 trillion. If the bailout had begun in 1986 instead of after the presidential election, the cost would have been contained at $20 billion.
These, then, are the people -- the Republicans -- who want to run our government for four more years. John McCain isn't just one of them. He rides their jets. He takes their campaign donations. He makes them his campaign advisors. And he tells us to trust him.
He must think we are a nation of village idiots.
Hell, maybe we are.
Don't let them tell you this economic meltdown is a complicated mess. It's not. Our national financial crisis is readily understood by anyone who has seen greed and hypocrisy. But we are now witnes...
He must think we are a nation of village idiots
Commodity Futures Modernization Act into the budget bill
Richard Rainwater...Bill Frist...Richard Scott...HEALTHCARE is involved in this Financial Crisis also, big time..Look at the ongoing NCFE trial in Colubus Ohio Federal Prosectors claimtobe bigger than Enron!
Look at the DUMPING that transpired wiht the LOSING assets of HCA/TN Inc.located in TEXAS! Oh, and let us not forget Rainwater's Wife, Darla Moore, the QUEEN of Bankruptcy dubbed by FORTUNE magazine.
Remember, Rainwater was GWBush's ex-partner with the Texas Rangers.
From the Huff Post:
Conservative Republicans always want the government to stay out of business and avoid regulation as long as they are making lots of money. When their greed, however, gets them into a fix, they are the first to cry out for rules and laws and taxpayer money to bail out their businesses. Obviously, Republicans are socialists. The Bush administration has decided to socialize the debt of the big Wall Street Firms. Taxpayers didn't get to enjoy any of the big money profits on the phony financial instruments like derivatives or bundled sub-prime
...
That's pretty easy to answer, too. His name is Phil Gramm. A few days after the Supreme Court made George W. Bush president in 2000, Gramm stuck something called the Commodity Futures Modernization Act into the budget bill. Nobody knew that the Texas senator was slipping America a 262 page poison pill. The Gramm Guts America Act was designed to keep regulators from controlling new financial tools described as credit "swaps." These are instruments like sub-prime mortgages bundled up and sold as securities. Under the Gramm law, neither the SEC nor the Commodities Futures Trading Commission (CFTC) were able to examine financial institutions like hedge funds or investment banks to guarantee they had the assets necessary to cover losses they were guaranteeing.
This isn't small beer we are talking about here. The market for these fancy financial instruments they don't expect us little people to understand is estimated at $60 trillion annually, which amounts to almost four times the entire US stock market.
And Senator Phil Gramm wanted it completely unregulated. So did Alan Greenspan, who supported the legislation and is now running around to the talk shows jabbering about the horror of it all. Before the highly paid lobbyists were done slinging their gold card guts about the halls of congress, every one from hedge funds to banks were playing with fire for fun and profit.
Gramm didn't just make a fairy tale world for Wall Street, though. He included in his bill a provision that prevented the regulation of energy trading markets, which led us to the Enron collapse. There was no collapse of the house of Gramm, however, because his wife Wendy, who once headed up the Commodities Futures Trading Commission, took a job on the Enron board that provided almost $2 million to their household kitty. And why not? Wendy got a CFTC rule passed that kept the federal government from regulating energy futures contracts at Enron.
If John McCain gets elected and chooses Phil Gramm as his Treasury Secretary, which many politico types see as likely, they will be able to talk about the good old days when Gramm was in congress and McCain was in the senate and they were in the midst of the Savings and Loan crisis.
The S and L scandal, which may look precious when compared to our present cascade of problems, isn't hard to understand, either. But it is impossible to take John McCain seriously on our current financial Armageddon since he was dabbling in the historic collapse of 747 S&Ls that occurred during Ronald Reagan's era. In the early 80s under the Republican president, congress deregulated the savings and loan industry in much the same way that Gramm made sure there were no laws hindering our current financial malefactors on Wall Street. S&Ls simply lobbied until they had less regulation and then began making rampant, unsound investments.
The guy who was going the wildest with financial freedom was Charles Keating, who headed up Lincoln Savings and Loan of California. Because the S&L industry had managed to get congress to increase FDIC insurance from $40,000 to $100,000 on deposits, the irresponsible investing of people like Keating began to put taxpayer insurance funds at great risk of loss. Keating placed money in junk bonds and questionable real estate projects and because so many other S&Ls started acting the same way the Federal Home Loan Bank Board (FHLBB) began to push for a regulation that limited these dangerous speculative "direct" investments to 10% of an S&L's assets.
And Keating didn't like it; he called on a private economist named Alan Greenspan, who promptly produced a study saying that there was no danger in "direct" investments.
But that didn't convince the FHLBB and as further scrutiny showed Lincoln Savings and Loan was making even more historically bad investment decisions, a federal investigation was launched.
So Keating called his home state senator John McCain.
McCain and four other US senators (known to history as the Keating Five) met with Edwin Gray, then chairman of the FHLBB. McCain had been hesitant to attend but had reportedly been called a "wimp" behind his back by Keating. The message to the FHLBB and Gray from the Keating Five was to lay off Lincoln and cool the investigation. Gray and the FHLBB did not relent but Lincoln stayed in business until 1989 when it collapsed with the rest of the S&L industry. The life savings of more than 20,000 elderly investors disappeared with the failure of Lincoln. Keating went to prison for five years.
Charles Keating was John McCain's pal. They met in 1981 and Keating dumped $112,000 in the McCain campaign bank accounts between '82 and '87. A year before McCain met with the FHLBB regulators, his wife Cindy and her father, according to newspaper reports at the time, invested about $360,000 in one of Keating's shopping centers. The Arizona Republic reported McCain and his wife and their babysitter took nine trips on Keating's private jet to the Bahamas to stay at the S&L liar's decadent Cat Cay resort. The senator didn't pay Keating back for the plane rides until years later when he was under investigation.
McCain wasn't found guilty of anything but bad judgment, which is an historic understatement. Republicans, who led deregulation of the S&L industry, delayed the bailout until after the 1988 election to make sure George H. W. won the White House. The cost to taxpayers for helping these 747 bad actors in the S&L industry was finally estimated at $1.4 trillion. If the bailout had begun in 1986 instead of after the presidential election, the cost would have been contained at $20 billion.
These, then, are the people -- the Republicans -- who want to run our government for four more years. John McCain isn't just one of them. He rides their jets. He takes their campaign donations. He makes them his campaign advisors. And he tells us to trust him.
He must think we are a nation of village idiots.
Hell, maybe we are.
Don't let them tell you this economic meltdown is a complicated mess. It's not. Our national financial crisis is readily understood by anyone who has seen greed and hypocrisy. But we are now witnes...
Wednesday, September 17, 2008
Federal Financial Institutions Examination Council.
TOO little too late!
The House Financial Services Committee today passed H.R. 1427, the Federal Housing Finance Reform Act of 2007. The bill will overhaul the regulatory oversight of the government sponsored enterprises (GSE) of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and create a new, independent regulator with broad powers analogous to current banking regulators.
Press Release
For Immediate Release: March 29, 2007
Financial Services Committee Passes GSE Reform Bill
Washington, DC - The House Financial Services Committee today passed H.R. 1427, the Federal Housing Finance Reform Act of 2007. The bill will overhaul the regulatory oversight of the government sponsored enterprises (GSE) of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and create a new, independent regulator with broad powers analogous to current banking regulators. In addition, the bill creates an off budget and non-taxpayer financed affordable housing fund, which will dedicate hundreds of millions of dollars for the construction, maintenance and preservation of affordable housing with the first year of the fund to be dedicated to the hurricane stricken areas of the Gulf Coast, and billions of dollars over the next five years for affordable housing nationwide. The bill, as amended, passed on a bipartisan majority of 45 to 19.
The Federal Housing Finance Reform Act of 2007 is the product of both bipartisan legislation in the 109th Congress and careful discussions and compromise with the Department of Treasury. The bill also comes after a series of legislative hearings on GSE reforms and proposals, where regulators and expert witnesses testified before both the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, and the full Financial Services Committee.
