Dino Ainsly blog

Judge allows suits against BofA to proceed

A U.S. federal court judge has allowed Deutsche Bank AG and the mortgage unit of France's BNP Paribas SA to proceed with their lawsuits against Bank of America related to losses they incurred in connection with the collapse of mortgage lender Taylor Bean & Whittaker Mortgage Corp.

Bank of America was a trustee for notes issued by Taylor Bean's Ocala Funding LLC unit.

Ocala used proceeds from note sales to Deutsche Bank and BNP Paribas's mortgage unit to buy Taylor Bean mortgages. But when Taylor Bean collapsed it was unable to repay the notes.

Taylor Bean was once the 12th-largest mortgage originator in the United States but went bankrupt in August.

Deutsche Bank (DBKGn.DE) and BNP filed the original suit in November 29 saying that Bank of America breached its obligations on a total of more than $1.7 billion of mortgage-related transactions.

Judge Robert Sweet, of the U.S. district Court in Manhattan, dismissed some claims against Bank of America. He allowed others relating to their claims of breach of contract to proceed, saying the two had stated "a plausible claim" against Bank of America. His opinion was filed on Wednesday.

A Bank of America (BAC.N) spokeswoman was not available for comment.

Sweet, dismissed the claims by the parent company BNP Paribas (BNPP.PA), which was added later as a plaintiff, saying it lacked standing.

The lender for Taylor Bean was Colonial Bank of Montgomery, Alabama, which Bank of America sued in 2009, charging it with refusing to return more than $1 billion it received from Freddie Mac (FRE.N) for loan purchases BofA helped fund.

Bank of America last year filed suit against the Federal Deposit Insurance Corp over the $1.75 billion of investor losses mainly from the 2009 collapses of Colonial and Taylor Bean.

In February, the former treasurer of Taylor Bean pleaded guilty to conspiracy. In March a former Colonial Bank executive pleaded guilty to one count of conspiracy to commit bank, securities and wire fraud.

Deutsche Bank accused Charlotte, North Carolina-based Bank of America in one lawsuit of breach of contract for failing to safeguard more than $1.25 billion of cash and mortgage loans from deals in 2007 and 2008.

In the other lawsuit, BNP Paribas Mortgage Corp said Bank of America refused to pay $480.7 million of principal and interest on secured notes when the sum came due on August 10.

Deutsche Bank said it invested $750 million in asset-backed commercial paper issued by the Ocala Funding LLC vehicle on December 13, 2007, and invested $450 million more on June 30, 2008.

Also on June 30, 2008, Paribas collectively with Deutsche Bank invested about $481 million in the commercial paper issued by Ocala.

The cases are Deutsche Bank AG v Bank of America, U.S. District Court for the Southern District of New York, No. 09-9784; and BNP Paribas Mortgage Corp v Bank of America, No. 09-9783.

(Reporting by Ilaina Jonas; editing by Carol Bishopric)

Al-Qaida Suspect Too Cheap to Attack Chicago

s biggest skyscraper, seemed to be a likely secondary target for terrorist. The building, now officially called the Willis Tower, was evacuated that day and has increased anti-terrorist security.

It made sense as a symbolic target, just as the World Trade Centers and the Pentagon seemed to be. More recently, an attempted attack on Times Square made symbolic sense as well.

The Christmas 2009 attack on Detroit? Not so much.

According to the , the man accused of trying to bomb Detroit's Metro Airport chose the target out of purely financial considerations, instead of some lofty or devious notion of symbolism. He couldn't afford a ticket to Chicago or Houston, the targets he would have preferred.

The revelation is indicative of a different type of terrorist approach, the report says, a desire to take out a target because it is available rather than because it means something.

Detroit, much maligned and facing mass exodus, was simply a cheaper destination.

Between its politics and the collapse of American manufacturing, Detroit is no longer a jewel of the Midwest. It has become a target of opportunity.

And while the news can't be encouraging for the city, the bigger worry is what the Associate Press conclusions may mean for other parts of the country, including small-town America. It's easier in small towns not to lock the doors of your car. The Williamson County Regional Airport, about five miles from my house, has much more lax security than any metropolitan airport, even Detroit.

So the question prompted by this report is what targets of opportunity are we neglecting to secure simply because we didn't think that terrorists would ever strike there?

In the fall of 2007, when I was flying back to St. Louis from Detroit, my flight was delayed for over an hour because of a suspicious package at the airport. That was before an international terrorist tried to attack there. Last year, flying through Metro Airport, security was much tighter than at Lambert Field in St. Louis.

If the conclusions reached by the Associated Press are reasonable, it would appear that the more heightened the security, and the higher the price of the plane tickets, the more likely we are to be safe in flying. Since I have some flying to do this summer, could we enhance security in St. Louis and Seattle?

Lucinda Gunnin cut her teeth as a reporter covering Illinois government as an intern in the statehouse pressroom. Now, she brings 20 years of experience and insight to covering Illinois issues.

Dow rises for seventh day

NEW YORK (Reuters) – The Dow notched a seventh straight day of gains on Tuesday, but light volume suggested that investors don't believe the more than five-month rally has the legs to keep going.

