Updated November 12, 2011: As shown in the lists below, the lawsuits against subprime lenders are starting to mount up. This is hardly a surprising development; as the WSJ.com Law blog noted (here), law firms are already announcing their formation of subprime lending task forces and teams, just as a year ago law firms were announcing their formation of "options backdating teams." Along the same lines, on April 25, 2007, Law.com ran an article entitled "Subprime Crash May be a Boon to Attorneys" (here).

There is a growing list of lawsuits against subprime lenders arising from the deteriorating environment these companies face. The list is now sufficiently long that it seems to be time to create a running tally of the subprime lending lawsuits, as a complement to The D & O Diary’s popular running tally (here) of the options backdating related lawsuits. I have linked below to the list of subprime lending lawsuits of which I am aware. This list may be incomplete, and I entreat readers to please let me know of any omission of which they are aware. I will endeavor to keep this list updated and will indicate any additions to the list in red. The legend "2008" indicates that the lawsuit was filed in 2008; items without a legend were filed in 2007.

Securities Class Action Lawsuits: To see the list of the 229 subprime related securities lawsuits, refer here. (Word Document)

NOTE ABOUT THE LIST OF CASES: As time has gone by, it has become increasingly difficult to maintain absolute categorical precision regarding what is a subprime related lawsuit. For example, the Care Investment Trust case noted above involved a mortgage trust that holds healthcare related assets. The allegation is that the company’s prospectus failed to disclose the impairment of the value of certain of its assets and that the company was having difficulty obtaining warehousing financing for its investment activities. The company’s woes are undoubtedly due to contagion in the credit market deriving from the subprime meltdown, but the company itself has no ties to the subprime industry. Owing to the connection of the contagion effect in the credit markets, I have included the case in the list. Reasonable minds might omit the case.

ERISA/401(k) Lawsuits:

1. Fremont General
2. Beazer Homes
3. Citigroup
4. Countrywide Financial Corp.
5. Merrill Lynch
7. Morgan Stanley
8. State Street
9. MBIA [2008]

10. Bear Stearns [2008]

11. Regions Financial Corporation [2008]

12. Huntington Bankshares [2008]

13. National City Corp. [2008]

14. Impac Mortgage Corp. [2008]

15. Sovereign Bancorp [2008]

16. Wachovia [2008]

17. First Horizon [2008]

18. PFF Bancorp. [2008]

19. Fannie Mae (2008)

20. Hartford Financial Services Group (2008)

21 Bank of America (2009)

22. IndyMac (2008)

23. American Express (2009)

24. Northern Trust Investments (2009)

25. Sterling Financial (2010)

Subprime lenders have also been sued in various lawsuits alleging that they engaged in deceptive or unfair trade practices. Recent examples involve the lawsuit pending against First Franklin Financial Corp. (here) and the lawsuit that Wells Fargo recently settled (here). While I will provide occasional updates on this post of these kinds of deceptive trade practices lawsuit, I do not propose to comprehensively catalog them here.

In at least one instance, an investment bank has been sued in connection with the bond securitization of subprime loans. According to news reports (here), Credit Suisse was sued by Bankers Life Insurance Co. in a lawsuit in which the insurer claims it lost money on the investment grade bonds backed by subprime mortgages the Credit Suisse had sold. The lawsuit generally pertains to the quality (or lack thereof) of the mortgages that backed the bonds.

There may well be other companies or kinds of companies adversely affected by the declining residential real estate market who find themselves facing securities class action or other lawsuits, as if so, I will update this post accordingly.


Readers are encouraged to suggest additional listings or references that should be added to this post.