In addition, the Committee adopted amendments concerning the composition of the boards of the enterprises and of the FHLB’s, use of the Affordable Housing Fund and the Affordable Housing Goals, provisions to promote diversity at the agency and at the regulated entities, and clarifying authorities of the agency in determining capital and supervising the operations of the regulated entities.
The “Federal Housing Finance Reform Act of 2007” Summary
Title I – Reform of regulation of enterprises and Federal Home Loan Banks
Subtitle A – Improvement of Safety and Soundness
· Establishes the Federal Housing Finance Agency (FHFA), as an independent agency, to regulate Fannie Mae, Freddie Mac, and Federal Home Loan Banks (the regulated entities). FHFA succeeds to the current authority of the Office of Federal Housing Enterprise Oversight (OFHEO) and Federal Housing Finance Board (FHFB).
· FHFA is headed by a Director, appointed by the President and confirmed by the Senate for a 5-year term. There are Deputy Directors for Divisions of Enterprise Regulation, Federal Home Loan Bank Regulation, and Housing.
· A Federal Housing Enterprise Board advises the Agency on overall strategies and policies, but has no executive authority. The Board comprises of the Secretaries of the Treasury and Housing and Urban Development, two presidential appointees, and the Director as Chairperson.
· The agency annually assesses the regulated entities for FHFA’s reasonable costs and expenses; Congressional appropriations approval is not required.
· The agency issues and enforces prudential management and operations standards for the regulated entities, including credit, interest rate, and market risks; internal controls, including information security and privacy, liquidity, and investments.
· The agency may require a regulated entity to withhold compensation from an executive officer during a review of the reasonableness and comparability of compensation, and may take into consideration any wrongdoing by the officer.
· The agency is given discretion to adjust risk-based capital requirements for the regulated entities to ensure that they operate in a safe and sound manner and maintain sufficient capital and reserves to support the risks of their operations.
· The agency may increase the minimum capital levels for the regulated entities through regulation or, if there is a serious safety and soundness concern, temporarily through an order. The agency may also establish capital or reserve requirements with respect to particular programs or activities as the agency considers appropriate. The agency will periodically review the capital maintained by the regulated entities.
· The agency establishes standards by which portfolio holdings and growth of the portfolio will be deemed consistent with mission and safety and soundness.
In developing the standards, the agency considers factors relating to the size of market, liquidity, mission, risk, and other factors necessary to determine whether portfolio holdings are consistent with the mission of the enterprise as well as safe and sound operations of the enterprises. The agency reviews the assets and obligations of each enterprise and may require an enterprise to dispose of or acquire any asset or obligation for safety and soundness or mission-related reasons.
· The legislation establishes corporate governance requirements for the composition, operation, and compensation of the board of directors. The enterprises are required to comply with several provisions of the Sarbanes-Oxley Act regardless of their registration status with the SEC.
· The regulated entities are required to register at least one class of capital stock with the Securities and Exchange Commission.
The enterprises will disclose in reports filed with the SEC the amount of income they report to the IRS.
· The agency will participate as a liaison to the Federal Financial Institutions Examination Council.
· The agency, in consultation with federal banking regulators must report to Congress on guarantee fees and analogous practices.
Each regulated entity will establish an Office of Minority and Women Inclusion to implement standards for inclusion of minorities and women in all business, activities, and contracts of the regulated entities.
Subtitle B – Improvement of Mission Supervision
· Program and housing goal oversight for Fannie Mae and Freddie Mac (“enterprises”) is transferred from the Department of Housing and Development (HUD) to the new regulator.
· The agency has the authority to approve new products. An enterprise may not offer a new product before obtaining the agency’s approval. The agency must act on a request within 30 days after providing a 30 day notice and comment period. A product may only be approved if it is authorized by law, in the public interest, consistent with safety and soundness of the enterprise and the mortgage finance system, and does not materially impair the efficiency of the mortgage finance system. An enterprise must provide the agency prior notice of new activities that are not new products. This does not restrict the Director’s general authority over all programs, activities, and products.
· The legislation sets the conforming loan limits and requires the agency to adjust the conforming loan limit according to the annual housing price index maintained by the agency. An additional high-cost area limit is established for areas where the median home price exceeds the general conforming loan limit, up to the lower of 150 per cent of the conforming loan limit or the median cost in that area. Loans in high cost areas above the general conforming loan limit must be securitized. The regulator will conduct a study of whether the securitization requirement raises the cost to borrowers of high-cost area loans, and may terminate the requirement if it is found to raise costs.
· The agency establishes affordable housing goals and an annual home purchase goal for the enterprises. The agency may take enforcement action against an enterprise for failure to meet the housing goals.
· The bill creates an “Affordable Housing Fund,” to be managed by the new GSE regulator. Funds are derived through contributions by Fannie Mae and Freddie Mac in amounts equal to 1.2 basis points on each GSE’s total outstanding mortgages (including both those held in portfolio and those securitized) each year from 2007 through 2011. 75% of these funds are used for affordable housing fund purposes, and 25% are allocated to the federal government, to keep the bill deficit neutral.
· In 2007, 75% of the funds go to Louisiana and 25% of the funds go to Mississippi for affordable housing needs arising out of Hurricanes Katrina and Rita. Thereafter, funds are allocated by formula to the states (including also D.C., federal territories, and federally recognized tribes). 100% of funds must be used for the benefit of very low and extremely low income families. Funds may be used for rental housing, homeownership and public infrastructure activities in conjunction with housing. The Fund includes a number of provisions to ensure that the funds are used for housing and are not misused or used for other purposes, including a strict prohibition against any funds being used for grantee administrative costs or expenses, political activities, advocacy, lobbying, counseling, travel expense, or preparation or advice on tax returns.
Subtitle C – Prompt Corrective Action
· The legislation establishes capital classifications for the regulated entities and supervisory actions applicable to these classifications, including appointment of the agency as conservator or receiver to reorganize, rehabilitate, or wind up its business. If a regulated entity becomes critically undercapitalized, the agency must be appointed as receiver if the agency determines that the debts of the entity have exceed its assets for 30 days or the entity has not been paying its debts as they became due for 30 days. A receiver may not revoke an enterprise’s charter.
Subtitle D – Enforcement Actions
· The agency may issue cease and desist orders, remove officers, directors, and affiliated parties, and impose civil money and criminal penalties.
· The agency is empowered to issue civil money penalties and has the authority to remove management.
Subtitle E – General Provisions
· The size of the Fannie Mae and Freddie Mac boards are reduced from 18 members to thirteen or such other number as the agency determines. Presidential appointees on the boards of Fannie Mae and Freddie Mac are eliminated.
· The agency is required to conduct studies on the portfolio operations of the enterprises and on alternative secondary market systems
Title II – Federal Home Loan Banks
· Federal Home Loan Bank boards of directors are decreased in size from 14 to 13 members. The cap on director compensation is lifted and the terms of directors are extended from 3 years to 4. The grandfather clause concerning numbers of member directors from each state is preserved.
· The FHLBs are authorized to establish joint offices to perform functions on a collective basis. Joint offices, including the Office of Finance, are subject to the authority of the agency.
· The Federal Home Loan Banks are exempt from some of the disclosures required under the Securities Exchange Act of 1934.
· One or more FHLBs are permitted to merge with the approval of the boards of the FHLBs and the FHFA.
The agency, in appointing independent directors to the boards of the FHLBs, will consider the demographic makeup of the communities most served by the AHPs of the FHLBs for whom directors are being appointed.
· Government-insured depository institutions with assets less than $1 billion (currently $500 million) may use Federal Home Loan Bank advances for lending to community development activities (currently small business and agricultural purposes only) and use such secured loans as collateral for advances generally.
Title III – Transfer of functions, personnel, and property of OFHEO and Federal Housing Finance Board
Subtitle A – Office of Federal Housing Enterprise Oversight
· OFHEO is abolished six months after enactment, through an orderly transfer of functions to FHFA. OFHEO regulations and orders remain in effect and are enforceable, until determined otherwise; employees are transferred with temporary protections.
Subtitle B – Federal Housing Finance Oversight Board
· FHFB is abolished six months after enactment, through an orderly transfer of functions to FHFA. FHFB regulations and orders remain in effect and are enforceable, until determined otherwise; employees are transferred with temporary protections.
