1 00:00:00,040 --> 00:00:03,320 Speaker 1: Well, now it's time for our Bloomberg Law Report. Let's 2 00:00:03,360 --> 00:00:05,800 Speaker 1: get to the legal stories we're watching this morning with 3 00:00:05,840 --> 00:00:12,040 Speaker 1: Steve Potus in the Bloomberg One Washington newsroom. Tax reform 4 00:00:12,119 --> 00:00:15,040 Speaker 1: is getting harder as Republican leaders have to compromise on 5 00:00:15,160 --> 00:00:18,720 Speaker 1: revenue razors, even as President Trump says certain tax breaks 6 00:00:18,760 --> 00:00:21,840 Speaker 1: such as four oh one K retirement accounts won't be touched. 7 00:00:22,120 --> 00:00:25,000 Speaker 1: The Justice Departments any trust dimension is taking a fresh 8 00:00:25,000 --> 00:00:28,080 Speaker 1: look at about fourteen hundred agreements between the government and 9 00:00:28,120 --> 00:00:31,800 Speaker 1: companies intended to curb anti competitive behavior. Now, the truck 10 00:00:31,800 --> 00:00:34,400 Speaker 1: and trailer industry went up to comply with the EPAS 11 00:00:34,479 --> 00:00:37,640 Speaker 1: greenhouse gas requirements for now, but the industry is still 12 00:00:37,680 --> 00:00:40,200 Speaker 1: waiting to see whether the agency will exempt it from 13 00:00:40,240 --> 00:00:45,000 Speaker 1: the overall regulation. Bloomberg Law everything you need, all on 14 00:00:45,000 --> 00:00:50,479 Speaker 1: one legal research platform, including guidance analysis and Bloomberg market Intelligence. 15 00:00:50,680 --> 00:00:55,520 Speaker 1: Find out more at Bloomberg Law dot com. Now another 16 00:00:55,600 --> 00:00:58,040 Speaker 1: legal news, Let's take a look at reports of renewed 17 00:00:58,120 --> 00:01:01,600 Speaker 1: talks between Barclays and the US Justice Department over a 18 00:01:01,640 --> 00:01:05,160 Speaker 1: decade old suspicions of fraudulent mortgage sales at the bank. 19 00:01:05,480 --> 00:01:08,479 Speaker 1: For more in the story, Bloomberg Lahost Joan Grasso speaks 20 00:01:08,480 --> 00:01:13,520 Speaker 1: with Robert Hawckett, a professor at Cornell University Law School. Bob, 21 00:01:13,640 --> 00:01:18,240 Speaker 1: let's begin with the lawsuit itself. Tell us about it. Yeah, 22 00:01:18,280 --> 00:01:20,560 Speaker 1: so this is in a certain sense kind of familiar, 23 00:01:20,600 --> 00:01:22,440 Speaker 1: at least as far as the content of it goes right. 24 00:01:22,480 --> 00:01:27,960 Speaker 1: The claim is that Barkley's quite cavalierly sold defective mortgage 25 00:01:28,000 --> 00:01:32,640 Speaker 1: backed securities to its various customers, and that it's financed, indeed, 26 00:01:33,080 --> 00:01:36,160 Speaker 1: the extending of mortgage loans to people who are very 27 00:01:36,160 --> 00:01:39,000 Speaker 1: bad risks. So it's essentially a kind of classic sort 28 00:01:39,000 --> 00:01:42,320 Speaker 1: of securities fraud type claim or wire fraud type claim. 