The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Category Archives: Subprime Litigation

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RBS Settles Harborview MBS Securities Suit for $275 Million

Posted in Subprime Litigation
In a reminder that litigation from the credit crisis is still kicking around and that there are still some significant credit crisis cases that are yet to be resolved, Royal Bank of Scotland has agreed to settle theĀ  Harborview Mortgage-Backed Securities litigation for a payment of $275 million dollars. The settlement is subject to documentation … Continue Reading

E&Y Settles Lehman Brothers Securities Suit for $99 Million

Posted in Subprime Litigation
On November 27, 2013, the parties to the consolidated Lehman Brothers securities litigation filed with the court a stipulation of settlement pertaining to the securities class action lawsuit brought by Lehman investors against the bankrupt company’s former auditors, Ernst & Young. The accounting firm has agreed to settle the investors’ claims for a payment of … Continue Reading

Countywide MBS Securities Suit Settles for $500 Million

Posted in Subprime Litigation
In what is the largest settlement so far of an mortgage-backed securities class action lawsuit filed as part of the subprime and credit-crisis securities litigation wave, the parties to the consolidated Countrywide mortgage-backed securities suit pending in the Central District of California have agreed to settle the litigation for $500 million. The settlement is subject … Continue Reading

Cornerstone Research: Securities Suits Involving Accounting Allegations Less Likely to Be Dismissed, Costlier to Settle

Posted in Securities Litigation, Subprime Litigation
Securities class action lawsuits involving accounting allegations are less likely to be dismissed, take longer to resolve, and make up a much greater proportion of total securities suit settlement dollars than non-accounting cases, according to a new report from Cornerstone Research. The report, entitled “Accounting Class Action Filings and Settlements: 2012 Review and Analysis,” and … Continue Reading

Catching Up: Citigroup Bondholders Settlement; FDIC Failed Bank Litigation Update; Freddie Mac Libor Suit: and More

Posted in Securities Litigation, Subprime Litigation
Much happened in recent days while The D&O Diary was away on extended travel. Some of the developments were significant. What follows is a brief summary of the more significant events over the last few days.   Subprime-Related Citigroup Bondholders Action Settles for $730 Million: In what is the second-largest settlement of a subprime and … Continue Reading

A Closer Look at the DoJ’s Complaint against McGraw-Hill and S&P

Posted in Subprime Litigation
By now you will have heard that the U.S. Department of Justice has filed a securities class action lawsuit against S&P and its corporate parent, McGraw-Hill, about the rating agency’s  ratings of collateralized debt obligations as the subprime meltdown unfolded. A copy of the DoJ’s complaint, filed on February 4, 2013 in the Central District of … Continue Reading

Australian Court: S&P Liable for Negligent Misrepresentations in Complex Financial Instrument Triple-A Rating

Posted in Subprime Litigation
Though many include the rating agencies among the list of culprits that contributed to the global financial crisis, the rating agencies have up until now largely dodged attempts to hold them liable. While there have been a small number of cases (refer for example here) where courts have denied the motions of rating agencies to dismiss … Continue Reading

About the $2.43 Billion BofA/ Merrill Lynch Merger Securities Suit Settlement

Posted in Subprime Litigation
In what is by far the largest settlement of a credit crisis-related securities class action lawsuit, Bank of America has agreed to pay $2.43 billion to settle the suit filed against the company and certain of its directors and officers in connection with the bank’s financial crisis-driven acquisition of Merrill Lynch. The settlement is subject … Continue Reading

Second Circuit Hands Subprime Mortgage-Backed Securities Plaintiffs Substantial Standing Victory

Posted in Subprime Litigation
Many of the toxic mortgage-backed securities that were a key part of the subprime mortgage meltdown were sold in multiple separate offerings based on the same shelf registration statement but separate prospectuses. Each separate offering included multiple securities at varying tranches of seniority and subordination. In the litigation following the subprime meltdown, defendants in suits … Continue Reading

Rating Agencies Must Face Fraud Claims for Toxic SIV Ratings

Posted in Subprime Litigation
In the latest development in the long-running  investor lawsuit  involving the collapsed Cheyne Financial structured investment vehicle, Southern District of New York Judge Shira Scheindlin has held that the rating agency defendants in the case must face the investors’ claims for common law fraud under New York law. A copy of Judge Scheindlin’s August 17, … Continue Reading

Carlyle Capital Credit Crisis Securities Suit Dismissed (and Two Other Dismissals)

Posted in Subprime Litigation
In an interesting opinion that includes among other things a noteworthy discussion of issues arising under the Morrison v. National Australia Bank case, one of the last securities suits filed as part of the ed credit crisis-related litigation wave has been dismissed. In an August 13, 2012 opinion (here), District of Columbia District Court Judge … Continue Reading

Dismissals Granted for U.S.-Listed Chinese Company’s CFO and in the Deutsche Bank Subprime Securities Suit

Posted in Securities Litigation, Subprime Litigation
Two of the significant securities litigation trends we have been following are the subprime-related securities litigation and the securities suits that have been filed against U.S.-listed Chinese companies. As discussed below, in the past few days courts granted dismissal motions in each of these kinds of cases.   Jiangbo’s CFO’s and Auditors’ Dismissal Motions Granted … Continue Reading

Post-Holiday Quick Hits

Posted in Securities Litigation, Subprime Litigation
Former CFO’s Dismissal Motion Denied in Longtop Financial Securities Suit: Longtop Financial Technologies may be unique among U.S.-listed Chinese companies that have been caught up in the wave of accounting scandals and related securities litigation. Unlike many of the others, Longtop did not obtain its U.S.-listing by way of a reverse merger, but instead, in … Continue Reading

IndyMac CEO Settles Long-Running Subprime-Related Securities Suit

Posted in Securities Litigation, Subprime Litigation
When plaintiffs first filed their securities class action lawsuit against IndyMac Bancorp back in March 2007, the suit was one of the first of what later became a wave of subprime and credit crisis-related securities class action lawsuits. The suit itself, which has come to be known as the Tripp litigation, initially was dismissed and … Continue Reading

Rating Agencies Must Defend Negligent Misrepresentation Claims for Toxic SIV Ratings

Posted in Subprime Litigation
The rating agencies must defend against  claims for negligent misrepresentation in connection with the ratings the firms assigned to a pair of structured investments vehicles, Southern District of New York Judge Shira Scheindlin has ruled in a pair of May 4, 2012 decisions. Judge Scheindlin did grant the defendants’ motions to dismiss claims for negligence, breach … Continue Reading

Dismissal Motion Denied in Part in General Electric Credit Crisis-Related Securities Suit

Posted in Subprime Litigation
In a January 12, 2012 opinion that quotes from (and relies upon) former Treasury Secretary Henry Paulson’s credit crisis memoirs, Southern District of New York Judge Richard Holwell granted in part and denied in part the motion to dismiss in the subprime and credit crisis related securities class action lawsuit that investors had filed against … Continue Reading

E*Trade Settles Subprime Securities Suit for $79 Million

Posted in Securities Litigation, Subprime Litigation
E*Trade Financial Corporation has reached an agreement in principle to settle the subprime-related securities class action lawsuit pending against the company and certain of its directors and officers, the company reported in its December 21, 2011 filing on Form 8-K. The agreement calls for the company and its D&O insurance carriers to pay a total … Continue Reading