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Real Estate investor sues TD Bank; Delta fears; Fannie, Freddie stress 😫

By August 16, 2021 No Comments

Real Estate inventor sues TD Bank for allegedly failing to protect their $$$ 

What a mess we have to start the week.

Pennsylvania-based Moore Capital Holdings, an investor in real estate, was targetted by online fraudsters who cleaned them out of more than $275,000. 

Not only was the attack very well-organized, as you will read below, but TD Bank’s alleged reaction to the multiple thefts was also extremely lacking, Moore Capital said in a lawsuit it filed against the bank last week.

(Courier Post, 3 free articles per month)

Here’s how the theft went down.

Moore Capital was victimized in April when an employee tried to establish an account profile for the firm's TD eTreasury account, a business banking service.

The employee clicked a link that appeared to be a TD Bank login, but instead led to a fake website that resembled the TD page in every respect except for one altered letter in the domain address, the Courier Post reports.

After the worker entered his credentials and a phone number, he received a call from a man claiming to be a TD employee. A caller ID system said the call appeared to be coming from “TD Bank.” That’s a pretty advanced ruse, don’t you think?

Moore Capital workers continue to follow the instructions of the thrive until Moore Capital “suddenly lost all Internet access across all office work stations,” the suit says.

That was when the phone alerts started pinging on their phones. The first alert, at 12:37 p.m., said about $90,000 had been transferred to another account over at JP Morgan. A second alert five minutes later showed more than $94,000 had been wired to a Bank of America account.

Moore Capital said they called the TD Bank toll-free number to report the fraud, but that was “just a general services line that funneled Moore into an automated answering system.”

And that’s when a third fraudulent transfer sent $91,450 to a Wells Fargo account during that period.

All of the funds were quickly transferred out of the receiving banks.

Moore Capital claims no fraud investigator from TD Bank even contacted them.

“It, therefore, appears that while TD Bank instructs customers to report fraud, the reporting serves no purpose,” the lawsuit claims.

The lawsuit, filed by attorney Jordan Rand of Philadelphia, seeks to recover Moore Capital's losses, including its expenses in trying to reclaim the stolen money.


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Delta variant begins to disrupt the economic recovery

Well, to say we could have avoided this is an understatement.

U.S. consumer sentiment fell in early August to the lowest level in nearly a decade as Americans grew more concerned about the economy’s prospects, inflation and the recent surge in coronavirus cases.

The University of Michigan’s preliminary sentiment index fell by 11 points to 70.2, the lowest since December 2011, data released Friday showed. The figure fell well short of all estimates in a Bloomberg survey of economists.

The slump in confidence risks a more pronounced slowing in economic growth in the coming months should consumers rein in spending. The recent deterioration in sentiment highlights how rising prices and concerns about the delta variant’s potential impact on the economy are weighing on Americans. The hot housing market is also showing signs of a slow down.

But, Goldman Sachs analysts say from a psychological perspective, the extent of the damage to the economy caused by the surge in the Delta variant is built around fear, which means it may not have a lasting impact. 

That’s because even amid a rapidly spreading delta variant, real-world data on vaccine protection remains relatively reassuring, says Goldman Sachs Research’s Terence Flynn in an email to clients.

“Bottom line is the vaccines work very, very well. Breakthrough infection can happen, unfortunately, but the vaccines do a great job at protecting against the most severe outcomes,” he tells host Allison Nathan on a recent episode of Exchanges at Goldman Sachs. 

“And that's obviously a big focus of the healthcare system because when we talked about these lockdowns and different measures that countries are taking, it relates to really trying to preserve that healthcare system capacity,” he added.

Nonetheless, growing fears over the variant are still likely to weigh on growth, says Daan Struyven, a senior economist for Goldman Sachs Research. 

“We do think that the increase in the spread of the delta variant is going to weigh moderately on growth in the U.S., mostly because of consumer risk aversion,” he notes. 

Struyven points to a recent Gallup poll showing that the share of Americans that feels protected from the coronavirus dropped from 50% in June to 38% in July. 

“What's fascinating is that the people who are really scared…are the fully vaccinated individuals,” he adds. “And people who feel safe are the people who don't plan to get vaccinated. So I think risk aversion is very important in the economic effects, not only about objective medical risk here.”


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FHFA: Fannie and Freddie have more than enough cash in any economy

Even with the economic recovery teetering up and down, one thing we won’t have to worry about is Fannie Mae and Freddie Mac going bankrupt.

That’s because the two GSEs were stress-tested this year, which runs the companies through various models of economic duress.

In the worst case, the mortgage giants Fannie Mae and Freddie Mac would face up to $20 billion in combined credit losses in the event of a severe financial downturn, according to stress test results released Friday by the Federal Housing Finance Agency.

Although the credit losses would exceed those forecast under previous stress test scenarios (this is an annual exercise, undertaken every year since the implementation of the Dodd-Frank Act), Fannie and Freddie likely maintain a large enough capital cushion to cover the projected losses.

The government-sponsored enterprises, as part of an annual exercise required for institutions with more than $250 billion of assets, were tested against a hypothetical financial crisis scenario that featured a severe global recession with stressed commercial real estate and corporate debt markets as well as a global market shock.


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