Subtitle C – Department of Housing and Urban Development
· “Enterprise-related” employees and functions of HUD are transferred to FHFA six months after enactment. HUD regulations and orders concerning the enterprises remain in effect and are enforceable, until determined otherwise; employees are transferred with temporary protections.
Detailed Summary of the Affordable Housing Fund:
The bill creates an “Affordable Housing Fund,” to be managed by the new GSE regulator [the “Director”]. Funds are derived through contributions by Fannie Mae and Freddie Mac in amounts equal to 1.2 basis points on each GSE’s total outstanding mortgages (including both those held in portfolio and those securitized) each year from 2007 through 2011. The program sunsets after five years. 75% of these funds are used for affordable housing fund purposes, and 25% are allocated to the federal government, to keep the bill deficit neutral.
75% of the affordable housing funds available in the first year will go to Louisiana and 25% of such funds will go to Mississippi for affordable housing needs arising out of the Gulf Coast hurricanes. Thereafter, funds are allocated by formula to the states (including also D.C., federal territories, and federally recognized tribes). This formula is to be developed by HUD, and is to be based on a number of factors, including population, housing affordability, percentage of very and extremely low income families, cost of rehab, and extent of substandard and aging housing. If HUD fails to establish this formula on time, funds are distributed to states based on HOME allocations to states and Participation Jurisdictions.
100% of funds must be used for the benefit of very low and extremely low income families. Funds may be used for rental housing, homeownership [at least 10% of funds must be used by each state for this purpose], and public infrastructure activities in conjunction with housing [no more than 12.5% of funds in any state].
Affordable housing grants are to be made to eligible recipients, which can be any “organization, agency, or other entity (including a for-profit entity, a nonprofit entity, a federally recognized tribe, an Alaskan Native Village, or a faith-based organization)” that has a demonstrated experience and capacity to carry out the proposed fund use. Grantee funds may only be used for affordable uses and not for administrative costs.
Each state allocates funds under its own Allocation Plan, to be based on priority housing needs in each state, and on criteria that include greatest impact, geographic diversity, ability to obligate funds in a timely manner, and the extent to which rental housing projects are affordable, especially for extremely low income families. Funds are redistributed from any state that does not obligate funds within 2 years.
The Fund includes a number of provisions to ensure that the funds are used for housing and are not misused or used for other purposes, including:
(a) a strict prohibition against any funds being used for grantee administrative costs or expenses, political activities, advocacy, lobbying, counseling, travel expense, or preparation or advice on tax returns,
(b) limits set by the Director on how much States can spend on administrative costs,
(c) a requirement by the Director to establish program regulations, authority for the Director to audit each state’s compliance, a requirement that each state develop systems to ensure program compliance, and required annual state fund use reports,
(d) authority of the Director to impose penalties on states that do not comply with requirements, including requiring states and grantees to reimburse misused funds.
The House Financial Services Committee today passed H.R. 1427, the Federal Housing Finance Reform Act of 2007. The bill will overhaul the regulatory oversight of the government sponsored enterprises (GSE) of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and create a new, independent regulator with broad powers analogous to current banking regulators.
Press Release
For Immediate Release: March 29, 2007
Financial Services Committee Passes GSE Reform Bill
Washington, DC - The House Financial Services Committee today passed H.R. 1427, the Federal Housing Finance Reform Act of 2007. The bill will overhaul the regulatory oversight of the government sponsored enterprises (GSE) of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and create a new, independent regulator with broad powers analogous to current banking regulators. In addition, the bill creates an off budget and non-taxpayer financed affordable housing fund, which will dedicate hundreds of millions of dollars for the construction, maintenance and preservation of affordable housing with the first year of the fund to be dedicated to the hurricane stricken areas of the Gulf Coast, and billions of dollars over the next five years for affordable housing nationwide. The bill, as amended, passed on a bipartisan majority of 45 to 19.
The Federal Housing Finance Reform Act of 2007 is the product of both bipartisan legislation in the 109th Congress and careful discussions and compromise with the Department of Treasury. The bill also comes after a series of legislative hearings on GSE reforms and proposals, where regulators and expert witnesses testified before both the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, and the full Financial Services Committee.
In addition, the Committee adopted amendments concerning the composition of the boards of the enterprises and of the FHLB’s, use of the Affordable Housing Fund and the Affordable Housing Goals, provisions to promote diversity at the agency and at the regulated entities, and clarifying authorities of the agency in determining capital and supervising the operations of the regulated entities.
The “Federal Housing Finance Reform Act of 2007” Summary
Title I – Reform of regulation of enterprises and Federal Home Loan Banks
Subtitle A – Improvement of Safety and Soundness
· Establishes the Federal Housing Finance Agency (FHFA), as an independent agency, to regulate Fannie Mae, Freddie Mac, and Federal Home Loan Banks (the regulated entities). FHFA succeeds to the current authority of the Office of Federal Housing Enterprise Oversight (OFHEO) and Federal Housing Finance Board (FHFB).
· FHFA is headed by a Director, appointed by the President and confirmed by the Senate for a 5-year term. There are Deputy Directors for Divisions of Enterprise Regulation, Federal Home Loan Bank Regulation, and Housing.
· A Federal Housing Enterprise Board advises the Agency on overall strategies and policies, but has no executive authority. The Board comprises of the Secretaries of the Treasury and Housing and Urban Development, two presidential appointees, and the Director as Chairperson.
· The agency annually assesses the regulated entities for FHFA’s reasonable costs and expenses; Congressional appropriations approval is not required.
· The agency issues and enforces prudential management and operations standards for the regulated entities, including credit, interest rate, and market risks; internal controls, including information security and privacy, liquidity, and investments.
· The agency may require a regulated entity to withhold compensation from an executive officer during a review of the reasonableness and comparability of compensation, and may take into consideration any wrongdoing by the officer.
· The agency is given discretion to adjust risk-based capital requirements for the regulated entities to ensure that they operate in a safe and sound manner and maintain sufficient capital and reserves to support the risks of their operations.
· The agency may increase the minimum capital levels for the regulated entities through regulation or, if there is a serious safety and soundness concern, temporarily through an order. The agency may also establish capital or reserve requirements with respect to particular programs or activities as the agency considers appropriate. The agency will periodically review the capital maintained by the regulated entities.
· The agency establishes standards by which portfolio holdings and growth of the portfolio will be deemed consistent with mission and safety and soundness.
In developing the standards, the agency considers factors relating to the size of market, liquidity, mission, risk, and other factors necessary to determine whether portfolio holdings are consistent with the mission of the enterprise as well as safe and sound operations of the enterprises. The agency reviews the assets and obligations of each enterprise and may require an enterprise to dispose of or acquire any asset or obligation for safety and soundness or mission-related reasons.
· The legislation establishes corporate governance requirements for the composition, operation, and compensation of the board of directors. The enterprises are required to comply with several provisions of the Sarbanes-Oxley Act regardless of their registration status with the SEC.
· The regulated entities are required to register at least one class of capital stock with the Securities and Exchange Commission.
The enterprises will disclose in reports filed with the SEC the amount of income they report to the IRS.
· The agency will participate as a liaison to the Federal Financial Institutions Examination Council.
· The agency, in consultation with federal banking regulators must report to Congress on guarantee fees and analogous practices.
Each regulated entity will establish an Office of Minority and Women Inclusion to implement standards for inclusion of minorities and women in all business, activities, and contracts of the regulated entities.
Subtitle B – Improvement of Mission Supervision
· Program and housing goal oversight for Fannie Mae and Freddie Mac (“enterprises”) is transferred from the Department of Housing and Development (HUD) to the new regulator.
· The agency has the authority to approve new products. An enterprise may not offer a new product before obtaining the agency’s approval. The agency must act on a request within 30 days after providing a 30 day notice and comment period. A product may only be approved if it is authorized by law, in the public interest, consistent with safety and soundness of the enterprise and the mortgage finance system, and does not materially impair the efficiency of the mortgage finance system. An enterprise must provide the agency prior notice of new activities that are not new products. This does not restrict the Director’s general authority over all programs, activities, and products.
