Rule 10b-5: Manipulative and Deceptive
Practices

http://www.ritholtz.com/blog/2010/04/rule-10b-5-manipulative-and-deceptive-practices/

*THE
POOLING & SERVICING AGREEMENT in a SECURITIZED LOAN typically
states the following:

Violation of consumer protection laws may
result in losses on the mortgage loans and the offered certificates.

Applicable
state laws generally regulate interest rates and other charges, require
certain disclosure, and require licensing of the originators. In
addition, other state laws, public policy and general principles of
equity relating to the protection of consumers, unfair and deceptive
practices and debt collection practices may apply to the origination,
servicing and collection of the mortgage loans.

The mortgage loans
are also subject to federal laws, including the Federal
Truth-in-Lending Act and Regulation Z promulgated thereunder, which
require certain disclosures to the mortgagors regarding the terms of the
mortgage loans.

Violations of certain provisions of these federal
and state laws may limit the ability of the servicer to collect all or
part of the principal of or interest on the mortgage loans and in
addition could subject the trust to damages and administrative
enforcement. In particular, the failure of the originators to comply
with certain requirements of the Federal Truth-in-Lending Act, as
implemented by Regulation Z, could subject the trust to monetary
penalties, and result in the mortgagors’ rescinding the mortgage loans
against the trust.

*SO IF THE POOLING & SERVICING AGREEMENT
CALLS FOR ASSIGNMENTS TO BE MADE WITHIN 30 DAYS OF CUTOFF – AND THE
ONLY ASSIGNMENT OF RECORD COMES 2 YEARS AFTER CUTOFF… IS SOMEBODY
SELLING UNLICENSED, UNREGULATED SECURITIES?

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http://compliancex.typepad.com/compliancex/2010/05/jail-time-for-wall-st-crime-senate-considers-it.html
Jail Time for Wall St. Crime? Senate Considers
It

May 05, 2010


Cyrus Sanati, The New York Times/DealBook, May 4,
2010

With the Goldman Sachs securities fraud case in
the background, a Senate hearing considered Tuesday whether tougher
criminal
and civil laws were needed to discourage wrongdoing on Wall Street and
whether
the prospect of jail time was an effective deterrent.

At issue is whether Congress should impose some
sort of
fiduciary duty of care on broker-dealers and investment banks, forcing
them to
act in their clients’ best interest at all times. Currently,
broker-dealers owe
no such duty of care (except under special circumstances and in the
state of
California).

“The people who I have talked to have said ‘this is
wrong I
know it’s wrong — you should go to jail if you did what Goldman Sachs
did,’”
Senator Ted Kaufman (Above), Democrat of Delaware, said at the Senate
Judiciary
subcommittee hearing. “But they can’t go to jail now because it’s not
against
the law.”

Continue to full article.

Synopsis: Congress is currently considering whether
brokers
should have a fiduciary duty to their clients while also trying to
determine if
jail time would be a more effective deterrent against financial crime
than
fines that are often paltry compared to firm’s profits.

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