Access To Justice

A class action lawsuit filed last week in Tulsa County District Court in Oklahoma alleges that BOK Financial Corp. and Bank of Oklahoma maximized customers’ overdraft fees by manipulating the order of electronic debit transactions to quickly deplete a customer’s available funds.

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Insurer Prudential Financial Inc. is the subject of a probe by the House Oversight Committee into its controversial practice of not automatically paying dead veterans’ life insurance benefits to their survivors but depositing the money instead into its own general fund, reports Law360 (subscription required).

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In a victory for current and retired General Dynamics employees, a tentative agreement has been reached to settle a class action suit alleging participants in two of the company’s 401(k) plans were charged excessive fees. As part of the $15 million settlement, an outside consultant will review the 401(k) plans; their fees and expenses will also be more clearly explained.

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New York Attorney General Andrew Cuomo is investigating the health care credit card industry after receiving hundreds of consumer complaints about aggressive marketing of the high-interest cards and predatory financing practices.

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Countrywide Financial will pay $600 million to settle shareholder lawsuits alleging the company once known as the nation’s largest mortgage lender hid its risky business practices from investors even as it loosened its standards for home loans.
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Law 360 (subscription required) reports that Prudential Insurance Co. has been hit with a class action lawsuit that alleges the company shortchanged military families by paying them only 1 percent interest on the unpaid balance of a veteran’s life insurance benefits instead of the 5.7 percent Prudential earned on the benefits. Prudential has also been subpoenaed by the New York Attorney General Andrew Cuomo, who is investigating the practice.

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The Department of Veterans Affairs will launch a full investigation into a Bloomberg Magazine report that “life insurance companies are putting veterans’ death benefits in corporate accounts and keeping most of the investment profits instead of paying the survivors.”

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The Wall Street Journal (subscription required) reports that a dispute over a $15 million life-insurance policy taken out on an Indianapolis woman who drowned in her bathtub took a new twist after her family alleged in a suit filed against American International Group (AIG) that the insurer ran a “scheme” to let investors buy big policies on older people as speculative bets, a practice known as “stranger-originated” insurance. The Journal reports the lawsuit is among hundreds pending nationwide following the collapse in the market for life-insurance policies purchased by investors.

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Most readers probably saw the news last Friday that hedge fund billionaire Raj Rajaratnam was charged by federal prosecutors with insider trading.

According to the The New York Times federal prosecutors have charged Rajaratnam, and six other individuals, of with raking in more than $25 million from illegal trading in companies like Akamai, Google, and Hilton Hotels.

According to Law.com, the case may be the largest hedge fund insider-trading scheme ever uncovered.

In addition to the very serious criminal charges, Rajaratnam and his fellow Wall Streeters may also be liable for civil judgments.

That’s because brokers, financial advisors and insurance agents have a fiduciary obligation to those they serve that forbids them to engage in behavior that places their own interests above those of their clients. Under certain conditions, clients may be entitled to compensation for damages they suffer as the result of an agent’s failure to perform fiduciary duties.

Securities fraud or negligence, for example, occurs when clients are encouraged to invest in high-risk schemes, purchase volatile stock, or participate in financial arrangements that devalue their savings or otherwise cause financial loss. Insurance bad faith occurs when a client loses money as a result of an insurance company’s delay in handling claims, refusal to make a reasonable settlement offer, or unreasonable interpretation of an insurance policy.

Backed by our selective affiliate network, Sokolove Law, LLC has recovered damages for thousands of clients who have suffered financial loss because of securities fraud or insurance bad faith. From initial case signing to active litigation, we work closely with our co-counsel firms to ensure our clients receive the quality legal representation and the fair compensation they so rightly deserve.

If you or someone you know, thinks that they may have lost money because a financial advisor breached their duty, please visit our website to learn more about your legal rights.