· The legislation sets the conforming loan limits and requires the agency to adjust the conforming loan limit according to the annual housing price index maintained by the agency. An additional high-cost area limit is established for areas where the median home price exceeds the general conforming loan limit, up to the lower of 150 per cent of the conforming loan limit or the median cost in that area. Loans in high cost areas above the general conforming loan limit must be securitized. The regulator will conduct a study of whether the securitization requirement raises the cost to borrowers of high-cost area loans, and may terminate the requirement if it is found to raise costs.
· The agency establishes affordable housing goals and an annual home purchase goal for the enterprises. The agency may take enforcement action against an enterprise for failure to meet the housing goals.
· The bill creates an “Affordable Housing Fund,” to be managed by the new GSE regulator. Funds are derived through contributions by Fannie Mae and Freddie Mac in amounts equal to 1.2 basis points on each GSE’s total outstanding mortgages (including both those held in portfolio and those securitized) each year from 2007 through 2011. 75% of these funds are used for affordable housing fund purposes, and 25% are allocated to the federal government, to keep the bill deficit neutral.
· In 2007, 75% of the funds go to Louisiana and 25% of the funds go to Mississippi for affordable housing needs arising out of Hurricanes Katrina and Rita. Thereafter, funds are allocated by formula to the states (including also D.C., federal territories, and federally recognized tribes). 100% of funds must be used for the benefit of very low and extremely low income families. Funds may be used for rental housing, homeownership and public infrastructure activities in conjunction with housing. The Fund includes a number of provisions to ensure that the funds are used for housing and are not misused or used for other purposes, including a strict prohibition against any funds being used for grantee administrative costs or expenses, political activities, advocacy, lobbying, counseling, travel expense, or preparation or advice on tax returns.
Subtitle C – Prompt Corrective Action
· The legislation establishes capital classifications for the regulated entities and supervisory actions applicable to these classifications, including appointment of the agency as conservator or receiver to reorganize, rehabilitate, or wind up its business. If a regulated entity becomes critically undercapitalized, the agency must be appointed as receiver if the agency determines that the debts of the entity have exceed its assets for 30 days or the entity has not been paying its debts as they became due for 30 days. A receiver may not revoke an enterprise’s charter.
Subtitle D – Enforcement Actions
· The agency may issue cease and desist orders, remove officers, directors, and affiliated parties, and impose civil money and criminal penalties.
· The agency is empowered to issue civil money penalties and has the authority to remove management.
Subtitle E – General Provisions
· The size of the Fannie Mae and Freddie Mac boards are reduced from 18 members to thirteen or such other number as the agency determines. Presidential appointees on the boards of Fannie Mae and Freddie Mac are eliminated.
· The agency is required to conduct studies on the portfolio operations of the enterprises and on alternative secondary market systems
Title II – Federal Home Loan Banks
· Federal Home Loan Bank boards of directors are decreased in size from 14 to 13 members. The cap on director compensation is lifted and the terms of directors are extended from 3 years to 4. The grandfather clause concerning numbers of member directors from each state is preserved.
· The FHLBs are authorized to establish joint offices to perform functions on a collective basis. Joint offices, including the Office of Finance, are subject to the authority of the agency.
· The Federal Home Loan Banks are exempt from some of the disclosures required under the Securities Exchange Act of 1934.
· One or more FHLBs are permitted to merge with the approval of the boards of the FHLBs and the FHFA.
The agency, in appointing independent directors to the boards of the FHLBs, will consider the demographic makeup of the communities most served by the AHPs of the FHLBs for whom directors are being appointed.
· Government-insured depository institutions with assets less than $1 billion (currently $500 million) may use Federal Home Loan Bank advances for lending to community development activities (currently small business and agricultural purposes only) and use such secured loans as collateral for advances generally.
Title III – Transfer of functions, personnel, and property of OFHEO and Federal Housing Finance Board
Subtitle A – Office of Federal Housing Enterprise Oversight
· OFHEO is abolished six months after enactment, through an orderly transfer of functions to FHFA. OFHEO regulations and orders remain in effect and are enforceable, until determined otherwise; employees are transferred with temporary protections.
Subtitle B – Federal Housing Finance Oversight Board
· FHFB is abolished six months after enactment, through an orderly transfer of functions to FHFA. FHFB regulations and orders remain in effect and are enforceable, until determined otherwise; employees are transferred with temporary protections.
Subtitle C – Department of Housing and Urban Development
· “Enterprise-related” employees and functions of HUD are transferred to FHFA six months after enactment. HUD regulations and orders concerning the enterprises remain in effect and are enforceable, until determined otherwise; employees are transferred with temporary protections.
Detailed Summary of the Affordable Housing Fund:
The bill creates an “Affordable Housing Fund,” to be managed by the new GSE regulator [the “Director”]. Funds are derived through contributions by Fannie Mae and Freddie Mac in amounts equal to 1.2 basis points on each GSE’s total outstanding mortgages (including both those held in portfolio and those securitized) each year from 2007 through 2011. The program sunsets after five years. 75% of these funds are used for affordable housing fund purposes, and 25% are allocated to the federal government, to keep the bill deficit neutral.
75% of the affordable housing funds available in the first year will go to Louisiana and 25% of such funds will go to Mississippi for affordable housing needs arising out of the Gulf Coast hurricanes. Thereafter, funds are allocated by formula to the states (including also D.C., federal territories, and federally recognized tribes). This formula is to be developed by HUD, and is to be based on a number of factors, including population, housing affordability, percentage of very and extremely low income families, cost of rehab, and extent of substandard and aging housing. If HUD fails to establish this formula on time, funds are distributed to states based on HOME allocations to states and Participation Jurisdictions.
100% of funds must be used for the benefit of very low and extremely low income families. Funds may be used for rental housing, homeownership [at least 10% of funds must be used by each state for this purpose], and public infrastructure activities in conjunction with housing [no more than 12.5% of funds in any state].
Affordable housing grants are to be made to eligible recipients, which can be any “organization, agency, or other entity (including a for-profit entity, a nonprofit entity, a federally recognized tribe, an Alaskan Native Village, or a faith-based organization)” that has a demonstrated experience and capacity to carry out the proposed fund use. Grantee funds may only be used for affordable uses and not for administrative costs.
Each state allocates funds under its own Allocation Plan, to be based on priority housing needs in each state, and on criteria that include greatest impact, geographic diversity, ability to obligate funds in a timely manner, and the extent to which rental housing projects are affordable, especially for extremely low income families. Funds are redistributed from any state that does not obligate funds within 2 years.
The Fund includes a number of provisions to ensure that the funds are used for housing and are not misused or used for other purposes, including:
(a) a strict prohibition against any funds being used for grantee administrative costs or expenses, political activities, advocacy, lobbying, counseling, travel expense, or preparation or advice on tax returns,
(b) limits set by the Director on how much States can spend on administrative costs,
(c) a requirement by the Director to establish program regulations, authority for the Director to audit each state’s compliance, a requirement that each state develop systems to ensure program compliance, and required annual state fund use reports,
(d) authority of the Director to impose penalties on states that do not comply with requirements, including requiring states and grantees to reimburse misused funds.
"the Paulson group," ...key members of Congress have recently expressed concern that U.S. companies may be over-regulated.
With the encouragement of senior federal lawmakers, officials from the SEC and the Public Company Accounting Oversight Board, which sets rules and oversees accountants, are meeting to hash out an accord on scaling back the rule.
Business interests, seizing on concerns that a law passed in the wake of the Enron scandal has overreached, are advancing a broad agenda to limit government oversight of private industry, including making it tougher for investors to sue companies and auditors for fraud.
A group that has drawn support from Treasury Secretary Henry M. Paulson Jr. plans to issue a report tomorrow that argues that the United States may be losing its preeminent position in global capital markets to foreign stock exchanges because of costly regulations and nettlesome private lawsuits.
Interest groups are trying to build political support to review long-standing rules that govern companies, as well as parts of the 2002 Sarbanes-Oxley law, which imposed stringent responsibilities on accountants, boards of directors and corporate executives. Some key members of Congress have recently expressed concern that U.S. companies may be over-regulated.
