American Express to Cut 5,400 Jobs

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American Express, the second largest employer in the Fort Lauderdale area with a local payroll of 3,000 employees, is taking a $400 million restructuring charge to cover severance payments related to the elimination of an estimated 5,400 jobs across the U.S. and overseas.

The firm’s Plantation office focuses on commercial and consumer financial services, as well as traveling consulting. Reductions will primarily involve positions that do not directly generate revenue, according to the company. Details on whether or not Fort Lauderdale job area employees will be affected by cuts were not disclosed.

Reductions will be partly offset by jobs the company expects to add during the year.  Overall staffing levels by year end 2013 are expected to be 4 to 6 percent less than the current total of 63,500.

Elements of the restructuring program outlined in an American Express news release include:

  • Re-engineering the business model in Global Business Travel to reduce its cost structure and invest in capabilities that better align it with the shift of customer volumes to online channels and automated servicing tools;
  • Continuing the reconfiguration of card member servicing and collections to drive efficiency globally as more customers use online and mobile channels instead of paper and telephone;
  • Reducing the size of staff groups while continuing to maintain the right focus and resources on risk and control activities;
  • Ensuring the right organizational structure across client management and sales functions to best serve customers; and
  • Consolidating similar functions and eliminating duplicate efforts wherever possible in order to drive efficiency.

The job reductions will take place across seniority levels, businesses and staff groups. The largest reductions will come in the travel businesses, which operate in an industry that is being fundamentally reinvented as a result of the digital revolution.

The Fort Lauderdale Law Firm of  Kahn & Resnik, P.L.

The Florida lawyers at Kahn & Resnik, P.L. are available to service your legal needs.

Our concierge approach to the practice of law reflects our philosophy of personalized and confidential attention. When you retain an attorney at Kahn & Resnik, P.L., we work efficiently and effectively to help you achieve your business and personal objectives.

We can assist you in legal matters relating to commercial litigation, divorce, disability law, real estate litigation, securities litigation, and corporate transactions.

We serve business owners, professionals and individual clients across Florida, including Miami, Fort Lauderdale, Boca Raton, West Palm Beach, Naples, Orlando, Tampa, Daytona Beach, Jacksonville, Tallahassee, and other cities throughout the state. Contact Howard N. Kahn, Esq. at 954-321-0176 or online.

Morgan Stanley to Lay-Off 1,600 Bankers and Support Staff

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Pink slips will go out to 1,600 Morgan Stanley employees soon. The firm has Florida offices in Boca Raton and Miami, but details by office location were not disclosed. Half of the lay-offs are expected in the U.S., with the balance of staff reductions overseas. Highly paid investment bankers are targeted, as well support team members.

Click on the link to watch a video news report of the Morgan Stanley staff cuts from Bloomberg News.

According to an early 2012 New York Times article, “the average base pay for managing directors at Morgan Stanley has risen to $400,000 and to $600,000 at Goldman Sachs.” Most Wall Street employees, particularly bankers and senior executive, earn a large annual bonus which may be paid in cash or stock. Morgan Stanley capped 2011 cash bonuses at $125,000, according to the Times.

Overall, compensation and benefits expenses in the third quarter of 2012 were $1,638 million, up almost 8 percent from the comparable prior year quarter. As of September 30, 2012, the Company had 57,726 employees worldwide.

Morgan Stanley, a leading competitor to Goldman Sachs, conducts its business from its headquarters in and around New York City, its regional offices and branches throughout the U.S. and its principal offices in London, Tokyo, Hong Kong and other world financial centers.

Fort Lauderdale Securities Litigation and Arbitration Attorney

Contact Fort Lauderdale securities litigation and arbitration attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker dispute. He is an experienced securities litigation and arbitration attorney, and is available to assist individual investors, brokers, and brokerage firms involved in securities matters. You can reach him at 954-321-0176 or online.

Mary Curran of Palm Beach to Pay $21 Million Tax Penalty

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Mary Estelle Curran of Palm Beach, Fla., pleaded guilty today in the U.S. District Court for the Southern District of Florida to filing false tax returns for tax years 2006 and 2007, the Justice Department and Internal Revenue Service, Criminal Investigation (IRS-CI) announced.

According to court documents, Curran, a U.S. citizen, maintained undeclared bank accounts at UBS AG in Switzerland and a bank in Liechtenstein, which she inherited from her husband in 2000. The accounts at UBS AG were held in the names of nominee foreign entities, including the Flognet Foundation and Norega Investment. The account earned income each year, which Curran failed to report on her 2001 through 2007 individual income tax returns.

According to the plea agreement, Curran’s conduct caused a tax loss to the government of approximately $667,716.   The value of all undeclared foreign financial accounts owned or controlled by Curran exceeded $42 million in 2007. In order to resolve her civil liability for failure to report her foreign bank accounts, Curran has agreed to pay a civil penalty in the amount of 50 percent of the high balance of the accounts, which is $21,666,929.

