It ain’t the $400 million that was sought, but the $30 million judgment Mike Ciresi wrung out of a jury in a suit against Well Fargo — and against rival attorney, the always dapper Robert Weinstine — that will have plenty of folks scouring the case for details and precedents. The Strib story, by David Phelps, explains: “The jury determined that Wells Fargo breached its fiduciary duty to its clients. During jury instruction, [Judge M. Michael] Monahan told the jurors that fiduciary duty meant the bank must operate in the best interests of its clients with good faith, loyalty, integrity and full disclosure. More than half of the total damages — $16 million — was awarded for violation of the Minnesota Consumer Fraud Act. The jury was asked, ‘Did Defendant Wells Fargo provide false information or use a deceptive practice in the course of selling the securities lending services?’ Jurors answered yes on the verdict form.”
The Bloomberg BusinessWeek story, co-written by MinnPost contributing writer Beth Hawkins, says: “The suit is one of multiple complaints alleging U.S. banks purchased illiquid securities for clients. The U.S. Securities and Exchange Commission said in September it is examining whether banks that engage in securities lending make adequate disclosures to pension-fund clients. Wells Fargo denied it made any misrepresentations or pushed risky investments, blaming any losses on the financial crisis.”
For the PiPress, John Welbes writes: “Although the verdicts provide an outcome to the marathon trial — which moved into its seventh week when closing arguments wrapped up on Tuesday — it’s not completely over. The jury reached a verdict after one day. Today, attorneys for the nonprofits and Wells Fargo will appear before Ramsey County District Judge Michael Monahan to argue possible punitive damages. The jury is set to return later in the day to take up the same question and, if damages are warranted, help determine an amount. To tie punitive damages either to the civil count against Wells Fargo for breach of fiduciary duty or for the violation of Minnesota’s Consumer Fraud Act, the judge will have to determine there was ‘deliberate disregard’ by the bank in its handling of the nonprofits’ accounts, said Larry Espel, a Minneapolis attorney with extensive experience in civil litigation. A finding of negligence alone wouldn’t translate into a claim for punitive damages, he said. A finding of negligence alone wouldn’t translate into a claim for punitive damages, he said.”
And on top of that, the Strib’s Dan Browning notes Wells Fargo’s “inexcusable mistake” in not shutting off all of Ponzi schemer Trevor Cook’s accounts. That screw-up allowed him to continue his mischief and mayhem. Browning quotes court receiver R.J. Zayad: ” ‘Wells Fargo’s failure to freeze these accounts allowed Cook to funnel thousands of dollars in receivership funds through these two accounts between July 7, 2009, and November 2009.’ He said the transfers resulted in ‘further dissipation and concealment of investor funds.’ As examples, he cited a $60,000 payment to Mike Shutze, a currencies consultant recruited from the Chicago area; $20,000 that Cook spent on a Lexus in November; mortgage payments on Cook’s residence; and a $2,000 payment on one of his credit cards.” Don’t you wonder what modern giant banks actually do all day long — I mean, after jacking around with nonprofits and bungling court orders?
Oh heck, while WE are at it, a banking story by Mark Anderson of Finance and Commerce, reports that, “Minnesota banks — not including U.S. Bank, which is chartered in Ohio — saw earnings drop by one-third between 2008 and 2009. That precipitous decline turned around slightly in first quarter 2010, climbing 8 percent. Nationally, the 2009 collapse mirrored Minnesota’s decline, but the 2010 drop was followed by an equally sharp recovery for all U.S. banks. That big bounce up reflected gaudy income gains by the nation’s largest banks; for instance, Goldman Sachs earned $3.6 billion in first quarter, which accounted for almost 20 percent of all the nation’s bank profits.” That is so reassuring.
“Not true” is the family reaction to a report out of Rwanda that (can we describe him as “eccentric”?) Billy Mitchell law professor Peter Erlinder, attempted suicide in his African jail cell. The AP story (via the PiPress) says: “Rwandan police spokesman Eric Kayiranga said Erlinder swallowed 45 to 50 pills in his prison cell Tuesday night and the attempt may lead courts to charge the professor again, this time with attempted suicide. ‘He mixed between 45 and 50 tablets in water and took the concoction in an attempted suicide,’ Kayiranga said. ‘However, the police managed to intercept and took Erlinder to the hospital before the drugs could take their toll on his body.'” We, of course, urge intense skepticism toward any claim made by an oppressive government.