For example, Sen. Charles E. Schumer (D-N.Y.) joined New York City Mayor Michael R. Bloomberg (R) to commission a study by McKinsey & Co. on whether U.S. stock exchanges are losing listings to more lightly regulated overseas markets. Sen. Christopher J. Dodd (D-Conn.), who is set to head the Banking Committee, has expressed skepticism that the Sarbanes-Oxley law has led businesses to flee overseas but has signaled a willingness to hold hearings next year on how the legislation is working.
The business groups are initially focused on getting rules changed at the Securities and Exchange Commission, the independent federal agency that oversees U.S. capital markets and companies. The growing bipartisan concern about over-regulation will help set the tone for deliberations at the agency, which is led by Christopher Cox, a Republican and former congressman from California.
"From our perspective, the more people talking about this, the better," said David C. Chavern, director of the U.S. Chamber of Commerce's corporate-governance initiative. The chamber plans to publish its own study next year that attacks what it views as duplicative rules and overly aggressive enforcement by securities regulators.
The renewed push to soften government oversight of business comes as the outcry begins to diminish over a series of financial scandals that erupted five years ago after Enron collapsed, costing thousands of employees their jobs and wiping out billions of investor dollars. The phony accounting at Enron and the bankruptcy of WorldCom months later prompted Congress to pass the Sarbanes-Oxley law.
The chamber panel studying regulation contains several prominent Democrats, including two members of President Bill Clinton's Cabinet -- William M. Daley, who headed the Commerce Department, and former U.S. trade representative Mickey Kantor.
Lobbyists at the chamber are moving to line up meetings with Dodd, who is considering a bid for the presidency in 2008, and soon-to-be House Financial Services Chairman Barney Frank (D-Mass.). Frank recently spoke in general terms of his willingness to compromise with business on some matters to win concessions on minimum-wage legislation and housing reforms.
The current drive to roll back regulation pivots on a complex rule that requires companies to assess their financial controls to prevent fraud and mistakes. The provision, contained in Sarbanes-Oxley, has proved more expensive than regulators envisioned, particularly for small businesses.
With the encouragement of senior federal lawmakers, officials from the SEC and the Public Company Accounting Oversight Board, which sets rules and oversees accountants, are meeting to hash out an accord on scaling back the rule. How far they go, perhaps effectively exempting smaller companies, is raising intense concerns from those who think the rules are necessary to protect investors from fraud.
If they decide to exempt small companies, that would take out "the guts of getting accounting and auditing straightened out" after years of cursory reviews by accountants helped fuel financial scandals, warned Charles A. Bowsher, former comptroller general.
But business groups are not stopping there. They were encouraged when Paulson gave a speech last week calling for "a more balanced approach" to regulation.
The private panel is frequently called "the Paulson group," even though Paulson is not a member. Instead, the panel is directed by Harvard University law professor Hal S. Scott. Other members include R. Glenn Hubbard, former chairman of President Bush's Council of Economic Advisers, and Brookings Institution Chairman John L. Thornton.
The group's report tomorrow is to advocate raising the standard for charging companies with crimes, according to sources briefed on its content who spoke on condition of anonymity because the document has not been officially released. It also is to propose shielding accountants from fraud lawsuits under certain circumstances.
Many of the group's recommendations would require congressional action, and passage of new laws is uncertain in the last two years of the Bush administration, even with a growing concern over regulation among senior lawmakers.
University of Rochester President Joel Seligman expressed concern about any new limits on the ability of people to sue companies over accounting, saying it could "handicap the ability of the SEC to be a vigilant watchdog."
"To have this occur, so soon after the dramatic increase in fraud that led to Sarbanes-Oxley, would be deeply troublesome," he said.
Business interests, seizing on concerns that a law passed in the wake of the Enron scandal has overreached, are advancing a broad agenda to limit government oversight of private industry, including making it tougher for investors to sue companies and auditors for fraud.
A group that has drawn support from Treasury Secretary Henry M. Paulson Jr. plans to issue a report tomorrow that argues that the United States may be losing its preeminent position in global capital markets to foreign stock exchanges because of costly regulations and nettlesome private lawsuits.
Interest groups are trying to build political support to review long-standing rules that govern companies, as well as parts of the 2002 Sarbanes-Oxley law, which imposed stringent responsibilities on accountants, boards of directors and corporate executives. Some key members of Congress have recently expressed concern that U.S. companies may be over-regulated.
For example, Sen. Charles E. Schumer (D-N.Y.) joined New York City Mayor Michael R. Bloomberg (R) to commission a study by McKinsey & Co. on whether U.S. stock exchanges are losing listings to more lightly regulated overseas markets. Sen. Christopher J. Dodd (D-Conn.), who is set to head the Banking Committee, has expressed skepticism that the Sarbanes-Oxley law has led businesses to flee overseas but has signaled a willingness to hold hearings next year on how the legislation is working.
The business groups are initially focused on getting rules changed at the Securities and Exchange Commission, the independent federal agency that oversees U.S. capital markets and companies. The growing bipartisan concern about over-regulation will help set the tone for deliberations at the agency, which is led by Christopher Cox, a Republican and former congressman from California.
"From our perspective, the more people talking about this, the better," said David C. Chavern, director of the U.S. Chamber of Commerce's corporate-governance initiative. The chamber plans to publish its own study next year that attacks what it views as duplicative rules and overly aggressive enforcement by securities regulators.
The renewed push to soften government oversight of business comes as the outcry begins to diminish over a series of financial scandals that erupted five years ago after Enron collapsed, costing thousands of employees their jobs and wiping out billions of investor dollars. The phony accounting at Enron and the bankruptcy of WorldCom months later prompted Congress to pass the Sarbanes-Oxley law.
The chamber panel studying regulation contains several prominent Democrats, including two members of President Bill Clinton's Cabinet -- William M. Daley, who headed the Commerce Department, and former U.S. trade representative Mickey Kantor.
Lobbyists at the chamber are moving to line up meetings with Dodd, who is considering a bid for the presidency in 2008, and soon-to-be House Financial Services Chairman Barney Frank (D-Mass.). Frank recently spoke in general terms of his willingness to compromise with business on some matters to win concessions on minimum-wage legislation and housing reforms.
The current drive to roll back regulation pivots on a complex rule that requires companies to assess their financial controls to prevent fraud and mistakes. The provision, contained in Sarbanes-Oxley, has proved more expensive than regulators envisioned, particularly for small businesses.
With the encouragement of senior federal lawmakers, officials from the SEC and the Public Company Accounting Oversight Board, which sets rules and oversees accountants, are meeting to hash out an accord on scaling back the rule. How far they go, perhaps effectively exempting smaller companies, is raising intense concerns from those who think the rules are necessary to protect investors from fraud.
If they decide to exempt small companies, that would take out "the guts of getting accounting and auditing straightened out" after years of cursory reviews by accountants helped fuel financial scandals, warned Charles A. Bowsher, former comptroller general.
But business groups are not stopping there. They were encouraged when Paulson gave a speech last week calling for "a more balanced approach" to regulation.
The private panel is frequently called "the Paulson group," even though Paulson is not a member. Instead, the panel is directed by Harvard University law professor Hal S. Scott. Other members include R. Glenn Hubbard, former chairman of President Bush's Council of Economic Advisers, and Brookings Institution Chairman John L. Thornton.
The group's report tomorrow is to advocate raising the standard for charging companies with crimes, according to sources briefed on its content who spoke on condition of anonymity because the document has not been officially released. It also is to propose shielding accountants from fraud lawsuits under certain circumstances.
Many of the group's recommendations would require congressional action, and passage of new laws is uncertain in the last two years of the Bush administration, even with a growing concern over regulation among senior lawmakers.
University of Rochester President Joel Seligman expressed concern about any new limits on the ability of people to sue companies over accounting, saying it could "handicap the ability of the SEC to be a vigilant watchdog."
"To have this occur, so soon after the dramatic increase in fraud that led to Sarbanes-Oxley, would be deeply troublesome," he said.
