N.Y. AG releases year-end report

By Nick Rees | Dec 27, 2012

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman released his end-of-the-year review Thursday, detailing his office's accomplishments, including economic justice, taxpayer protection, civil rights and labor enforcement.

"Across every bureau, our office has worked diligently this year to restore New Yorkers' faith in the public and private sectors, and I am proud of the results we've delivered for the people of this state," Schneiderman said. "From pursuing the financial frauds that were at the heart of the economic crisis, to cracking down on government corruption, to rooting out fraud against taxpayers and consumers, to keeping our streets safe from crime, we are moving closer to fulfilling the goal of building the best public law firm in the country to serve and protect all New Yorkers."

In the areas of economic justice and consumer protection, Schneiderman reported that he filed a lawsuit against J.P. Morgan for fraudulent misrepresentations and omissions by the former Bear Stearns as a means of promoting sales of mortgage-backed securities, which led to the collapse of the housing market.

Schneiderman also filed a Martin Act lawsuit against Credit Suisse Securities for deceiving investors over the care used to evaluate mortgage loans packaged into securities prior to the 2008 foreclosure crisis.

Additionally, settlements were obtained from the nation's five largest mortgage servicers, totaling $130 million for the state of New York, and a multi-billion dollar settlement with the foreclosure firm Steven J. Baum P.C. will be used to fund state programs providing assistance to homeowners facing foreclosure or who were the victims of predatory lending practices.

Consumers also saw Schneiderman secure a $410 million settlement with J. Ezra Merkin, who controlled four funds that invested more than $2 billion with Bernard Madoff, a $210 million settlement with Ivy Asset Management, which advised clients to invest in Madoff's Ponzi scheme, and a $7.8 million settlement with eAppraiseIT for colluding with Washington Mutual to inflate the value of homes.

Other settlements included a $1.6 billion global settlement with Abbott Laboratories for the illegal promotion of an anti-seizure drug, a $162 million agreement with biotech giant Amgen for illegal marketing practices and a $95 million settlement with Boehringer-Ingelheim Pharmaceuticals Inc. for illegal promotion of its products, including kickbacks to medical professionals.

Schneiderman also led an effort to crack down on synthetic drugs by filing lawsuits against 23 head shops that sold illegally mislabeled designer drugs. Eight of the lawsuit resulted in the permanent removal of bath salts and other synthetic drugs from store shelves, as well as penalties. Schneiderman also won a major court victory that found synthetic drug vendors to be liable for the sale of products they know will be used in dangerous, off-label ways.

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