Wilmington – Attorney General Beau Biden announced today that his office has joined 41 other State Attorneys General in reaching a $35 million nationwide settlement with Pfizer Inc, as parent of Wyeth Pharmaceuticals Inc., over allegations the company unlawfully promoted Rapamune, an immunosuppressive drug currently approved by the FDA for use in preventing organ rejection after kidney transplant surgery.  Delaware will receive $423,000, which will be paid to the Attorney General’s Consumer Protection Fund.

“We are acting to protect patients by ensuring that pharmaceutical companies market their drugs only for uses that are approved and safe,” Biden said.

The states allege that Wyeth violated state consumer protection laws by misrepresenting the uses and benefits of Rapamune, including making representations related to the unapproved (off-label) use of the drug following an organ transplant other than a kidney transplant, the unapproved protocol of converting patients to Rapamune after initially receiving a different drug, and using Rapamune in unapproved drug combinations.

In addition to its $35 million payment, under the terms of the settlement filed today for approval in Superior Court in New Castle County Pfizer is required to ensure that its marketing and promotional practices do not unlawfully promote Rapamune, or any Pfizer product.  Specifically, Pfizer is prohibited from:

• Promoting any Pfizer Product for off-label uses;
• Seeking the inclusion of Rapamune in hospital protocols or standing orders unless Rapamune has been approved by the FDA for those specific uses;
• Seeking to influence the prescribing of Rapamune in hospitals or transplant centers in any manner (including through funding clinical trials) that does not comply with the Federal anti-kickback statute.
• Making any written or oral claim that is false, misleading, or deceptive regarding any Pfizer product;
• Making any claim comparing the safety or efficacy of a Pfizer product to another product when that claim is not supported by substantial evidence;
• Providing incentive compensation for sales that may be attributable to off-label uses of any Pfizer Product, or;
• Disseminating information describing any off-label or unapproved use of Rapamune unless such information complies with applicable FDA regulations and guidelines.

Today’s action follows a multi-state settlement this past June with GlaxoSmithKline that resolved allegations the company unlawfully promoted its asthma drug, Advair, and antidepressant drugs, Paxil and Wellbutrin by misrepresenting the uses and qualities of these drugs.  Delaware received $1 million in that action.

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Latest enforcement action secures more than $17 million to Delaware from Citi;

Biden’s insistence on accountability for housing crisis has resulted in more than $130 million for Delaware in past three years;

Demands for accountability will continue   

WILMINGTON – Delaware Attorney General Beau Biden announced Monday that Citigroup Inc. will pay at least $17 million to Delaware to settle allegations stemming from the bank’s conduct that helped cause the housing crisis.

The settlement with Citi is part of a multi-billion dollar settlement announced Monday between the bank, the United States Department of Justice, four other states and Delaware. The settlement resolves allegations centering on the bundling and sale of mortgages to investors. The investments – bought by pension funds, mutual funds and other investors – were much riskier than advertised. The resulting losses were disastrous for the economy.

This settlement is the latest result of Biden’s work to ensure there is accountability for those responsible for causing the steepest economic downturn since the Great Depression. Over the past three years, Biden has secured more than $130 million for Delaware from financial institutions in housing-related settlements.

“Our financial system only works when everyone plays by the rules,” Biden said. “The housing crisis was a manmade disaster that did not have to happen. The funds we have secured have helped thousands of Delaware families avoid foreclosure, strengthen communities hit hard by the housing crisis and reimburse taxpayers. Our work seeking accountability and helping Delaware homeowners is not finished.”

Delaware’s recovery comes in two parts. Citi will make a minimum of $10 million in direct relief available to Delaware homeowners in the form of credits similar to the 2012 National Mortgage Settlement (such as mortgage modifications and forgiveness of second mortgages). Citi will also pay the State $7.35 million. As with the recent JPMorgan settlement, these funds will be used to remediate the harm caused by Citi’s misconduct, including reimbursing government entities that suffered losses.

“Many neighborhoods in Delaware continue to suffer from the effects of the housing crisis,” Biden said. “Financial recoveries such as this one will give communities opportunities to thrive.”

The federal investigation was led by the U.S. Department of Justice’s Residential Mortgage-Backed Securities Working Group, under the leadership of Associate U.S. Attorney General Tony West.

“Associate Attorney General West’s leadership makes possible the joint federal-state law enforcement actions that hold accountable the financial institutions that broke the rules and helped cause the housing crisis,” said Biden, who is also a working group member.

Previous financial settlements that Biden’s office has secured with banks relating to their conduct that contributed to the housing crisis include:

• In February 2012, Biden, 48 of his colleagues and the federal government signed a $25 billion settlement with the nation’s five largest mortgage-servicing banks. That settlement brought $11.7 million to the State and has, so far, meant $75 million in financial benefits to 3,000 Delawareans. It also included important new protections for America’s military personnel that Biden fought to include;

• In November 2013, Biden secured $19 million from JP Morgan Chase to settle allegations that the bank misled investors about the risk level of mortgage-backed securities; and

• In December 2013, Biden announced that Ocwen Financial Corporation and its subsidiary, Ocwen Loan Servicing, will provide $7 million to Delaware borrowers, holding Ocwen accountable for past mortgage servicing and foreclosure abuses, providing relief to homeowners and stopping future fraud and abuse.