Surprisingly strong sales by McDonald's boosted optimism on consumer spending and drove the Dow's gains on what turned out to be the quietest day of trading so far in 2011, with total volume about 17 percent below last year's daily average.

Weakness in energy shares limited gains in the S&P 500 and Nasdaq after China, the world's second-biggest energy consumer, raised interest rates for the second time in six weeks. The move pressured commodities on fears of lower demand but had little market impact outside that sector.

"The rate hike is important, but it isn't at a critical level where it becomes troublesome," said Michael Mullaney, a portfolio manager who helps manage $9.5 billion at Fiduciary Trust Co in Boston.

McDonald's Corp (MCD.N) shares surged 2.6 percent to $75.36 after its January same-store sales beat expectations, led by a rebound in European demand. The S&P consumer discretionary index (.GSPD) was up 1.2 percent and was by far the top performer among S&P sectors.

"McDonald's had a really great number and is a sign that consumer spending is rebounding," Mullaney added, noting that his fund owns the stock.

The Dow Jones industrial average (.DJI) was up 71.52 points, or 0.59 percent, at 12,233.15. The Standard & Poor's 500 Index (.SPX) was up 5.52 points, or 0.42 percent, at 1,324.57. The Nasdaq Composite Index (.IXIC) was up 13.06 points, or 0.47 percent, at 2,797.05.

Just 6.99 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's daily average of 8.47 billion.

In extended trading, Dow component Walt Disney Co (DIS.N) gained 2.8 percent after it reported higher first-quarter earnings and revenue.

The S&P energy sector (.GSPE) was by far the weakest S&P sector, down 0.5 percent. U.S. crude for March delivery settled down 0.6 percent.

Merger activity continued for a second straight day with Kindred Healthcare Inc's (KND.N) planned acquisition of RehabCare Group Inc (RHB.N) to create a post-acute healthcare services company.

Kindred Healthcare jumped 28.3 percent to $25.00 and RehabCare soared 45.5 percent to $37.05.

On the downside, U.S.-listed shares of generic drugmaker Teva Pharmaceutical Industries' (TEVA.O) fell 5.4 percent to $52.02 after it reported results that fell short of forecasts.

Avon Products Inc (AVP.N) posted a steeper-than-expected drop in quarterly profit. Shares of the cosmetics company fell 3 percent to $28.47.

(Editing by Leslie Adler)

Cellphone security threats rise sharply - McAfee

LONDON (Reuters) – Cellphone security threats rose sharply last year as a proliferation of Internet-enabled mobile devices like smartphones and tablets provided new opportunities for cybercriminals, security software maker McAfee (MFE.N) said.

In its fourth-quarter threat report, released on Tuesday, McAfee said the number of pieces of new cellphone malware it found in 2010 rose 46 percent over 2009's level.

"As more users access the Internet from an ever-expanding pool of devices -- computer, tablet, smartphone or Internet TV -- web-based threats will continue to grow in size and sophistication," it said.

McAfee, which is being bought by Intel (INTC.O) for $7.68 billion, said it expected PDF and Flash maker Adobe (ADBE.O) to remain a favorite of cybercriminals this year, after it overtook Microsoft (MSFT.O) in popularity as a target in 2010.

It attributed the trend to Adobe's greater popularity in mobile devices and non-Microsoft environments, coupled with the ongoing widespread use of PDF document files to convey malware.

McAfee said Google's (GOOG.O) Android, which last quarter overtook Nokia (NOK1V.HE) as the maker of the world's most popular smartphone software, had been targeted by a trojan horse that buried itself in Android applications and games.

And politically motivated hacking was on the rise, it said, with the highest-profile protagonist being the "Anonymous" activist group that targeted the websites of organizations it perceived to be hostile to controversial site WikiLeaks.

Confirming a trend that other software security companies have reported, McAfee said spam levels had decreased sharply, especially in the second half of the fourth quarter, with 62 percent less by the end of the year than at the beginning.

The company said, however, that spam's hitting its lowest level for years simply represented a transition period with several botnets -- collections of computers harnessed to act in concert -- going dormant at an usually busy time of year.

(Reporting by Georgina Prodhan; Editing by Steve Orlofsky)

Saudi bourse plunges 6.43% on Egypt tensions

RIYADH (AFP) – The Saudi stock market, the largest Arab bourse, plunged 6.43 percent to 6,267.22 points on Saturday as tensions soared in Egypt, where deadly anti-government protests continued for a fifth day.

The market has been gripped by severe anxiety because of the events in Egypt, traders told AFP, expressing fears that other Gulf markets, due to open on Sunday, will be similarly affected.

The Saudi Tadawul Index lost 430.58 points to close at 6,267.22 points. Turnover was $1.68 billion.

Shares in the leading petrochemical sector fell 8.37 percent, while the banking and financial sector was down by four percent. The real estate sector fell by 6.64 percent.

Insurances fell by 9.12 percent, telecoms by 6.7 percent, investment companies by 8.62 percent and building and constructions 7.8 percent.

The drop affected the shares of all the 145 companies trading on Saturday, according to the stock market website.

The Saudi bourse has a market value of about $350 billion.

The remaining six Gulf markets -- Abu Dhabi, Dubai, Kuwait, Doha, Muscat and Manama -- will begin their new trading week on Sunday.