It was revealed on Friday that a former Ocwen Financial exec also settled charges with the commission. The news came just one day after Ocwen announced that its acquisition of PHH Corp. is nearly a done deal.
Former Ocwen VP Bryan Ziegenfuse settled insider trading charges related to the PHH merger and the company’s dealings with Altisource Portfolio Solutions. Ziegenfuse did not admit to any wrongdoing but settled with the commission in an agreement that cost him $128,000 plus interest, which is double the profit he made on three transactions flagged by the SEC.
According to the complaint, Ziegenfuse was apprised of negotiations between Ocwen and PHH in February, and then he proceeded to purchase call options of PHH stock plus 4,000 shares of PHH stock in his mother’s name. Just after news of Ocwen’s PHH acquisition, Zeignfuse sold the options and shares, pocketing $36,000.
The SEC complaint specifies two other incidents in which it claims Ziegenfuse profited from his inside knowledge of Ocwen’s business dealings, including its settlement with 10 states over servicing practices and CFPB enforcement action against Ocwen spin-off Altisource.
Zeigenfuse resigned from Ocwen in June, and the company issued a statement saying that the allegations represented “a clear violation of numerous Ocwen policies, including those prohibiting improper securities trading and breaches of confidentiality.”
On Friday, just before news of the Zeigenfuse scandal was dug up with settlement details, Ocwen said its $360 million acquisition of PHH Corp. is set to close within 10 days.
Finally, just one more scandal to spice up your Monday morning:
An official at the Consumer Financial Protection Bureau is in hot water after the discovery of blog posts he authored that expressed controversial views on hate crimes and the n-word.
According to an article in The Washington Post, CFPB Policy Director Eric Blankenstein blogged in 2004 under an assumed name, questioning whether the n-word was inherently racist and claiming that the great majority of hate crimes were actually hoaxes.
In one post, Blankenstein refuted a proposal at the University of Virginia that called for harsher academic penalties for intolerant acts, calling it “racial idiocy.”
“Fine… let’s say they called him n-----,” he wrote. “Would that make them racists, or just a-------?”
He then asserted that “hate-crime hoaxes are about three times as prevalent as actual hate crimes.”
Blankenstein was appointed by Trump to the CFPB and, as one of the highest-paid employees in the government, is responsible for supervising lenders and enforcing laws that include protecting minorities from discriminatory practices and promoting fair lending.
Blankenstein’s posts, which were unearthed Wednesday by The Post, were condemned Friday in an email to hundreds of agency employees by Patrice Ficklin, a career staffer and director of the Office of Fair Lending and Equal Opportunity.
“The tone and framing are deeply disturbing to me as a woman, African American, advocate for LGBTQ rights, and human being,” Ficklin wrote.
“And while he has been collegial, thoughtful and meticulous, I have had experiences that have raised concerns that are now quite alarming in light of the content of his blog posts – experiences that call into question Eric’s ability and intent to carry out his and his Acting Director’s repeated yet unsubstantiated commitment to a continued strong fair lending program under governing legal precedent,” Ficklin wrote.
Employees rallied around Fricklin, according to The Post, with dozens sending company-wide emails issuing their support for her sentiments regarding Blankenstein.
When news of Blankenstein’s writings were published last week, Sens. Sherrod Brown, D-Ohio, and Elizabeth Warren, D-Mass., called for his termination.
“Eric Blankenstein has done everything he can to keep the CFPB from doing its job, gutting the Office of Fair Lending and failing to file a single anti-discrimination lawsuit since he arrived at the agency in December,” Warren said in a statement. “Now we know why – Blankenstein must be fired.”
via Housing Wire