Mr Cooper Group Inc (COOP)

[ne trader]

Repost from last night:
From Seeking Alpha.com Truth and transparency blog."While all these revelations can suggest that Washington Mutual, Inc. was not a failed institution, and they can support speculation that Washington Mutual was improperly seized, recent court filings in Federal District Court in Texas and U.S. Bankruptcy Court in Delaware suggest something more sinister.

For example, the filing in U.S. Bankruptcy Court in Delaware, referring to a Texas State Court action (since removed to Federal District Court for the Southern Disrict of Texas (3:09-cv-00044)) is located at the following link:

http://www.kccllc.net/...

In the above-referenced filing, it is alleged that wrongful conduct of JP Morgan Chase & Co. includes

(i) entering into false negotiations with the Washington Mutual, Inc. under the guise of a good-faith bidder during the summer of 2008;

(ii) gaining access to Washington Mutual's confidential and proprietary information through a variety of deceptive practices; and

(iii) disclosing Washington Mutual's confidential information as well as false information to the media and investors in an effort to drive down WMI's credit rating and stock price, cause depositors to withdraw deposits as a result of fear, and hamper efforts of Washington Mutual, Inc. to find a purchaser for itself.

The filing suggests that additional claims that could arise in the bankruptcy proceeding might include, without limitation, unfair competition, tortious interference, interference with prospective economic advantage, breach of contract, misappropriation of confidential information and trade secrets, and conversion. The filing further suggest that by way of these claims, JPMC may be held responsible for the destruction of Washington Mutual, Inc. and the total losses suffered by its creditors and shareholders.

In addition, the underlying Texas action alleges that JP Morgan Chase & Co. used plants or moles (e.g., the Rotella allegations) inside of Washington Mutual, Inc. for the purposes of gaining insider information and exploiting that information for economic gain. Recent news reports have stated that in 2005, a small group of senior risk managers drew up a plan to limit risky lending practices, but a new executive team at the bank nixed the plan. Thus, it is conceivable that if the allegations of insider plants are true, these same plants could have knowingly undertaken or encouraged risky or fraudulent lending practices in an effort to destroy Washington Mutual's reputation and shareholder value.

Under Federal Rule of Civil Procedure 11(b), the above-identified filings are subject to the requirement of certification "that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances . . . ." Thus, whereas previous revelations in the news or government papers regarding Washington Mutual's situation might command a relatively lower level of trust, the allegations in the above-identified filings demand the additional respect that the Federal Rules of Civil Procedure are designed to command.

The sum of these allegations is that, if any number of the allegations are true, the activities of JP Morgan Chase & Co.'s leading up to the seizure and sale of Washington Mutual, Inc. assets have the capacity of implicating the laws of unfair competition, unjust enrichment, fraud, securities violations at the expense of Washington resident investors, breach of contract (confidentiality agreement), breach of fiduciary duty, conversion, etc.

While many of such violations may be the province of federal law, it is also clear that the magnitude of the allegations and potential extent of damages suffered by Washington residents would likely raise issues of state law violations. Washington residents deserve to have a fair and complete investigation on the subject by the Attorney General of the State of Washington and to have themselves availed of Washington State law if such an investigation deems this an appropriate course of action"

Could be biggest court ruling of the last 10 years.