“The Justice Department continues to pursue those who hide income and assets from the IRS through the use of nominee businesses and offshore bank accounts,” said Assistant Attorney General Keneally. “U.S. taxpayers who fail to come forward in the voluntary disclosure program risk prosecution and substantial fines, as this case demonstrates.”

“U.S. citizens who seek to avoid their tax obligations by hiding income in undeclared bank accounts abroad should by now be fully on notice that they will be held accountable for their actions, both civilly and criminally,” said U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer. “The U.S. Attorney’s Office is committed to helping the IRS enforce our nation’s tax laws.”

“Offshore accounts can no longer be used to hide from the IRS and avoid paying the fair amount of tax,” said Richard Weber, Chief, IRS Criminal Investigation.  “IRS Criminal Investigation is aggressively pursuing tax cheats – both domestically and internationally.  We owe it to every American taxpayer to use all lawful means to identify and prosecute both those who evade their taxes and those who assist them in evading their tax obligations.”

Curran faces a potential maximum prison term of six years. A sentencing date has not been set.

Fort Lauderdale Securities Litigation and Arbitration Attorney

Contact Fort Lauderdale securities litigation and arbitration attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker dispute. He is an experienced securities litigation and arbitration attorney, and is available to assist individual investors, brokers, and brokerage firms involved in securities matters. You can reach him at 954-321-0176 or online.

Florida Homeowners in Foreclosure May Get up to $125,000 in Relief

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Fort Lauderdale area homeowners dealing with mortgage foreclosures may find some relief in a new federal housing settlement announced today by the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board.

Ten mortgage servicing companies will pay $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. The ten firms involved in today’s agreement are:

  • Aurora
  • Bank of America
  • Citibank
  • JPMorgan Chase
  • MetLife Bank
  • PNC
  • Sovereign
  • SunTrust
  • U.S. Bank
  • Wells Fargo

The payments involve mortgage servicers operating under enforcement actions issued in April 2011 by the OCC, the Federal Reserve, and the Office of Thrift Supervision.

How Florida Homeowners in Foreclosure Qualify for Financial Assistance

To qualify for cash compensation, borrowers’ homes must have been in foreclosure in 2009 and 2010 with the participating servicers. Eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error.

For the ten participating servicers, fulfillment of the agreement would meet the requirements of the enforcement actions that mandated that the servicers retain independent consultants to conduct an Independent Foreclosure Review.

As a result of this agreement, the participating servicers would cease the Independent Foreclosure Review, which involved case-by-case reviews, and replace it with a broader framework allowing eligible borrowers to receive compensation significantly more quickly.

No Application is Required

Eligible borrowers will receive compensation whether or not they filed a request for review form, and borrowers do not need to take further action to be eligible for compensation.

A payment agent will be appointed to administer payments to borrowers on behalf of the servicers.  Eligible borrowers are expected to be contacted by the payment agent by the end of March with payment details. Borrowers will not be required to execute a waiver of any legal claims they may have against their servicer as a condition for receiving payment.  In addition, the servicers’ internal complaint process will remain available to borrowers.

Additional Mortgage Servicers May be Named

The agencies continue to work to reach similar agreements in principle with other servicers that are not parties to the agreement announced today, but that are also subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing.

OCC and Federal Reserve examiners are continuing to closely monitor the servicers’ implementation of plans required by the enforcement actions issued in April 2011 to correct the unsafe and unsound mortgage servicing and foreclosure practices.

Click on the link to read about the OCC / Federal Reserve Board mortgage foreclosure settlement.

Fort Lauderdale Foreclosure Defense Attorney

Choosing the best approach to protecting yourself and your family from a mortgage foreclosure involves many legal considerations. Contact Fort Lauderdale mortgage foreclosure attorney Marcy Resnik to discuss how you can defend your legal rights in a foreclosure. You can contact Ms. Resnik online or call her at 954-321-0176.

CEO Yan Skwara of US Farms to Pay $59K SEC Fine

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US Farms, Inc. and Yan K. Skwara, its CEO, President, CFO, and Chairman, engaged in a fraudulent scheme involving the company’s stock, illicit kickbacks, and phony agreements to mask those kickbacks, according to SEC allegations.

The Commission announced that on January 2, 2013, the U.S. District Court for the Southern District of Florida entered a Final Judgment of Permanent Injunction by consent, against Defendant Yan K. Skwara enjoining him from violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (“Exchange Act”) and Section 17(a) of the Securities Act of 1933 (“Securities Act”).

U.S. District Judge Robin S. Rosenbaum ordered Yan K. Skwara, CEO, President, CFO, and Chairman of US Farms, Inc., to pay Disgorgement, Prejudgment Interest and a Civil Penalty pursuant to Section 21(d)(3) of the Exchange Act and Section 20(d) of the Securities Act.  The Final Judgment orders Defendant Skwara to pay disgorgement in the amount of $28,000, prejudgment interest of $3,372.57 and imposes a civil penalty of $28,000 for a total of $59,372.57.

