By Jonathan Stempel

(Reuters) – A week after settling a landmark federal discrimination case, Bank of America Corp’s Countrywide unit was ordered to face a lawsuit by a Hispanic couple who said it applied excessive pressure to refinance their home on terms they did not accept and could not afford.

In an opinion by a prominent Republican-appointed judge, the 9th U.S. Circuit Court of Appeals in Pasadena, California said a lower court was wrong to dismiss the complaint by Victor and Belen Balderas, who claimed they could not read the English language loan documents they signed.

Countrywide was accused of violating the federal Truth in Lending Act by refusing to let the couple cancel their 2006 refinancing as the law allowed.

The Balderases said a Countrywide broker cold-called them and persuaded them to switch to a mortgage that could let them cash out $50,000, based on documents that overstated their annual income by more than $40,000.

They said the broker soon showed up and demanded they sign the loan documents “that night,” refusing to leave their home or reschedule so their English-literate daughter could attend.

They said that after six hours of “unrelenting pressure” they capitulated just after midnight. Over the next two days, the broker and Countrywide wrongly refused their timely request to rescind the transaction, they alleged.

By Jonathan Stempel

(Reuters) – Deutsche Telekom AG will pay more than $95 million to settle U.S. criminal and civil charges that a Hungarian unit and three former executives schemed to bribe government officials in Macedonia and Montenegro.

Regulators said the charges arose from the company’s Magyar Telekom unit having in 2005 and 2006 arranged payments of 12.2 million euros ($15.8 million) to intermediaries, expecting some or all of the money to be funneled to the officials in exchange for business benefits.

This violated the Foreign Corrupt Practices Act, a U.S. law designed to thwart bribery of foreign officials, according to the U.S. Department of Justice and U.S. Securities and Exchange Commission, which announced Thursday’s settlements.

The SEC filed related charges against the three former Magyar executives: Chief Executive Elek Straub, director of central strategic organization Andras Balogh, and director of business development and acquisitions Tamas Morvai.

Magyar agreed to pay a $59.6 million criminal penalty and enter a two-year deferred prosecution agreement with the Justice Department. It also agreed to pay more than $31.2 million of disgorgement and interest to settle with the SEC.

Deutsche Telekom agreed to pay a $4.36 million penalty and enter a two-year nonprosecution agreement with the Justice Department for failing to maintain accurate books and records.

By Jonathan Stempel

(Reuters) – Actavis Group has reached an $84 million settlement with Texas to resolve civil claims that it defrauded the state’s Medicaid program by artificially inflating prices for its generic drugs.

The sum is just under half the $170.3 million that a Travis County state jury had ordered Actavis, a privately-held Icelandic company, to pay the state in February. Actavis had appealed that verdict, which followed a three-week trial.

In announcing the accord with U.S. units Actavis Elizabeth LLC and Actavis Mid-Atlantic LLC, Texas Attorney General Greg Abbott said Actavis’ inaccurate price reporting caused the Medicaid program to overpay pharmacies for prescription drugs.

The company did not admit liability in agreeing to settle, and both Actavis and Texas agreed to settle to avoid further litigation, according to the settlement agreement.

Doug Boothe, chief executive of Actavis Inc, the direct parent of Actavis Elizabeth and Actavis Mid-Atlantic, called the settlement a “favorable outcome” that allows Texas’ Medicaid patients to continue using its drugs.

“Actavis will continue to report our product pricing in an manner consistent with all applicable laws as well as the terms of this agreement,” Boothe said in a statement.

By Jonathan Stempel and Karen Freifeld

(Reuters) – A U.S. appeals court agreed to resolve a dispute among institutional investors over whether Bank of America Corp’s $8.5 billion mortgage debt settlement should be sent back to a New York state court for approval.

The 2nd U.S. Circuit Court of Appeals in New York on Tuesday said it plans to rule within a 60-day period on whether U.S. District Judge William Pauley in Manhattan correctly took the case from the state court.

It granted the requests of Bank of New York Mellon Corp, which as trustee negotiated the settlement, and investors including BlackRock Inc, MetLife Inc and Allianz SE’s Pimco to appeal Pauley’s decision.

Other investors, led by a group called Walnut Place, preferred that the case stay in federal court, which could result in higher recoveries.

The June settlement was intended to address much of Bank of America’s remaining legal liability from the Charlotte, North Carolina-based bank’s 2008 purchase of mortgage lender Countrywide Financial Corp.

It would cover claims by investors in 530 mortgage securitization trusts with $174 billion of unpaid principal that the home loans underlying their investments were toxic or underwritten poorly.

By Jonathan Stempel

(Reuters) – The Securities and Exchange Commission filed an emergency request to put its securities fraud lawsuit against Citigroup Inc on hold, saying a failure to delay the case would derail its proposed settlement with the bank and threaten “irreparable” harm.

Tuesday’s filing with the 2nd Circuit Court of Appeals in New York seeks an expedited appeal of a November 28 decision by District Judge Jed Rakoff that harshly rejected the SEC’s $285 million accord with Citigroup.

Rakoff said that because the SEC did not require the New York-based bank to admit or deny its charges, he had no way to know whether the settlement was adequate.

But the SEC said the ruling was “legal error,” at odds with decades of court decisions allowing such settlements and letting investors get faster recoveries, and could affect its ability to reach similar accords with other companies.

According to Tuesday’s filing, Rakoff in a teleconference set a January 3, 2012 deadline for Citigroup to “answer” the SEC complaint, 27 days sooner than federal rules require.

