In a sweeping 581-page report (here), the examiner appointed in connection with the New Century Financial Corporation bankruptcy found that New Century “engaged in a number of significant improper and imprudent practices related to its loan originations” that “created a ticking time bomb that detonated in 2007.”
Bankruptcy examiner Michael J. Missal issued
Add Merrill Lynch and Morgan Stanley to the growing list of companies that have been sued in securities class action lawsuits by investors for allegedly deceptive representation in connection with the sale of auction rate securities. According to the plaintiffs’ attorneys’ March 25, 2008 press release (here), the plaintiffs’ have filed a securities
The subprime litigation wave is growing in amplitude and volume, as four companies have found themselves the targets of a total of five new subprime-related securities class action lawsuits, joining the now quite lengthy list of companies that have been swept up in the wave. With the addition of these five new securities lawsuits, as well
In Bear Stearns’ March 16, 2008 announcement (here) of J.P. Morgan’s acquisition of the company, Alan Schwartz, Bear’s CEO, is quoted as saying that “this transaction represents the best outcome for all our constituencies based upon the current circumstances.” Apparently, a few of those constituencies take a different view.. In addition to
We knew it was coming but it sure got here fast. On March 17, 2008, plaintiffs’ counsel initiated a securities class action lawsuit in the United States District Court for the Southern District of New York against Bear Stearns and certain of its directors and officers. A copy of the plaintiffs’ lawyers’ press release can
The wave of subprime-related securities class action litigation has continued to spread, as plaintiffs’ lawyers have filed new securities lawsuits against two different companies.
First, according to their March 12, 2008 press release (here), plaintiffs’ lawyers have filed a securities class action lawsuit in the United States District Court for the Northern District
You will never read a headline that says “Financial Institution Fires Rogue Trader Who Racked Up Massive Gains.” Therein lies the fundamental tension in financial institution risk management. It is not a merely cynical view that financial institutions tacitly tolerate control lapses as long as gains result – indeed, some of the leading commentators place the blame for
There are a variety of different ways that the subprime-related litigation might be categorized. For example, the lawsuits might be grouped by type of defendant (as in my prior discussion of lawsuits against the mortgage-backed asset securitzers, here). The lawsuits might also be grouped by type of mortgage-backed asset involved (as in my discussion
Add credit default swap counterparty litigation to the growing list of subprime-related litigation categories.
Credit default swaps have, of course, already been drawn into the subprime litigation wave to a certain extent. For example, as I previously noted (here), Swiss Re has been sued in a subprime related securities lawsuit in connection with
New York Subprime Lawsuit Between Two Foreign Banks: As I noted in prior posts (most recently here), mortgage-backed securities investors have already initiated several lawsuits against the investment banks and others that created the securities, some lawsuits filed as individual actions and some as class actions. A mortgage-backed securities investor’s individual lawsuit initiated this week