U.S. District Judge Robin S. Rosenbaum entered a permanent injunction by default against US Farms, Inc. enjoining them from violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (“Exchange Act”) and Section 17(a) of the Securities Act of 1933 (“Securities Act”).  Judge Rosenbaum ordered US Farms, Inc. to pay disgorgement in the amount of $28,000 and prejudgment interest of $3,372.57 for a total of $31,372.57.

The Commission commenced this action by filing its Complaint on June 4, 2012, against Yan K. Skwara and US Farms, Inc.  [SEC v. Yan K. Skwara et. al., Civil Action No. 12-61078-CIV- Rosenbaum/Seltzer, (S.D. Fla.)] (LR-22584).

Fort Lauderdale Securities Litigation and Arbitration Attorney

Contact Fort Lauderdale securities litigation and arbitration attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker dispute. He is an experienced securities litigation and arbitration attorney, and is available to assist individual investors, brokers, and brokerage firms involved in securities matters. You can reach him at 954-321-0176 or online.

SEC Charges Kevin Dowd of Boca Raton in Pharmasset Stock Tip

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Financial advisor Kevin Dowd allegedly gave a penny stock promoter an illegal tip about on a pending acquisition of Princeton, N.J.-based Pharmasset Inc. by California-based Gilead Sciences, according to SEC charges. Dowd allegedly received $35,000 and a jet ski dock from the tipee in exchange for the information.

The SEC alleges that Kevin L. Dowd got details about the Pharmasset Inc. acquisition from one of his supervisors at the brokerage firm where he worked. The supervisor learned about the deal from a customer who sat on Pharmasset’s board of directors.

Dowd, who knew the customer, breached his duty to keep the information confidential by tipping a friend in the penny stock promotion business who bought Pharmasset stock on the last trading day before the public announcement of the deal. The trader also tipped another individual who bought Pharmasset call options, and collectively they made $708,327 in illicit insider trading profits in just two trading days. The SEC’s investigation is continuing.

“As an industry professional, Dowd surely knew what he was doing was wrong, but he incorrectly thought that his scheme was clever enough to avoid detection by investigators,” said Daniel M. Hawke, Chief of the SEC Enforcement Division’s Market Abuse Unit. “Professionals in the securities industry or any sector should know that you’ll be held accountable for violating insider trading laws, even if you don’t trade the securities yourself.”

In a parallel action, the U.S. Attorney’s Office for the District of New Jersey today announced criminal charges against Dowd.

According to the SEC’s complaint filed in federal court in New Jersey, the Pharmasset director told Dowd’s supervisor in confidence as his financial adviser that Pharmasset was going to be sold and the price would be in the high $130s per share. Dowd’s supervisor provided Dowd with the information along with an instruction that he was restricted from trading or recommending Pharmasset securities. Despite the warning, Dowd tipped his penny stock promoter friend, who wired $196,000 into a brokerage account with a zero balance and bought 2,700 shares of Pharmasset stock on Friday, Nov. 18, 2011. Dowd’s friend tipped another individual who bought 100 out-of-the-money call options, which are securities that derive their value from the underlying common stock of the issuer and give the purchaser the right to buy the underlying stock at a specific price within a specified time period. Investors typically purchase call options when they believe the value of the underlying securities is going up.

According to the SEC’s complaint, Gilead and Pharmasset announced the acquisition on Monday, November 21. Dowd’s tippees immediately sold all of their Pharmasset securities to obtain their illegal profits.

The SEC alleges that Dowd violated Sections 10(b) and (14)(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. The SEC is seeking disgorgement of ill-gotten gains with prejudgment interest, a financial penalty, and a permanent injunction against Dowd.

Fort Lauderdale Securities Litigation and Arbitration Attorney

Contact Fort Lauderdale securities litigation and arbitration attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker dispute. He is an experienced securities litigation and arbitration attorney, and is available to assist individual investors, brokers, and brokerage firms involved in securities matters. You can reach him at 954-321-0176 or online.

Home Foreclosures Spike 28% over 2011

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Home foreclosures are up 28% in January 2012 over last year, according to Lender Processing Services.

Fort Lauderdale area homeowners who are at risk of default on their mortgage or already in foreclosure should be aware that banks and other U.S. lenders will be moving faster to resolve foreclosures this year.

The U.S. reached a $25 billion settlement with Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. in February. Now that claims of foreclosure process flaws and allegations of “robo-signing” are behind them, banks are trying to clear up their backlog of foreclosures.

Florida leads the nation in mortgages that are “underwater” by at least 25 percent, according to RealtyTrac.

If you are one of the more than 2.5 million homeowners in Florida whose mortgage is more than 25% underwater, contact Fort Lauderdale mortgage foreclosure attorney Marcy Resnik to discuss how you can defend your legal rights in a foreclosure. You can contact her online or call her at 954-321-0176.