An answer can force Citigroup to deny some or all of the SEC allegations, or seek to dismiss the case entirely.

- (Reuters) – Four Chinese citizens were charged by the U.S. Securities and Exchange Commission with insider trading in shares of Global Education & Technology Group Ltd before the Beijing company agreed to be bought last month by Britain’s Pearson Plc.

The charges are the latest in the SEC crackdown on alleged wrongdoing involving U.S.-listed Chinese companies, with much of its focus on accounting practices. Global Education provides English language and other test preparation services in China.

In a complaint filed with the U.S. District Court in Chicago on Monday, the SEC said Sha Chen, Song Li, Lili Wang and Zhi Yao reaped more than $2.7 million of illegal profit from trading in Global Education’s American depository shares in the two weeks leading up to November 21 takeover.

The SEC said the trades accounted for 35 percent of volume in the normally thinly-traded stock on November 18, the last trading day before the merger was announced.

It also said Xiaodong “Veronica” Zhang, Global Education’s co-founder and chairman, had “apparently tipped Wang and possibly others” about the acquisition.

Global Education agreed to be bought for $155 million, or $11.01 per share, a 105 percent premium.

The SEC also filed charges against Chen’s company All Know Holdings Ltd.

Dec 6 (Reuters) – Bank of America Corp agreed to pay $315 million to settle claims by investors who said they were misled about mortgage securities offerings by its Merrill Lynch unit.

The proposed class-action accord is one of the largest settlements of investor claims against banks over seemingly safe mortgage-backed securities that later proved toxic as credit and housing conditions worsened.

It is also the latest step in Bank of America’s efforts to address its legal liabilities stemming from its purchases of Merrill in January 2009 and the mortgage lender Countrywide Financial Corp six months earlier.

Bank of America is based in Charlotte, North Carolina, and is the second-largest U.S. bank by assets.

A Bank of America spokesman did not immediately respond to requests for comment on the settlement. Lawyers for the investors were also not immediately available.

Reuters in mid-November reported the size of the settlement, citing an unnamed source.

The settlement was disclosed publicly late Monday night in court papers filed in U.S. District Court in Manhattan. The settlement requires approval by Judge Jed Rakoff.

By Jonathan Stempel

(Reuters) – BP Plc accused Halliburton Co of destroying evidence that the oilfield services company did inadequate cement work on the Gulf of Mexico oil well that blew out last year, and asked a federal judge to punish Halliburton.

The accusation, in a BP court filing, raises the stakes ahead of a trial, expected in late February, to assign blame and damages for the April 2010 blowout of the Macondo well, which triggered the largest offshore oil spill in U.S. history.

Citing recent depositions and Halliburton’s own documents, BP said Halliburton “intentionally” destroyed the results of slurry testing for the well, in part to “eliminate any risk that this evidence would be used against it at trial.”

The oil company also said Halliburton appeared to have lost computer evidence showing how the cement performed, with Halliburton maintaining that the information is simply “gone.”

BP asked U.S. District Judge Carl Barbier in New Orleans, who oversees spill litigation, to sanction Halliburton by ruling that Halliburton’s slurry design was “unstable,” a finding of fact that could be used at trial.

It also asked Barbier to direct that forensic experts be hired to find the missing computer data.

By Jonathan Stempel and Karen Freifeld

(Reuters) – Ernst & Young LLP has been sued for $900 million by the liquidators of a fund that once funneled money to the now-imprisoned swindler Bernard Madoff.

The lawsuit, filed on behalf of M-Invest Ltd, accused Ernst & Young of negligence, professional malpractice and breach of contract over its audits for the Cayman Islands-based fund from 2003 to 2007.

Union Bancaire Privee, a private Swiss bank, created the M-Invest “feeder fund” solely to invest client assets with Madoff’s firm, Bernard L. Madoff Investment Securities LLC.

The bank and M-Invest agreed last December to pay as much as $500 million to settle claims by Irving Picard, the trustee liquidating Madoff’s firm and seeking money for his victims, that they profited improperly from Madoff’s Ponzi scheme.

Neither admitted wrongdoing in agreeing to settle, and the accord won bankruptcy court approval in January. Picard had sued for $1 billion.

Ernst & Young spokesman Charles Perkins in an emailed statement said the lawsuit has no merit, and the auditor will defend itself vigorously.

Dec 2 (Reuters) – As investigators search for an estimated $1.2 billion missing from MF Global customer accounts, one customer says his entire account has vanished and blames the trustee liquidating the firm.

An Illinois-based futures fund on Friday said its more than $50 million account with the broker-dealer unit of MF Global Holdings Ltd is missing, and asked a federal bankruptcy judge to order the trustee to find it.

Highridge Futures Fund LLP said the trustee James Giddens has refused to help locate its account with MF Global Inc, even after transferring some 38,000 other accounts and giving customers access to some of their collateral.

Once run by former New Jersey Governor Jon Corzine, MF Global filed for bankruptcy on Oct. 31 after a bet on European sovereign debt worried markets, causing a liquidity shortfall.

The Highridge fund said Giddens, CME Group Inc’s Chicago Mercantile Exchange and regulators have told it nothing about the status of its account, which held commodity positions and cash. It also said it had been told twice that the account was being transferred, but the transfer never occurred.

“This account is nowhere to be found,” said the fund, overseen by Lombard, Illinois-based Highridge Trading Co.

The trustee’s office has been in contact with Highridge, and will try to resolve the matter without the need for a court ruling, said Kent Jarrell, a spokesman for Giddens.