A couple of Denny Hecker supporting characters, Jim Gustafson and Steve Leach, made court appearances Wednesday. Dee DePass’ Strib story has Gustafson getting hit with a $550 contempt fine for not turning over all the information the court is after, while Leach wants out from nine of the 15 counts against him. Leach “also asked that his trial be separate from Hecker’s case, which is scheduled for trial in October. His attorney, Robert Sicoli, said in a motion in U.S. District Court that Leach needs to sever ties with Hecker’s criminal case to avoid confusing a jury. Sicoli also said the adverse publicity surrounding Hecker’s turbulent bankruptcy, divorce and criminal cases would prejudice a jury. He submitted dozens of news reports as evidence.” Once again, folks, it’s the media’s fault.
“False,” says MPR’s PoliGraph fact-determining “service,” this one edited by Catharine Richert, about Independence Party candidate Tom Horner’s claim that the next governor will be looking at a $9 billion deficit, thanks to the fecklessness of a careerist governor and nebbish Legislature. PoliGraph, modeled on the Poynter Institute’s “PolitiFact” truth-assessing site (and to be fair, ‘CCO TV Pat Kessler’s longer-running “Reality Check”) says: “Horner is double-counting what the state owes schools. Minnesota is facing a big budget problem in the next biennium, but Horner’s estimate is off by at least $1.2 billion. As a result, Horner fails his first PoliGraph test.” What a concept, huh? News organizations assessing truthfulness in politicians. What’ll they think of next? Reporting on sports?
Save the Ran-Ham! St. Paul’s beloved eight-lane, basement bowling alley (across from Cretin-Derham Hall High School) may never open again, says the PiPress’s John Brewer. “Steve Steiner shut down his Ran-Ham Bowling Center for the summer last month, just like he has every year for the past two decades. But, unlike years past, Steiner isn’t sure he’ll be able to reopen the St. Paul institution in September. ‘About three weeks ago, (the landlord) called me up on the phone, told me he wasn’t going to renew the lease. He couldn’t give me an answer why. I asked him, ‘So who’s moving in?’ He wouldn’t tell me that,’ Steiner said. ‘It was just out of the blue.’ ” If any place deserves a historic preservation designation, its the Ran-Ham, dude.
KARE-TV “shooter” Aethan Hart gives his old buddy, Eric Eskola, (bought out by WCCO radio) a send-off in his “HartBeat” blog. He says, “Though Eric didn’t consider himself as the leader of the Capitol jackal pack, to me and others, he was. He would often walk down the narrow hallway past the offices where his fellow journalists were toiling and ask who would be joining him at the rotunda rally, legislative leader news conference or other political occurrences. Most of the time, we would follow him to cover the events. Over the years the KARE legislative assistants learned a great deal from Eric. Working with Eric for them was like a short and intensive Masters program.” He also tells the story of Eskola lining up to get Elvis tickets for Hart’s hospitalized wife.
Target will start selling Kindles in all of its stores starting Sunday. A Business Journal story by John Vomhof Jr. says: “Minneapolis-based Target … became the first brick-and-mortar retailer to carry the Kindle in April, when it began selling the product at its flagship downtown Minneapolis store and 102 stores in south Florida. The devices sell for $259 each, the same price as on Amazon’s website.”
City Pages links to Chris Matthews’ “Hardball” shot at Michele Bachmann, this time for complaining that the federal government had not stepped in and “commandeered” private property, boats specifically, to fight the Gulf oil slick.
OK, it happened a couple weeks ago. But Fox9 and KARE and a few others just now got hold of the story of the 16-year-old kid who reeled in a 43-inch muskie from Eagle Lake in Carver County, with the help of a sheriff’s deputy who just happened to be walking by. “Erickson had just cast a spinning lure into the water, when a big black object swimming nearby quickly took the bait. For 15 minutes, he struggled to pull his underwater adversary onto the dock.” Those things are like dinosaurs.