Federal prosecutors have come in for considerable criticism over their failure to press criminal charges against executives of financial institutions whose stumbles led to the global financial crisis. As Southern District of New York Judge Jed Rakoff pointed out in his blistering January 9, 2014 opinion column in The New York Review of Books (
credit crisis litigation
A Closer Look at AIG’s $960 Million Credit Crisis-Related Securities Suit Settlement
AIG has agreed to pay $960 million to settle the consolidated securities class action lawsuit that had been filed against the company and certain of its directors and officers in the wake of the company’s near collapse at the peak of the credit crisis. The settlement, which AIG disclosed in its August 4, 2014 filing …
E&Y Settles Lehman Brothers Securities Suit for $99 Million
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…
Credit Crisis Residue: Economic Problems and Litigation Both Grind On
As the most dramatic evens from the financial crisis recede into the past, there is an urge to consign the downturn to the pages of history, But the banking crisis in Cyprus earlier this week, along with persistent unemployment in this country and elsewhere, show that, as much as we would all like to turn…
A Closer Look at the DoJ’s Complaint against McGraw-Hill and S&P
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…
Australian Court: S&P Liable for Negligent Misrepresentations in Complex Financial Instrument Triple-A Rating
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…
About the $2.43 Billion BofA/ Merrill Lynch Merger Securities Suit Settlement
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…
Second Circuit Hands Subprime Mortgage-Backed Securities Plaintiffs Substantial Standing Victory
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…
Big Bank Litigation: Barclays Libor Scandal Securities Suit Filed and Other Financial Institution Litigation Developments
At the PLUS D&O Symposium in New York this past March, I participated on a panel entitled, “Financial Institutions Underwriting: Is it Safe to Come Out Yet?” The implication of the panel topic was that perhaps with the passage of the credit crisis, financial institutions might not be as big of a D&O underwriting risk as…
Dismissal Denied in Goldman Sachs CDO Disclosure Securities Suit
In a harsh June 21, 2012 opinion (here), Southern District of New York Judge Paul A. Crotty rejected the motion to dismiss of Goldman Sachs and three individual defendants in the securities class action lawsuit pertaining to the infamous “built to fail” Abacus CDO transaction and other ill-fated deals. Judge Crotty did, however,…