Goldman Sachs Really Does Not Like to Be Sued!
You know the power that great wealth can bring when banks sue a judge who does not rule in their favor. The kind of justice system that banks would prefer is one that never finds them guilty of any wrongdoing and, in order to make sure that happens, the banks’ money is fully employed in paying many, many lawyers to do their bidding.
The listing alone of the corporate lawyers engaged in the filing takes four pages!
These banks have already been found civilly guilty of mortgage fraud elsewhere so no one will be surprised at finding many new instances of fraud committed by them.
To no one’s surprise, of course, Goldman Sachs is fully represented in this case.
Why Are Big Banks Going To War With A Federal Judge?
The accusation: shoddy underwriting of mortgage-backed securities.
The request: that banks buy back their ugly securities so shoddily underwritten.
The nation’s largest banks have devised a novel way to protect their interests and save themselves from hundreds of billions of dollars in legal exposure. They’re taking a judge to court.
Lawyers for 17 banks submitted an unusual filing in the Second Circuit Court of Appeals this week (just listing all the corporate lawyers involved takes up the first four pages). The banks – including JPMorgan Chase, Bank of America, Wells Fargo, Goldman Sachs, Citigroup and Morgan Stanley – stand accused of ripping off the mortgage giants Fannie Mae and Freddie Mac. The Federal Housing Finance Agency, Fannie and Freddie’s conservator, alleges that these banks improperly sold $200 billion worth of mortgage-backed securities without disclosing the shoddy underwriting of the underlying loans. FHFA argues the banks knew the loans in the securities were bad, yet sold them to Fannie and Freddie anyway, leading to massive losses and the need for a government bailout. So FHFA wants the banks to buy back the securities they improperly sold under false pretenses.
U.S. District Court Judge Denise Cote took over the case in December, 2011, and quickly made a series of rulings in the case, first denying a motion by the banks to dismiss the lawsuit. The bank lawyers have become so dissatisfied with Cote’s rulings, in fact, that they have asked the Second Circuit to reverse them. The filing calls for a “writ of mandamus” that would throw out a series of rulings around discovery, which the bank lawyers claim “deprived Petitioners of their right to obtain evidence.” (You can chew for a moment on the idea that banks are being deprived of their rights.)
A federal judge Monday rejected Hobby Lobby Stores Inc.’s request to block part of the federal health care overhaul that requires the arts and craft supply company to provide insurance coverage for the morning-after and week-after birth control pills.
In a 28-page ruling, U.S. District Judge Joe Heaton denied a request by Hobby Lobby to prevent the government from enforcing portions of the health care law mandating insurance coverage for contraceptives the company’s Christian owners consider objectionable.
The Oklahoma City-based company and a sister company, Mardel Inc., sued the government in September, claiming the mandate violates the owners’ religious beliefs. The owners contend the morning-after and week-after birth control pills are tantamount to abortion because they can prevent a fertilized egg from implanting in a woman’s womb. They also object to providing coverage for certain kinds of intrauterine devices.
At a hearing earlier this month, a government lawyer said the drugs do not cause abortions and that the U.S. has a compelling interest in mandating insurance coverage for them.
In his ruling denying Hobby Lobby’s request for an injunction, Heaton said that while churches and other religious organizations have been granted constitutional protection from the birth-control provisions, “Hobby Lobby and Mardel are not religious organizations.”
“Plaintiffs have not cited, and the court has not found, any case concluding that secular, for-profit corporations such as Hobby Lobby and Mardel have a constitutional right to the free exercise of religion,” the ruling said.
Heaton wrote that “the court is not unsympathetic” to the problems cited by Hobby Lobby and their owners, the Green family. He said the health care law’s expansion of employer obligations “results in concerns and issues not previously confronted by companies or their owners.”
“The question of whether the Greens can establish a free exercise constitutional violation by reason of restrictions or requirements imposed on general business corporations they own or control involves largely uncharted waters,” Heaton wrote.
Hobby Lobby’s attorney said the companies’ owners will appeal.
“Every American, including family business owners like the Greens, should be free to live and do business according to their religious beliefs,” Kyle Duncan, general counsel for the Becket Fund for Religious Liberty, said in a statement.
The morning-after pill works by preventing ovulation or fertilization. In medical terms, pregnancy begins when a fertilized egg attaches itself to the wall of the uterus. If taken within 72 hours of unprotected sex, it can reduce a woman’s chances of pregnancy by as much as 89 percent.
Critics of contraception say it is the equivalent of an abortion pill because it can prevent a fertilized egg from attaching to the uterus. The lawsuit also alleges that certain kinds of intrauterine devices can destroy an embryo by preventing it from implanting in a woman’s uterus.
Hobby Lobby is the largest business to file a lawsuit against the mandate.
Hobby Lobby calls itself a “biblically founded business” and is closed on Sundays. Founded in 1972, the company now operates more than 500 stores in 41 states and employs more than 13,000 full-time employees who are eligible for health insurance coverage. The company, which is self-insured, has said it will face a daily $1.3 million fine beginning Jan. 1 if it ignores the law.
“It is by God’s grace and provision that Hobby Lobby has endured,” said David Green, founder and CEO. “Therefore we seek to honor God by operating the company in a manner consistent with biblical principles.”
The Green family has said it has no moral objection to the use of other contraceptives and will continue covering them for its employees.