29 00:01:42,760 --> 00:01:46,320 Speaker 1: Um quite a great deal, like uh many other such 30 00:01:46,360 --> 00:01:49,400 Speaker 1: cases or suits that we've heard about in the year's past. 31 00:01:49,440 --> 00:01:51,720 Speaker 1: What was sort of different about this one was essentially 32 00:01:51,800 --> 00:01:54,640 Speaker 1: the sort of partiness with which it was filed. This 33 00:01:54,760 --> 00:01:58,400 Speaker 1: wasn't filed until last December, and in the essentially the 34 00:01:58,400 --> 00:02:02,400 Speaker 1: waning days of the Obama Justice Department. Well, Bob, other 35 00:02:02,600 --> 00:02:06,600 Speaker 1: lenders negotiated settlements worth tens of billions of dollars in 36 00:02:06,680 --> 00:02:10,799 Speaker 1: penalties overall, rather than risk litigation. Deutsche Bank paid seven 37 00:02:10,800 --> 00:02:14,400 Speaker 1: point two billion dollars, but people familiar with the situation 38 00:02:14,480 --> 00:02:17,200 Speaker 1: say Barkley's was willing to pay no more than two 39 00:02:17,240 --> 00:02:20,680 Speaker 1: billion to settle the matter, while the Justice Department reportedly 40 00:02:20,760 --> 00:02:24,520 Speaker 1: demanded five billion. What are some of the possible reasons 41 00:02:24,560 --> 00:02:29,200 Speaker 1: that Barkley's preferred having the government suet? Well, that there 42 00:02:29,200 --> 00:02:32,160 Speaker 1: seemed to be two possibilities at least that come to 43 00:02:32,240 --> 00:02:35,760 Speaker 1: my mind. The first is that Barkley's actually believed what 44 00:02:35,880 --> 00:02:39,080 Speaker 1: it said at the time, which was that, well, look, 45 00:02:39,120 --> 00:02:41,640 Speaker 1: we didn't do nearly as much of this kind of 46 00:02:41,720 --> 00:02:44,440 Speaker 1: thing as the other banks did, and we certainly didn't 47 00:02:44,440 --> 00:02:47,959 Speaker 1: do anything nearly as much as the American banks did. 48 00:02:48,160 --> 00:02:52,000 Speaker 1: A second possibility is that because the suit in their 49 00:02:52,040 --> 00:02:55,240 Speaker 1: case was sort of looming fairly late in the game, 50 00:02:55,440 --> 00:02:57,680 Speaker 1: they might very well have been guessing or betting that 51 00:02:57,720 --> 00:03:00,720 Speaker 1: they could actually do better with a Trump to Justice Department. 52 00:03:00,760 --> 00:03:05,160 Speaker 1: In any event, in April, the judge skeptically urged Barkley's 53 00:03:05,160 --> 00:03:08,720 Speaker 1: to settle rather than request the case dismissal. So is 54 00:03:08,760 --> 00:03:12,200 Speaker 1: that a clear signal that they're unlikely to win dismissal 55 00:03:12,200 --> 00:03:15,320 Speaker 1: of the government suit. Yeah. And there was one other 56 00:03:15,360 --> 00:03:17,320 Speaker 1: signal that came out as well, and that was at 57 00:03:17,320 --> 00:03:21,639 Speaker 1: the Trump p o J contested right that particular request, 58 00:03:21,760 --> 00:03:24,760 Speaker 1: right that particular motion to dismiss was contested by the 59 00:03:24,760 --> 00:03:27,680 Speaker 1: Trump do o J, and that itself might also have 60 00:03:27,720 --> 00:03:30,320 Speaker 1: come as something of a surprise to barkleyst. And that's 61 00:03:30,440 --> 00:03:33,840 Speaker 1: Robert Hawckett, a professor at Cornell University Law School, speaking 62 00:03:33,840 --> 00:03:36,680 Speaker 1: with Bloomberg stun Grosso. You can listen to Bloomberg Law 63 00:03:36,680 --> 00:03:40,360 Speaker 1: weekdays at one pm Wall Street Time here on Bloomberg Radio, 64 00:03:40,640 --> 00:03:43,560 Speaker 1: and find more legal news at Bloomberg law dot com. 65 00:03:43,840 --> 00:03:47,160 Speaker 1: Attorneys will find exceptional legal research and business development tools 66 00:03:47,200 --> 00:03:51,640 Speaker 1: there as well. Visit Bloomberg Law dot com for more information.