The Citi matter was handled for Delaware by Victoria Counihan, David Casler, and Owen Lefkon of the Attorney General’s Investor Protection Unit, and Matthew Lintner, Fraud Division Director.

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Wilmington – Attorney General Beau Biden announced today that his office has secured a consent order requiring a Smyrna-area manufactured home community to refund monies it collected in violation of the law.

“We’re acting to ensure that residents of manufactured home communities are treated fairly and that community owners are held accountable to the promises they make and to their obligations under the law,” Biden said.

Earlier this year, as a result of multiple complaints received from residents of the Bon Ayre manufactured home community in Smyrna, the Attorney General’s Consumer Protection Unit opened an investigation into supplemental fees that were being charged by the community to its tenants.  Investigators learned that Bon Ayre had previously claimed in advertising promotions that tenants would not be responsible for the payment of real estate taxes, and information sheets provided to prospective purchasers stated that “Real Estate or Land Taxes are paid by the owner of the land, and not by the home owners.”  While Bon Ayre subsequently modified its information sheets, the investigation revealed that it continued to foster the belief that the community owner would be responsible for the payment of property taxes, not the tenants.

Contrary to the representations made in the promotional materials, Bon Ayre sent out invoices last December billing its tenants for real estate tax increases dating back to 2006.  Some long-term tenants were directed to pay up to $291.00 each. Biden’s office concluded that the new charges billed to tenants to cover increased real estate taxes are considered “rent” under the law, and that imposing those charges violate Delaware’s Manufactured Home Owners and Community Owners Act because they are not specified in tenant leases.  Moreover, Biden’s office concluded that these additional increases in rent violated the same law, which limits a landlord from increasing tenant’s lot rent more than once per year and requires that 60-day written notice be provided to tenants before doing so.

Bon Ayre denied that it had violated Delaware law, but agreed to the terms of the consent order, through which it is:

Required to remove language in all future leases which states that tenants are required to pay “Supplemental Community Fees” that represent the tenant’s share of increases in real estate taxes, environmental impact fees, and other new fees imposed on the community by any government agency, and is prohibited from enforcing this existing provision in current leases;

Required to calculate maintenance fees at the end of the calendar year and only collect them from tenants in the following year after providing a required 60-day written notice;

Required to refund to tenants within 60 days the share of increased property taxes they paid, and report to the Attorney General within 90 days that those refunds have been issued.  194 tenants are expected to receive refunds or as much as $291, depending on how long they resided in the community.

Prohibited from using any increase in property taxes as justification to increase tenants’ rent under the State’s rent justification law if the company continues to promote and advertise “no real estate taxes” or claim that real estate or land taxes are paid by the owner of the land.

Biden’s office secured the final settlement with Bon Ayre last week, and it was approved in a legally binding Court Order signed by Superior Court Judge M. Jane Brady on May 13.

Read the Order HERE

<http://www.attorneygeneral.delaware.gov/fraud/cpu/documents/20140514135945.pdf>.

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Wilmington – Attorney General Beau Biden’s Investor Protection Unit today issued an investor advisory cautioning investors to consider the risks associated with Bitcoin and other virtual currencies.  Read the advisory online.

“Investing and trading in virtual currencies carries substantial risks,” Biden said.  “Unlike traditional currency, these alternatives are not issued by a governmental authority or backed by governmental guarantees and are subject to little or no oversight.”

Virtual currencies, which include digital and crypto-currencies, are gaining in both popularity and controversy. Virtual currencies are electronic mediums of exchange that are bought or sold through virtual currency exchanges and can be used to purchase goods or services where accepted.  Growing numbers of merchants, businesses and other organizations currently accept Bitcoin, a popular virtual currency, in lieu of traditional currency. Recently, one of the largest Bitcoin exchanges, MtGox, shut down after claiming to be the victim of hackers and losing more than $350 million of virtual currency. Despite the controversy, proponents of virtual currencies continue to purchase and hold virtual currencies, often to their detriment.

The Investor Protection Unit’s advisory alerts Delawareans to the risks associated with investing in any financial offering containing virtual currency.  They include:

• Virtual currencies are not legal tender and companies do not have to accept them as a form a payment.  For example, if no one accepts Bitcoins, Bitcoins can become worthless.
• Virtual currency holdings are vulnerable to hacking attacks; there may be no way to recover stolen virtual currency.
• Virtual currency accounts are not insured by the FDIC, which insures traditional bank accounts up to $250,000 per account.
• Virtual currencies are extremely volatile, and may be unsuitable for most investors.
• Investors in virtual currencies must rely on unregulated companies that may lack appropriate internal controls and may be more susceptible to fraud and theft than established financial institutions.
• Unlike stocks, bonds, treasury bills, or other traditional investments, virtual currencies are not backed by any assets, legal rights or guarantees.

For more information about the risks associated with virtual currency, call the Attorney General’s Investor Protection Hotline at (302) 577-8424 or e-mail investor.protection@delaware.gov.

The Attorney General’s Office, through its Investor Protection Unit, enforces the Delaware Securities Act, which governs the sale of investment products and the activities of investment professionals in Delaware.  The Unit investigates and prosecutes securities fraud and licensing violations by investment brokers and advisers.  Visit the Unit’s webpage at http://www.attorneygeneral.delaware.gov/fraud/ipu to review a variety of investor education resources, a searchable broker/dealer registration database, and information about filing an investor complaint.

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