Sunday, December 4, 2011

State attorneys general and deterring robo-signing

For more than a year, the attorneys general of all 50 states have been in talks with major banks  over fraudulent foreclosure practices that drove millions of Americans from their homes following the bursting of the housing bubble, including so-called robo-signing.  Some points of a settlement have been reportedly agreed to, including a $25 billion cost to the banks.  Last Thursday, Massachusetts Attorney General Martha Coakley broke ranks and sued the five biggest mortgage servicers , in the first government lawsuit targeting all five for alleged improper foreclosure practices. The Wall Street Journal, December 2, 2011, Markets

In middle of November, Nevada Attorney General Catherine Cortez Masto had a grand jury hand up criminal indictments against two title officers employed by Lender Processing Services Inc. for allegedly directing and supervising a robo-signing scheme, in which documents filed in foreclosure cases were signed without proper legal review. The 606-count indictment alleges that the two title officers, Gary Trafford and Gerri Sheppard, directed employees under their supervision to forge their names on foreclosure documents, then notarize the forged signatures, so that it appeared that the pair actually signed the documents. Lender Processing Services, Inc. was not indicted.  The Wall Street Journal, November 16, 2011, U.S. News

Twenty five billion dollars is a lot of money, and if there has been wrongdoing that damaged foreclosed homeowners, it is just for those homeowners to be compensated by those who perpetrated the wrongdoing.

If there has been corporate wrongdoing that caused $25 billion in damages to foreclosed homeowners, that would seem to represent a significant mission failure of ethics and compliance officers at the banks in question.  If so, hopefully those ethics and compliance officers will do some post-mortem review of their mission failure.

I think those ethics and compliance officers should think about the effectiveness of $25 billion being paid by the banks, as compared to criminal prosecution of culpable officers and employees who did the wrongful actions, as means to deter corporate wrongdoing.

I believe the Ethics & Compliance Officer Association, the Ethics Resource Center, and other business ethics organizations and advocates should interest themselves in the issue of entity level liability versus officer and employee liability for deterring corporate wrongdoing.

The state attorneys general should also think about this issue.  For the time being, the National Association of Attorneys General has indicated that it is not within its purview of that organization to conduct policy research and analysis of the issue for the benefit of its member attorneys general.  See this entry.

Saturday, December 3, 2011

Business and Professional Ethics Journal

From: RDShatt@aol.com
To: bpej@depaul.edu
Sent: 12/2/2011 8:42:51 A.M. Central Standard Time
Subj: Follow up to 2009 submission


Dear Sir or Madam,
In 2009 I submitted "Whither the Quest of Business Ethicists?" to the Business and Professional Ethics Journal.
Connected to my article, earlier this year, I initiated this project to investigate the views and analyses that multiple interested parties have concerning the subject of entity level liability versus officer and employee individual liability as a means to deter corporate wrongdoing.
In trying to proceed with my project, I have contacted a variety of persons, including the Business Ethics Quarterly and several recent authors in that journal. You may review my correspondence at these entries in my blog.
I continue interested in publishing my article "Whither the Quest of Business Ethicists?" and in finding collaboration and relevant literature pertaining to my project and also an outlet for publishing an article growing out of my project.
If the Business and Professional Ethics Journal and its staff can provide me any help to locate relevant literature or refer me to a possible collaborator or can encourage me about possible article publication in the journal, I will be very thankful.
Sincerely,
Rob Shattuck

Friday, December 2, 2011

National Association of Attorneys General

From: RDShatt@aol.com
To: jmcpherson@naag.org
Sent: 9/22/2011 7:03:51 A.M. Central Daylight Time
Subj: Project to investigate diverse perspectives on entity vs. individual liability

Dear Jim,
I have initiated this project to investigate the perspectives, views, analyses, and information that multiple interested parties have concerning the subject of entity level liability versus officer and employee individual liability as a means to deter corporate wrongdoing.
Parties who have an interest or should have an interest in this topic include lawmakers, judges, regulators, state attorneys general, criminal prosecutors, corporate management, ethics and compliance officers, corporation lawyers, various academics, plaintiffs' lawyers, tort reform organizations, and consumer protection organizations.
I am sending this email to you to inquire whether the National Association of Attorneys General would care to participate in dialogue on the subject of my project.
Our prior email correspondence would suggest that my project is not something that NAAG would be willing to participate in, but I thought I would ask anyway.
Thanks.
Sincerely,
Rob Shattuck

From: jmcpherson@NAAG.ORG
To: RDShatt@aol.com
CC: jhunter@NAAG.ORG, jhunter@NAAG.ORG
Sent: 9/22/2011 9:33:19 A.M. Central Daylight Time
Subj: RE: Project to investigate diverse perspectives on entity vs. individual liability

Thank you for thinking of us but not at this time.
Jim
James E. McPherson
Executive Director
National Association of Attorneys General
2030 M Street, NW
Washington, DC 20036
Phone: 202-326-6260
Cell: 202-701-9115

From: RDShatt@aol.com
To: jmcpherson@NAAG.ORG
Sent: 9/28/2011 7:35:01 A.M. Central Standard Time
Subj: Re: Project to investigate diverse perspectives on entity vs. individual liab...

Thanks for replying, Jim.
I know members of NAAG may have differing views on the subject, and that inhibits the Association. If you are willing to consider it, I would like to suggest that, in your newsletter or other form of periodic communication to members, you could include the following notification information for the members:
NAAG has been contacted about this project (http://robertshattuck.blogspot.com/2011/06/statement-of-project.html) to investigate the perspectives, views, analyses, and information that multiple interested parties (including state attorneys general) have concerning the subject of entity level liability versus officer and employee individual liability as a means to deter corporate wrongdoing.. Mr. Shattuck, the propounder of the project, understands that the members of the Association may have differing views about the subject, and the Association is thus not in a position to express views about the subject. The Association, however, wishes to notify its members of the existence of the project, particularly if individual members wish to dialogue about the subject. Please contact Mr. Shattuck by email at rdshatt@aol.com if you are interested.
Just a thought.
Thanks.
Rob