PHH Drops CFPB Challenge, Litvak Conviction Overturned

PHH Drops CFPB Challenge, Litvak Conviction Overturned

May 4, 2018
UBS Group is waiting to be hit with a Department of Justice (DOJ) lawsuit related to its sale of residential mortgage-backed securities (RMBS) in period before the 2008 financial crisis
A pair of high-profile court cases related to the mortgage industry took surprising turns yesterday.
PHH Corp. has announced that it will not appeal a U.S. Court of Appeals ruling from January that ruled against the mortgage company’s efforts to challenge the constitutionality of the Consumer Financial Protection Bureau (CFPB). That ruling overturned a 2016 decision from a panel of the court’s judges that declared the president had the authority to fire the CFPB director at will.
PHH informed The Hill of its decision not to seek an appeal to the U.S. Supreme Court. PHH brought its lawsuit against the CFPB over a $103 million enforcement action, and the Court of Appeals reimbursed PHH over what it considered as an inappropriate fine as part of its January ruling.
Separately, the 2nd U.S. Circuit Court of Appeals overturned the second criminal conviction against former Jefferies Group mortgage bond trader Jesse Litvak on charges of defrauding a customer about bond prices between 2009 and 2011, generating $2.5 million in illegal profits. According to a Reuters report, the court determined that the jury in the case had wrongly been allowed to hear irrelevant evidence, and the case was ordered back to the U.S. District Court in Connecticut for what could be a third criminal trial.