When MF Global filed for bankruptcy yesterday, it not only became the eighth largest corporate bankruptcy in U.S. history. It also became the first U.S. company taken down by the troubles afflicting European sovereign debt. How big of a problem all of this represents depends on whether or not you think the MF Global
credit crisis
Puerto-Rican Bank Settles Subprime-Related Securities Suit
According to Popular, Inc.’s January 27, 2011 press release (here), the Puerto Rican bank holding company has reached an agreement in principle to settle the subprime related securities lawsuit pending against the company, as well as in the related ERISA lawsuit. The securities suit has settled for $37.5 million, and the ERISA suit…
Subprime Securities Suit Against Toll Brothers Settles for $25 Million
In a resolution of one of the longest running subprime-related securities class action lawsuits, the parties to the Toll Brothers subprime securities suit have agreed to settle the case for $25 million. The parties’ stipulation of settlement filed on October 28, 2010 can be found here.
The Toll Brothers case was among the…
O.K., So The SEC Sued Goldman Sachs – Now What?
The SEC’s blockbuster announcement last Friday of its civil enforcement action against Goldman Sachs and one of its investment bankers rocked the securities markets and made headlines in the financial press around the world. Undoubtedly because of Goldman’s prominence and perhaps also because of the nature of the allegations, the SEC’s action is widely seen…
Congress, the Credit Crisis, and Culprits
Congressional fact-finding hearings are generally unedifying spectacles, involving as they do the weird rite of ritual public witness humiliation and accomplishing little except the suggestion of troubling questions about the kind of person who manages to get elected to Congress. Some might say that the series of hearings about Wall Street and the Financial Crisis recently launched…
Will Their “Collective Stupidity” Spare Subprime Officials from Liability?
In a provocative statement suggesting the unlikelihood of "damage awards" against subprime lenders’ directors and officers, XL Capital Ltd. CEO Michael McGavick yesterday told a Goldman Sachs Group conference that "being collectively stupid is not a basis for a lawsuit," according to a December 9, 2009 Bloomberg article (here).
As reflected in…
Commercial Mortgage Defaults: Final Surge in the Credit Crisis Litigation Wave?
The worst of the global financial crisis may be past, and we may even be well on the road to economic recovery, but there still may be considerable pain yet to come, particularly in connection with commercial mortgages. Increased vacancies, declining property values and shortages of refinancing capital could mean increasing numbers of commercial mortgage…
More Subprime Lawsuit Dismissals and Other Web Notes
Finacial Downturn, Not Fraud, Caused Plaintiffs’ Losses: In a ruling that is interesting for what it says about the relevance of the overall economic downturn to the wave of subprime lawsuits, on August 20, 2009, Eastern District of Pennsylvania Judge R. Barclay Surrick, Jr. granted the motion to dismiss the securities fraud lawsuit that Luminent…
The Bank Failure Capital of the World?
Georgia’s banks have issues. The state has led the nation in the number of bank failures since January 1, 2008, a fact that earlier this year (even before the most recent round of closures) led the Wall Street Journal (here) to describe the Atlanta area as "the bank failure capital of the world."…
Credit Crisis Securities Suits: Potential Hurdles?
The current global financial crisis may result in "unprecedented levels of litigation" that "will either serve to identify ‘weak links’ in the chain of participants who originate, appraise, and service collateral and underwrite, manage, insure, rate and sell securities," or it will serve to "highlight where the market may have underappreciated certain risks or failed…