Richmond Fed Teaches Us a Lesson in the Importance of Google in the Hiring Process
There's about to be some new LandAmerica news so in the meantime I figured I'd offer a little bit of background on our favorite character in this drama, Richmond Fed's not-that-new-anymore General Counsel Michelle Gluck.
“Problems and Concerns Regarding the Marketing and Sales of Title Insurance and LandAmerica Financial Group, Inc.’s Conduct Regarding Federal and State Examinations of Title Insurance" via the House Financial Services Committee, December 2006:
According to documents made available to the Committee on Financial Services, LandAmerica Financial Group, Inc. allegedly engaged in a deliberate effort to negatively influence state and federal examinations into the company’s captive title reinsurance agreements. Senior company management, including CEO Ted Chandler and General Counsel Michelle Gluck, in internal correspondence, authorized LandAmerica Senior Vice President Peter Kolbe to use personal background information obtained on Colorado Deputy Commissioner Erin Toll to raise conflict of interest charges in an effort to limit her investigation into LandAmerica’s Colorado operations, undermine her efforts to lead a multi-state settlement on captive reinsurance, and, in the opinion of Ms. Toll, to discourage her from testifying at a hearing before a subcommittee of the Committee. The company had personal information regarding Ms. Toll’s family background and relationships and raised it with several other state insurance regulators, threatening to “go public” and get “real stinky real quick” if Ms. Toll continued her efforts. The company’s officials also used their contacts in state insurance departments and at the National Association of Insurance Commissioners (NAIC) to obtain information about, and reduce support for, Ms. Toll’s negotiations towards a multi-state settlement, and to remove her from the process.
According to state insurance regulators, the captive reinsurance arrangements are merely a sophisticated form of kickback. Real estate brokers and agents, lenders, and home builders formed the captive reinsurance companies and referred all of their title insurance business to a specific title insurance company if that firm agreed to reinsure the title policy to the captive reinsurance company owned by the real estate broker or agent, lender, or home builder.
Several large title insurance companies have now been implicated in the captive reinsurance arrangements. Most title insurers, including LandAmerica, have agreed to immediately terminate their captive reinsurance programs, and several companies settled with state regulators, resulting in millions of dollars in fines. In fact, after investigations shed light on the frequency of these arrangements, it was revealed that many title insurance companies felt it was necessary to offer improper inducements in order to stay afloat in the marketplace.
At the Committee’s April 26, 2006 hearing on title insurance, Douglas Miller, President and CEO of Title One, Inc., a title insurer located in Minneapolis, Minnesota, testified that his company lost a huge amount of market share because he refused to participate in referral incentive schemes. According to Mr. Miller:
“I’ve had many real estate professionals who are involved in these schemes tell me that they miss my company because our service was better and our fees were lower, but that they are now locked into the partnership and feel that they have no choice but to continue to refer ‘their’ business to these shams.”
Seriously, someone should have Googled this lady before they hired her over there, there's all kinds of good stuff just like this.
I wonder how closely Richmond Fed is watching the decomposition of the LandAmerica corpse?
At least Richmond BizSense is:
LandAmerica’s former 1031 exchange customers can either battle themselves for the shrinking scraps of the bankrupt company or collect some money now and hope two other lawsuits recover the rest of their money.
And that second part could take years.
Around 350 customers who used the Richmond-based company have until Nov. 10 to vote on a plan that divides the bankrupt company’s current assets and lays out how future proceeds will be divided.
And while some victims abhor the settlement and feel robbed, legal fees will keep eating into that dwindling sum – by the millions – if the plan is not approved.
Tick tick tick is either the sound of the time left for LandAmerica exchange victims to make their decision or of the PR nightmare lurking in the Richmond bunker about to go boom. Perhaps if someone had done their due diligence beforehand this wouldn't even be an issue. Lucky for me at least I will always have something scandalous to write about (if everyone behaves, where would I get my material??).
Now I have promised not to get catty about this but are these the kind of people we want working at the Fed, and more importantly at our favorite Fed bank? Pffft.
LandAm exchange victims have until November 10th to take this crap or go back in there swinging. I'm hoping they take what's behind Door #2 and no one tries to get "real stinky real quick."
My last LandAm update may be found here.
Please figure this one out, Richmond, I still expect better out of you.