Monday, September 15, 2008
the renowned Texas investor...Richard Rainwater
Wake up! Can;t you bigshot investigative reporters dig into this deeper?
"...firm decided to keep what is now $4.6 billion of assets on its balance sheet instead, exposing Morgan Stanley to potential losses..."
"...Morgan bought Crescent before the credit crunch hit..."
"...deal was completed in August 2007"
"A Morgan Stanley spokeswoman declined to discuss Crescent"
I bet!!
When Richard Rainwater, the renowned Texas investor, sold Crescent Real Estate Equities Co. to Morgan Stanley for $2.78 billion early last year, some Crescent shareholders complained the price was too low.
Now it looks like Morgan Stanley's shareholders are the ones who should have been griping.
Morgan Stanley, one of the largest real-estate investors among Wall Street firms, originally planned to put Crescent's office buildings, resorts, housing projects and other properties in one of the real-estate funds it manages for institutions and wealthy individuals. But the firm decided to keep what is now $4.6 billion of assets on its balance sheet instead, exposing Morgan Stanley to potential losses. The company didn't disclose the value of the assets at the time, but the overall deal was valued at $6.5 billion, including the assumption of $3.1 billion of debt.
Michael Stravato for The Wall Street Journal According to Real Estate Alert, Greenway Plaza in Houston is among the Crescent properties that Morgan Stanley is trying to sell.
The reason? Morgan bought Crescent before the credit crunch hit and commercial-real-estate values started to fall. It was also before Morgan was able to launch the fund that it hoped would own the properties. That left Morgan trying to persuade investors to buy into a fund including properties with top-of-the-market prices, something Morgan was unable to do.
A Morgan Stanley spokeswoman declined to discuss Crescent. In a securities filing, the firm cited "current market conditions, valuation, size of the investment and timing of the fund" as reasons why it held onto Crescent.
'Peak-Market Price'
"It's likely that investors didn't want those properties or Morgan Stanley couldn't distribute those properties into the fund at a price that investors were willing to pay," says Cedrik Lachance, an analyst with Green Street Advisors Inc., a Newport Beach, Calif., real-estate research and trading firm. "Investors didn't want to pay the peak-market price."
Morgan Stanley marked down the value of the Crescent properties by $150 million in its fiscal second quarter ended May 31, deepening losses for its asset-management business. Additional write-downs are likely if commercial-property values keep declining.
The Crescent deal is yet another example of the damage being done to Wall Street firms by their aggressive push into commercial real estate when money was easy and prices were rising. Lehman Brothers Holdings Inc. has been hammered by ill-timed investments in California land and New York City apartment buildings. Commercial banks Wachovia Corp. and Bank of America Corp. have high exposures to deteriorating construction loans.
So far, Morgan Stanley's reported real-estate losses have been relatively small. The firm has significantly reduced the amount of commercial-real-estate debt on its balance sheet without taking the sort of painful write-downs that rivals have.
Morgan Stanley made headlines late last year when a venture led by the firm bought 11,000 house lots from home builder Lennar Corp. for $525 million, about 60% less than where Lennar carried the land on its books. While that land has likely fallen further in value, Morgan Stanley isn't at risk. The firm was able in that case to put the holdings in an investor fund, according to people familiar with the matter.
Real-estate funds, also known as opportunity funds, have become a big business on Wall Street over the past 15 years. Now more than 500 funds have been raised or are being raised from pension funds and other institutional investors, according to Real Estate Alert, a trade publication. They typically seek net returns, after management fees, of at least 10% for U.S. investors. But many of them have run into choppy waters this year because tight credit has made it very difficult to buy or sell property.
Risky Business
Investment firms without the balance sheets of large investment banks typically don't buy property for real-estate funds until the money has been raised. The benefit of buying before the money is in place is that it allows investment banks to move quickly. But they risk losing investor commitments if the property they buy becomes undesirable.
Morgan Stanley has been one of the most active real-estate fund managers. As of June 30, the New York company had $96.4 billion in real-estate assets under management, according to the firm. Morgan Stanley is about to close an approximately $1.5 billion commercial-real-estate debt fund and is in the process of raising a global real-estate fund with $10 billion in targeted equity capital, according to Real Estate Alert.
A 7% Discount
Crescent, co-founded by Mr. Rainwater and John Goff and taken public in 1994, was one of the weakest performers in the real-estate-investment-trust sector when it announced in May 2007 that it was selling itself to Morgan Stanley. The sale price represented a 7% discount to the underlying value of its real estate, analysts said at the time.
Some Crescent shareholders complained that the company could have commanded a better price by divesting itself of some resorts and other "noncore" properties and focusing on the office sector.
Since the deal was completed in August 2007, Morgan Stanley has been shedding some of the Crescent properties. It has closed the sale of about $552 million of assets, committed to selling $411 million and offered to sell an additional $1.3 billion, according to Real Capital Analytics, a research firm in New York.
Hits to Morgan Stanley
Morgan Stanley appears to have taken some financial hits on these sales.
For example, the firm sold a Denver office complex for $31.8 million in June. That property was valued at nearly $33 million a year earlier, according to Real Capital.
Among other properties Morgan Stanley is trying to unload: Greenway Plaza, a 10-building office complex in Houston. In July, the estimated value of the property was about $826 million, according to Real Estate Alert.
Crescent holders, though annoyed at the deal at first, may end up with the last laugh.
Write to Lingling Wei at lingling.wei@dowjones.com and Aaron Lucchetti at aaron.lucchetti@wsj.com
"...firm decided to keep what is now $4.6 billion of assets on its balance sheet instead, exposing Morgan Stanley to potential losses..."
"...Morgan bought Crescent before the credit crunch hit..."
"...deal was completed in August 2007"
"A Morgan Stanley spokeswoman declined to discuss Crescent"
I bet!!
When Richard Rainwater, the renowned Texas investor, sold Crescent Real Estate Equities Co. to Morgan Stanley for $2.78 billion early last year, some Crescent shareholders complained the price was too low.
Now it looks like Morgan Stanley's shareholders are the ones who should have been griping.
Morgan Stanley, one of the largest real-estate investors among Wall Street firms, originally planned to put Crescent's office buildings, resorts, housing projects and other properties in one of the real-estate funds it manages for institutions and wealthy individuals. But the firm decided to keep what is now $4.6 billion of assets on its balance sheet instead, exposing Morgan Stanley to potential losses. The company didn't disclose the value of the assets at the time, but the overall deal was valued at $6.5 billion, including the assumption of $3.1 billion of debt.
Michael Stravato for The Wall Street Journal According to Real Estate Alert, Greenway Plaza in Houston is among the Crescent properties that Morgan Stanley is trying to sell.
The reason? Morgan bought Crescent before the credit crunch hit and commercial-real-estate values started to fall. It was also before Morgan was able to launch the fund that it hoped would own the properties. That left Morgan trying to persuade investors to buy into a fund including properties with top-of-the-market prices, something Morgan was unable to do.
A Morgan Stanley spokeswoman declined to discuss Crescent. In a securities filing, the firm cited "current market conditions, valuation, size of the investment and timing of the fund" as reasons why it held onto Crescent.
'Peak-Market Price'
"It's likely that investors didn't want those properties or Morgan Stanley couldn't distribute those properties into the fund at a price that investors were willing to pay," says Cedrik Lachance, an analyst with Green Street Advisors Inc., a Newport Beach, Calif., real-estate research and trading firm. "Investors didn't want to pay the peak-market price."
Morgan Stanley marked down the value of the Crescent properties by $150 million in its fiscal second quarter ended May 31, deepening losses for its asset-management business. Additional write-downs are likely if commercial-property values keep declining.
The Crescent deal is yet another example of the damage being done to Wall Street firms by their aggressive push into commercial real estate when money was easy and prices were rising. Lehman Brothers Holdings Inc. has been hammered by ill-timed investments in California land and New York City apartment buildings. Commercial banks Wachovia Corp. and Bank of America Corp. have high exposures to deteriorating construction loans.
