Sheppard Mullin Financial Institutions Law Blog

To hold a bank liable for aiding and abetting a breach of duty by corporate officers, is it enough to allege generally that the bank knew the officers "were engaged in wrongful or illegal conduct"? No. According to the Fourth District Court of Appeal, a plaintiff must allege the bank had "actual knowledge of the specific breach of fiduciary duty for which it seeks to hold the defendant liable." Thomas H. Casey, as trustee, v. U.S. Bank National Association, et al., 05 C.D.O.S. 2615 (March 28, 2005).

In our Newsflash dated December 28, 2004, we reported that the Fourth District Court of Appeal had held that the "yield spread premium" a lender pays to a loan broker should not be included in the calculation of "points and fees payable by a borrower" under California's predatory lending law. After granting a rehearing, the court reaffirmed its opinion. Wolsky v. Fremont Investment & Loan, 05 C.D.O.S. 1933 (March 4, 2005).