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VISIT US ONLINE @ DSNEWS.COM unload. As of the end of the second quarter, Citi Holdings' assets made up 10 percent of Citigroup's total assets. Citi Holdings' revenues declined 62 in MetLife no longer being subject to the Federal Reserve's oversight. percent to $924 million in the second quarter, while Citicorp, the unit which the bank considers its core business, reported revenues of $18 billion. Citi decreased its loan loss allowance from 5.4 percent in the second quarter of last year to 4.3 percent in Q2 2012. Sterling Acquires Universal Mortgage acquisition of Universal Mortgage, Inc., last month. Universal employees will join Sterling as Sterling National Bank announced the part of the takeover, and the acquisition is ef- fective immediately. Terms of the acquisition were not disclosed. Sterling Bancorp is a New York City- Treasury Brings in More Than $5B from Sale of AIG Shares million shares of its American International Group (AIG) common stock at $30.50 per share early last month and brought in an esti- mated $5 billion. The underwriters exercised their option to purchase another 24.5 million shares of AIG stock from Treasury's holdings at the $30.50 price point, adding an additional $750 million to the government's coffers. The sale cut Treasury's stake in AIG from The U.S. Treasury priced nearly 164 based financial corporation with assets of $2.6 billion. Universal Mortgage is a residential mortgage broker based in Brooklyn. "The addition of Universal Mortgage has 61 percent to 53 percent. AIG remains the largest investment for the Troubled Asset Relief Program (TARP). Treasury dropped a total of $67.8 billion of taxpayer dollars on AIG. According to a recent report from TARP's inspector general, $36 billion is still owed to taxpayers. many exciting strategic benefits for Sterling," said Louis J. Cappelli, Sterling Bancorp's chairman and CEO. "We are acquiring a strong source of mortgage production that will complement our existing mortgage banking business and further enhance our significant level of noninterest income. At the same time, Universal's offices give us our first physical presence in Brooklyn." MetLife Fined $3.2M for Servicing and Foreclosure Practices $3.2 million for the life insurer's "failure to adequately oversee its subsidiary bank's mort- gage loan servicing and foreclosure process- ing operations." Fed officials said the fine is the maximum The Federal Reserve fined MetLife amount that can be "prescribed for unsafe and unsound practices under the applicable statutory limits." The Federal Reserve acknowledged it is Ally Suffers Q2 Losses After ResCap Bankruptcy of $898 million for the second quarter of 2012. The company stated its Q2 results were adversely affected by a $1.2 billion charge re- sulting from ResCap's Chapter 11 bankruptcy protection, which was announced May 14. In the first quarter of this year, Ally Ally Financial Inc. reported a net loss reported a net income of $310 million; the company turned a profit of $113 million for the second quarter of 2011. ResCap, the bank's mortgage investment USA structured and marketed Delphinus CDO [collateralized debt obligation] 2007-1, a $1.6 billion investment vehicle backed by subprime bonds, and then used dummy assets to inflate credit ratings and falsely market the notes to investors. According to the SEC's complaint, all of The SEC alleged Mizuho Securities the collateral assets for Delphinus had been purchased by July 17, 2007, with the transac- tion scheduled to close July 19. Around noon on July 18, S&P issued a press release an- nouncing changes to its CDO ratings system that Mizuho employees knew would cause Delphinus to fall short of its rating targets. These employees emailed multiple alternative portfolios that contained millions in dummy assets in order to secure a AAA rating. Using the inaccurately rated portfolio, Mizuho successfully closed the transaction. Delphinus defaulted in 2008 and was liquidated in 2010. Jury Convicts Two Attorneys in $25M Mortgage Fraud Scheme of 10 felony counts for their roles in a $25 mil- lion mortgage fraud scheme. A federal jury in Brooklyn returned a guilty verdict in late July against Matthew Burstein, 40, and Aaron Rabinowitz, 40, of the law firm Burstein & Rabinowitz. The pair was involved in a real estate Two New York attorneys were convicted arm, suffered major losses after taking risks in the subprime market. Excluding the ResCap bankruptcy, Ally's mortgage operations increased profits to $110 million from $55 mil- lion in the first quarter of 2012. taking action against MetLife during a time when the life insurer announced plans to sell its subsidiary banking operations. The central bank said now is the appropriate time to act since the sale needs approval from regula- tors other than the Fed and would result Mizuho Securities Pays $127.5M in Ratings Scam Case of Mizuho Financial Group agreed to pay $127.5 million to settle charges brought by the Securities and Exchange Commission of misleading investors. The U.S. investment banking subsidiary closing scheme that defrauded Countrywide Financial, Fremont Investment and Loan, IndyMac Bank, SunTrust Mortgage, Inc., Wells Fargo & Company, and New Century Mortgage Corporation. The defendants conspired with real estate agents and loan officers to falsify loan documents in order to obtain loans for properties located in Queens, Brooklyn, and Long Island. Many of the properties were purchased by recruited straw buyers who failed to make payments, resulting in millions of dollars in defaulted loans. Sentencing for Burstein and Rabinowitz is scheduled for November 26. They could each face up to 30 years in prison for bank and wire fraud. Four others were indicted for their roles in the scheme. Real estate agent Elias Compres, loan officers Arturo Giraldo and John Constantanides, and Rolando E. Roldan were all charged with conspiracy to commit bank and wire fraud. 131

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