So far, Morgan Stanley's reported real-estate losses have been relatively small. The firm has significantly reduced the amount of commercial-real-estate debt on its balance sheet without taking the sort of painful write-downs that rivals have.
Morgan Stanley made headlines late last year when a venture led by the firm bought 11,000 house lots from home builder Lennar Corp. for $525 million, about 60% less than where Lennar carried the land on its books. While that land has likely fallen further in value, Morgan Stanley isn't at risk. The firm was able in that case to put the holdings in an investor fund, according to people familiar with the matter.
Real-estate funds, also known as opportunity funds, have become a big business on Wall Street over the past 15 years. Now more than 500 funds have been raised or are being raised from pension funds and other institutional investors, according to Real Estate Alert, a trade publication. They typically seek net returns, after management fees, of at least 10% for U.S. investors. But many of them have run into choppy waters this year because tight credit has made it very difficult to buy or sell property.
Risky Business
Investment firms without the balance sheets of large investment banks typically don't buy property for real-estate funds until the money has been raised. The benefit of buying before the money is in place is that it allows investment banks to move quickly. But they risk losing investor commitments if the property they buy becomes undesirable.
Morgan Stanley has been one of the most active real-estate fund managers. As of June 30, the New York company had $96.4 billion in real-estate assets under management, according to the firm. Morgan Stanley is about to close an approximately $1.5 billion commercial-real-estate debt fund and is in the process of raising a global real-estate fund with $10 billion in targeted equity capital, according to Real Estate Alert.
A 7% Discount
Crescent, co-founded by Mr. Rainwater and John Goff and taken public in 1994, was one of the weakest performers in the real-estate-investment-trust sector when it announced in May 2007 that it was selling itself to Morgan Stanley. The sale price represented a 7% discount to the underlying value of its real estate, analysts said at the time.
Some Crescent shareholders complained that the company could have commanded a better price by divesting itself of some resorts and other "noncore" properties and focusing on the office sector.
Since the deal was completed in August 2007, Morgan Stanley has been shedding some of the Crescent properties. It has closed the sale of about $552 million of assets, committed to selling $411 million and offered to sell an additional $1.3 billion, according to Real Capital Analytics, a research firm in New York.
Hits to Morgan Stanley
Morgan Stanley appears to have taken some financial hits on these sales.
For example, the firm sold a Denver office complex for $31.8 million in June. That property was valued at nearly $33 million a year earlier, according to Real Capital.
Among other properties Morgan Stanley is trying to unload: Greenway Plaza, a 10-building office complex in Houston. In July, the estimated value of the property was about $826 million, according to Real Estate Alert.
Crescent holders, though annoyed at the deal at first, may end up with the last laugh.
Write to Lingling Wei at lingling.wei@dowjones.com and Aaron Lucchetti at aaron.lucchetti@wsj.com
Wednesday, September 10, 2008
Letter to Wall Street Journal Reporters
Wonder if you can connect a pattern for Mr. Richard Rainwater?
Your article:
"Crescent, co-founded by Mr. Rainwater and John Goff and taken public in 1994, was one of the weakest performers in the real-estate-investment-trust sector when it announced in May 2007 that it was selling itself to Morgan Stanley.
The reason? Morgan bought Crescent before the credit crunch hit and commercial-real-estate values started to fall." (Really? In May of 2007, insiders did not know this crisis was coming? )
"…originally planned to put Crescent's office buildings, resorts, housing projects and other properties in one of the real-estate funds it manages for institutions and wealthy individuals. But the firm decided to keep what is now $4.6 billion of assets on its balance sheet instead, exposing Morgan Stanley to potential losses."
You failed to mention 'ex-partner' of G W Bush
"When Richard Rainwater, the renowned Texas investor, sold Crescent Real Estate Equities Co. to Morgan Stanley for $2.78 billion early last year, some Crescent shareholders complained the price was too low." (The operative word is 'some')
Seems to me that the one who is laughing loudest is Richard Rainwater.
Mr. Rainwater seems to follow a pattern of dumping. Maybe someday a good investigative reporter will report the true connection of this case even though the DOJ seems to write it as over. .
Not that too many reporters, including those at the WSJ have followed the National Century Financial Enterprise, Inc. (NCFE) fraud case in Dublin Ohio. This case was dubbed by the Department of Justice "Prosecutors have compared the Dublin-based company's collapse to Enron and Worldcom". Most of you seem to have a 'hands-off' approach to this case. Why?
Take a good look at the NCFE trial in Dublin, Ohio.
Prosecutors have compared the Dublin-based company's collapse to Enron and Worldcom
By WTVN Newsroom; Wednesday, August 6, 2008
Now mind you, the co-founder, Lance Poulsen has yet to go on trial along with the last indicted executive, James K Happ. James K Happ will follow the co-founder Poulsen. Why? Why did Judge Marbley on July11, 2008, agree to delay Poulsen's corporate fraud trial to Oct. 1. and Marbley also pushes back trial of former company executive James Happ to Dec. 1. James Happ goes last?
Once again, who is James K Happ?
Source: Med Diversified Inc. Annual Meeting Of Stockholders September 9, 2003
Prior to joining Med Diversified, James Happ served as executive vice president of National Century Financial Enterprises ("NCFE"), a health care financing company and the primary lender of Med Diversified.. Prior to joining NCFE, Happ was chief financial officer of Columbia/HCA's Homecare Group based in Dallas, Texas. Previously, he served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationally and more than $1 billion in revenue in 1997. In this role, he directed the company through the challenging reimbursement climate known as the interim payment system, and he participated in the divestiture of all of Columbia/HCA's home care operations.
Between May 1998 and May 2001, NCFE sold notes to investors with a combined value of $4.4 billion, which evidence showed were actually worth approximately six cents on the dollar at the time of NCFE's bankruptcy in November 2002.
Between 1998 & 1999, guess who purchased most of the losing assets of Columbia Homecare Group, Inc? NCFE. Richard Rainwater owned, then 'dumped' the HomeHealth care companies that were divested by James K Happ.
NCFE. Rainwater owned then 'dumped' the HomeHealth care companies that were divested by James K Happ.
The Department of Justice has issued their statement :
FOR IMMEDIATE RELEASE
Thursday, August 7, 2008
WWW.USDOJ.GOVCRM
(202) 514-2007
TDD (202) 514-1888
"These sentences mark the end of a nearly six-year march to justice for the architects of the financial house of cards known as National Century," said Gregory G. Lockhart, U.S. Attorney for the Southern District of Ohio."
"Mark the end" ? Is this case over? What about the trial for the founder, Lance Poulsen and James K Happ, Richard Rainwater's ex-employee?
And Morgan Stanley, well where do they fit?
The following is an excerpt from a 10-K SEC Filing, filed by J P MORGAN CHASE & CO on 3/9/2006.
Enron litigation. JPMorgan Chase and certain of its officers and directors are
involved in a number of lawsuits arising out of its banking relationships with
Enron Corp.
The three current or former Firm employees are sued in their roles as former members of NCFE's board of directors (the "Defendant Employees"). JPMorgan
Chase, JPMorgan Partners and Beacon Group, LLC, are claimed to be vicariously liable for the alleged actions of the Defendant Employees. Banc One Capital
Markets, Inc. is sued in its role as co-manager for three note offerings made by NPF XII. Other defendants include the founders and key executives of NCFE, its
auditors and outside counsel, and rating agencies and placement agents that were involved with the issuance of the Notes. Plaintiffs in these actions include
institutional investors who purchased more than $2.7 billion in original face amount of asset-backed securities issued by NCFE
National Century Financial Enterprises litigation. JPMorgan Chase, JPMorgan Chase Bank, JPMorgan Partners, Beacon Group, LLC and three current or former
Firm employees have been named as defendants in more than a dozen actions filed in or transferred to the United States District Court for the Southern District
of Ohio (the "MDL Litigation"). In the majority of these actions, Bank One, Bank One, N.A., and Banc One Capital Markets, Inc. are also named as defendants.
JPMorgan Chase Bank and Bank One, N.A. are also defendants in an action brought by The Unencumbered Assets Trust ("UAT"), a trust created for the benefit of the
creditors of National Century Financial Enterprises, Inc. ("NCFE") as a result of NCFE's Plan of Liquidation in bankruptcy. These actions arose out of the
November 2002 bankruptcy of NCFE. Prior to bankruptcy, NCFE provided financing to various healthcare providers through wholly-owned special-purpose vehicles,
including NPF VI and NPF XII, which purchased discounted accounts receivable to be paid under third-party insurance programs. NPF VI and NPF XII financed thepurchases of such receivables, primarily through private placements of notes ("Notes") to institutional investors and pledged the receivables for, among other things, the repayment of the Notes. In the MDL Litigation, JPMorgan Chase Bank is sued in its role as indenture trustee for NPF VI, which issued approximately $1 billion in Notes. Bank One, N.A. is sued in its role as indenture trustee for NPF XII, which issued approximately $2 billion in Notes.
The three current or former Firm employees are sued in their roles as former members of NCFE's board of directors (the "Defendant Employees"). JPMorgan
Chase, JPMorgan Partners and Beacon Group, LLC, are claimed to be vicariously liable for the alleged actions of the Defendant Employees. Banc One Capital
Markets, Inc. is sued in its role as co-manager for three note offerings made by. Other defendants include the founders and key executives of NCFE, its
auditors and outside counsel, and rating agencies and placement agents that were involved with the issuance of the Notes. Plaintiffs in these actions include
institutional investors who purchased more than $2.7 billion in original face amount of asset-backed securities issued by NCFE
Your article:
"Crescent, co-founded by Mr. Rainwater and John Goff and taken public in 1994, was one of the weakest performers in the real-estate-investment-trust sector when it announced in May 2007 that it was selling itself to Morgan Stanley.
The reason? Morgan bought Crescent before the credit crunch hit and commercial-real-estate values started to fall." (Really? In May of 2007, insiders did not know this crisis was coming? )
"…originally planned to put Crescent's office buildings, resorts, housing projects and other properties in one of the real-estate funds it manages for institutions and wealthy individuals. But the firm decided to keep what is now $4.6 billion of assets on its balance sheet instead, exposing Morgan Stanley to potential losses."
You failed to mention 'ex-partner' of G W Bush
"When Richard Rainwater, the renowned Texas investor, sold Crescent Real Estate Equities Co. to Morgan Stanley for $2.78 billion early last year, some Crescent shareholders complained the price was too low." (The operative word is 'some')
Seems to me that the one who is laughing loudest is Richard Rainwater.
Mr. Rainwater seems to follow a pattern of dumping. Maybe someday a good investigative reporter will report the true connection of this case even though the DOJ seems to write it as over. .
Not that too many reporters, including those at the WSJ have followed the National Century Financial Enterprise, Inc. (NCFE) fraud case in Dublin Ohio. This case was dubbed by the Department of Justice "Prosecutors have compared the Dublin-based company's collapse to Enron and Worldcom". Most of you seem to have a 'hands-off' approach to this case. Why?
Take a good look at the NCFE trial in Dublin, Ohio.
Prosecutors have compared the Dublin-based company's collapse to Enron and Worldcom
By WTVN Newsroom; Wednesday, August 6, 2008
Now mind you, the co-founder, Lance Poulsen has yet to go on trial along with the last indicted executive, James K Happ. James K Happ will follow the co-founder Poulsen. Why? Why did Judge Marbley on July11, 2008, agree to delay Poulsen's corporate fraud trial to Oct. 1. and Marbley also pushes back trial of former company executive James Happ to Dec. 1. James Happ goes last?
Once again, who is James K Happ?
Source: Med Diversified Inc. Annual Meeting Of Stockholders September 9, 2003
Prior to joining Med Diversified, James Happ served as executive vice president of National Century Financial Enterprises ("NCFE"), a health care financing company and the primary lender of Med Diversified.. Prior to joining NCFE, Happ was chief financial officer of Columbia/HCA's Homecare Group based in Dallas, Texas. Previously, he served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationally and more than $1 billion in revenue in 1997. In this role, he directed the company through the challenging reimbursement climate known as the interim payment system, and he participated in the divestiture of all of Columbia/HCA's home care operations.
Between May 1998 and May 2001, NCFE sold notes to investors with a combined value of $4.4 billion, which evidence showed were actually worth approximately six cents on the dollar at the time of NCFE's bankruptcy in November 2002.
Between 1998 & 1999, guess who purchased most of the losing assets of Columbia Homecare Group, Inc? NCFE. Richard Rainwater owned, then 'dumped' the HomeHealth care companies that were divested by James K Happ.
NCFE. Rainwater owned then 'dumped' the HomeHealth care companies that were divested by James K Happ.
The Department of Justice has issued their statement :
FOR IMMEDIATE RELEASE
Thursday, August 7, 2008
WWW.USDOJ.GOVCRM
(202) 514-2007
TDD (202) 514-1888
"These sentences mark the end of a nearly six-year march to justice for the architects of the financial house of cards known as National Century," said Gregory G. Lockhart, U.S. Attorney for the Southern District of Ohio."
"Mark the end" ? Is this case over? What about the trial for the founder, Lance Poulsen and James K Happ, Richard Rainwater's ex-employee?
And Morgan Stanley, well where do they fit?
The following is an excerpt from a 10-K SEC Filing, filed by J P MORGAN CHASE & CO on 3/9/2006.
Enron litigation. JPMorgan Chase and certain of its officers and directors are
involved in a number of lawsuits arising out of its banking relationships with
Enron Corp.
The three current or former Firm employees are sued in their roles as former members of NCFE's board of directors (the "Defendant Employees"). JPMorgan
Chase, JPMorgan Partners and Beacon Group, LLC, are claimed to be vicariously liable for the alleged actions of the Defendant Employees. Banc One Capital
Markets, Inc. is sued in its role as co-manager for three note offerings made by NPF XII. Other defendants include the founders and key executives of NCFE, its
auditors and outside counsel, and rating agencies and placement agents that were involved with the issuance of the Notes. Plaintiffs in these actions include
institutional investors who purchased more than $2.7 billion in original face amount of asset-backed securities issued by NCFE
National Century Financial Enterprises litigation. JPMorgan Chase, JPMorgan Chase Bank, JPMorgan Partners, Beacon Group, LLC and three current or former
Firm employees have been named as defendants in more than a dozen actions filed in or transferred to the United States District Court for the Southern District
of Ohio (the "MDL Litigation"). In the majority of these actions, Bank One, Bank One, N.A., and Banc One Capital Markets, Inc. are also named as defendants.
JPMorgan Chase Bank and Bank One, N.A. are also defendants in an action brought by The Unencumbered Assets Trust ("UAT"), a trust created for the benefit of the
creditors of National Century Financial Enterprises, Inc. ("NCFE") as a result of NCFE's Plan of Liquidation in bankruptcy. These actions arose out of the
November 2002 bankruptcy of NCFE. Prior to bankruptcy, NCFE provided financing to various healthcare providers through wholly-owned special-purpose vehicles,
including NPF VI and NPF XII, which purchased discounted accounts receivable to be paid under third-party insurance programs. NPF VI and NPF XII financed thepurchases of such receivables, primarily through private placements of notes ("Notes") to institutional investors and pledged the receivables for, among other things, the repayment of the Notes. In the MDL Litigation, JPMorgan Chase Bank is sued in its role as indenture trustee for NPF VI, which issued approximately $1 billion in Notes. Bank One, N.A. is sued in its role as indenture trustee for NPF XII, which issued approximately $2 billion in Notes.
The three current or former Firm employees are sued in their roles as former members of NCFE's board of directors (the "Defendant Employees"). JPMorgan
Chase, JPMorgan Partners and Beacon Group, LLC, are claimed to be vicariously liable for the alleged actions of the Defendant Employees. Banc One Capital
Markets, Inc. is sued in its role as co-manager for three note offerings made by. Other defendants include the founders and key executives of NCFE, its
auditors and outside counsel, and rating agencies and placement agents that were involved with the issuance of the Notes. Plaintiffs in these actions include
institutional investors who purchased more than $2.7 billion in original face amount of asset-backed securities issued by NCFE
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